Judd Gregg

Mr. GREGG

Mr. GREGG. I ask unanimous consent the next two votes be 10 minutes in duration.

Mr. GREGG. Mr. President, I am fairly confident that earlier, at the beginning of this section, I asked that all quorum calls be charged equally in relationship to the time allocated. In fact, I am absolutely confident that I made that unanimous consent request. However, I will renew that unanimous consent request at this time.

Mr. GREGG. Mr. President, I ask unanimous consent that the time be restored in the context of that request, and I suggest the absence of a quorum.

Mr. GREGG. I ask again the modification I sent to the desk be accepted.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Mr. President, I ask unanimous consent that amendment No. 1117, Senator Nelson; amendment No. 1118, Senator Nelson; amendment No. 1137, Senator Collins; amendment No. 1108, Senator Lott; amendment No. 1197, Senator Lautenberg; and amendment No. 1194, Senator Nelson, which are at the desk, be called up and agreed to en bloc.

Mr. GREGG. Proceed.

Mr. GREGG. Mr. President, I move to reconsider the vote and to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. GREGG. Mr. President, we are now proceeding under a prior unanimous consent agreement relative to debate on the three amendments dealing with mass transit and rail. I hope that Members who have time allocated under that agreement will come over and begin the debate. Otherwise, I recommend that the time be equally divided in the quorum call between my hour and the 2 hours on the other side and that the time come off those in the proper proportion. I suggest the absence of a quorum.

Mr. GREGG. I also ask unanimous consent that prior to the next two votes there be 2 minutes equally divided.

Mr. GREGG. As I understand it, the prior unanimous consent request that I asked for reflects the Democratic leader's time was also agreed to.

Mr. GREGG. Thank you. Amendment No. 1217

Mr. GREGG. Mr. President, this is an amendment to increase funding in the mass transit area by $100 million which is done by taking that money out of a different account, specifically the State and local first responder account. The reason that account was chosen was, as we discussed before, there is over $7 billion of unspent money in those accounts. To the extent the States have the capacity to handle that money, we will make sure they get additional moneys, but right now they have more money than they can handle in those accounts. This will be within the budget. I hope Members support this amendment. Amendment No. 1205

Mr. GREGG. Mr. President, I now make a point of order under section 302(f) of the Congressional Budget Act that the amendment provided by Senator Byrd provides spending in excess of the subcommittee's 302(b) allocation.

Mr. GREGG. I ask all time be yielded back, if the Senator from West Virginia is agreeable.

Mr. GREGG. Mr. President, I move to reconsider the vote and I move to lay that motion on the table.

Mr. GREGG. Yes. I reserve my request and make a point of order a quorum is not present.

Mr. GREGG. I call up amendment 1139 and send a modification to the desk on behalf of Senator Sessions. I send to the desk a second degree to that amendment proposed by Senator Kennedy. I ask they be agreed to en bloc.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Mr. President, I have a modification of my amendment No. 1220 which I send to the desk and ask be accepted.

Mr. GREGG. Mr. President, what is the status of the time?

Mr. GREGG

Mr. GREGG. Mr. President, sustained military operations in Afghanistan and Iraq have brought to light another example of how outdated and burdensome government policies can punish generous employers. Employers that continue to pay their employees now on active duty in the uniformed services are experiencing tax and pension difficulties that are discouraging this pro-worker, patriotic gesture. Apparently, when it comes to companies showing their respect for their employees called to serve, there is special meaning to the old cliche ``no good deed goes unpunished.'' The National Committee for Employer Support for the Guard and Reserve, a nationwide association, reports that thousands of employers across the country have signed a pledge of support and have gone above and beyond the requirements of the law in support of their National Guard and Reserve employees. This includes many of our Nation's largest and most reputable corporations, including 3M, McDonalds, Wal-Mart, Home Depot, Liberty Mutual and many others. These commendable companies provide reservist employees who are on active duty with ``differential pay'' that makes up the difference between their military stipend and civilian salary. In New Hampshire, some of the most remarkable stories of corporate patriotism can be found. BAE Systems of Nashua has 110 people serving in the Guard and Reserves, 11 of whom are currently deployed overseas. They provide differential pay to all their called-up employees and continuing access to benefits to family members. The company even provides a stipend to make up the lost pay of active duty spouses of company employees when the spouse's employer is not able to provide differential pay. Consider also the account of Mr. Marian Noronha, Chairman and Founder of Turbocam, a manufacturer based in Dover, New Hampshire. An immigrant from India, Mr. Noronha has not only provided his employees with differential pay and continued family health benefits, but has also extended to each of his activated employees a $10,000 line of credit. His active duty reservist and Guard employees have used this money to, among other things, purchase personal computers so their families can communicate with them while they are overseas. Several other New Hampshire private-sector companies, including Hitchiner Manufacturing Company in Milford, have exemplary records when it comes to dealing with reservist employees. Under current law, employers of reservists and guardsmen called up for active duty are required to treat them as if they are on a leave of absence under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The Act does not require employers to pay reservists who are on active duty. But as I have pointed out, many employers pay the reservists the difference between their military stipends and their regular salaries. Some employers provide this ``differential pay'' for up to three years. For employee convenience, many of these companies also allow deductions from the differential payment for contributions to their 401(k) retirement plans. The conflict arises, however, because a 1969 IRS Revenue Ruling considers the employment relationship terminated when active duty begins. This ruling prevents employers from treating the differential pay as wages for income tax purposes, resulting in unexpected tax bills at the end of the year for these military personnel. Further, the contributions made to the worker's retirement account potentially invalidate, disqualify, the employer's entire retirement plan which could make all amounts immediately taxable to plan participants and the employer. The Uniformed Services Differential Pay Protection Act that I am introducing today clarifies that differential wage payments are to be treated as wages to current employees for income tax purposes and that retirement plan contributions are permissible. The bill does the following: Differential wage payments would be treated as wages for income tax withholding purposes and reported on the worker's W-2 form. This means that active duty personnel will not be hit with end-of-the-year tax bills. No New Taxes: The legislation does not change present law, and deferential wage payments will not be subject to Social Security and unemployment compensation taxes. Definition: ``Differential wage payments'' are defined to mean any payment which: 1. is made by an employer to an individual while he or she is on active duty for a period of more than 30 days, and 2. represents all or a portion of the wages the individual would have received from the employer if he or she were performing service for the employer. An individual receiving differential wage payments would continue to be treated as an employee for purposes of the rules applicable to qualified retirement plans, removing the threat that contributions on his or her behalf would invalidate the employer's entire plan. Distributions Protected: Clarifying language is included to ensure that individuals would continue to be permitted to take distributions from their accounts when they leave their jobs for active duty. Thus, the right to receive distributions will be preserved even though individuals are treated as current employees for contribution purposes. The bill includes a prohibition on making elective deferrals or employee contributions for six months after receiving a distribution. Satisfying Nondiscrimination Rules: In order to avoid disruptions in retirement savings plans and to remove disincentives, employers could disregard contributions to retirement savings accounts based on differential wage payments for nondiscrimination testing purposes, provided that such payments are available to all mobilized employees on reasonably equivalent terms. In summary, the Uniformed Services Differential Pay Protection Act upholds the principle that employers should not be penalized for their generosity towards our Nation's reservists and members of the National Guard.

Mr. GREGG

Mr. GREGG. Mr. President, sustained military operations in Afghanistan and Iraq have brought to light another example of how outdated and burdensome government policies can punish generous employers. Employers that continue to pay their employees now on active duty in the uniformed services are experiencing tax and pension difficulties that are discouraging this pro-worker, patriotic gesture. Apparently, when it comes to companies showing their respect for their employees called to serve, there is special meaning to the old cliche ``no good deed goes unpunished.'' The National Committee for Employer Support for the Guard and Reserve, a nationwide association, reports that thousands of employers across the country have signed a pledge of support and have gone above and beyond the requirements of the law in support of their National Guard and Reserve employees. This includes many of our Nation's largest and most reputable corporations, including 3M, McDonalds, Wal-Mart, Home Depot, Liberty Mutual and many others. These commendable companies provide reservist employees who are on active duty with ``differential pay'' that makes up the difference between their military stipend and civilian salary. In New Hampshire, some of the most remarkable stories of corporate patriotism can be found. BAE Systems of Nashua has 110 people serving in the Guard and Reserves, 11 of whom are currently deployed overseas. They provide differential pay to all their called-up employees and continuing access to benefits to family members. The company even provides a stipend to make up the lost pay of active duty spouses of company employees when the spouse's employer is not able to provide differential pay. Consider also the account of Mr. Marian Noronha, Chairman and Founder of Turbocam, a manufacturer based in Dover, New Hampshire. An immigrant from India, Mr. Noronha has not only provided his employees with differential pay and continued family health benefits, but has also extended to each of his activated employees a $10,000 line of credit. His active duty reservist and Guard employees have used this money to, among other things, purchase personal computers so their families can communicate with them while they are overseas. Several other New Hampshire private-sector companies, including Hitchiner Manufacturing Company in Milford, have exemplary records when it comes to dealing with reservist employees. Under current law, employers of reservists and guardsmen called up for active duty are required to treat them as if they are on a leave of absence under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The Act does not require employers to pay reservists who are on active duty. But as I have pointed out, many employers pay the reservists the difference between their military stipends and their regular salaries. Some employers provide this ``differential pay'' for up to three years. For employee convenience, many of these companies also allow deductions from the differential payment for contributions to their 401(k) retirement plans. The conflict arises, however, because a 1969 IRS Revenue Ruling considers the employment relationship terminated when active duty begins. This ruling prevents employers from treating the differential pay as wages for income tax purposes, resulting in unexpected tax bills at the end of the year for these military personnel. Further, the contributions made to the worker's retirement account potentially invalidate, disqualify, the employer's entire retirement plan which could make all amounts immediately taxable to plan participants and the employer. The Uniformed Services Differential Pay Protection Act that I am introducing today clarifies that differential wage payments are to be treated as wages to current employees for income tax purposes and that retirement plan contributions are permissible. The bill does the following: Differential wage payments would be treated as wages for income tax withholding purposes and reported on the worker's W-2 form. This means that active duty personnel will not be hit with end-of-the-year tax bills. No New Taxes: The legislation does not change present law, and deferential wage payments will not be subject to Social Security and unemployment compensation taxes. Definition: ``Differential wage payments'' are defined to mean any payment which: 1. is made by an employer to an individual while he or she is on active duty for a period of more than 30 days, and 2. represents all or a portion of the wages the individual would have received from the employer if he or she were performing service for the employer. An individual receiving differential wage payments would continue to be treated as an employee for purposes of the rules applicable to qualified retirement plans, removing the threat that contributions on his or her behalf would invalidate the employer's entire plan. Distributions Protected: Clarifying language is included to ensure that individuals would continue to be permitted to take distributions from their accounts when they leave their jobs for active duty. Thus, the right to receive distributions will be preserved even though individuals are treated as current employees for contribution purposes. The bill includes a prohibition on making elective deferrals or employee contributions for six months after receiving a distribution. Satisfying Nondiscrimination Rules: In order to avoid disruptions in retirement savings plans and to remove disincentives, employers could disregard contributions to retirement savings accounts based on differential wage payments for nondiscrimination testing purposes, provided that such payments are available to all mobilized employees on reasonably equivalent terms. In summary, the Uniformed Services Differential Pay Protection Act upholds the principle that employers should not be penalized for their generosity towards our Nation's reservists and members of the National Guard.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on July 14, 2005, at 10 a.m., to conduct a hearing on ``The Department of Treasury's report to Congress entitled: `Assessment: The Terrorism Risk Insurance Act of 2002.' ''