Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, this is, to my infinite wisdom, parochial as it may be, not a complicated issue. I used to be in business. I produced the product. The laws of supply and demand worked. We abided by them. We did not want to have any government inference, no marketing orders, no anything. It had worked. This is different. The laws of supply and demand simply do not work in this business. It has been proven over and over again. That is number one. Number two, if one tries to sell something and one's customer does not want it, it is not a very good deal. As the gentleman from Missouri (Mr. Blunt) was saying, 96 percent of the farmers voted against eliminating marketing orders. To me, that is a very clear message. So we can sit here; we can intellectualize what is best for the American family and what is best in terms of food supply. If the customers do not want it, we should not try to sell it.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am introducing legislation to address a problem that exists for employees of the World Bank and other international organizations. This same legislation was introduced in the last three Congresses. I understand that the estate tax rules, as amended by the Technical and Miscellaneous Revenue Act of 1988 (TAMRA), are producing a serious and probably unintentional tax burden on certain employees of the World Bank and other international organizations. The employees affected are those who are neither U.S. citizens nor permanent resident aliens, but who come to the United States temporarily for purposes of their employment at an international organization. In addition, nonresidents who are not U.S. citizens may also be affected. These individuals are normally exempt from U.S. individual income taxes. The problem involves the restrictions on the use of a marital deduction in the estates of these individuals. These restrictions may result in an unwarranted U.S. estate tax burden because the individuals happen to die while in the United States, when their purpose for being here is employment with an international organization. This bill addresses these problems by providing for a limited marital transfer credit. The bill would apply to a holder of a G-4 (international organization employee) visa on the date of death. Normally, a resident employee and the spouse would each be entitled to a unified estate and gift tax credit, which under current law is equivalent to an exemption of $650,000 or a total of $1,300,000. However, if the employee dies the spouse would normally return to the country of citizenship. In that case, the surviving spouse would not utilize his or her unified credit. The bill would provide for a limited marital transfer credit, which again would be the equivalent of $650,000. Thus, in a deceased employee's estate, there would be available the unified estate and gift tax credit for bequests to any beneficiaries selected by the decreased, as well as a maximum marital transfer credit equivalent to $650,000, the latter limited for use to marital transfers. A similar provision would apply to nonresident individuals who are not U.S. citizens; however, the unified credit equivalent of $60,000 would be submitted for the $650,000. I believe this change would appropriately address the problem that currently exists. Support of my colleagues in enacting this important piece of legislation is welcomed.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I do not know why we are doing this to ourselves. I mean, every single year we come up and beat the tambourine and hit the drum. This is not going to go anyplace. We cannot cut off our relationship with China. We do not want to do it. It is the wrong thing to do. There are hundreds of ways to make China an enemy. This just happens to be one of them. Now, it is very easy to get into specifics here, but I have been to China. I have done business there. I know what they are doing. We have a trade deficit. It is not going to get turned around soon. There are human rights problems. There are labor problems. There are environmental problems. But I can remember talking to one of the people in one of our plants over there who said, You can be philosophic about trade relations with China. You can cut it off or increase the tariffs. Let me tell you something, my job is on the line; and I want you to remember that, because I am trying to have an impact here not only with my company but also with my family. We must be able to relate and to talk and share ideas and to trade. How else do things change? Just by shutting off things? No. So to cut off the normal trade status with China, I think, is wrong, and I think we must oppose H.J. Res. 57.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, really, there are two themes here. One is the economic and one is the human. And sometimes we get confused with sort of the opinions on the economics and the facts on the economics. I am not going to get into the details because I disagree totally with some of the assumptions that have been made, that transshipments are going to deluge this country, it is going to open the doors to China. I do not think that is going to happen, but that is an opinion. We have the mechanisms to stop that. I think that regarding the question about textile jobs, if I were representing a textile State, I would probably be concerned, also. But when we take a look at the actual numbers and the impact this is going to have, it is not a big worry. I think as far as the human side, Sheila Sisulu, the Ambassador from South Africa, said this: If the first 5 years after apartheid were about ``nation-building, now it is about making hope a reality,'' and that is in terms of helping them economically. Frankly, if we cannot help Africa in this tiny little impact on this Nation, who can we help? I love Africa, but if everybody else loved Africa, why can they not support this bill?

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleagues, Messrs. Sam Johnson from Texas and Sander Levin from Michigan, and Ms. Jennifer Dunn from Washington, in introducing our bill which would protect, as confidential tax information, advance pricing agreements (APAs) and the information in the background file. This information would be protected under Section 6103 of the Internal Revenue Code and treated as an exception to the public inspection provisions provided in Section 6110 of the Code. The APA program began in 1991. From all reports it has been successful. The program has provided a mechanism to resolve transfer pricing issues (i.e. the appropriate arm's length price for sales, services, licenses and other transactions between related parties) of multinational companies for not only prior years, but also for specified years in the future. It saves time and money for the government as well as for taxpayers. It also reduces protracted and costly litigation. The program involves not only taxpayers and the IRS, but also where certain double taxation treaties are applicable, foreign taxing authorities as well. From the beginning of the program, taxpayers, as well foreign governments, have relied on assurances that the information received or generated by the IRS would be protected under the confidentiality requirements of Section 6103. Such assurances were based on published IRS information. As a result, multinational companies were willing to disclose sensitive pricing information, trade secrets, and other data in the interests of efficiently determining the proper and agreed-upon transfer pricing methodology and agreement. Earlier this year, the IRS notified taxpayers that, contrary to its long-standing policy, the APAs are subject to disclosure under Section 6110--which requires disclosure of any IRS ``written determination''. This change by the IRS came in response to a lawsuit brought by a commercial publisher of tax information. Although the lawsuit is not settled, the IRS is proceeding with redaction and release of the APAs issued since 1991. The release is scheduled for October, 1999. We do not find it difficult to believe that tax return information, as well as pricing, trade secrets and other sensitive data which were provided and used in completing an APA, remain confidential under Section 6103, and excluded from the provisions of Section 6110. Otherwise, we do not believe taxpayers will continue to support the program. Clearly it is essential under our tax system to provide as much useful tax guidance to the public as possible, while maintaining the confidentiality and identity of the taxpayers involved. Thus, the bill would provide for an annual report by the Secretary of the Treasury. This report would include statistical information on the issuance of APAs and renewed APAs. In addition, the report would set forth general summaries of the methodologies used in the APAs, together with hypothetical examples. Such a report should serve the interests of providing additional guidance to taxpayers regarding the approach used by taxpayers and the IRS in reaching agreements on transfer pricing. We invite our colleagues to join us in supporting this important legislation affecting the confidentiality of taxpayer information.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise to say that I missed votes numbered 204-238 from June 14 to 18, 1999, as I was attending the inauguration ceremony of South African President Thabo Mbeki. Under the authorization of Chairman Ben Gilman of the House International Relations Committee, I was the sole representative of the U.S. Congress at the inauguration.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I rise in recognition of Alan Emory. On June 7, Mr. Emory began his 53rd year with the Watertown Daily Times. He has spent more than 47 of those years reporting and analyzing news in Washington. A year ago he became the paper's senior correspondent, reporting on politics and Canadian-United States relations, in addition to writing two columns a week, one Op-ed in midweek, one in the Times' Sunday Opinion Weekly Section. Mr. Emory's most recent work includes breaking stories on: the dispute over the John Kennedy assassination film between the Zapruder family and the government, the assassination review board's failure in its last report to end the theories of how the President died, the continued federal secrecy surrounding the late physicist Glenn Seaborg's diaries, the significance of the Supreme Court's ruling that a sitting President must answer civil suit charges involving pre-White House activities, the fact that the House of Representatives has never censured a sitting President, the saga of the Navy crew making the most daring air-sea rescue in World War II's Pacific fighting and the service high command's refusal to give the crewmen the medals they had been promised 54 years ago, and the word that the only New York City mayor ever to ascend to a higher political office in the state was named Clinton (DeWitt). Two years ago President Clinton and Vice President Gore saluted Mr. Emory's 50 years with The Times, and last year my colleagues John McHugh, Jerry Solomon, Jim Walsh and Tom Davis commended him on the House floor. Today I would like to echo their praise and thanks to Alan for his good work, and wish him well as he continues as the Johnson Newspaper Corp.'s (Watertown's) senior correspondent and Washington columnist.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I rise to recognize a constituent of mine, Sandra Sopak. Sandy is the County Clerk for Chautauqua County, New York and recently won the National Genealogical Society's Award of Merit. It reads: Sandra Sopak receives the NGS Award of Merit for her willingness to cooperate with the Chautauqua County Genealogical Society in order to make records more available to the public. Her latest efforts include arranging to have photocopies made of all county tax lists, many of which date from 1850 and before, so the Society's publications committee can extract, index, and ultimately publish this valuable historical information. The Society, in turn, donated a set of their genealogical indexes to aid the county clerk when she is asked for vital record information. This is a fine example of record-keepers and record-seekers working together for the benefit of both. This is the first time that this award has been given to a County Clerk--and a popular County Clerk at that. Sandy was elected in 1993, and was re-elected in 1997 overwhelmingly. In praise of her contribution, a friend and coworker of Sandra writes, ``She is a thoughtful leader within Chautauqua County government, a former town supervisor, a former hospital nurse, as well as a dedicated mother and wife. Her example should be recognized by Americans from not only New York but from all across America.'' Mr. Speaker, today I rise to spread that recognition across America. Thank you, Sandy, for your hard work.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleague from New York, Mr. Rangel, together with a number of other colleagues, in introducing our bill, The Work Opportunity Tax Credit Reform and Improvement Act of 1999. The bill would permanently extend the Work Opportunity Tax Credit and make other changes discussed below. After a number of improvements over the past few years, the program is being well received in providing employment, with training, for our disadvantaged. We believe the WOTC and Welfare to Work Credit (WTWC) programs have been very important in helping individuals become employed and make the transition from welfare to work. Such training can be costly and the credits provide an incentive to employers to hire the disadvantaged and provide the needed training while offsetting costs associated with the latter effort. Of course, many believe that the program would be even more successful if it could be extended indefinitely. Employers, both large and small, could depend on the program and would be more likely to seek out potentially qualified employees. That change would benefit everyone. We have proposed several other changes in the bill which would streamline and simplify the program. First, the Welfare to Work Credit program would be merged into WOTC, by establishing an additional category for WTWC. The separate Section 51A for WTWC would be repealed. The bill would also standardize the definition of wages based on the current law WTWC definition. This change broadens the definition by including benefits paid to the employee. The bill would also apply the same 40% credit rate for both the WOTC categories (first year wages of $6,000) and for the WTWC category (first and second year wages of $10,000) in the interests of simplification. Lastly, the bill would add ``Section 501(c)(3)'' organizations as a qualifying employer. The credit would be treated as an offset against employment tax liabilities otherwise due. It is believed that these organizations could hire and train many of the disadvantaged, and the credit would provide an incentive for such organizations to seek out these individuals. This provision would add a new avenue for moving individuals from welfare to work. Because this is a new change to the program, even though included in proposed legislation in the past, it is being proposed as a three year pilot project. This period will allow a period of time to determine if this feature of the overall WOTC program is effective and produces the desired result. We urge our colleagues to join us in cosponsoring this important legislation to extend and improve the Work Opportunity Tax Credit program.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleagues, Messrs. Levin, Sam Johnson, Herger, Matsui, Crane, and English in introducing our bill, ``International Tax Simplification for American Competitiveness Act of 1999''. The world economy is globalizing at a pace unforseen only a few years ago. Our trade laws and practices have encouraged the expansion of U.S. business interests abroad, but our tax policy lags decades behind--in fact, in many cases, our international tax policy seems to promote consequences that are contrary to the national interest. In the 1960s, the United States accounted for more than 50 percent of cross-border direct investment. By the mid-1990s, that share had dropped to about 25 percent. Similarly, of the world's 20 largest corporations (ranked by sales), 18 were U.S.-headquartered in 1960. By the mid-1990s, that number had dropped to eight. The 21,000 foreign affiliates of U.S. multinationals now compete with about 260,000 foreign affiliates of multinationals headquartered in other nations. The declining dominance of U.S.-headquartered multinationals is dramatically illustrated by the recent acquisitions of Amoco by British Petroleum, the acquisition of Chrysler by Daimler-Benz, the acquisition of Bankers Trust by Deutsche Bank, and the acquisition of Case by New Holland. These mergers have the effect of converting U.S. multinationals to foreign-headquartered companies. Ironically, despite the decline of U.S. dominance of world markets, the U.S. economy is far more dependent on foreign direct investment than ever before. In the 1960s, foreign operations averaged just 7.5 percent of U.S. corporate net income. By contrast, over the 1990-97 period, foreign earnings represented 17.7 percent of all U.S. corporate net income. Over the last three decades, the U.S. share of the world's export market has declined. In 1960, one of every six dollars of world exports originated from the United States. By 1996, the United States supplied only one of every nine dollars of world export sales. Despite a 30 percent loss in world export market share, the U.S. economy now depends on exports to a much greater degree. During the 1960s, only 3.2 percent of national income was attributable to exports, compared to 7.5 percent over the 1990-97 period. Foreign subsidiaries of U.S. companies play a critical role in boosting U.S. exports--by marketing, distributing, and finishing U.S. products in foreign markets. U.S. Commerce Department data show that in 1996 U.S. mulitnational companies were involved in 65 percent of all U.S. merchandise export sales. In the 1960s, the foreign operations of U.S. companies were sometimes viewed as disconnected from the U.S. economy or, worse, as competing with domestic production and jobs. In today's highly integrated global economy, economic evidence points to a positive correlation between U.S. investment abroad and U.S. exports. At the end of the 20th century, we confront an economy in which U.S. multinationals face far greater competition in global markets, yet rely on these markets for a much larger share of profits and sales, than was the case even a few years ago. In light of these changed circumstances, the effects of tax policy on the competitiveness of U.S. companies operating abroad is potentially of far greater consequence today than was formerly the case. As we begin the process of re-examining in fundamental ways our income tax system, we believe it imperative to address the area of international taxation. In an Internal Revenue Code stuffed with eye- glazing complexity, there is probably no area that contains as many difficult and complicated rules as international taxation. Further, I cannot stress enough the importance of continued discussion between the Congress and Treasury of simplifying our international tax laws; and in making more substantial progress in regard to eliminating particular anomalies such as with the allocation of interest expense between domestic and foreign source income for computation of the foreign tax credit or in regard to how our antiquated tax rules deal with new integrated trade areas such as the European Union. None of us is under any illusion that the measure which we introduced removes all complexity or breaks bold new conceptual ground. We believe, however, that the enactment of this legislation would be a significant step in the right direction. The legislation would enhance the ability of America to continue to be the preeminent economic force in the world. If our economy is to continue to create jobs for its citizens, we must ensure that the foreign provisions of the United States income tax law do not stand in the way. There are many aspects of the current system that should be reformed and greatly improved. These reforms would significantly lower the cost of capital, the cost of administration, and therefore the cost of doing business for U.S.-based firms. This bill addresses a number of such problems, including significant anomalies and provisions whose administrative effects burden both the taxpayers and the government. The focus of the legislation is to put some rationalization to the international tax area. In general, the bill seeks in modest but important ways to: (1) simplify this overly complex area, especially in subpart F of the Code and the foreign tax credit mechanisms; (2) encourage exports; (3) enhance U.S. competitiveness in other industrialized countries. The bill would, among other necessary and important adjustments, make permanent the provision regarding the subpart F exception for active financial services income, modify other provisions that apply subpart F of the Code in inappropriate ways, eliminate double taxation by extending the periods to which excess foreign tax credits may be carried, restore symmetry to the treatment of domestic and foreign losses, and make needed adjustments to the so-called ``10/50 company'' provisions that burden the joint venture relationships that many of our companies form in their international business relations. In summary, the law as now constituted frustrates the legitimate goals and objective of American business and erects artificial and unnecessary barriers to U.S. competitiveness. Neither the largest U.S. based multinational companies nor the Internal Revenue Service is in a position to administer and interpret the mine numbing complexity of many of the foreign provisions. Why not then move toward creating a set of international tax rules which taxpayers can understand, and the government can administer? Therefore the proposed changes we believe represent a creditable package and a ``down payment'' on further reform in the international tax area. We urge our colleagues to join us in cosponsoring this important legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, it is good to be here talking about this issue. I really do not think it is playing around. This is an honest debate, and it is a good debate, and I applaud the basic concept of the lockbox. Since Vietnam, we have been digging into the Social Security fund. It does not make any sense. It is not right. It has got to be stopped. This is one method to stop it. I just do not happen to agree with it, and I know my associate on the other side of the aisle says, we are going to vote for it. But why not? I think there is a real distinction here, and I would like to tell my colleagues why I am going to vote against the bill. The goal is valid, and we have got to reach that goal, but we have got to reach it honestly. The thing I fear is that we are so driven by a concept that we will not think through what it means, and this is a pretty exact piece of legislation. It requires that all Social Security receipts, all of them in excess of cost, paying Social Security checks, be set forth separately and immediately into the House and Senate budget resolution. There are no exceptions for emergencies, and it requires a point of order in the House, and 60 votes of the Senate to act otherwise. Now, there is going to be a surplus, but there is not a surplus now, and with the supplemental emergency dollars just approved for Kosovo and the military buildup and other natural disasters, we are, as we have in the past, using a part of that Social Security excess. Now, if we do not, then we have to borrow that money because we do not have that money, and we all want to stop that practice. Now, we have borrowed enough, so all we need to do is to avoid borrowing, or if we do not want to do that, we can wean ourselves away from using Social Security funds. These are worthy goals. We are within sight of achieving both of them, but we are not there yet, and I think we will be in three years, but we are not today. So if we insist on passing this lockbox legislation, I predict with almost certainty that before the year is out we will be violating our promise. I cannot believe this is a sound way of approaching our budget and, therefore, I am going to vote against the measure.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, Congress can take great pride in changes we have made in tax law in recent years for small businesses, families and middle income Americans. Unfortunately, we cannot claim to have reduced the complexity of the tax code. A simple Constitutional amendment ratified in 1913 runs to 32 words: ``The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.'' The Revenue Act of 1913 which enacted the income tax was 15 pages long. The copy of the Internal Revenue Code on the bookshelf in my office is printed on the tissue thin paper. It covers over 2300 pages. The regulations springing from the code fill many volumes. The court cases would fill a library. Is it any wonder that 66 percent of respondents in a recent Associated Press poll said that the federal tax system is too complicated? The same poll showed that over half of those surveyed, 56 percent, pay someone else to complete their returns. When you consider that only 30 percent of taxpayers itemize, that is a good number of people who are paying someone else to fill out 1040s and 1040EZs. Something is wrong when so many taxpayers with relatively straightforward returns lack confidence in their ability to fill out a 1040 or a 1040EZ. At the beginning of this year, the Ways and Means Subcommittee on Oversight heard from the Taxpayer Advocate in its first hearing of the 106th Congress. The Advocate presented some 39 legislative proposals for improving service or reducing the compliance burden. He told us that his recommendations came from a ``groundswell of casework.'' Later this month, the Oversight Subcommittee will hold a hearing on the need to simplify the tax code and reduce the compliance burden. I look forward to hearing from Treasury and from several professional organizations, also from practitioners who work in the field every day trying to help working men and women comply with our tax laws. In the meantime, I am in the process of drafting legislation (The Tax Simplification and Burden Reduction Act). It includes several of the Advocate's recommendations, proposals developed by the Tax Section of the American Bar Association and the American Institute of Certified Public Accountants, also suggestions I have received from the people of New York's 31st Congressional District and from people across the United States who have written to the Subcommittee on Oversight. My bill would include the following provisions: Eliminate nonrefundable credits as adjustments to regular taxable income in calculating alternative minimum taxable income. No one should have to pay the alternative minimum tax (AMT) simply because he or she claimed a child credit or HOPE scholarship credit. Exempt taxpayers from the AMT if their modified adjusted gross income is below a middle-income threshold ($85,000 for individuals, $120,000 for married, filing jointly). The AMT was never intended to penalize middle-income taxpayers who aren't using loopholes in the tax code. Increase the AMT gross receipts exemption for small businesses from $7,500,000 to $10,000,000. By the same token, the AMT is an unnecessary and extraordinary burden for many small businesses. Replace the current individual capital gains tax regime with a simple 50 percent deduction from gross income. The current form is 54 lines long and according to the Treasury Department takes an average of 6 hours and 41 minutes to complete. Many taxpayers have to fill out this form simply because they earned a few dollars from a mutual fund. The 50 percent calculation would completely eliminate this burden. Allow a deduction for all refinancing mortgage points for personal residences in the year paid. It is simply too confusing to require these relatively small amounts to be amortized over the life of a long- term mortgage. Increase the exclusion for group-term life insurance purchased for employees from $50,000 to $100,000. Taking modest life insurance coverage into income is a needless inconvenience for many taxpayers. Repeal the percent limitation on contributions to defined contribution retirement plans. The current law restriction is not only confusing, it limits the ability of lower income workers to save for retirement. Simplify the safe harbor for payment of estimated income taxes. Under current law, the safe harbor changes from year to year. My bill would eliminate the fluctuation. Allow expensing of off-the-shelf computer software by small businesses. Depreciating such small investments is hardly cost- effective considering the compliance burden for the taxpayer. Allow expensing of personal property (e.g. carpeting, refrigerators, washers) purchased for use in connection with residential rentals. this would eliminate a common error and result in increased compliance. Simplify Subchapter S rules. The Subchapter S regime has become a maze of complex requirements and a snare for even the most experienced taxpayers. A major overhaul is needed. Increase the gross receipts threshold for the cash method of accounting from $5,000,000 to $10,000,000. We are forcing far too many small businesses to use the accrual method of accounting. Extend the $10,000,000 gross receipts threshold for the uniform capitalization (UNICAP) rules to all small business activity. Compliance with the UNICAP rules is particularly complex if not impossible for small businesses. Reduce recordkeeping requirements. Under current law taxpayers are required to keep indefinitely all records that may become material. The bill would require taxpayers to keep only primary records after six years if there is no audit in progress. Increase from $10 to $25 the threshold for dividend and interest payments that must be reported on form 1099. Requiring savings institutions and other payors to report such minimal amounts is an inefficient use of private sector resources. Treat the postmark date as the filing date on all returns. Under current law, the postmark date is material only when the return is filed on time. Considering the postmark date as the filing date for all returns would eliminate confusion. Mr. Speaker, several of my colleagues, including the gentleman from Pennsylvania (Mr. Coyne) and the gentleman from Massachusetts (Mr. Neal), both of whom serve on the Oversight Subcommittee, have introduced simplification bills of their own. My immediate predecessor, the gentlelady from Connecticut (Mrs. Johnson), established a compelling hearing record when she chaired the Subcommittee. I applaud their efforts and look forward to working with them on this tremendous important challenge. In the coming days, I will be approaching my colleagues to ask them to join me as original co-sponsors of the Tax Simplification and Burden Reduction Act.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, J.J. (Jake) Pickle is one of the outstanding men I've ever known. He is a doer. His House record is filled with significant and sensitive accomplishments. But you have to dig it out. As contrasted to the hefty P.R. machines that work around Washington, Jake's was modest, infrequent, and honest. As a human being and friend, one could find no more genuine example. Friendship consists of a special radar and consistency. The knowledge that a friend is ``there'' reflects the kernel of friendship. That is Jake Pickle. Jake stood on the world stage for years with distinction. But his most meaningful contributions always seemed to show up with everyday people. Some have that touch to relate. Jake's touch is infallible. To dedicate anything to Jake Pickle does the greatest credit to the originators.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise today on behalf of H.R. 1604, a bill which would allow New York State farmers to join the New England Dairy Compact. The compact is not a panacea for dairy problems, but it is a start. There are those who argue against it--too restrictive, anti- competitive, will increase milk prices. Despite the nay-sayers, there are many reasons to support this compact, and I support it. There are cultural reasons, economic reasons, and an overriding consideration: our own farmers want it. The current compact in New England was established about two years ago. It provides dairy farmers with a steady, predictable floor price for their milk. And that is important. Dairy farmers for the most part live so close to the line that mild gyrations in the price they receive can be lethal. How would anyone like to run a business where the price of your product in one day can drop 40% and you have no control over it. Your product, your quality, your service is better than ever. Through non- economic sources beyond your control your whole business stands on the brink of destitution. 5,600 New York dairy farms went that route in the last ten years. There are three groups opposed to this life-saving compact. First, the large Midwestern producers who in effect control through government orders the floor price of liquid milk and cheese. Second, the big city political powers who claim that a compact to stabilize prices will at the same time increase prices to the poor. This has been disproved over and over again. Third, the middle men--those who handle, package and distribute the raw milk before it reaches retail consumers. While the farmer receives the same price for his milk on average as he did 20 years ago--this guy has jacked up the price to the consumer in this same period by 35%. Everyone has a right to fight for his or her economic interests, but not using the government as an accomplice, and not at the expense of those who milk the cows and produce the basic product. Something is terribly wrong when downstream interests enrich only themselves and prey on the vulnerability of smaller family farms. These plus others hold in their hands the ability to drive an important part of our heritage as well as our food supply to the wall. If government is for anything it is to protect those who can't protect themselves. This is why I, along with others, am fighting for a multi-state Dairy Compact. The dairy business could soon be dominated by mega-farms whose only claimed advantage is an economy of scale. That's not sufficient reason to muscle out others of lesser size whose costs are similar, but whose deep pockets are not. If the federal government is going to be in the dairy business at all, it better try to serve the many, not the few. Is a compact the answer to all the problems in our dairy industry? Of course not. But it will help preserve our family producers until a more permanent solution can evolve. So, the way I see it, a compact benefits farmers and consumers. That's why I will fight for its passage.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from New York, Mr. Rangel, together with a number of other colleagues, in introducing our bill that would eliminate a fundamental unfairness in the application of the U.S. tax law to taxpayers that have income from foreign sources. A U.S. citizen or domestic corporation that earns income from sources outside the United States generally is subject to tax by a foreign government on that income. The taxpayer also is subject to U.S. tax on that same income, even though it is earned outside the United States. Thus, the same income is subject to tax both in the country in which it is earned and in the United States. However, the United States allows taxpayers to treat the foreign taxes paid on their foreign-source income as an offset against the U.S. tax with respect to that same income. This offset is accomplished through the foreign tax credit; the foreign tax paid on foreign-source income is treated as a credit against the U.S. tax that otherwise would be payable on that same income. Although the details of the foreign tax credit rules are extraordinarily complex (as are the international provisions of the Internal Revenue Code generally), the basic principle is simple: to provide relief from double taxation. When it comes to the alternative minimum tax (AMT), this basic principle of providing relief from double taxation falls by the wayside. The AMT was enacted to ensure that individuals and businesses that qualify for various ``preferences'' in the tax rules nevertheless are subject to a minimum level of taxation. However, the foreign tax credit provisions of the AMT operate to ensure double taxation. Under these AMT rules, the allowable foreign tax credit is limited to 90 percent of the taxpayer's alternative minimum tax liability. Because of this limitation, income that is subject to foreign tax is subject also to the U.S. AMT. The result is double (and even triple) taxation of income that is used to support U.S. jobs, R&D and other activities. There is no rational basis for denying relief from double taxation to that class of taxpayers that are subject to the AMT. Accordingly, the bill we are introducing today will eliminate the 90 percent limitation on foreign tax credits for AMT purposes. With the elimination of this limitation, relief from double taxation will be provided to taxpayers that are subject to the AMT in the same manner as it is provided to those taxpayers that are subject to the regular tax. Concern regarding the unfairness of the AMT limitation on the use of the foreign tax credits is not new. Indeed, the House in 1995 passed a provision repealing the 90 percent limitation as part of a complete package of AMT reforms. Overall reform of the AMT, for individuals and businesses, remains an important piece of unfinished business. This bill to eliminate the 90 percent limitation on foreign tax credits for AMT purposes represents an important step in that direction and we urge our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I'd like to recognize a hero. His team has won the World Series in two of the last three years (1996 and 1998). Last year he managed perhaps the greatest team in history, winning 114 regular season games (out of 162) and 125 overall. And after these victories, he said, ``As far as the hunger and desire, I'll walk away from this game before I think I don't have to work hard.'' And that man is the New York Yankees' 31st Field Manager, Joe Torre. But, Mr. Speaker, Joe Torre is a hero in another field as well, in the health arena, as a patient winning his fight against prostate cancer. Prostate cancer is the second leading cause of cancer death among men, with over 80% of all cases occurring in men over 65. African-American men tend to be diagnosed with the disease at later stages and to die from prostate cancer at a higher rate than do white men. Joe Torre was diagnosed by a screening exam that was conducted for the entire Yankee team. Prostate cancer is the most diagnosed non-skin cancer in the US. In 1999, prostate cancer will kill an estimated 37,000 men in the US. In 1999, 179,000 men will be diagnosed with prostate cancer in the US. The most important thing to do is to catch the cancer early. Generally, the earlier the stage of cancer at the time of detection, the higher the survival rate. Prostate-specific antigen screening PSA blood test and digital rectal examination (DRE) of the prostate gland are the most common of detection methods. The American Cancer Society recommends annual PSAs and DREs, to men aged 50 and older with at least a ten year life expectancy, and to younger men at higher risk, such as African-American men or men with a strong familial pre-disposition to prostate cancer. Thankfully, for Joe Torre, this annual screening process detected the disease in its early stages, so he has great chances of defeating this terrible disease. Doctors say they expect a full recovery. On behalf of the men who can be similarly helped, I encourage all men, starting around age 50, to have a regular exam annually. And I'd also like to encourage my colleagues to support the continuation of sufficient funding for research into the causes and cures for prostate cancer.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from Michigan, Mr. Levin, together with twenty-one of our colleagues, in introducing our bill, the ``Public Benefit Collaborative Research Tax Credit.'' This bill would amend the research and experimentation tax credit in order to foster collaborative scientific research projects through broadly supported non-profit section 501(c)(3) research consortia. These collaborative not-for-profit scientific research consortia are devoted to research projects that benefit not just one company, but the economy and the country as a whole. Our amendment to the research credit would provide incentives for multi-company and multi-industry research partnerships, with the result that this important tax credit would be structured to foster the kind of collaborative research on which America's economic growth in the 21st century will depend. Our proposal would require that the research tax credit be extended beyond its June 30, 1999 expiration date, and we strongly urge extension of the credit. The research intensive sectors of our economy find it very difficult to do planning for research due to the constant stop-and-start arising from the perennial expiration and re-enactment of the research credit. The research credit is one of our most important tax incentives for economic growth, because scientific and technological innovation are, in the final analysis, the sources of that growth. This is why our public benefit collaborative research credit proposal is so important. More and more scientific and technological research of the greatest economic value now takes place not in the confines of individual companies, but collaboratively--and this is true for traditional manufacturing and utility sectors as well as computers and telecommunications. Yet the research credit as it currently stands actually contains disincentives for collaborative research. Companies are required to reduce their contributions to non-profit research consortia by an arbitrary 25% before those amounts can be used in the computation of the credit. Our proposal would eliminate the disincentives in current law for collaborative research, and make the research credit ``fit'' modern research-partnership approaches. Under our bill, companies would be entitled to a flat (non- incremental) 20% credit for support payments made to non-profit, tax exempt section 501(c)(3) scientific research organizations. Section 501(c)(3) scientific research organizations are required under existing law--which would not change--to make their research results available to the public on a nondiscriminatory basis. In this way, our proposal assures that all the scientific research for which our new credit is allowed is public-benefit research. In addition, for support payments to be eligible for our credit, the tax-exempt scientific research organization receiving the support payments would be required to have at least 15 unrelated supporting members, no three of which provide more than half of its funding and no one of which provides more than 25% of its funding. This assures that only truly multi-company collaborative research consortia are supported by our proposal. Examples of broadly supported section 501(c)(3) research consortia whose continued success is tied to our proposal are the Gas Research Institute, funded by member companies in the natural gas industry, the Electric Power Research Institute, funded by member companies in the electric utility industry, the National Center for Manufacturing Sciences, funded by a coalition of high-technology manufacturing companies, the American Water Works Association Research Foundation, funded by water utilities, and non-profit consortia funded by other utility sectors, Collaborative public-benefit scientific research conducted by these and other section 501(c)(3) research consortia (and our bill should encourage new consortia) represents some of the most efficient and economically significant research being performed in the United States today, e.g. in the areas of cutting-edge manufacturing techniques, energy efficiency, public health, and economically rational pollution control, among many other areas. Collaborative research consortia supported by our proposal are devoted to sophisticated scientific research that in many cases no single company could afford, or would be willing, to conduct on its own, because of the uncertainty of immediate success or because of the risk of copycat competitors. For all these reasons collaborative scientific research represents our brightest economic future. Our bill amends the research tax credit provisions to foster this goal. We urge our colleagues to join us in cosponsoring this very important legislation, the ``Public Benefit Collaborative Research Tax Credit Act of 1999.''

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am not going to take long. To me it is very simple. I absolutely support the members of the armed forces, I support our President, I support the mission. I do not think there is a single person around here who does not see this as one of the most difficult decisions we can make. But make it we must, and we may not be divided. We must not be divided. Mr. Speaker, I support this particular House Resolution 130 wholeheartedly.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I applaud the gentleman from Indiana for bringing up this issue. It is an important one, we have to get at it, we have got to do something about it. The issue is not over the hurt. The issue is how to cure the hurt. It seems to me from my experience that this bill has a heart but it does not have a head. What do I mean by that? First of all, it is not going to go anyplace. Even if it did, it is WTO illegal. Furthermore, the most important thing is we have sort of a reverse golden rule. We are doing unto others what we do not want others to do unto us. An example of that, of course, is the banana issue. I have been in this situation personally. I have been in a company which almost went on its knees because of unfair trading practices, and I relate to that. There are two issues here, though. There is the antidumping issue, and there is the threatening of an industry issue. It is not just antidumping. This is an industry, the steel industry, which is threatened by its very existence, and this is a different part of the trade law and we have got to get at this. But this is not the way to do it, because it is not going to go anyplace. It is not going to be legal. It is going to hurt us long-term. There is another alternative, and I really point to the gentleman from Michigan (Mr. Levin) who has been extraordinarily helpful in this. There is a bill coming up within the next couple of weeks called H.R. 1120. It gets at the issue, it is legal, it is bipartisan, and I think it has the support of the administration. I think the important thing to know is that there is a mine field out there in international trade. It is not exactly clear, and you have to sort of muddle your way through it but you have to do it in consideration of the rest of the world and also our trading partners. The bill that will be coming up that the gentleman from Michigan (Mr. Levin) and I are sponsoring does several things. First of all it shortens the time. If you have a 201 case, many times you will say, ``Why should I apply this, why should I file, because I can't afford it. It takes too long. It's very, very expensive.'' We are going to fix that. Also, it creates an early warning system which is very, very important and anticipates these surges. The most important thing it does, and I think the gentleman from Michigan (Mr. Dingell) indicated this earlier, if people work the laws on the books as they are now, then we would not have this problem. The administration for years and years and years has not done that. The last person out of the oval office is usually one of the top secretaries, the Secretary of the Treasury, the Secretary of State and they are talking about the macro issues. In the meantime, the individual industries go under. This tends to put the onus on the President, on the administration to abide by and enact and do the things which are necessary under the laws. I would encourage people not to vote for H.R. 975 but to wait for a couple of weeks because we have a good bill coming up.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, I am tempted to go through the philosophies and the history and the risks and the costs that are involved here. But to me, and it may be a reflection on my own position, to me, it is a very simple issue that we are in a situation now where decisions have to be made. We can be doubtful and unclear and opinionated about some of the things, whether it is the reigniting of anarchy in Albania or destabilizing Macedonia, but that is not the point. The point is this is a horrible time I think to have this debate. If we are going to have peace, we must have successful negotiations. We are right in the middle of negotiations now. If we vote down this resolution, the negotiations have no merit because there is no incentive for the people to continue the negotiations. If we vote for this resolution, we can continue the negotiations. It is a nonbinding resolution. If we want to, we can take up the issue whether we should have troops in Bosnia or not. So, therefore, it is a very clear issue. Do we want to continue the negotiations? Do we not want to continue the negotiations? I am for continuing, and I am for this resolution.

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 State and Local Investment Opportunity Act of 1999.'' The bill would raise the annual cap on states' authority to issue their own tax-exempt ``Private Activity'' bonds to $75 times population ($225 million if greater) and provides for an inflation adjustment based on the consumer price index for calendar years after 2000. The bill would be effective for calendar years after 1999. A similar bill was introduced in the 105th Congress and was enacted without the indexation provision and the increase in the annual cap is being phased in starting in 2003. Thus, our new bill is the same as last year's bill except for the indexation and effective date. Chairman Archer of the Ways and Means Committee was totally cooperative in our effort last Congress, and indeed was key in including our original proposal in the Taxpayer Relief Act of 1998, which the House passed but the Senate did not take up. Nevertheless, the Chairman persisted in including the phased-in provision in the smaller so-called ``extender bill'' that was enacted. We believe this change is important to all of us, in that tax-exempt Private Activity Bonds finance affordable ownership and rental housing, manufacturing job creation, environmental cleanup, infrastructure and student loans. Nationwide, demand for bond authority exceeded supply by nearly 50 percent in 1997, according to the National Council of State Housing Agencies. This is a bipartisan issue. Three-quarters of the House supported our bill in the 105th Congress and a majority of the Senate cosponsored identical Senate legislation. The nation's governors and mayors, other state and local governmental groups, and the public finance community all strongly support full bond cap restoration. On the possibility that a large tax package moves forward this session, we believe it is important to reconsider the effective date issue, as well as the indexing for inflation going forward. We urge our colleagues to join us in cosponsoring this important legislation--``The State and Local Investment Opportunity Act of 1999.''

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from New York, Mr. McNulty, as well as a number of other colleagues, in introducing a new bill to effectively exempt from taxation the proceeds of the Federal government's reward of $1 million paid to Mr. David Kaczynski for information leading to the conviction of the Unabomber. We introduced a similar bill late last session, which was passed by the Senate but, due to procedural and content changes, was not considered in the House before adjournment. We believe we have addressed the content concerns of the proposal and are reintroducing a more general bill to be considered through the regular legislative process. As you may remember, in the fall of 1995 Mr. David Kaczynski provided invaluable assistance to the FBI. As a result of Mr. Kaczynski placing the health and safety of American citizens ahead of family loyalty, Federal authorities were able to apprehend his brother Theodore, the infamous Unabomber. The Federal Government had offered a $1 million reward for information leading to the conviction of the Unabomber. Not wanting to profit personally from the tragedy caused by a deeply troubled member of their family, David Kaczynski and his wife pledged to distribute the net proceeds, after taxes and attorneys' fees, to his brother Theodore's victims and their families. However, because this income was considered taxable they were only able to direct $534,150 to a community based foundation to be used to benefit the victims of violent crime. If this reward had been tax-exempt, David and his wife would have had approximately $200,000 more to distribute. Accordingly, we are reintroducing the bill today, which would permit the full reward to be tax-exempt and allow the amount, otherwise used to pay taxes, to ultimately benefit the victims and their families. We invite our colleagues to cosponsor this legislation and assist us in closing this chapter of the Unabomber saga and bring some sense of justice to the Unabomber's victims and their families.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am going to take a little different tact here. I stand here as a Republican. I am proud of my party. But I am opposed to impeachment, and have proposed my own censure motion, which sadly will die with this session. But this is today. What about tomorrow? Today we deal with the law. Tomorrow we deal with people's lives. The famous parliamentarian which we have all read, Edmund Burke, once said, ``The law sharpens the mind by narrowing it. But in a few, law has lifted the mind to a level of comprehension and humanity.'' So, Mr. Speaker, when all the arguments are done and when the votes are taken, this is what we must work for, the humanity, the healing of this Nation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I have been sort of a hard hat all my life about countries and industries taking advantage of the United States. One of the hardest things for me to have seen in terms of our basic materials are consumer electronics, things like that, where as countries come in and put our businesses out of business and yet at the same time we cannot get back into their countries. Now having said that, we must be careful in how we counterattack. The idea of banning steel I think is very, very risky. We have provisions in the trade law called 301 and super 301 as against dumping which we can enact. They are on the books; we can do something about it. Furthermore, even with the depreciation of the currency where there is no dumping at all there are opportunities to use section 201 which allows endangered industries to appeal and get some sort of relief. Those 2 provisions are on our books. We must use them, use those provisions. That is what the trade law was supposed to do.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise today to applaud the University of Miami for naming the North-South Center after one of their most esteemed graduates and one of the greatest Members of Congress to sit in this chamber--Dante Fascell. My experience with Dante really started when I joined the International Relations Committee in 1988. Dante was Chairman. He was always fair, even handed, and very knowledgeable in all matters of international relations--especially on issues pertaining to the U.S.- Latin America relationship. That's why I feel that naming the Center after Dante is particularly appropriate. Dante Fascell has contributed so much to the North-South Center, the University of Miami, the Congress, the Nation, and the world. I'm so glad that he's been honored so appropriately. I think I speak for everyone, Mr. Speaker, when I say that we all miss him dearly.