Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the U.S. Postal Service provides a vital and important communication link for the Nation and the citizens of my home state of Iowa. Rural Letter Carriers play a special role and have a proud history as an important link in assuring the delivery of our mail. Rural Carriers first delivered the mail with their own horses and buggies, later with their own motorcycles, and now in their own cars and trucks. They are repsonsible for maintenance and operation of their vehicles in all types of weather and road conditions. In the winter, snow and ice is their enemy, while in the spring, the melting snow and ice causes potholes and washboard roads. In spite of these quite adverse conditions, rural letter carriers daily drive over 3 million miles and serve 24 million American families on over 66,000 routes. Although the mission of rural carriers has not changed since the horse and buggy days, the amount of mail they deliver has changed dramatically. As the Nation's mail volume has increased throughout the years, the Postal Service is now delivering more than 200 billion pieces of mail a year. The average carrier delivers about 2,300 pieces of mail a day to about 500 addresses. Most recently, e-commerce has changed the type of mail rural carriers deliver. This fact was confirmed in a recent GAO study entitled ``U.S. Postal Service: Challenges to Sustaining Performance Improvements Remain Formidable on the Brink of the 21st Century,'' dated October 21, 1999. As this report explains, the Postal Service expects declines in its core business, which is essentially letter mail, in the coming years. The growth of e-mail on the Internet, electronic communications, and electronic commerce has the potential to substantially affect the Post Service's mail volume. First-Class mail has always been the bread and butter of the Postal Service's revenue, but the amount of revenue from First-Class letters is declining. E-commerce is providing the Postal Service with another opportunity to increase another part of its business. That's because what individuals and companies order over the Internet must be delivered, sometimes by the Postal Service and often by rural carriers. Currently, the Postal Service has about 33 percent percent of the parcel business. Carriers are not delivering larger volumes of business mail, parcels, and priority mail packages. But, more parcel business will mean more cargo capacity will be necessary in postal delivery vehicles, especially in those owned and operated by rural letter carriers. When delivering greeting cards or bills, or packages ordered over the Internet, Rural Letter Carriers use vehicles they currently purchase, operate and maintain. In exchange, they receive a reimbursement from the Postal Service. This reimbursement is called an Equipment Maintenance Allowance (EMA). Congress recognizes that providing a personal vehicle to deliver the U.S. Mail is not typical vehicle use. So, when a rural carrier is ready to sell such a vehicle, it's going to have little trade-in value because of the typically high mileage, extraorindary wear and tear, and the fact that it is probably right- hand drive. Therefore, Congress intended to exempt the EMA allowance from taxation in 1988 through a specific provision for rural mail carriers in the Technical and Miscellaneous Revenue Act of 1988. That provision allowed an employee of the U.S. Postal Service who was involved in the collection and delivery of mail on a rural route, to compute their business use mileage deduction as 150 percent of the standard mileage rate for all business use mileage. As an alternative, rural carrier taxpayers could elect to utilize the actual expense method, business portion of actual operation and maintenance of the vehicle, plus depreciation. If EMA exceeded the allowable vehicle expense deductions, the excess was subject to tax. If EMA fell short of the allowable vehicle expenses, a deduction was allowed only to the extent that the sum of the shortfall and all other miscellaneous itemized deductions exceeded two percent of the taxpayer's adjusted gross income. The Taxpayer Relief Act of 1997 further simplified the tax returns of rural letter carriers. That Act permitted the EMA income and expenses ``to wash,'' so that neither income nor expenses would have to be reported on a rural letter carrier's return. That simplified taxes for approximately 120,000 taxpayers, but the provision eliminated the option of filing the actual expense method for employee business vehicle expenses. The lack of this option, combined with the dramatic changes the Internet is having on the mail, specifically on rural carriers and their vehicles, is a problem I believe Congress can and must address. The mail mix is changing and already Postal Service management has, understandably, encouraged rural carriers to purchase larger right-hand drive vehicles, such as Sports Utility Vehicles, SUVs, to handle the increase in parcel loads. Large SUVs are much more expensive than traditional vehicles, so without the ability to use the actual expense method and depreciation, rural carriers must use their salaries to cover vehicle expenses. Additionally, the Postal Service has placed 11,000 postal vehicles on rural routes, which means those carriers receive no EMA. These developments have created a situation that is contrary to the historical congressional intent of using reimbursement to fund the government service of delivering mail, and also has created an inequitable tax situation for rural carriers. If actual business expenses exceed the EMA, a deduction for those expenses should be allowed. To correct this inequity, I am introducing a bill today that reinstates the ability of a rural letter carrier to choose between using the actual expense method for computing the deduction allowable for business use of a vehicle, or using the current practice of deducting the reimbursed EMA expenses. Rural carriers perform a necessary and valuable service and face many changes and challenges in this new Internet era. We must make sure that these public servants receive fair and equitable tax treatment as they perform their essential role in fulfilling the Postal Service's mandate of binding the Nation together. I urge my colleagues to join Senators Bingaman, Murkowski, Jeffords, Conrad, Breaux, Rockefeller, Daschle, Baucus, Lincoln and myself in sponsoring this legislation. I ask unanimous consent that the text of the bill be printed in the record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the month of May, since 1963, has helped the Nation focus on the contributions and achievements of America's older citizens because the month of May is a month where we recognize these achievements. Congress does this by cooperating with various organizations in bringing senior interns to Washington, DC, for 1 week out of the month of May. There are other things that are done as well. The image of those over the age of 65 is dramatically different than it was as recently as a generation ago. Older Americans increasingly redefine modern maturity. They reshape cultural boundaries, and they dispel age-old stereotypes associated with getting older. They are leaders in our families, in our workplaces, and in our communities. Each week this month I am going to recognize a different Iowan and highlight what these older Iowans are doing as a contribution to the workplace and communities. The one I recognize this week is a 68-year- old woman from Sioux City, IA. JoAnn Owens understands the value of family and understands community involvement. Through her initiative, her concern, and her commitment, she has touched the lives of many in her family and in the entire Sioux City community. Born and raised in Sioux City, Ms. Owens moved to New York in her twenties and spent much of her adult life on the east coast. In 1993, at the age of 60, she moved back to Sioux City to care for her ailing mother. Seeking a way to keep herself active, and at the same time stimulate her mind, Ms. Owens began to volunteer in the community. For the last 7 years, she has served as a senior companion by providing care to people in the community who need extra assistance in order to live independently. She currently volunteers 4 days a week helping young people suffering from brain injuries to develop their academic skills. Ms. Owens also serves as a volunteer judge for the Woodbury County Drug Court Program. She is a member of the city's Human Rights Commission and active in the Quota Club, an international service organization. Ms. Owens describes herself as a woman motivated by challenges. As a volunteer with the Sioux City Police Department, Ms. Owens took the initiative to develop a program to provide domestically abused women with cellular phones so they could better protect themselves. She also spent a series of weeks attending the Sioux City Police Citizens Academy where she was trained on the responsibilities and challenges facing police officers. Ms. Owens' concern for her family is also a driving force for her involvement. Her desire to play an active role in her mother's care prompted Ms. Owens to join the care review board at the care center where her mother lived. Although Ms. Ownens' mother passed away 5 years ago, she is still involved as a resident advocate, currently serving as the chairperson for the care review committee. She visits with the residents at least once a month and works with staff to take care of any problems at the center. Ms. Owens has six grandchildren and one great-grandchild. Her concern for their education motivated her to become a member of the Board of Education equity committee. She is currently the chairperson of the committee. Her mission is to ensure that education in Sioux City is equally and equitably dispensed to all students. Beyond her community involvement, Ms. Owens enjoys raising tomatoes, reading, and feeding the birds, squirrels and rabbits. She lives with her cat Mr. Roberts and her dog Jordan. I thank Ms. Owens for helping to make Sioux City a better place to live. Her initiative and compassionate care for others is an example to us all that we should contribute to our communities, no matter what our age. I yield the floor and suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, now I know who I have to thank that I can get 5 minutes. So I thank the Senator from Alaska. But in show of my appreciation, I say to him that on the matter he spoke about in relation to our energy needs, I look forward to helping solve a great deal of our energy issues because through our Committee on Finance we will be dealing with a lot of tax issues that deal with the efforts to spur production and alternative energies. A very big part of your program that you have introduced--and we compliment you for being a leader in trying to solve the energy crisis--will be the work of the committee on which the Senator and I serve. I will be very happy to work on that.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, last month I held a hearing on the Ecstasy problem affecting today's youth. At that hearing the White House released a Pulse Check report on drug trends over the past year. I would like to draw my colleagues' attention to the information in this report. Drug use in our nation is still increasing. The Pulse Check report found that for most drugs, the availability and usage has been getting worse. It is clear we must take further steps to combat this increase in availability. The report included information collected from cities all over the country, both urban and rural. It found that heroin use is increasing relative to cocaine. The availability of heroin has been increasing. In fact, drug experts reported that heroin is readily available on our streets, and about half of these experts stated that access to heroin is getting easier. Heroin purity is also increasing, especially as Colombian white heroin is showing up on our door. One major trend found across the nation is that more and more young people are taking up heroin. This is a scourge that must be stopped. There is another drug that's devastating our young people: Ecstasy and other so-called ``club drugs.'' The report highlighted the dramatic increases in use, particularly among teenagers. Eighteen of twenty cities in the report found Ecstasy to be an emerging concern. Ninety percent of drug treatment and law enforcement experts attest that the availability of Ecstasy has increased in the past year, in spite of all the attention it's been given. It's time we stop just talking about this problem that's destroying our youth, and start taking real action to educate our children and stop the easy availability of this drug at parties and clubs and increasingly in our schoolyards. Use of other drugs remain at high levels. Marijuana is still widely available, and law enforcement officials regard marijuana as a major threat to our cities. Cocaine, crack, methamphetamine, and other drugs are also increasing in availability and presenting a growing threat to our law enforcement personnel and to all Americans. The Pulse Check report found that the one trend that transcended all drugs was that the users were increasingly likely to be younger people. The age of onset of use is dropping. This heightened assault on our young people cannot be allowed to continue. We must stop the drug trafficking in our schools and near our children. There were a few positive signs in the report, however. Crack and marijuana use seem to be leveling off, and it appears our efforts are beginning to work in these areas. More effort should be placed in these areas so we do not lose any momentum in fighting these drugs. I received another report, from the Pew Research Center, that discusses the American people's feelings on the drug war. Pew reports that 74 percent of Americans feel that we are losing the drug war. Drugs also ranked as the number one concern for rural areas, such as my home state of Iowa. This is an issue that clearly affects everyone; there is no place left to hide from this scourge. Americans are worried about this problem, and with good cause. I wish I had more good news to report, but unfortunately the drug problem remains serious. Drug use is up sharply among our youth, and availability of most drugs is increasing as traffickers are increasing the flow of drugs into our country and into our schools. Bold steps must be taken to let our children know the risks of these drugs, while also stopping the pushers before they reach young people.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to commend Farmland Industries for their leadership in educating farmers on the importance of international trade, through the program ``Support Trade, for Farmers, For Farmland, For You.'' I also congratulate them for receiving the 2001 National Agri-Marketing Association's award for Best of Show. I ask that the letter of congratulations I sent to Farmland Industries be printed in the Record. The letter follows. United States Senate, Committee on Finance, Washington, DC, May 2, 2001. Mr. Robert Honse, President & CEO, Farmland Industries, Inc., Kansas City, MO. I recently read that Farmland's trade education program, ``Support Trade, For Farmers, For Farmland, For You'' was selected to receive the 2001 National Agri-Marketing Association's award for Best of Show. Congratulations on this impressive achievement! Farmland Industries clearly understands the important role of international trade to the agriculture industry. As the only working family farmer in the United States Senate and Chairman of the Senate Committee on Finance, I also appreciate the importance of international trade to America's farmers. International trade has a significant impact on my home state of Iowa, with agriculture exports contributing more than $5 billion a year to Iowa's economy. Nationwide, approximately $6 million in agriculture products, such as grains, oilseed, cotton, meats, and vegetables are processed for export every day. These exports generate more than $100 billion in total business activity, and sustain nearly a million American jobs. Trade is vital to the United States economy generally, and to our farmers in particular, as agriculture makes an enormous and valuable contribution as our third largest export. Increased market opportunities in agricultural trade are of tremendous importance to American farmers and to our economy. That is why I applaud your efforts to inform and mobilize the farming community in support of open markets. The ``Support Trade'' program sponsored by Farmland Industries, and the communications team led by Sherlyn Manson and David Eaheart, addressed a vitally important issue through a program that has informed and enlightened farmers at the grassroots level on the importance of international trade. You are to be highly commended for your leadership. Too few companies appreciate the importance of trade education at the grassroots level. Farmland Industries is truly a leader whose example I hope others will emulate. I look forward to working with you during this session of Congress as we address such important international trade issues as renewing Trade Promotion Authority for President Bush, continuing normal trade relations for the People's Republic of China, passing normal trade relations for Vietnam, and preparing for the launch of a new round of World Trade Organization negotiations this November. Again, congratulations for your selection as the recipient of the 2001 National Agri-Marketing Association's Best of Show. Sincerely, Charles E. Grassley.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to apprise the Senate of a very distressing development. Today marks Tax Freedom Day, the day when Americans will finally have earned enough money to pay off their tax bills for the year. This year's Tax Freedom Day marks the longest period Americans have ever had to work to pay their taxes. It is astounding that every hour worked since the beginning of this year will go solely to pay America's tax bills. The average American is shouldering a heavier tax burden than ever before. This year, Americans will work longer to pay for Government than they will to pay for food, clothing and shelter combined. Congress has got to put a stop to this. I am pleased to report that Senator Baucus and I, and the other members of the Senate Finance Committee, are right now working on a tax cut bill that will provide a real reduction in income taxes. With $1.35 trillion, we can now produce income tax cuts large enough that working Americans will actually see a difference in their paychecks. So what has caused the lengthiest Tax Freedom Day in our Nation's history? It was the Federal individual income tax increases enacted in 1993. And here is the proof. The Tax Foundation is the nonpartisan, nonprofit policy group that calculated today's Tax Freedom Day. The Tax Foundation's analysis shows that the Federal tax burden grew by 14 days' pay between 1992 and 2001. That means that because of the 1993 tax increases, Americans now have to work an additional 2 weeks just to meet their Federal tax burden. That is equal to some Americans' vacation pay. In stark contrast, the Tax Foundation says State and local tax burdens remained virtually unchanged during this period. So the culprit in creating the longest Tax Freedom Day in history is the Federal Government. The biggest source of Federal revenue is the individual income tax. Over the past decade Federal tax collection levels for payroll taxes, corporate taxes, and all other taxes have been relatively stable. Collections of individual income taxes, however, have soared. In 1992, tax collections from individual income taxes were 7.7 percent of our gross domestic product. That percentage has risen steadily each year, and as of the year 2000, it was an astounding 10.2 percent of GDP. Individual income taxes now take up the largest share of GDP in history. Even during World War II, collections from individuals were 9.4 percent of GDP, nearly a full percentage point below the current level. The source of the current and projected tax surpluses is from the huge runups in individual tax collections. And that has given us the lengthiest Tax Freedom Day in our Nation's history. Yesterday, the members of the Finance Committee met informally to discuss what everyone thinks should be in the tax cut package. I think there was a nearly unanimous agreement that individual income tax rates are simply too high. Senator Baucus and I are working hard to put together a bipartisan tax cut package. I ask Members of the Senate and the American public to support our efforts. Our quest for real tax rate reduction is sincere and urgent. With an uncertain economy and excessive Federal tax collections, America needs action and it needs it now. American taxpayers expect us to deliver tax relief and we must not fail them. As I stand here today, I pledge to you that as chairman of the Senate Finance Committee, I will do everything in my power to ensure that next year's Tax Freedom Day will not mark the longest period Americans have to work to pay their taxes. And I am confident that my Democratic colleagues will join us in supporting this goal.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as chairman of the Senate Caucus on International Narcotics Control, I rise to commend the counterdrug efforts of the National Guard. The National Guard performs vital work to assist law enforcement with interdiction/eradication operations, including the manufacture, sale, use and importation, and demand reduction for drugs throughout our country. Every day the National Guard has approximately 3,600 personnel on duty performing counterdrug work. The National Guard supports the President's counterdrug priorities, with special emphasis along the Southwest Border and designated High Intensity Drug Trafficking Areas (HIDTAs). In addition, the Governor of each State can assign the National Guard to unique local issues. Skills the National Guard brings include personnel, specialized vehicles and military equipment, logistical support, thermal imaging, intelligence analysis, translation, searching cargo containers at ports of entry, and listening/observation posts. Federal agencies typically supported include the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), the Customs Service, and the Border Patrol, while State and local agencies include highway patrols, country sheriffs, and local police departments. The Department of Defense is prohibited by U.S. Code Title 10, under the Posse Comitatus Act, from military personnel enforcing State and local laws. The National Guard, under its United States Code Title 32 status, does not have this prohibition, although National Guard regulations do not allow direct involvement in law enforcement, such as arrest, apprehension, search and seizure. Since 1988, the Governor of each State submits a plan each year to the Department of Defense outlining the proposed use of the National Guard in support of counterdrug efforts. Currently, about 50 percent of the requests are able to be funded. The National Guard also has an active demand reduction mission geared to helping youth avoid starting to use illegal drugs. These programs include involvement in schools and working with parent and community based anti-drug organizations. National Guard personnel serve as excellent citizen-soldier role models and also assist with mentoring, speakers bureaus, Adopt-A-School, Red Ribbon, and PRIDE events. Last year the National Guard had contact with tens of thousands of youth. I am proud of the role the National Guard and its citizen-soldiers performs in our vital counterdrug programs.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce important tax legislation to help address the current energy shortage in our country. The legislation, entitled the ``Growing Renewable Energy for Emerging Needs [GREEN] Act,'' will extend and expand the tax credit for homegrown, clean-burning, renewable biomass. As many of my colleagues know, I authorized the section 45 credit in the Senate and it was included in the Energy Policy Act of 1992. However, the tax credit for the production of energy from biomass is set to expire on January 1, 2002. For this reason, I am introducing legislation to extend and expand the credit to help sustain the many benefits derived from biomass. Last month, I introduced S. 530 to extend the wind energy portion of section 45, which has been extremely successful. The purpose of today's bill is to extend and expand the biomass portion of section 45 to include technologies such as biomass combustion and cofiring biomass with coal-fired facilities. Formerly, section 45 only allowed the use of closed-loop biomass. The clean, controlled combustion of biomass, which consists of sawdust, tree trimmings, agricultural byproducts, and untreated construction debris, is another proven, effective technology that currently generates numerous pollution avoidance and waste management public benefits across the nation. In addition, biomass energy displaces more polluting forms of energy generation while decreasing our dependence on foreign oil. Our national security is currently threatened by a heavy reliance on foreign oil. Biomass can also produce enormous economic benefits for rural America. Rural economies will grow because of the development of a local industry to convert biomass to electricity. Moreover, studies show that biomass crops could produce between $2 to $5 billion in additional farm income. In order to retain the environmental, waste management, and the rural employment benefits that we could receive from the existing ``open- loop'' biomass facilities, my bill rewrites section 45 to allow tax credits for clean combustion of wood waste and similar residues in these unique facilities. Importantly, we have also ensured that the definition of qualifying biomass materials is limited to organic, nonhazardous materials that are clearly proven to burn cleanly without any pollution risk. Also, to allay any concern that biomass plants might burn paper and thus possibly jeopardize the amount of paper that is available to be recycled, I have specifically excluded paper that is commonly recycled from the list of materials that would qualify for the credit. I believe this bill provides a common sense combination of current and new technologies to help maintain the economic, environmental and waste management benefits derived from biomass power. The current electricity shortage in California and the soaring prices of home heating fuel and natural gas this winter are reasons enough to support and accelerate this renewable energy. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce important tax legislation to help address the current energy shortage in our country. The legislation, entitled the ``Growing Renewable Energy for Emerging Needs [GREEN] Act,'' will extend and expand the tax credit for homegrown, clean-burning, renewable biomass. As many of my colleagues know, I authorized the section 45 credit in the Senate and it was included in the Energy Policy Act of 1992. However, the tax credit for the production of energy from biomass is set to expire on January 1, 2002. For this reason, I am introducing legislation to extend and expand the credit to help sustain the many benefits derived from biomass. Last month, I introduced S. 530 to extend the wind energy portion of section 45, which has been extremely successful. The purpose of today's bill is to extend and expand the biomass portion of section 45 to include technologies such as biomass combustion and cofiring biomass with coal-fired facilities. Formerly, section 45 only allowed the use of closed-loop biomass. The clean, controlled combustion of biomass, which consists of sawdust, tree trimmings, agricultural byproducts, and untreated construction debris, is another proven, effective technology that currently generates numerous pollution avoidance and waste management public benefits across the nation. In addition, biomass energy displaces more polluting forms of energy generation while decreasing our dependence on foreign oil. Our national security is currently threatened by a heavy reliance on foreign oil. Biomass can also produce enormous economic benefits for rural America. Rural economies will grow because of the development of a local industry to convert biomass to electricity. Moreover, studies show that biomass crops could produce between $2 to $5 billion in additional farm income. In order to retain the environmental, waste management, and the rural employment benefits that we could receive from the existing ``open- loop'' biomass facilities, my bill rewrites section 45 to allow tax credits for clean combustion of wood waste and similar residues in these unique facilities. Importantly, we have also ensured that the definition of qualifying biomass materials is limited to organic, nonhazardous materials that are clearly proven to burn cleanly without any pollution risk. Also, to allay any concern that biomass plants might burn paper and thus possibly jeopardize the amount of paper that is available to be recycled, I have specifically excluded paper that is commonly recycled from the list of materials that would qualify for the credit. I believe this bill provides a common sense combination of current and new technologies to help maintain the economic, environmental and waste management benefits derived from biomass power. The current electricity shortage in California and the soaring prices of home heating fuel and natural gas this winter are reasons enough to support and accelerate this renewable energy. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as chairman of the Senate Caucus on International Narcotics Control, I rise to highlight some of the recent interdiction and investigative successes by the men and women of the Drug Enforcement Administration, DEA, the United States Customs Service, the United States Coast Guard, and the National Guard. These men and women, and their agencies, are dedicated professionals committed to protecting our great nation from the devastating affects of the illegal drug trade. They are frequently called to place their lies in harm's way in an effort to keep our national secure. As announced by the Attorney General in January 2001, DEA successfully concluded a 10-month narcotics trafficking investigation named Operation White Horse, that involved the movement of heroin by ``swallowers'' from Colombia to the United States via the cities of Philadelphia and New York. Sixty-five members of the organization, from the Colombia headquarters of the street-level dealers, were arrested in what was described as a ``wholesale dismantling'' of the smuggling organization. The United States Customs Service also had an impressive spring 2001, including a recent week on the Southwest border that netted 61 drug seizures, yielding 5,449 pounds of marijuana and 82 pounds of cocaine, as well as 16 export violations, 6 seizures of prohibited medications, and additional seizures of undeclared merchandise, stolen vehicles, counterfeit credit cards, and illegal fireworks. The Customs Service is rapidly distinguishing itself with the front-line use of X-ray, Gamma- ray, and other non-intrusive technologies at their inspection stations and ports of entry. Customs also completed major domestic and international child pornography cases involving Germany and Russia, as well as continued interdiction of large amounts of the drug Ecstasy. Coast Guard successes, supported by the Department of Defense, include a 6-day period in February 2001 when it seized 28,845 pounds of cocaine and arrested 24 smugglers, on numerous vessels in both the Caribbean and Eastern Pacific. To date, the Coast Guard has seized 60,636 pounds of cocaine, 20,194 pounds of marijuana, as well as interdicted 1,681 illegal migrants at sea, all in a period of 10- percent operational reductions due to budget constraints. Finally, I appreciate the superb job the National Guard does in operating the four domestic counterdrug training schools, and hopefully soon a fifth one in Iowa, throughout the country that provide much needed training of Federal, State, local, and community personnel in various counterdrug topics. I am extremely proud of these successes and the personnel involved. As we consider the budgets for these agencies in the weeks ahead, we need to remind ourselves from time to time that it is real, flesh-and- blood individuals out there on the front lines and not bland numbers on spreadsheets and in our briefing books. Their commitment does us all proud.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today along with Senators Baucus, Graham, Hatch, Breaux, Murkowski, Kerry, Jeffords, Torricelli, Kyl, Lincoln, Hutchinson, Johnson, Hagel, Durbin, Gregg, Schumer, Hutchison, Bayh, Chafee, and Reid to introduce bipartisan legislation intended to help Americans build a more secure retirement. Many of these members, such as Senator Graham, Hatch, Breaux, and Jeffords have been engaged in pension reform issues for many years. Others bring new energy to the pension reform debate. I want to take a moment to thank them all for their hard work and enthusiasm in this bipartisan effort. For five years now, Senate Finance Committee has worked on this comprehensive pension reform legislation. In the last Congress, we came very close to enacting it into law. For example, the Finance Committee unanimously reported out the bill in early September 2000. While our bill was not considered on the floor, my colleagues and I are not discouraged. We have built on the work from the last five years in crafting the Retirement Security and Savings Act of 2001. Many baby boomers will enter retirement ill prepared for the potentially high costs of supporting themselves. Inflation alone can siphon money from a fixed income, reducing a retiree's standard of living. So it is important to have a considerable sum saved for one's postemployment years. A fixed income for a worker who retires today will have half the purchasing power 20 years from now, assuming the historical average rate of inflation of 3.25 percent. Having adequate retirement savings can protect against inflation and other unexpected costs. Savings rates are at an historical low, but this bill will provide the incentives individuals need to boost their savings rates. The Retirement Security and Savings Act of 2001 has six titles: individual retirement arrangements; expanding coverage; enhancing fairness for women and families; increasing portability for participants; strengthening pension security and enforcement; and reducing regulatory burdens. Let me highlight a few provisions from each title. The limit on annual contributions to an IRA has not increased in twenty years. If the contribution limit kept up with inflation, individuals would now be able to contribute around $5000 to an IRA each year. Our bill would increase the maximum contribution limit from $2000 to $5000 and adjust that limit for inflation. The Retirement Security and Savings Act of 2001 would also eliminate the marriage penalty applicable to contributions to a Roth IRA. The income limits for contributing would now be increased so that the applicable limit for married couples is twice the limit for single taxpayers. The Small Business Administration reports that, small businesses employ 52 percent of the private sector labor force. An amazing 75 percent of new jobs are created by small businesses. Yet less than 20 percent of small business employees are covered by a retirement plan of any kind. By contrast, approximately 70 percent of employees who work for larger firms are offered a retirement plan. We work to address this disparity in the bill by making pension plans more attractive to business owners. The limitations on annual contributions to 401(k) plans would increase from $10,500 to $15,000. The SIMPLE limit would increase to $10,000. We know that pension plans are bought and not sold. In a voluntary system such as ours, retirement plans must be attractive to the business owner in order for him or her to establish a plan in the first place and maintain it over many years. These higher limits help to make qualified plans more attractive, relative to non- qualified plans. When a business establishes a qualified plan, workers benefit, as well as business owners. The bill would also help defray the administrative costs of setting up a retirement plan by offering a partial tax credit of the costs associated with starting a plan. Furthermore, the bill would provide an additional credit for small business employers who make an employer contribution to the new retirement plan for the benefit of non-highly compensated employees. These credits have the potential to expand coverage among small businesses and we hope they will help us to accomplish that objective. This bill also encourages lower or middle income individuals, to save for their retirement by establishing a retirement savings tax credit. This non-refundable credit will be equal to 50 percent of up to $2000 in contributions for a married couple with an income up to $30,000, and $15,000 for an individual taxpayer. Our goal with this provision is get people, especially young people, in the habit of saving. The Retirement Security and Savings Act of 2001 would encourage small businesses to start a retirement plan for their employees by eliminating unnecessary administrative complexity in the top heavy rules. Top heavy rules that apply only to small businesses and, according to an Employee Benefits Research Institute, EBRI, survey, are the number one regulatory reason why small business owners do not start a pension. While the language in this bill may not go as far as many would like, the changes we have made are a step in the right direction. Women tend to be somewhat more at risk of living in poverty as they age. There are many causes for this trend. For example, women may have breaks in service to care for young children or for elderly family members. Consequently, we hope this legislation will help women workers more saving options despite periodic departures from the paid workforce. The Retirement Security and Savings Act partially restores the artificial limits on how much people can save in their employer's pension plan. One of the most burdensome provisions in the Internal Revenue Code is that 25 percent of compensation limitation contained within section 451(c). Under section 415(c), total contributions by employer and employee into a defined contribution plan are limited to 25 percent of compensation or $35,000, whichever is less. But the retirement savings vehicle available for most private sector workers is the 401(k) plan where the maximum amount a worker can save is currently $10,500. Thus, a workers who makes $40,000 annually could only save $10,000, but not the additional $500 allowed by the rules in the Code. My colleagues and I see section 415(c) as an artificial barrier to saving of ordinary Americans and believe the 415(c) limit should be removed. Our bill also allows catch-up contributions for contributions to defined contribution plans and IRAs. The provision is applicable only to individuals age 50 and older--aiding many who may have started saving late in life or after other major financial obligations were out of the way such as paying down mortgages or sending children to college. It may also help those who were not in the paid labor force while they took time off to care for young children or ailing family members. This provision is also important for those who save for retirement only through an IRA. As I said a moment ago, the limits on IRAs have not escalated for twenty years. IRA savers have lost out on twenty years of contributions and earnings on those contributions that presumably would have been made had the limits increased with inflation as they do in other plans. Under current law, certain workers who save in section 403(b) plans or 457 (or in some cases a 401(k)) deferred compensation plans for state and local government employees are allowed to make catch-up contributions for a period of time prior to their retirement dates. I know of no justification why catch-up contributions should not be allowed for all types of defined contribution plans. One complaint that plan administrators in the 403(b) and governmental (both 457 and 401(k)) plans have made is that the rules concerning when such catch-up contributions can be and how they must be made are cumbersome. Those plan experts advocate a greatly simplified framework for allowing catch-up contributions such as the one in our bill. Under current law, an employer may require up to five years of service before an employee is entitled to employer's matching contributions to its retirement savings plan. The legislation would reduce the maximum number of years of service required to vest the employer's matching contributions to only three years. A shorter vesting requirement would ensure that more short-service workers will have a vested right to their employers' matching contributions. Thus, larger accounts will be available to be saved for retirement despite frequent job changes. The legislation also contains proposals which promote retirement savings plan portability. The lack of portability among plans is one of the weak links in our current retirement saving system. This is an especially difficult problem for our public employees for whom current law does not permit rollovers. A police officer or firefighter who leaves public service at age 50 or 55 and begins another career in the private sector, may not transfer savings to his or her new plan even if the new employer's plan would accept them. Our bill would change this. It removes unnecessary obstacles to portability for all types of plans in the governmental, not-for-profit and the for-profit sectors of our economy. In addition, this bill allows public sector workers to take benefits from a defined contribution plan and by service credit in their defined benefit plan. For example, many school teachers who move from one school district to another may not accrue sufficient years of service in their defined benefit plan to obtain the maximum benefit they need to retire. Yet many school teachers are good savers. They discipline themselves and save regularly in their defined contribution plans. Our bill will permit those employees who choose to do so, to ``purchase service credit'' in the defined benefit plan offered by their employing agency. It is said that knowledge is power. Knowledge about an individual's pension benefits gives him or her the power to plan for retirement and correct errors before they enter retirement. The legislation would require that plan sponsors provide benefit statements to their participants on a periodic basis. For defined contribution plans, the statement would be required annually. For defined benefits plans, a statement would be required every three years. However, employers who provide an annual notice to employees of the availability of a benefit statement would not be required to provide automatic benefit statements to all employees. The bill also simplifies and repeals some of the legal requirements that burden plans and increase costs for employers who sponsor pension plans. For example, the legislation seeks to repeal the full-funding limit that is imposed on defined benefit plans. This limit prevents employers from funding their defined benefit plans based on the current liability. This depressed funding level threatens the ability of employers to pay benefits, especially as the Baby Boom begins to retire. This bill will also adjust the section 415 limits that have harmed many participants in multiemployer pension plans over the years. It will also provide a default option for a rollover to an IRA for certain involuntary cash outs. This is our first look at ways to reduce plan leakage. In the case of a significant restructuring of a pension plan benefit formula, the Retirement Security and Savings Act of 2001 would require that affected recipients be given a benefit estimation tool kit. This would allow pension plan participants to easily determine how their individual benefits would be altered. The bill also directs the Treasury Department to study on the long-term effects of the trend of restructuring retirement plans. To reduce the burdens of plan compliance, and to encourage voluntary compliance, the legislation includes a number of proposals intended to peel away at the layers of laws and regulations that add costs to plan administration, but don't add many benefits. The legislation would repeal unnecessary rules bogging down pension administration, such as the multiple use test and the same desk rule. Moreover, mistakes made in administering a pension plan are often inadvertent. The IRS would be directed to simplify and expand its voluntary compliance resolution system. The Retirement Security and Savings Act of 2001 has considerable bipartisan support. Furthermore, over the years that it has been pending, this legislation has received the support of over 100 organizations. These organization include business groups and labor unions; large companies and small companies; private sector organizations and organizations representing government employees and many individuals. Few bills in the Senate can claim the diversity of support from organizations that traditionally don't agree on policy that the Retirement Security and Savings Act of 2001 enjoys. I am proud of this fact. I think it is the clearest signal that we need to enact comprehensive pension reform this session. I am happy to add one more organization to the list of organizations supporting the Retirement Security and Savings Act of 2001. Horace Deets, Executive Director of AARP sent a letter to me this week expressing AARP's support for the legislation. I will work to pass this critical piece of pension reform legislation this Congress. I urge my colleagues who have not already done so, to support the Retirement Security and Savings Act of 2001 and help Americans build a more secure retirement. I ask unanimous consent that the text of the Retirement Security and Savings Act of 2001 be printed in the Record.

Mr. GRASSLEY. Yes, I would be pleased to work with the Senator from Texas on this matter, and pledge my good faith to give serious consideration to including language that meets her concerns in an appropriate tax bill in the near future.

Mr. GRASSLEY. Mr. President, today I rise to introduce the Enrolled Agent Credentials Protection Act. This legislation would make it clear that Enrolled Agents have the right to use their federally granted credentials, by making it clear that states shall not restrict enrolled agents from using the words ``Enrolled Agent'' or the abbreviations ``EA'' and ``E.A.'' A number of states have enacted laws that restrict the right of Enrolled Agents to use their credentials or designations as Enrolled Agents. The Supreme Court has held in similar situations that because the Federal Government grants the license, restricting its use is an unmerited exercise of state powers. This legislation is consistent with the Uniform Accountancy Act, Third Edition, as drafted by the American Institute of Certified Public Accountants and National Association of State Accountancy Boards. Enrolled Agents have been providing valuable services to taxpayers since 1884. Since that time, the profession has evolved and now includes preparing and advising on tax returns for individuals, partnerships, corporations, estates, trusts and any entity with tax- reporting requirements. They also provide affordable representation to individuals and small businesses with disputes before the Internal Revenue Service. At present, there are approximately 35,000 Enrolled Agents in the country providing practical and affordable tax service to taxpayers. Enrolled Agents are highly qualified tax professionals. While certified public accountants and licensed attorneys also represent taxpayers before the Internal Revenue Service, only Enrolled Agents are required to demonstrate to the IRS their technical competence in the field of taxation. In order to maintain their status as Enrolled Agents, they must take 72 hours of continuing professional education, reported every three years to the IRS. Because Enrolled Agents focus on federal taxes and tax administration, they are able to keep on the forefront of current changes in the law and regulations. The Enrolled Agent designation dates to the Enabling Act of 1884 and the profession is regulated by Treasury Circular 230, the same body of regulations that governs the practice of attorneys and certified public accountants before the Internal Revenue. This bill would restate the statutory validation that Enrolled Agents hold and allow them the right to use their credentials as Enrolled Agents. In doing so, this bill does not add to the powers that Enrolled Agents currently maintain, nor would it affect the rules and regulations provided for in Treasury Circular 230. Section 10.30 of Circular 230 authorizes Enrolled Agents to advertise and display their ability to practice before the IRS provided the designation is not misleading or deceptive to the public. Neither Congress nor the Treasury Department ever intended for states to interfere with the right of Enrolled Agents to inform taxpayers that they hold a license to practice before the Internal Revenue Service.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I thank the Senator for what he thinks is a clarification. But he, I think, makes my point. They have reserved some money, but when you add all of their proposals, and when you take into consideration the AMT, and when you also take into consideration their votes on bipartisan tax proposals, there is no way that you are going to squeeze that into their numbers. Let me tell you, we have had problems on this side of the aisle. Even if we go at $1.6 trillion, there is going to be a difficulty squeezing everything in. But we have a problem of having the greatest amount of flexibility that we can. Now, as has been said, the Democratic budget number of $900 billion does not even accommodate their own tax priorities. I believe Senator Breaux knows that. I think those who have proposed numbers in the range of $2 trillion to $2.4 trillion are also pushing the wrong number. That tax cut number doesn't balance our priorities in paying down debt and targeted spending increases. Senator Breaux's number is better than the Democratic number because it allows more tax cuts to be addressed. However, it does not have enough room. Unlike the Democratic number, Senator Breaux's number might be enough to cover Democratic priorities, plus a little bit more; but it would ignore the President's priorities. So I believe the number that the President has proposed is appropriate but not just because he proposed it. It is appropriate because it will allow us to accommodate the bipartisan tax cut priorities before us. Senator Baucus and I will need the full $1.6 trillion to make the tax cuts for all of you, through these votes and through these proposals, have indicated that you are interested in, and to make it work. The Democrat side has said they want bipartisan legislation. So in order to do that, the Finance Committee will need $1.6 trillion in tax cut relief authority from the Senate through the budget resolution. I also think that many in this body are looking at the number too much in terms of a win or loss for President Bush. This is true of Republicans, who tend to look at the $1.6 trillion number, or anything higher, as a win for the President. Democrats are looking at anything less than that number as somewhat of a loss for the President. Democratic leaders, budgetwise and their elected leadership, have been explicit in this objective. They have worked very hard to try to defeat the President's tax cut. All the amendments we have been voting on take money from the tax cut, which indicates that is their strategy. We ought to look at the numbers in terms of the tax cut agenda, including the President's proposal, the bipartisan and the bicameral proposals and, of course, the Senate's own proposals. Senator Breaux's amendment, while well intentioned, does not provide the Finance Committee with the tools necessary to do the job of delivering bipartisan tax relief to the American people. I want to bring this down State by State. All politics is local, we are told. The Treasury Department has released data showing the number of individual tax returns on a State-by-State basis that will benefit from the President's tax relief plan. These returns are a mix of married couples filing jointly, single return filers, and heads of household. The data is significant for all Senators. For example, in my home State of Iowa, over 1 million individual returns would benefit under the President's plan. If even half of those returns are married filing jointly, that means over 1.5 million people in my State will receive a tax benefit from the President's plan. The numbers are even greater for larger States. For example, the number of individual returns that would receive a tax benefit under the President's plan in: Arkansas, 787,000; California, 11 million; Florida, 5.5 million; Georgia, 2.7 million; Illinois, 4.5 million; Louisiana, 1.3 million; Missouri, 1.9 million; Nebraska, 631,000; New Jersey, 3.2 million; New York State, 6.5 million; North Carolina, 2.7 million. Keep in mind that these numbers I just listed are the number of individual tax returns. If a substantial portion in each of these States were married filing jointly, the number of taxpayers benefiting under the President's plan could nearly double. The number of individual taxpayers benefiting under the President's proposal is simply too big to ignore; unless, of course, we focus on the smaller States that do not file as many individual tax returns. For example, North Dakota has only 230,000 individual returns filed. South Dakota has only 236,000 returns; Maine, 465,000; Rhode Island, 385,000; Vermont, 232,000. Perhaps the tax benefits offered by the President's plan are not relevant to these smaller States. Those taxpayers do not really count, but they certainly count in my State, and I suspect they count in many of the other States as well. An interesting study was recently released by the Tax Foundation, a nonpartisan tax-exempt organization. I yield myself 5 more minutes.

Mr. GRASSLEY. May I do this one quote and then I will quit.

Mr. GRASSLEY. Yes, I will yield on his time.

Mr. GRASSLEY. I would like to have 25 minutes.

Mr. GRASSLEY. I am not going to go through this chart, but one can see we list the benefits of the households in the States, so one can see there is tremendous benefit and savings to the people living in these States. Just think what these families can do with those dollars if we let them keep their hard-earned money instead of taking it away to squander in Washington. For example, I know the cost-of-living in California is high, but $15,800 in the pockets of the average household in that State would buy quite a bit. If they decide to pay down early on their 30- year mortgage, the interest saved would save them a tremendous number of house payments. It can buy kids clothes, family vacations. Let the family decide how to spend it. The tax savings offered to the residents of each State is laid out in these charts, and I hope our constituents in each of these States hold us accountable to provide tax savings. It is time to wrap up the debate on whether the Finance Committee will have an opportunity to cut taxes up to $1.6 trillion over 10 years. I underscore the word ``opportunity'' because that is what this debate is all about: the opportunity for a tax cut. This vote is not about what the tax cut contains. That debate and vote will come later. That debate and vote comes when the Finance Committee marks up tax cut legislation. This vote is about whether we will consider the tax cut under reconciliation. Reconciliation plain and simple, as we sit here today, is the only way we are going to get a tax cut for the American people in a timely manner. There have been strong statements made by some on the other side about tax cuts and reconciliation. From the tone of the statements, one would think that a reconciled tax cut is a new event. We have gone through the history of it, and I do not want to repeat that history. It has been discussed between the Senator from New Hampshire and the Senator from New Mexico to a great extent, but I think it boils down to the question of cooperation and shared responsibility. A 50/50 Senate means shared power and, just as important, shared responsibility. The Senate today is operating under a historic powersharing arrangement reached on January 5, 2001. Republicans following our leader yielded a significant concession to the Democrats. What did we get in exchange? What we got was, as Senator Lott put it, a good-faith promise on the part of Democrats to cooperate. In the Senate Finance Committee, I have had this sort of cooperation from Senator Baucus, and we will continue to do it. However, the opponents of Senator Domenici's amendment depart from the spirit of that historic agreement. In 1993, with a new President and majorities in both Houses, Democrats used reconciliation to raise taxes. Democrats in 1993 used reconciliation within their right to further their President's program, a partisan-designed major tax increase. Eight years later, we are faced with a similar situation, though I am hopeful more than one Member of the other side will support us. Republicans, by a razor-thin edge, have control of Congress and the Presidency. The core of President Bush's program, much as President Clinton's program 8 years ago, involves taxes. The difference is that President Bush wants to return a portion of the record level of income taxes to folks who pay them. Republicans did not object to use of reconciliation in 1993; Democrats should not object to Republicans' use of reconciliation today. For those of us on this side of the aisle, this is a very compelling point, especially in the context of our concession in powersharing. I want to quote Senator Byrd from West Virginia on this point. He made this point on January 5, 2001, when this agreement was reached.

Mr. GRASSLEY. Senator Byrd said: I know it has been difficult for Members, particularly on the Republican side to come to an agreement such as has been reached here, but they have been willing to give up their partisanship for the moment in the interests of the Nation. Also, it is exceedingly important--I have already mentioned it here--to George Bush. . . . It is vitally important to him, if he is to expect to see his programs considered and adopted. And hopefully, from his standpoint, certainly, and from the standpoint of many others, if he is to see those programs succeed, he-- Meaning President Bush-- is going to have to have help. He can't depend on all of it coming just from his side-- Meaning the Republican side of the aisle. He is going to have some help over here. . . . Meaning the Democrats side of the aisle. As always, Senator Byrd said it very well. At this point in history, the President's agenda, including the cornerstone of his proposed tax relief for working men and women, is tied in with his power-sharing agreement. With this power-sharing agreement that govern the operation of this Senate, this year, certainly from the perspective of those on this side of the Aisle, there is a connection. Therefore, it strikes us as particularly unfortunate that in the context of power sharing a new obstacle is raised to the use of the reconciliation process. It is particularly disappointing to this side of the aisle that this argument on reconciliation is forthcoming now. We believe the Domenici amendment should not be necessary. Reconciliation affords the President an opportunity to consider his program. It is an appropriate opportunity in the context of the history of the budget Act. It is also appropriate, and maybe more so, in the context of the power-sharing agreement governing the operation of the Senate, in this Congress, because the Senate is 50/50. A vote for the Domenici amendment is not a vote for a tax cut; it is a vote to give the Senate the opportunity we ought to have to consider such tax relief for working men and women.

Mr. GRASSLEY. The Federal Government is collecting too much in taxes. That is what is at the basis of the tax reduction package we hope to get through the Senate in a couple months. The Federal Government will accumulate over $3.1 trillion in excess tax collections over the next 10 years. Federal tax receipts are at one of their highest levels in our Nation's history. The bulk of these excess collections comes from the individual taxpayer, mostly the individual income-tax payer. Individual income tax collections are currently near an all-time high, even higher than they were at some levels imposed during World War II. So I have a series of charts I would like to have my colleagues review with me to illustrate our present situation. The first chart shows total Federal tax receipts as a percentage of gross domestic product over the last 40 years. Tax receipts have fluctuated frequently since 1960, but the most shocking spike in tax receipts began in 1993. The Congressional Budget Office's January 2001 report to Congress shows that in 1992, total tax receipts were around 17.2 percent of GDP. By the year 2000, Federal receipts had exploded to an astronomical 2.6 percent of gross domestic product. The significance of this percentage can only be appreciated by its historical comparison. In 1944, at the height of World War II, taxes as a percentage of GDP were 20.9 percent, only one-half percent higher than they are this very day. By 1945, those taxes had dropped to 20.4 percent of GDP, which is actually lower than collection levels today. It is unbelievable that in a time of unprecedented peace and prosperity, the Federal Government should rake in taxes at a wartime level. The sorriest part of this whole story is that this huge increase in taxes has been borne almost exclusively by the individual American taxpayer. As this next chart shows, over the past decade, tax collection levels for payroll taxes, corporate taxes, and all other taxes have been relatively stable. We can see that corporate taxes during the past 10 years have increased very little, from 1.6 percent of GDP to 2.1 percent, and estate taxes have remained essentially unchanged. Collections of individual income taxes, however, have soared. As this chart shows, in 1992, tax collections from individual income taxes were 7.7 percent of gross domestic product. That percentage has risen steadily each year and, as of the year 2000, was an astounding 10.2 percent of GDP. Individual income taxes now take up the largest share of GDP in history. Even during World War II, collections from individuals were 9.4 percent of GDP, nearly a full percentage point below the current levels. As we can see, the source of the current and future surpluses is from the huge runups in a single tax, the individual tax collections. These excess collections are attributable to the tax increases forced through by President Clinton in 1993. Since 1992, total personal income has grown an average of 5.6 percent per year. Federal income tax collections, however, have grown an average of 9.1 percent a year, outstripping the rate of personal income tax growth by 64 percent. The Joint Committee on Taxation, at the request of their parent committee, estimated that just repealing the revenue-raising provisions of President Clinton's 1993 tax hike would yield tax relief of more than $1 trillion over the 10 years. Democrats and Republicans alike can agree that individual taxpayers deserve relief from the Federal Government's overtaxation. President Bush has offered a plan to reduce individual income taxes across all tax rates, all brackets, and to reduce the number of brackets as well. This benefits taxpayers all across America. Now we hear, however, a hue and cry from some on the other side of the aisle that not all taxpayers should receive rate reductions. They say the President's plan disproportionately benefits upper income-tax payers and does not provide enough relief at the lower end of the income scale. There is some good news out there for those who believe that: None of those allegations are true. We need to first understand the current distribution of the tax burden in America. We have a highly progressive income tax system. According to the Congressional Budget Office, the top 20 percent of income earners pay over 75 percent of all individual income taxes. By contrast, households in the bottom three-fifths of the income distribution pay 7 percent of all individual taxes. The President's plan not only preserves this progressive system but--surprise--actually makes those top income people pay more of the percentage of income coming into the Federal Treasury, if the President's plan is adopted. To all those who are trying to engage in class warfare over the President's tax proposals, I invite them to pay attention to the next two charts. As the first of these two charts demonstrates, the President's marginal rate reductions, when combined with his increase in the child credit, the additional deduction for the lower earning spouse, and his refundable tax credit for individual health insurance, provides the greatest reduction in tax burden for lower income-tax payers. Look at the levels of reduction in tax burden shown on this chart. The upper income-tax payers receive an 8.7-percent reduction in their burden. Those at the lower end of the income scale, however, receive a 136.2 percent reduction in their taxes. This is because 4 million taxpayers will be taken off the income tax rolls. A four-person family earning $35,000 a year will no longer have any income tax burden. As this chart also shows, a large reduction of tax burden is targeted towards taxpayers making between $30,000 and $75,000 a year. These taxpayers will experience relief ranging from 20.8 percent to 38.3 percent of their current tax burden. Now, I also said the President's plan, when passed, actually makes our tax system more progressive. Look at the next chart to get the proof of that. This is a very important chart for those who will demagogue the President's proposal on the basis of income differences. As this chart demonstrates, under the President's proposal, the overall tax burden goes down for all taxpayers earning below $100,000. For taxpayers making $100,000 or more, however, their share of Federal tax burden will actually increase under the President's plan. For example, the share of the tax burden for taxpayers earning between $30,000 and $40,000 a year will drop from 2.5 percent to 1.8 percent. Similarly, for those earning between $50,000 and $75,000, the burden share drops from 12.2 percent to 11.3 percent. This is not the case, however, for taxpayers earning $200,000 or more. Their share of the overall burden will actually increase, and increase by a full 3 percent. As we can see, then, the President's plan not only retains the progressivity of our tax system, that progressivity is actually enhanced. The President's plan gives tax relief to all taxpayers, and it does so in a fair manner, one that requires more from those who are able to pay and provides the greatest relief for those most in need. There are several Members of the Senate who belong to a group called the Centrist Coalition. There is nothing wrong with that group; they are good people. They are out there to try to find compromise and to promote bipartisanship. In a time of a 50-50 Senate, you cannot knock that, and I do not. However, they have a plan on which I will comment. The Centrist Coalition is concerned that $1.6 trillion is not the right amount of tax reduction and argue that the right number is somewhere between the Democrat's number of $900 billion and the President's number, $1.6 trillion. I thank Senator Breaux, the head of the Centrist Coalition, for his efforts to find, as he says, a middle ground. Senator Breaux has a long history as one who tries to secure bipartisan consensus. He was one of the few Democrats to cross over and support the Senate tax relief plan in 1999. He is widely known for his efforts to find bipartisan consensus on Medicare. I will be relying on Senator Breaux, along with Senator Baucus, when we take up Medicare legislation later this year. Earlier this year, I accepted the centrists' invitation to join their meetings. I attended a meeting in a recent week on tax options and found it to be a very useful discussion. Senator Breaux suggests that the middle ground is splitting the difference between the President's number of $1.6 trillion and the Democratic alternative of $900 billion. If those were the only two numbers to consider, I would probably agree that his number of $1.25 trillion is pretty close to middle ground. But the reality is that the numbers range, as Senator Conrad has said, all the way up to $2.2 trillion down to $900 billion. Some of my colleagues on this side really like that $2.2 trillion number better, and I have to put water to dampen their desires, because we have to be realistic in this game. In comparing the numbers, I, like Senator Breaux, am not comfortable with either the Democrat number of $900 billion or the $2.2 trillion being thrown around by some on my side of the aisle. Unlike Senator Breaux, however, I am comfortable with the $1.6 trillion number, and this is why. I am going to run through a hypothetical calculation of a tax cut agenda and look at each number to see if it accommodates the agenda of its proponents. I want to look at Senator Conrad's number of $900 billion. Now Senators Daschle, Conrad, and the Democratic leadership have been talking a lot about their stimulus and rate cut package. Under Joint Tax scoring, that proposal loses around $506 billion over 10 years. That leaves $394 billion out of their $900 billion for other tax cuts that Senator Conrad and other Democrats say they support. The Democrat alternative on marriage tax relief, which was offered in the Finance Committee last year, contained a revenue loss of $197 billion over 10 years, without a sunset. The Democratic alternative on death tax relief contained a revenue loss of $64 billion over 10 years. So using Democratic proposals and last year's revenue loss estimates, the Democrats have less than $133 billion in surplus left. You have to keep in mind that these are only the Democrat proposals we are talking about. We have to consider that there are bipartisan tax cuts that passed either or both Houses of Congress during the past year. There is the retirement security bill that Senator Baucus and I will soon be introducing. A similar bill passed the House almost unanimously. That bill will run about $52 billion. There is a bill to repeal the Spanish-American War phone tax that passed the House last year by an overwhelming bipartisan margin, and that will run about $50 billion. Then there is the small business and agricultural tax cuts that everyone supports. That package totals over $17 billion. The education tax relief that unanimously passed the Finance Committee last month runs about $20 billion. Now, you have to add up all these bipartisan tax cuts and, when you do, we have now exceeded the $133 billion that was left in the Democrat budget. It is all gone. And we haven't even factored in their greatest objection to the President's proposal, and that is the problem with the alternative minimum tax. We have heard a lot of pointed criticism of the President's tax plan from Senators on the other side of the aisle on the issue of the alternative minimum tax. Senator Conrad has said that it takes $200 billion to $300 billion to fix the AMT problem under the Bush plan. Senator Conrad is correct that the President's plan could make the problem worse. As I have said, I intend to address that problem. The Senate Democratic stimulus and rate reduction package does nothing about the AMT problem that they have addressed and found fault with in the President's program. In fact, their legislation will make this problem worse. According to the Joint Tax Committee, the Democrats' package will subject an additional 7 million taxpayers to the AMT. So if Senator Conrad and other Senators on the other side of the aisle want to practice what they preach, they will have to raise their budget's tax cut numbers to deal with the alternative minimum tax. As they have said, that is another $200 billion to $300 billion. But at this point, after including their priorities and the bipartisan tax cuts, they don't have any surplus left to redress the AMT problem. So, as you can see, the Democratic budget number of $900 billion does not even accommodate their own tax priorities.

Mr. GRASSLEY. I believe many on the other side, like Senator Breaux, know this. I would like to finish, and then I'll respond; but I only have 25 minutes allotted.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I want to address the issue of tax cuts. It is an issue on which Republicans and Democrats all agree. We may not agree on how much taxes should be cut, but we do agree that the Federal Government is collecting too much tax. The current and projected U.S. tax receipts are far in excess of the amounts needed to operate the Federal Government. The most troubling news is that the bulk of these excess collections come from individual taxpayers. By coming from individual taxpayers, I mean through the individual income tax. The Congressional Budget Office projects that the Federal Government will accumulate over $3.1 trillion in excess tax collections over the next 10 years. These excess collections are projected at the time when overall Federal tax receipts are at one of the highest levels in the history of the country. You will see from the charts that, even worse, individual income tax collections are near an all-time high, even higher than some levels imposed during World War II. I have a series of charts to illustrate our present situation. The first chart I have shows total Federal tax receipts as a percentage of gross domestic product for the last 40 years. As you can see from this chart, tax receipts have fluctuated frequently since 1960. But they have escalated very significantly since 1993. The increase in receipts from 1965 to 1969 was attributable to the Vietnam conflict. The runup in receipts from 1976 to 1981 was caused by bracket creep, which occurs when inflation causes wages to increase, forcing people into ever higher rate brackets. We corrected the problem of bracket creep from inflation years ago. However, the most shocking spike in tax receipts began, as you can see, in 1993. The Congressional Budget Office's January 2001 report to Congress shows that, in 1992, total tax receipts were around 17.2 percent of GDP. However, since that time, Federal receipts have spiked upward very rapidly. By the year 2000, Federal tax receipts had exploded to an astronomical 20.6 percent of GDP. The significance of this percentage can only be appreciated in a historical context. In 1944, which was at the height of the buildup during World War II, taxes as a percentage of gross domestic product were 20.9 percent, only one-half percent higher than they are this very day. By 1945, those taxes had dropped to 20.4 percent of GDP, which is lower than the collection level this very day. It is simply unbelievable to me that in times of unprecedented peace and prosperity, the Federal Government should rake in taxes at a level that exceeds the level needed to defend America and the rest of the world during World War II. It simply does not make sense that the Federal Government should be collecting this record amount of taxes. As bad as what I said sounds, it is not the whole story. That is because Federal agencies are required to exclude a significant piece of Federal collections. I am talking about user fees that taxpayers pay in order to obtain Federal services. These are fees but are still money collected from the people of the United States by the Federal Government. For example, when someone visits Yosemite or Yellowstone National Park, they pay an entrance fee. Businesses are often required to pay user fees to obtain services of the Federal agencies. The dirty little secret on user fees is that, under our budget laws, they are not included as Federal receipts. Instead, they are treated as an offset to the expenses of the Federal agency collecting those receipts. So you heard me right, they never really show up on the Federal books as money that the Federal Government collects. Under this treatment, user fees, then, are a stealth receipt, one that understates Federal revenues and understates Federal outlays by offsetting the agency's operating expenses. These fees I just mentioned are not insignificant. During the year 2000, they accounted for nearly $212 billion in hidden revenue and expenses. You see on this chart that with user fees, we soon get to an unprecedented tax level of 22.76 percent of gross domestic product. The most sorry part of this whole story is that this huge increase in taxes has been borne almost exclusively by the individual American taxpayer. As this next chart shows, over the past decade, tax collection levels for payroll taxes, corporate taxes, and all other taxes have been relatively stable. Just look, every color on that chart--other taxes, corporate taxes, payroll taxes--have been constant over the last decade. But look at the very significant increase in income taxes during that period of time. Corporate taxes during the past 10 years have increased from 1.6 percent of GDP to 2.1 percent. Estate taxes have remained essentially unchanged. Collections of individual income taxes have soared. As this chart shows, in 1992, tax collections from individual income taxes were 7.7 percent of our gross domestic product. That percentage has risen steadily each year and, as of the year 2000, was an astounding 10.2 percent of gross domestic product. Any wonder, then, why the President and most Members of Congress believe there ought to be a tax cut? That is why the President and most members of his party believe there ought to be a significant tax cut and it ought to be concentrated on reducing income taxes. Individual income taxes now take up the largest share of gross domestic product in history. Even during World War II, collections from individuals were 9.4 percent of the gross domestic product, nearly a full percentage point below the current level. So, as you can see, the main source of the current and projected surpluses is from the huge runup in individual tax collections that have occurred since the passage of the biggest tax increase in the history of our country--the 1993 tax Clinton tax increase. Admittedly, some of this increase is due to our booming economy. A portion of this increase is attributable to real gains in wages, which has forced people into higher tax rate brackets. This real wage growth increase is not compensated for by the usual indexing of income tax brackets. Since 1992, total personal income has grown an average of 5.6 percent a year. In contrast, however, the Federal income tax collections have grown an average of 9.1 percent a year, outstripping the rate of personal income growth by 64 percent. That fact alone is outrageous. And it is a simple enough reason why we need to do something about individual income taxes and let American working men and women keep more of their resources. Again, this started with the biggest tax increase in the history of the country under President Clinton in 1993. The results of these increases are obvious from the charts that we have reviewed. Each chart shows a large increase in taxes from 1993 to the year 2000. The Joint Committee on Taxation, at the request of the Joint Economic Committee, estimated that just repealing the revenue-raising provisions of President Clinton's 1993 tax hike would yield tax relief of more than $1 trillion over 10 years. So I think the Democrats and Republicans alike can agree, and should agree, that individual taxpayers deserve relief from the Federal Government's overtaxation. We have a tax surplus. That tax surplus should go to the people who earned it in the first place. It should be retained by the taxpayers. It will do more economic good in their pockets than in the pockets of Federal bureaucrats and Members of Congress, and letting them make a determination of how that money is spent. Sometimes it burns such a hole in our pocket that we do not know how to get rid of it fast enough. President Bush has offered a plan to reduce individual income tax rates across all rate brackets, and to reduce the number of brackets. This benefits all income tax payers across America. We hear, however, a hue and cry from some on the other side of the aisle that not all taxpayers should receive a rate reduction. We hear that the President's plan is disproportionately benefitting upper income taxpayers, and does not provide enough relief at the lower end of the income scale. That is a bunch of baloney. We have some news for our colleagues: None of those allegations are true. To begin with, we need to first understand the current distribution of tax burdens in America. We have a highly progressive income tax system. According to the Congressional Budget Office, the top 20 percent of income earners pay over 75 percent of all individual income taxes. Now, by contrast, households in the bottom three-fifths of the income distribution pay 7 percent of all individual taxes. The President's plan not only preserves this progressive system, but it actually makes it more progressive. Now that is going to sound strange to people who have been concentrating on the rhetoric coming from the other side of the aisle that somehow only the rich are benefitting from the tax cut. But I say--and I can justify through the reports of the Joint Tax Committee--that once the President's program is passed, we are going to end up with an even more progressive system. So to all those who are trying to engage in class warfare over the President's proposal, I want you to pay special attention to the following two charts. As this first chart demonstrates, the President's marginal rate reductions, when combined with his increase in the child credit, the additional deduction for lower earning spouses, and his refundable tax credit for individual health insurance, provide the greatest reduction in tax burden for lower income taxpayers. Just see the charts. The $0-to-$30,000 categories actually come out with a 136- percent decrease in taxes. The upper income taxpayers receive an 8.7-percent reduction in their burdens. Compare a 136-percent reduction at the low income end to the high income end where the reduction is 8.7 percent. Now, there has to be some reason for a 136-percent reduction in taxes. This is because we take 4 million taxpayers off the income tax rolls. A four-person family earning $35,000 a year will no longer have any income tax burden. As this chart also shows, a large portion of tax burden reduction is targeted towards taxpayers making between $30,000 and $75,000 a year. These taxpayers will experience relief ranging from 20.8 percent to 38.3 percent of their current tax burdens. This is an important range of benefit because most small business owners and farmers operate their businesses as sole proprietorships, partnerships, limited liability corporations, or S corporations. The income of these types of entities are reported directly on the individual income tax returns of the owners, and a rate reduction for individuals reduces rates for farms and small businesses. The Department of Treasury has estimated that at least 20 million farmers and small business owners will benefit under the President's tax relief plan when it is fully phased in. Remember, I also said that the President's plan actually makes our tax system more progressive. The next chart provides the proof. This is a very important chart for those who are constantly demagoging the President's proposal on the basis of income differences. This is the class warfare that we hear about. As this chart clearly demonstrates, under the President's proposal, the overall tax burden goes down for all taxpayers earning below $100,000. For taxpayers making $100,000 and above, their share of the Federal tax burden will actually increase under the President's program. That demonstrates the statement I made earlier that based upon a Joint Tax Committee study, when the President's program is in place, the tax system will be more progressive than it is today. Now, I will give some ``for examples.'' The share of the tax burden for taxpayers earning between $30,000 and $40,000 will drop from 2.5 percent to 1.8 percent. For those earning between $50,000 and $75,000, their burden share drops from 12.2 percent to 11.3 percent. This is not the case for taxpayers earning $200,000 or more. Their share of the overall burden will increase by a full 3 percentage points. So as you can see, as I have said now for the third time, the President's plan not only retains the progressivity of our tax system, it actually enhances it. The President's plan gives tax relief to all income-tax payers, and it does so in a fair manner, one that requires more from those who are most able to pay and provides the greatest relief to those with the most need. Moreover, this tax cut is needed to redress any longstanding slowdown in the economy. No one can witness the events of the past few weeks and not be concerned about where the economy is headed. I was startled by what I read in the Congressional Budget Office's 2001 Budget Options report. The Congressional Budget Office stated that a typical estimate of the economic cost of a dollar of tax revenue ranges from 20 cents to 60 cents over and above each dollar of taxes collected. Based on these numbers, the negative economic effects flowing from the current historically high levels of overtaxation obviously cannot be ignored. We know from the Finance Committee hearing a few weeks ago that marginal rate reductions are the most efficient means of disbursing the benefits of any tax cut. Just think of the stimulative effect that could be achieved with a broad-based tax reduction that benefits all who pay taxes and targets the benefits to those who need them the most. That is what President Bush's tax plan does. I hope before this budget resolution debate is completed, we will have passed a budget resolution that gives my Finance Committee the ability and the flexibility to get the best possible tax reduction we can in a bipartisan way. I want to run through a hypothetical calculation of a tax cut agenda and look at each number to see if it accommodates the agenda of its proponents. That is the work of the Senate Finance Committee. I will look at Senator Conrad's number of $900 billion. The proposal Senators Daschle, Conrad, and the Democratic leadership have been talking about is their stimulus and rate reduction package. Under Joint Tax Committee scoring, the proposal loses $506 billion over 10 years. That leaves about $394 billion for tax cuts that Senator Conrad and others have said they support. We are talking about other bills beyond what is in their stimulus and rate reduction package. The Finance Committee's Democratic alternative on marriage tax relief without a sunset contains a revenue loss of $197 billion over 10 years. The Democratic alternative on death tax relief creates a revenue loss of $64 billion over 10 years. So using the Democratic proposals and last year's revenue estimates, which would only go up this year because of the higher revenue baseline, we have less than $133 billion left. Keep in mind, these are only the Democratic proposals we are talking about. Now let's go to the bipartisan tax cuts that have passed either or both Houses recently. There is a retirement security bill; Senator Baucus and I will soon be introducing that. That is a bipartisan bill. A similar bill passed the House almost unanimously. That bill will run about $52 billion. A bill to repeal the 104-year-old Spanish-American War phone tax passed the House last year by an overwhelming vote. That will run about $50 billion. Then there is the small business and agriculture tax cuts that everybody supports in a bipartisan manner. That package adds up to about $70 billion. Then we have the Educational Tax Relief Act that passed out of our Finance Committee unanimously in the last couple weeks. That runs about $20 billion. You have Democratic proposals that eat up more than the tax cuts they say they want. Then we have bipartisan proposals that are out there, that are very popular, and which have to fit into a package. These bipartisan tax cuts are left over from last year, and also exceed what is left in the Democratic budget. Now we have heard a lot of pointed criticism of President Bush's tax cut plan from Senator Conrad and other leaders on the other side who are handling the Democratic management of the budget resolution. We have heard them talk about the issue of the alternative minimum tax, sometimes referred to as the AMT. Senator Conrad has said it will take $200 billion to $300 billion to fix this AMT problem under the Bush plan. Remember, under current law, 10 percent of the taxpayers will have to deal with the alternative minimum tax. Senator Conrad is correct that the President's plan could make the problem worse. As I have said, our Finance Committee should be addressing that problem. Please note, however, that the Senate Democratic economic stimulus package does nothing with the AMT and will in fact make the problem worse. According to the Joint Tax Committee, by the year 2011 about 21 million taxpayers will be subject to AMT under current law. The Democratic bill will add about another 7 million taxpayers to the AMT hit. So if the Democratic leaders who make such a point of the AMT issue, then let them practice what they preach. These leaders will have to raise their budget tax cut numbers to deal with this alternative minimum tax situation. Under the tests I have laid out, the Democratic budget number does not accommodate their own tax priorities. We have all of these Democrat proposals before us. We have all the bipartisan proposals, some of them actually having been voted on by both Houses of Congress. These are all ideas that everybody wants passed. But the number put forth for tax reduction by the other political party will not accommodate all the ideas they propose. I know there are a lot of people on the other side of the aisle, such as Senator Breaux, who know this. I think those who have proposed numbers in the range between $2 trillion and $4 trillion are also pushing a wrong number. Most of those people are on my side of the aisle or, if not in the Senate, in the House of Representatives. That tax cut number does not balance our priorities of paying down the debt and targeted spending increases. I believe this brings us back to a low Democratic number that doesn't even accomplish all the tax policy they want adopted. The other extreme is people saying $1.6 trillion is not enough, it ought to be up near $2.5 trillion. This brings us to the point of President Bush's number that he proposed as being very appropriate. It is not appropriate just because President Bush proposed it. It is appropriate because it will allow us--particularly the Senate Finance Committee--to accommodate the bipartisan tax cut priorities that are before us. Senator Breaux's number is better than the Democratic number because it allows more tax cuts to be addressed. It is, however, not enough--it does not provide enough flexibility for the Senate Finance Committee to do its work. Unlike the Democratic number, though, Senator Breaux's number might be enough to cover Democratic priorities, plus a little bit more. But it would ignore the President's priorities. In considering the number, I want to give you my angle, as Chairman of the Senate Finance Committee. Senator Baucus and I need the full $1.6 trillion to make the tax cuts that all of the Members of Congress are interested in doing and may have voted on. I think that many in this body are looking at the 1.6 trillion number in terms of a win or a loss for President Bush, rather than whether it is the right policy. Many Republicans are tending to look at the number, or anything higher, as a win for the President. Democrats are looking at anything less than the number as a loss for President Bush. Senator Conrad and Senator Daschle have been explicit in their objective. They have worked very hard to try to defeat the President's tax cut. Let me give you an example. I just talked to my staff on a piece of legislation that I am trying to get budget authority for. I had 20 Democrats lined up for the Family Opportunity Act--a bill that last year had 78 cosponsors--and we are getting close to that number this year. But we weren't taking the money for the bill out of the tax cut. So the message went out: Don't help Grassley. Now, thank God, the main leader on the other side in that effort who is working with me, Senator Kennedy, has assured me he is going to be with me on what we ought to do. We are going to do the right thing. But that is how desperate the other side is to make sure that there is some victory of subtraction from the $1.6 trillion, just so the President can be defeated. We have to look at the numbers, whatever those numbers are, in terms of the tax cut agenda that is out there, including the President's and our own. So, Mr. President, when Senator Breaux's amendment comes up tomorrow, while it is well-intentioned, it just doesn't provide the Finance Committee with the tools necessary to do the job of delivering bipartisan tax relief. I want to take about 2 minutes--and then I will finish--on another item related to the recent debate. I was stimulated to give these remarks based upon the overuse of the word ``raiding''--the word ``raid'' or the word ``raiding''--like we are raiding the Medicare trust fund. I speak mostly about the leadership on the other side of the aisle. The manager for the Democrats speaks very well and very clearly. But I want to focus his attention on Webster's Dictionary. So I want to speak to Senator Conrad and others who have suggested that the Domenici budget and the amendments that we have adopted will raid the Medicare trust fund. I understand how tempting it is to use such colorful language, but I want to point out to my colleagues what the definition of the word ``raid'' is. As I read from Webster's dictionary, it says, ``a sudden hostile attack by an armed, usually mounted, bandit intent on looting.'' Well, I suppose we have to use some words from Sol Olinsky's school of political activism--which says that the more extreme you can be, the more attention you are going to get. There are some people in this body who have great aptitude in that respect. But, obviously, any people who study our budget process and who know what a Medicare trust fund is, or what any trust fund is, will know that no one is raiding the Medicare trust fund. I will explain what is really going on. Under the Domenici budget, Medicare will collect payroll taxes. Those taxes will be credited to the balance in the trust fund. That balance will be reserved for Medicare and is reserved only for Medicare. The Medicare trust fund is just like your bank account. When you make a deposit, your bank account increases the balance in your account, and only you can make a withdrawal from your own personal bank account. Now, when Senator Conrad talks about raiding the Medicare trust fund, he is trying to mislead us. He wants people to believe that we are reducing the balance in the Medicare trust fund for some other purpose. That is just not true. The balance in the Medicare trust fund can only be reduced to pay Medicare benefits. That is the law. Our budget does nothing to change the law. Once you get past the rhetoric, you will see this debate is not about Medicare, it is about debt reduction. In Senator Conrad's view, we have to use the Medicare surplus to pay down the debt, or else we are raiding Medicare. Now, going back to the example of your own personal bank account, that is like saying your bank has to use your deposit to pay off the bank's mortgage, or else it is raiding your bank account. As everybody who has a bank account knows, that is clearly absurd because when you deposit money in your bank account, you rely on the bank's ability to collect on its loans to repay your money. When the Government borrows from Medicare, we rely on the Government's ability to do one of three things--raise taxes, reduce spending, or borrow from the public to repay Medicare. It might be easier to repay Medicare if we pay down the debt. But the fact is, we are already doing that, as you have heard so many times during these three days of debate. Under our Domenici budget resolution, we are going to pay down every dollar of national debt that can be paid down between now and the year 2001. Now, I believe that Senator Conrad knows that is true. So that is why he has stopped talking about public debt and he is now started talking about long-term debt. ``Reducing long-term debt'' is a secret code word for Social Security and Medicare reform. Of course, we have not been presented a plan to reform Social Security or Medicare from the other side of the aisle. As a result, we can only conclude that once the Government runs out of public debt to pay down, it will be forced to invest Social Security and Medicare funds in private assets. Federal Reserve Chairman Alan Greenspan has warned that such investments will disrupt the financial market and reduce the efficiency of our economy. Chairman Greenspan is not the only one concerned about such investment. In fact, in 1999, the Senate voted 99-0 against investing Social Security money in private assets. I suggest that instead of talking about our budget raiding Medicare, I believe the Senators on the other side of the aisle who use that word need to explain their secret plan to reduce the long-term debt. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation aimed at protecting Social Security benefits of some of the most vulnerable people in our society. Today, I am introducing, along with my colleagues Senator Breaux and Senator Burns, the Social Security Beneficiaries Protection Act of 2001. This legislation, identical to legislation introduced in the 106th Congress, is meant to provide additional safeguards for beneficiaries with organizational representative payees. Sometimes, beneficiaries are not capable of managing their benefits on their own. Usually, in these situations, a family member or close friend manages their benefits for them. However, there are those who, for whatever reason, don't have family or friends who are able to act as the representative payee. In those cases an organizational representative payee can handle their benefit checks. Approximately, 750,000 Social Security beneficiaries have an organization handling their monthly checks. These organizations include social service agencies, banks and hospitals. Most of these organizations provide a much needed service. However, in the spring of last year, the Senate Special Committee on Aging, which I chaired at the time, held a hearing examining the fraudulent misuse of benefits by some organizational representative payees. The hearing highlighted the findings of an investigation conducted by the Social Security Administration's, SSA, Office of Inspector General, OIG. James Huse, Inspector General for SSA testified that since fiscal year 1998 the Social Security Administration has identified over $7.5 million in losses to beneficiaries. In several of those cases, hundreds of individuals were victims of severe abuses by organizational representative payees. Another witness at the hearing, Ms. Betty Byrd testified to the hardship that is placed on a beneficiary who is the victim of a dishonest representative payee. Ms. Byrd was 70 years old and required a representative payee because of an extended hospital stay 100 miles from her home, followed by placement in an assisted living facility. Her fee-for-service organizational representative payee, Greg Gamble, was responsible for collecting Ms. Byrd's benefits and paying her utility bills, medical expenses, and rent. However, Mr. Gamble had his own ideas for how to spend Ms. Byrd's money. He stopped paying her rent and as a result she was forced to sell her trailer. The power was turned off because he stopped paying her utility bills. Her care facility informed her that Mr. Gamble was several months behind on her payments. The nursing home threatened to evict her. In her own words she was left, ``almost homeless, without medical care, and in serious financial trouble.'' Mr. Gamble was caught and pled guilty to using his clients' benefits for his own purposes. He has agreed to pay back $303,314. The primary purpose of this legislation, which is based on recommendations by Social Security Administration Office of Inspector General, is to provide immediate relief to victims of representative payee fraud. By providing SSA with the authority to re- issue benefits victims would be made whole again. This legislation would also provide for additional accountability by payees to the SSA in an effort to prevent abuses from taking place in the future. While the Social Security Administration does have a selection process in place, it needs strengthening. The Social Security Beneficiaries Protection Act of 2001 would require that non-governmental fee-for-service organizational representative payees be licensed and bonded. Under current law, an organization representative payee is only required to get one or the other. For any month in which the Social Security Commissioner or the courts have determined that an organizational representative payee misused all or part of an individual's benefits he or she would be required to forfeit the fees. The legislation would also make the representative payee liable for any misused benefits. Ms. Byrd's story demonstrates there is a need for stronger safeguards to protect the elderly and disabled who require an organizational representative payee. I urge my colleagues to cosponsor this important legislation and help protect the most vulnerable Social Security beneficiaries.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation aimed at protecting Social Security benefits of some of the most vulnerable people in our society. Today, I am introducing, along with my colleagues Senator Breaux and Senator Burns, the Social Security Beneficiaries Protection Act of 2001. This legislation, identical to legislation introduced in the 106th Congress, is meant to provide additional safeguards for beneficiaries with organizational representative payees. Sometimes, beneficiaries are not capable of managing their benefits on their own. Usually, in these situations, a family member or close friend manages their benefits for them. However, there are those who, for whatever reason, don't have family or friends who are able to act as the representative payee. In those cases an organizational representative payee can handle their benefit checks. Approximately, 750,000 Social Security beneficiaries have an organization handling their monthly checks. These organizations include social service agencies, banks and hospitals. Most of these organizations provide a much needed service. However, in the spring of last year, the Senate Special Committee on Aging, which I chaired at the time, held a hearing examining the fraudulent misuse of benefits by some organizational representative payees. The hearing highlighted the findings of an investigation conducted by the Social Security Administration's, SSA, Office of Inspector General, OIG. James Huse, Inspector General for SSA testified that since fiscal year 1998 the Social Security Administration has identified over $7.5 million in losses to beneficiaries. In several of those cases, hundreds of individuals were victims of severe abuses by organizational representative payees. Another witness at the hearing, Ms. Betty Byrd testified to the hardship that is placed on a beneficiary who is the victim of a dishonest representative payee. Ms. Byrd was 70 years old and required a representative payee because of an extended hospital stay 100 miles from her home, followed by placement in an assisted living facility. Her fee-for-service organizational representative payee, Greg Gamble, was responsible for collecting Ms. Byrd's benefits and paying her utility bills, medical expenses, and rent. However, Mr. Gamble had his own ideas for how to spend Ms. Byrd's money. He stopped paying her rent and as a result she was forced to sell her trailer. The power was turned off because he stopped paying her utility bills. Her care facility informed her that Mr. Gamble was several months behind on her payments. The nursing home threatened to evict her. In her own words she was left, ``almost homeless, without medical care, and in serious financial trouble.'' Mr. Gamble was caught and pled guilty to using his clients' benefits for his own purposes. He has agreed to pay back $303,314. The primary purpose of this legislation, which is based on recommendations by Social Security Administration Office of Inspector General, is to provide immediate relief to victims of representative payee fraud. By providing SSA with the authority to re- issue benefits victims would be made whole again. This legislation would also provide for additional accountability by payees to the SSA in an effort to prevent abuses from taking place in the future. While the Social Security Administration does have a selection process in place, it needs strengthening. The Social Security Beneficiaries Protection Act of 2001 would require that non-governmental fee-for-service organizational representative payees be licensed and bonded. Under current law, an organization representative payee is only required to get one or the other. For any month in which the Social Security Commissioner or the courts have determined that an organizational representative payee misused all or part of an individual's benefits he or she would be required to forfeit the fees. The legislation would also make the representative payee liable for any misused benefits. Ms. Byrd's story demonstrates there is a need for stronger safeguards to protect the elderly and disabled who require an organizational representative payee. I urge my colleagues to cosponsor this important legislation and help protect the most vulnerable Social Security beneficiaries.

Mr. GRASSLEY

Mr. GRASSLEY. Did the Senator from Nevada have a closing statement to make?