Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise in opposition to the motion to recommit.

Mr. HOUGHTON. Mr. Speaker, I know there is a lot of emotion on this. But I would like to speak on the other side of this issue. On May 25 of this year, just before we left for the Memorial Day break, the gentleman from Texas (Mr. Doggett) offered a 527 amendment to the telephone tax repeal. I understand what he was getting at. We are all trying to accomplish the same thing. But it was a curious proposal. It would repeal the telephone tax for everyone except for political organizations that do not comply with the new disclosure requirements. So the end result would be, at the end of the day, if section 527 organizations were willing to pay a 3 percent phone tax, they could avoid disclosure. I do not think that was in the spirit of what we were trying to do. Today the gentleman from Texas (Mr. Doggett) is proposing still something else. Though we are trying to repeal the estate and gift tax, we keep it on the books for section 527 organizations. These proposals bother me. They only attack part of the problem. Also, before we left for Memorial Day, I indicated that I was working with a group of people to try to get together a hearing, and we have been in session only 3 days since that time. We are going to have the hearing. It is going to be set for the 20th of this month. An article in yesterday's Wall Street Journal noted that, under the proposal offered by the gentleman from Texas (Mr. Doggett), that many tax exempt organizations would be shielded from disclosure laws, not full light on all the organizations that are contributing. Why is it fair to the American people, therefore, to require some tax exempt to disclose political activities and not all? Why is it right for one party or another to benefit from bringing some groups into the sunshine while allowing others to operate under the cloak of secrecy. We are taking a looking at lobbying and campaign intervention by all of these groups, regardless of their agenda, not just the 527 groups. What we would like is disclosure by these groups, but we have to be careful because we do not want to regulate constitutional rights to death so that the rights become meaningless. Yesterday I announced we were going to be having a hearing in Committee on Ways and Means on the 20th of this month. There are some that say that we do not need a hearing and just do it. But by doing it, we can do it the wrong way. If the majority were to bring this to the floor without a hearing, I think this would be wrong. My colleague and I serve on the key committee of the House. The committee has a strong tradition of trying to do things the right way. We try not to enact legislation piecemeal, imposing disclosure requirements on some tax exempt organizations but shielding others for not disclosing them. Senator McCain said yesterday that he was interested in broadening this. It was a first step. He wanted to broaden this. This is, of course, what we are trying to do. Now, in a political year, there are all sorts of pressures from the press and from parties and things like that. But I would like to think that most of us want to reject this. I am a very strong advocate of campaign finance reform. I signed a discharge petition on this House floor. I voted for the Shays-Meehan bill. But I do think that there is another way of doing this and doing it right. Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Armey), the majority leader of the House.

Mr. HOUGHTON

Mr. HOUGHTON. Yes, Mr. Speaker. I rise in opposition to the motion to recommit.

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to crank this thing down to a little lower level of intensity. I do not know why we are having this discussion, anyway. We all want illumination. We do not want to have people hiding behind 527s or 501(c)3s, or 4s or 5s or 6s. No one wants that. It is just the process we are going through. And we want to do it right, so it is right by not only us but also the American people. Two years ago in the IRS reform bill we directed the Joint Committee on Taxation and also the Treasury Department to report to the Congress by January. The joint committee report was completed on time, the treasury report was not. At the request of my boss, the gentleman from Texas (Mr. Archer), I have been working for several weeks to develop a meaningful, sound and responsive package of proposals to expand the disclosure by tax exempt organizations, and work on that package is well underway. I hope we will complete it relatively soon. We have been working all day on this thing. We worked yesterday. We will be working tomorrow on into next week. I would like to feel that when this is completed it will satisfy many of the things which the gentleman from Texas (Mr. Doggett) is interested in. But the point is we are still hearing, and we are waiting to hear from the Treasury Department. Earlier today, the Treasury passed on the opportunity to tell the Committee on Ways and Means when we are going to hear from them. It is really unfortunate that the gentleman from Texas (Mr. Doggett) continues to insist on consideration of the limited aspect of political activities by tax exempt without insisting on guidance of from the administration. Let me be clear. The administration's report was mandated by law. We do not have it. We are waiting for it. We do not have it. My friend accuses us of stalling, and I wonder whether this is not the pyromaniac posing as the firefighter. Today we are considering repeal of the telephone tax, which was enacted even before I was born, which is a long time ago. That proposal has broad bipartisan support and has been fully considered. The same cannot be said, I am afraid, of the proposal of the gentleman from Texas (Mr. Doggett). Today I have got to say in my heart, he talks about his heart, I will talk about my heart, is not the time and not the place for this debate. I wish to assure my colleagues on the other side and on this side that there will be an opportunity for full consideration of the important issues raised by my colleague from Texas. We are getting at it. We are trying to do it. We are trying to get that report out of the Treasury. And as soon as it comes, maybe even before it comes, we are going to have a suggestion here. Mr. Speaker, I yield to my friend, the gentleman from Ohio (Mr. Portman).

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I object to the vote on the grounds that a quorum is not present and make the point of order that a quorum is not present.

Mr. HOUGHTON. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I have just two points to make here. First of all, I am from New York, and I guess we have a lot of New Yorkers around here. But this is really important not only economically but in terms of all the relations we have with Canada. So that is number one. But number two, I have just been with my friend, the gentleman from Michigan (Mr. Upton), at a Canadian American delegation meeting. We talked about many issues, free trade to the Americas, the issue of trade with the European Union. We talked about agricultural issues, the whole variety of things. As we left yesterday that delegation, they said, do not forget that the single most important issue is this sword of section 110 hanging over our heads. So I just want to say to my colleagues, as I am sure others have said far more eloquently, this is very important and I am enthusiastically supportive of H.R. 4499.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, one of the advantages of old age is not necessarily wisdom but a lot of experience, and I do not pretend to try to convince those who are already convinced of their position. I just want to say how I feel about this particular issue. I am very strongly in favor of permanent normal trading relations with China, and I will say why. I have found, in my experience, that for every job that goes overseas that there are two jobs that are created in this country. One can say 850,000 have left. I do not know what the number is, but I bet many fold have come back into this country. That has been my experience. One does not send a job abroad to make a product primarily to send back into the United States. Sometimes that happens, but it is mostly to take care of that market. Secondly, we are not standing here making a decision in isolation. There are other people out there who do not want us to have this agreement. They want us to stay absolutely still in the water so their businesses, whether it is the South Koreans or the Germans or the Japanese, can get in there and take the lead on this, and once one has been in business there, in established relationships, it is very difficult to get in. Lastly, from a very practical standpoint, I have set up about four plants in China, and the experience which we have had has been we have moved in, we have given people dignity, good paying jobs, benefits. They have then gone out into their community and changed the democratic, the political, the human rights, the environmental aspects of those communities. One does not stand back and say, you fix it and then we will come in. You come in and fix it and help them work through this, that has been my experience. I just wanted to share that.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, last December I sponsored a ``Dear Colleague'' letter to the EU term President, Martti Ahtisaari, President of Finland, in support of Turkey as a EU candidate. Twenty- six of my colleagues from both sides of the aisle joined me in sending that message to President Ahtisaari. Thankfully, Turkey became the European Union's first candidate for full membership with a predominantly Muslim population later in the month. I strongly supported Turkey's EU membership became membership would anchor a country who's population has long aspired to be part of Europe. It would also further strengthen the Turkish-U.S. relationship, and help foster a stronger Turkish-Greek relationship. Turkey is a secular Muslim country with a democratic tradition, whose recent presidential election underscores those ideals. Ahmet Sezer, former Chief Justice of the Constitutional Court, who has devoted his career to democratic principles, the rule of law, and freedom of expression received broad parliamentary support to become Turkey's tenth President. This development was favorably received in European capitals, the European press, and within Turkey. Turkey is one of the U.S. strongest and most reliable allies. For over fifty years Turkey and the United States have fought for shared principles through the Korean War, the Cold War, the crisis in Iraq, the Balkans, Kosovo, and elsewhere. In addition, Turkey is a major ally in combating terrorism, Islamic fundamentalism, and injustice around the world. In Kosovo, Turkey not only was instrumental in the NATO operations, but its humanitarian assistance to refugees was key to helping ease the suffering of the victims. EU candidacy has also fueled the rapprochement between Turkey and Greece. While the respective foreign ministers had started to meet, the tragic earthquake in both countries provided the much-needed impetus. In recent months the two countries signed a series of cooperation agreements covering areas as diverse as terrorism, the environment, tourism, cultural cooperation, investment protection, customs, and scientific and technological issues. Recent press reports indicate that Turkish Armed Forces will take part in NATO maneuvers which will be carried out in Greek territory in May, and that last week, Greece allowed Turkish four F-16 planes to use its air space for the first time, while they were flying to Germany to attend ``Elite 2000'' maneuvers. These improved relations will not only benefit Greece and Turkey, but also the United States, NATO, and Europe at large. Mr. Speaker, as a long time observer of Turkey, I continue to support that country's further western integration, and congratulate my friends in Turkey on the election of their new President.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from New York, Mr. Rangel, in introducing our bill to fix a current problem in the Internal Revenue Code regarding use of American Legion Post facilities by members and their families. That is, who qualifies as a ``member'' versus a guest, for purposes of unrelated business income and the exempt status of the Legion Posts. We do not believe Congress intended or contemplated that use of the facilities by families of the member would result in unrelated business income, or worse yet, the possibility of losing the Post's tax exemption under Section 501(c)(19). By congressional charter, only veterans who served during specifically designated wars may become ``members'' of the American Legion. Section 501(c)(19) requires only that 75 percent of the members be current or former members of the Armed Forces, and substantially all the other members are cadets, spouses, widows or widowers of past or present members. The IRS says substantially all is 90 percent. The Legion requires internally that 100 percent of its members be qualifying veterans. However, the Legion has many programs, such as the Sons of the American Legion (SAL), as well as programs involving youth and family support groups. All are designed to further the purposes for which the exemption was granted. The Post is a family gathering place for many social and patriotic activities. As a result, many family members of numerous generations attend these events. At the present time, the regulations provide that certain relatives related to the war veteran qualify. These include grandparents, brother, sister, and grandchildren. Questions have been raised whether SALs count for the 100 percent or 90 percent test, or might be considered ``associate or social members.'' The same questions arise regarding auxiliary members and relatives beyond the position of the regulation, i.e. great grandparents, great grandchildren, etc. The answers could determine the extent of unrelated business taxable income as well as exempt status. This is not an issue regarding true guests, i.e. unrelated individuals who are, and must be, accompanied by a member. Nor is any substantive change contemplated regarding the sale of life and health insurance to members as provided in Section 512(a)(4). That section would be amended to conform the definition to Congressional charter members and their dependents. Our bill would eliminate these potential issues by providing that the definition of ``member'' for purposes of the exemption status and unrelated business income would be expanded to include ``ancestors or lineal descendants of the member'' (i.e. past or present member of the Armed Services meeting the congressional charter definition). We believe this change is not only fair, but recognizes the original intent of Congress, and the fact that more distant relatives of the member will come into existence over time. We hope our colleagues will join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would, first of all, like to thank the gentleman from Pennsylvania (Mr. Coyne). It has been wonderful to work with the gentleman from Pennsylvania (Mr. Coyne) and also the Members of the Democratic group. As Peter Druker has always said that all great ideas ultimately degenerate into work, and as a result I would like to thank Mac McKenney on our side, Hugh Hatcher, and Beth Vance. They have done a wonderful job, but particularly the gentleman from Pennsylvania (Mr. Coyne). It has been wonderful to work with him. Also I would like to thank my associates, the gentleman from Ohio (Mr. Portman) and the gentleman from Arizona (Mr. Hayworth) who will be speaking and also the gentleman from New York (Mr. Rangel) who is the full committee ranking Democrat. Now I am not going to review the bill's 25 provisions. That would take too long. Instead, let me give some examples of what this bill would do. I would like to describe some of the stories we have heard at the Subcommittee on Oversight, and I want to explain what some of these provisions mean to real taxpayers. The National Taxpayer Advocate told us that the IRS erroneously refunded $59,000 to a particular taxpayer. This is the story. The taxpayer sent the check back to the IRS. The IRS sent the check back to the taxpayer. The taxpayer then returned the check a second time and then the IRS manually refunded the money. The taxpayer deposited the money in the bank until the problem could be solved. When the matter was resolved and the taxpayer returned the money, the IRS required the taxpayer to pay interest. What kind of sense does that make? And so on and so forth. Under current law, really the problem is the IRS has no authority. There is no law to help it, to abate interest in such a case. So the problem is not the men and women who work very hard, as the gentleman from Pennsylvania (Mr. Coyne) referred to earlier, for the IRS. The problem is the law. The bill requires instant abatement in taxes like this one. The National Association of Enrolled Agents told us about a taxpayer, here is another story, who went to work for low wages in 1989. The company failed to withhold taxes during the year and at the end of the year the taxpayer was given a form 1099 miscellaneous and he could not pay his taxes. He now owes $17,000; $1,600 in penalties and $9,000 in interest, if one can believe it. So under this bill, our bill, the failure to pay penalty will be repealed for taxpayers who enter into the installing agreement with the IRS and interest can be waived if a gross injustice would result. Unfortunately, of course, this bill comes too late for our particular taxpayer who I mentioned earlier, but it will help others, we hope, who find themselves in a similar situation. The Taxpayer Advocate also told us of another taxpayer who discovered that his partners were defrauding the government. The taxpayer helped the IRS in securing a conviction. In 1990, the taxpayer asked the IRS how much he owed in taxes. The IRS said the information was not yet available and told the taxpayer to wait for a bill. So in 1997, 7 years later, the taxpayer received that bill. It was for $113,000. The taxpayer paid the $113,000 in 1998, but the taxpayer received another bill for $115,000 in interest. See, it does not make any sense at all. Once again, the problem is not the Internal Revenue Service. The problem is the law and that is what we are intending to change. Our bill will allow the taxpayers who find themselves in such a predicament to stop the running of interest by making a deposit in a dispute reserve account. Amounts deposited in escrow could be withdrawn with interest or used to satisfy an underpayment of tax. Any taxpayer in the dispute with the IRS could choose to put the money in the dispute reserve account to stop the running of interest; very important. So, Mr. Speaker, the Taxpayer Bill of Rights 2000 will do several things. It will reform the penalties and interests. It will strengthen the taxpayer privacy, very important condition. It will reduce the compliance burden and, lastly, level the field between the IRS and taxpayers. It will literally help millions of taxpayers. That is our hope. Now this is an important first step, and it is a first step. There are needed reforms, but we also need to simplify the Tax Code. Many of these provisions would be unnecessary if the Tax Code was less confusing. So I look forward to working with my colleagues on tax simplification, and I am pleased to join my colleagues from the Committee on Ways and Means, Republicans and Democrats, in bringing this needed bill before the House, and I urge my colleagues to support its adoption. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Arizona (Mr. Hayworth).

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I thank the gentleman from Pennsylvania (Mr. Coyne) for his comments. I am really disappointed that this thing has gone down into sort of the political pits where one party is accusing the other party. That was not the essence of what we were trying to do. We were trying do this on a bipartisan basis, the gentleman from Pennsylvania (Mr. Coyne), myself, the gentleman from Texas (Mr. Archer), and the gentleman from New York (Mr. Rangel). That was the essence of it. Every member of the Committee on Ways and Means has a bill he or she would like to add to this. But I have always felt, particularly now, we owe it to the taxpayers of this country to approve the taxpayer rights package and save any campaign finance debate for another forum. I really feel this, and I feel it not only as a Republican but also as a Member of this Chamber and really in a bipartisan mode. That is the important thing that we do now.

Mr. HOUGHTON. Mr. Speaker, I yield back the balance of my time.

Mr. HOUGHTON. Mr. Speaker, on that I demand the yeas and nays.

Mr. HOUGHTON. Mr. Speaker, I yield 5 minutes to the gentleman from Ohio (Mr. Portman).

Mr. HOUGHTON. Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. McInnis).

Mr. HOUGHTON

Mr. HOUGHTON. I thank the gentleman from Maryland (Mr. Hoyer), I thank the Speaker, I thank the gentleman from Georgia (Mr. Lewis) and thank so many of my associates here. I want to particularly thank the gentleman from Maryland for putting this together. It is the right and it is the decent thing to do. It is timely. And frankly what we are trying to do is to encourage others to be more involved in this enormous experience which we had down in Selma. As a matter of fact, we have had for several years now. The person, of course, that has driven it is a fellow called Doug Tanner who is the head of the Faith & Politics Institute. The gentleman from Georgia and I originally said that we would join the Faith & Politics Institute so long as we had no work to do because we were busy enough as it is, and all of a sudden we find ourselves doing more and more and more and more for Mr. Tanner, this Christlike figure who stands up there and feels, well, it is only because you want to do it, that is what is happening. I think the gentleman from Georgia would agree, we are doing far more than we originally bought into, but it has been enormously satisfying. I think one of the things that struck me in this extraordinary experience in going to Selma and going there with the gentleman from Georgia was just the gentleman from Georgia himself. I know this is embarrassing for the gentleman from Georgia to hear all this, but it is true. Martin Luther King is no longer with us. It is tragic. Here was a man who was born 3 years after I was born and has been dead over 30 years. But the younger members of that group, the SNCC, the Student Nonviolent Coordinating Committee were there and when you see not only our friend the gentleman from Georgia who is an associate of ours and works here and legislates with us and has been with us all along, and then to associate with Betty Fykes and Bernard Lafayette and Jose Williams and people like that, they are all alive, and they were the people that drove this whole thing, the younger people. I think one of the things that comes along is that the younger people really are the ones that say damn the torpedoes and go ahead and do the things which are right and the others are a little more conservative. As a result, we owe the gentleman from Georgia not only as our friend but also this enormous leader a tremendous debt of gratitude. I hope those people who are listening will recognize this; I think we all do around here. I will always remember when John came to Corning, we had a continuation of the days of dialogue in upstate New York, in the district in which I live. It was extraordinary to see him at work there, because all of a sudden people said, here is the man that did all this, here is the man that led it. We had not realized what he stood for and what he was doing, what he represented. And then, of course, he had this wonderful associate, Sheila Sisulu, who is the South African ambassador here. Sheila Sisulu as many Members I am sure realize is the daughter-in-law of Walter Sisulu who was one of the two other partners of Nelson Mandela and stayed in South Africa and went to Robben Island, was there with him for over 20 years while Oliver Tambo went to Lesotho to keep the African National Congress going. She is the daughter-in-law. But there was the gentleman from Georgia talking about the oppression that he was fighting, that he was literally willing to lay down his life for. I am sure there were times that he never thought that he would live another day. And here was Sheila Sisulu talking about the institutionalized apartheid in South Africa, what they had gone through. It made me realize how lucky we are to be Americans and to live in this particular time. It was just extraordinary. There were other things that came along. Just the singing, the music. I know the singing of Betty Fykes and what it did to you in 1965 but what it did to us. Here we were just standing there and all of a sudden this lovely lady burst out into song. It cheered our spirits and made us feel better about things. And then, of course, I take nothing away from the gentleman from Maryland's eloquence and he is a very eloquent man but I will never forget being in Brown Chapel following the pastor of Brown Chapel and the gentleman from Georgia and then me, this former glassblower from upstate New York trying to make some sense out of the message. It was an awe-inspiring feeling.

Mr. HOUGHTON. If the gentleman will notice, he placed me after the gentleman from Georgia.

Mr. HOUGHTON. When you hear those words and the emotions behind them, it does something to you. That is why this extraordinary experience is so important to be shared with everybody. This was an unusual year. It was the 35th anniversary of that march. It was unusual for another reason, because the President of the United States came down there. When the President of the United States comes down, it just changes the whole nature of it. But the crowds that were there and how they related to the words and the younger people that spoke. It was just a really extraordinary experience. It did something to me. Again as I mentioned earlier, I would love to be able to share that with others. There is one downside, if I could just mention very briefly, is that while we celebrated the 35th anniversary of this extraordinary experience and honored those people who had led us, the fact is that there is still tremendous racial tension. You could see it even in the school system in that area where most of the people in the old days used to be in the high schools, the official high schools were white. Now most of the people in the high schools are black. But where do the white people go? Many times they have gone into private education. They have not integrated the way I know that the gentleman from Georgia and the gentleman from Maryland and others had hoped they would, and how we had hoped they would. So the people that would say that Affirmative Action is wrong and we can go on automatic pilot and this thing is a thing of the past, there are no more Bull Conners, there is something very subtle going on here. It will not be erased for years and generations and generations to come. That is the thing that we have got to work on. It is not only what we do but really who we are. I will always remember a wonderful story about Archibald MacLeish giving a lecture. He was most of the way through, a student raised his hand and said, Mr. MacLeish, you have only got about 5 minutes to go, could you sort of sum up what you have to say? He said, yes, I will, I would sum it up like this. Don't forget the thing and the student said what do you mean by the thing? Mr. MacLeish says, the thing is what you are is just as important as what you do. That is why we so applaud and honor the gentleman from Georgia and all his associates. I thank the gentleman from Maryland again for allowing me to speak.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, every so often somebody comes into our lives that has a tremendous impact on us. And this is the case of the man who just gave the invocation, Bishop Thomas Shaw. He left his diocese, as the largest Episcopal diocese in this country, to come down and be with us for a month, not to preach, not to tell us things, but to learn with us about this great democracy. He has given us much, and the most important thing he has given us is his example. Everyone has words. We use a lot of words around here. His example has been extraordinary. And I only hope that the examples that he gives to us will be given to others in other parts of this country to be able to come down and understand this precious thing which we call a Republic. So I thank Bishop Shaw for being with us.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from Massachusetts, Mr. Neal, together with a number of other colleagues, in introducing our bill, ``The Life Insurance Tax Simplification Act of 2000.'' The bill repeals two sections of the Internal Revenue Code which no longer serve valid tax policies goals. This Congress has taken a major step forward in rewriting the regulatory structure of the financial services industry in the United States. This realignment is already having a positive impact on the way life insurance companies serve their customers, conduct their operations and merge their businesses to achieve greater market efficiencies. Unfortunately, the tax code contains several provisions which no longer represent valid tax policy goals, and in fact are carry-overs from the old tax and regulatory regimes that separated the life insurance industry from the rest of the financial world and differentiated between the stock and mutual segments of the life insurance industry. Today, the lines of competition are not between the stock and mutual segments of the life insurance industry. Rather, life insurers must compete in an aggressive, fast moving global financial services marketplace contrary to the premises underlying these old, outmoded tax rules. In 1984 Congress enacted Section 809, which imposed an additional tax on mutual life insurers to guarantee that stock life insurers would not be competitively disadvantaged by what was then thought to be the dominant segment of the industry. Section 809 operates by taxing some of the dividends that mutual life insurers pay to their policyholders. When Section 809 was enacted, mutual life insurers held more than half the assets of U.S. life insurance companies. It is estimated that within a few years, life insurers operating as mutual companies are expected to constitute less than ten percent of the industry. Section 809 has not been a significant component of the substantial taxes paid by the life insurance industry, including mutual companies. But it has been extremely burdensome because of its unpredictable nature and complexity. The tax is based on a bizarre formula under which the tax of each mutual life insurer increases if the earnings of its large stock company competitors rise--even when a mutual company's earnings fall. The provision has been critized by the Treasury Department and others as fundamentally flawed in concept. The original rationale behind the enactment of Section 809 no longer exists, and mutual life insurers should not pay taxes based on the earnings of their competitors or solely because they exist in the mutual form. Accordingly, the bill would repeal Section 809. Section 815 was added to the Code as part of the 1959 changes to the life insurance companies tax structure. Before 1959, life insurance companies were taxed only on their investment income. Underwriting (premium) income was not taxed, and underwriting expenses were not deductible. The change in 1959 provided that all life insurance companies paid tax on investment income not set aside for policyholders and on one-half of their underwriting income. The other half of underwriting income for stock companies was not taxed unless it was distributed to shareholders. The amount of that income was called a ``policyholders surplus account'' or ``PSA''. No money was set aside; a PSA was and is just a bookkeeping entry. Mutual companies were not required to establish PSAs. The 1959 tax structure sought to tax the proper amount of income of stock and mutual companies alike and the PSA mechanism helped implement that goal. In 1984, Congress rewrote the rules again. Both stock and mutual companies were subjected to tax on all their investment and underwriting income. In this context, dividend deductions for mutuals were limited under Section 809, and the tax exclusion for a portion of stock company's underwriting income was discontinued. Congress made a decision not to tax the amount excluded between 1959 and 1984. Rather the amounts are only taxed if one of the specific events described in the current Section 815 occurs (principally dissolution of the company). The bill would repeal the obsolete Section 815 provision. Since 1984, the Government has collected relative small amounts of revenue with respect to PSAs as companies avoid the specific events which trigger PSAs taxation. There is not a ``fund,'' ``reserve,'' ``provision'' or ``allocation'' on a life insurance company's books to pay PSA taxes because, under generally accepted accounting principles, neither the government nor taxpayers have ever believed that significant amounts of tax would be triggered. Nevertheless, the continued existence of the PSAs does result in a burden on the companies in today's changing financial services would--a burden based on bookkeeping entries made from fifteen to forty years ago to comply with Congress' then vision of how segments of the life insurance industry should be taxed. In addition, the Administration has made recent proposals to require that PSA balances be taxed, even though no triggering event has taken place--thus another cloud of uncertainty. The repeal of these two provisions, Sections 809 and 815, would provide certainty, less complexity, and remove two provisions from the Internal Revenue Code, which no longer serve a valid tax policy goal in the life insurance tax structure of the Internal Revenue Code. We urge our colleagues to join us in cosponsoring this legislation

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I yield briefly to the gentleman from Florida (Mr. Shaw).

Mr. HOUGHTON. Mr. Speaker, reclaiming my time, I thank the gentleman from Texas (Mr. Archer) for yielding me this time. It is sort of too bad that certain people on the other side take a partisan view of this thing. It is not partisan; it is bipartisan. It makes sense. The timing is right. There is overwhelming support for this. When I started to work in the early 1950s, 47 percent of the people over 65 were working. Today, only 17 percent. That is not very good. I always think as the speed of light and communication and data processing is sort of inevitable, so is the fact that people are living longer. I have a mother who is 99 years old, born in 1900. When she was born, the actual actuarial age of women was about 47. That was the life span. Today, it is in the 70s. Tremendous difference. We need able people. Warren Buffett of Berkshire Hathaway has a lady over 90 years old working in his company. When companies get somebody good, they want to hold on to them. And people who work longer, they live longer, they feel healthy and want to make a contribution. So anything standing in the way, which is this double taxation of their Social Security benefits, is wrong and is not fair and it will be scrapped, and should be scrapped, if H.R. 5 goes through. Mr. Speaker, I would just like to say one other thing. There was a lady called Marijo Gorney, and she has worked around here for 35 years. She is now retired. Mr. Speaker, this was her baby. This was her concept. She pushed it. She is now retired; and I hope she is watching this, because a lot of the success of this program is due to her.