Nancy Johnson

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, it is with great pride and admiration that I rise to pay tribute to the men and women, past and present, of the Enfield, CT, Fire Department as they celebrate 100 years of service and dedication to the citizens of Enfield, CT. Volunteers comprise the majority of members of the Enfield Fire Department, a further testament to the department's commitment to Enfield and its surrounding communities. For the past century the members of the Enfield Fire Department have selflessly contributed countless hours to ensure the safety of their neighbors and protect them from danger. These men and women are, indeed, a rare breed. Courageously, they put their lives on the line each day--often in situations where they are keenly aware of the realities of personal injury. The Enfield Fire Department and others across America deserve our thanks, as it is their meritorious deeds that have saved many lives each year. Accordingly, I would like to thank the Enfield Fire Department, on this their 100th anniversary, for their service, and let them know they are not forgotten.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I rise in strong support of House Resolution 299 and in opposition to the Solomon substitute. Mr. Speaker, this vote will be the vote that Members must take responsibility for their actions. The Committee on Standards of Official Conduct is bringing this rule to the floor because it is appropriate for the body to work its will on this subject. Normally, we bring other kinds of things to the floor. We are bringing a rule because the issue raised by it is an issue that Members should legitimately decide. Mr. Speaker, this is not a contest between good and evil. This is a contest between two proposals, each of which will change the way we govern Members who write books. Mr. Speaker, let me try to make as clear as I possibly can the difference between the two proposals. First of all, they both will require that the Committee on Standards of Official Conduct review contracts and approve contracts. This is a very important step forward, because we will assure through that mechanism that Members are not treated differently; that Members get no preferential deal in any book contract, but that every contract will have to meet usual and customary standards. Second, both proposals will ban advances. Now, advances used to cover costs. They have come to cover both costs and expected royalties. That is why it is very important that we ban advances. The third difference between the bills, the first two were similarities, they both involve Committee on Standard of Official Conduct approval of contracts and banning advances. Where they differ is in how they treat royalty income once the book is written and published. Mr. Speaker, the Committee on Standards of Official Conduct is recommending that royalty income be governed in the same way all other outside earned income is governed; that is, subject to the $20,040 limit. The alternative proposal does not limit royalty incomes on the theory that the book will sell only as many copies as its ideas merit and, since it is a matter of intellectual property, that we should not limit the income from ideas just like we do not limit the income from stocks. Mr. Speaker, that is not an illegitimate proposal. There are two legitimate proposals before Members. The Committee on Standards of Official Conduct chose this direction, that is in the underlying resolution, because we believe it is easier and fairer for the House of Representatives for all Members of the House to be governed in regard to outside income by a uniform and consistent rule. Consequently, our proposal will bring royalty income under the same governance that all other outside income is governed by in the House. Mr. Speaker, ideas are important. Ideas ought to be the currency of politics in America, now more than at any other point in our history. We do not believe our proposed rules will prevent ideas from materializing in book form, those books enriching the political dialogue of our Nation. Mr. Speaker, I urge the Members to support the Committee on Standards of Official Conduct resolution.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, as Chair of the Committee on Standards of Official Conduct I rise in strong support of the committee's proposal to bring book royalties within the restrictions that now apply to outside earned income. Rule 47 of the Rules of the House of Representatives currently restricts the outside income of Members and senior staffers to $20,040 per year. However, the rule's definition of ``outside earned income'' excludes ``copyright royalties received from established publishers pursuant to usual and customary contract terms.'' The Committee on Standards--as has the Senate Ethics Committee--interpreted this exclusion to also cover advances on royalties. Therefore, current rules permit a Member or senior staffer to earn an unlimited amount of money from book royalties and advances, while subjecting income earned from other outside work to a $20,040 cap. Nor is there any current requirement that book contracts be submitted to the Committee on Standards for approval. The proposal you will vote on today will end this anomaly. Advances on royalties would be prohibited; copyright royalties would be included in the definition of ``outside earned income,'' thus subjecting them to the $20,040 cap; the new cap would apply only to books sold after December 31, 1995, and then only if the book was published after the author began House service; all book contracts providing for payment to the author must be submitted to the Committee on Standards for approval before any payment may be accepted; and no contract will be approved which provides for deferral of royalty income beyond the year in which earned. Le me make clear that there will be no restriction on income from any book published before a Member entered the House; there will be no restriction on any advance paid or royalty earned prior to December 31; and any books sold in 1996 or thereafter cannot generate royalty payments to a Member or senior staffer that exceed $20,040, the outside earned income cap. As you all know, this proposal did not arise in a vacuum; nor is it directed at a particular book or at the finances of a particular Member. Rather, this proposal stems from our review of a number of contracts and is the result of many hours of hearings and deliberations. We heard from many major publishing houses and through the course of these discussions we became much more familiar with the industry, their practices, their usual royalties, and their negotiation process. Our proposal evolved as we received input from these experts and it is the Ethics Committee's considered judgment as to what is necessary and appropriate to ensure public confidence in our work. This proposal to limit income royalty is not novel. Since the Ethics Reform Act of 1989, there has been a cap on all outside earned income except book royalties, and there has been a complete prohibition on receiving compensation for practicing law or other professions involving a fiduciary relationship, as well as on being paid for serving on a board or as an officer of any organization. Thus, our colleagues who, while Members, work as teachers, dentists, doctors, painters, pilots, taxidermists, clergy, actors, artists, salespersons, or morticians, are all now subject to the same earned income cap that we now propose to place on those of us who write books, while Members of Congress. What we propose today simply subjects writing for pay to the same restrictions that have governed other activities for years, restrictions that this body imposed in the past so that it would be clear that Members are receiving outside compensation not because of their position, but because of their talents. I know that some will argue, not unreasonably, that it is unfair to change the rules in mid-stream. In reply, I would note that the Ethics Committee debated this issue fully and concluded that the ethical interests of the House must prevail over the financial interests of a few Members. I would also point out that, however unfortunate, Members have always had to incur financial setbacks when rules were changed. When the current restrictions were imposed in 1989, the financial interests of many Members were directly affected. Many Members who were lawyers had to forfeit payments altogether; those who served on boards or were officers in organizations could no longer be compensated; and all income--except that of authors--became subject to the cap. It also will be argued--that the new book rule will unnecessarily restrict the free flow of ideas from Members that wish to contribute to the public debate. But for this very reason--to insure that useful books are still written and published by Members--the proposed rule expressly permits the publisher to compensate those to whom the proceeds of advances are usually directed: the lawyers, agents, fact- checkers, and writers without whom a book could not be published. If a Member wants to communicate ideas through a book, and can convince a publisher that someone will buy the book, the publisher can pay those upfront expenses usually paid from the author's advance, the book will be published, and the Member/author can earn $20,040 per year in royalties. Thus, this new rule should not interfere with the free flow of ideas. Finally, I would like to state as clearly as I can why I have worked hard to bring this proposal directly to the floor of the House, although it is technically within the legislative jurisdiction of the Committee on Rules. I respect my good friend, the distinguished Chairman of the Committee on Rules, and his legitimate substantive and jurisdictional concerns. I also appreciate that the Ethics Committee recommendations usually go to the floor as privileged resolutions pertaining to specific matters of a Member's conduct. For the Ethics Committee to recommend a change that must go through another legislative committee is unusual; yet our right of direct access to the floor is no less important when we recommend a rule change than when we recommend an action with regard to a Member. We are a bipartisan committee composed of five Republicans and five Democrats. Thus it is fundamental to our independence and the integrity of our process that our recommendations come to the House floor as we write them. I urge the adoption of House Resolution 299.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I rise in support of H.R. 4, the Personal Responsibility and Work Opportunity Act. It is a significant improvement on the House-passed bill, and not only will it not suffer the children, but will provide women and children in need a window of opportunity to regain their independence from welfare. I am particularly pleased with two titles of the bill that I have worked on for years: child protective services and child support enforcement. We have 22 States currently under court order because their child welfare departments are failing in their mission to protect children in grossly abusive or neglectful families. Under the bill's child protective services title, foster care and adoption assistance payments remain entitlements, current law protection standards are retained, States must maintain their spending and may not transfer funds to other programs as they can do between other block grants, and spending on this title will increase by 92 percent--from $3.3 billion to $6.3 billion in the year 2002. In addition, the data collection section will allow us, for the very first time, to know how many children were in foster care last year, how long they stayed, what help they and their families received, and basic information we need to truly protect children. For the first time States will have to have citizen review boards, which, in States where they are well developed, have prevented kids from getting lost in the system, and prompted permanent placements and early intervention. And because it is new law, we will be monitoring States' performance very closely in upcoming years and learning from their experience to improve this legislation. The child support title of this bill, based on the bipartisan Child Support Responsibility Act I was privileged to introduce earlier this year, takes giant steps toward enabling us to effectively collect child support. This is one area where national uniform law is important, since at least one-third of nonsupport cases involves more than one State. Immediate reporting of new employees to centralized State databanks will allow cross-checking with outstanding child support orders on an interstate basis for the first time. This, coupled with new power to cross-reference support orders with bank information and license information, will help literally millions of children enjoy a level of financial security not possible without the support from both parents. And, finally, this is a families-first bill. For the first time, parents and children formerly on welfare will get paid the child support they are owed without having to wait for the States to get paid first. This families-first provision will help families to regain their independence and their hope. This is what welfare reform is all about-- giving families the tools they need to help themselves. I urge my colleagues to join me in support of the H.R. 4 conference report before us today.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, today I introduced a bill to establish a new intercity passenger rail trust fund. Serving over 500 destinations across the country, the National Railroad Passenger Corporation [Amtrak] provides 22 million passenger rail trips to Americans every year. With an estimated $4 billion needed in capital improvements over the next few years, the rail trust fund will provide Amtrak with much needed capital funds to improve rolling stock, cars and locomotives, upgrade maintenance facilities, and prevent the deterioration of track and signal equipment. First introduced by Senate Finance Committee Chairman Bill Roth, the rail trust fund will be a secure source of capital funding during this time of tight budgetary constraints. On October 1, the 2.5 cents of the existing 18-cents-per-gallon gas tax that had been going into the Treasury for deficit reduction was shifted back into the mass transit portion of the highway trust fund. This highway trust fund account has a huge balance--estimated at over $10 billion at the end of fiscal 1996. My bill would direct 0.5 cent of this 2.5 cents into the rail trust fund until September 30, 2000. The establishment of this rail trust fund will not adversely affect other modes of transport, including mass transit. In fact, special language has been included in the rail trust fund legislation protecting mass transit. If, under the Rostenkoski rule, the cash balance in the mass transit account were ever insufficient to cover the transit spending for the current year and the following fiscal year, the revenues from the rail trust fund would revert into the transit account. Amtrak is an essential part of this country's transportation network. Between 1982 and 1994, travel on Amtrak's operating rose 40 percent. This necessary capital funding will cut Amtrak's operating and maintenance costs and improve reliability and performance. In addition, these improvements will reduce air pollution, fuel consumption, highway congestion, and urban parking problems. I urge my colleagues to join me in enacting this measure into law.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for yielding me this time. Mr. Speaker, if this Congress does nothing, in 15 short years with the policies embodied in current law, every single dollar of tax revenue will go to entitlements or interest. If there is no serious reform of our budget and the policies that underlie it, in 15 years there will be no money for roads and bridges and airports, no money for education and Head Start, no money for embassies abroad, no defense, no EPA enforcement. We cannot allow that to happen, and yet the President's budget does nothing but deal with dollar figures. Just cutting here and cutting there will not put this Nation on a sound financial basis. We must reform the way we use our dollars. We have to reform Medicare, we have to reform welfare. This is not a budget that creates a future for our Nation.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank my colleague, the gentleman from Florida [Mr. Bilirakis], for his leadership on this issue and for his help in working out the amendment that has made it possible for this bill to offer this program on a permanent basis. He has always been a strong supporter and advocate of community health centers, and I appreciate the gentleman's good help. I also appreciate the support of my colleague, the gentleman from California, Mr. Waxman, his longtime support and hard work on the legislation governing our community health centers, and want to acknowledge the work of my colleague, the gentleman from Oregon, Mr. Ron Wyden, on this issue. He and I introduced the original legislation 3 years ago, which was heavy lifting, as we say in this body, and we are very pleased that this is before us today to make this program permanent. While he cannot be with us at this time, I want to commend the hard work and the real dedication of the gentleman from Oregon [Mr. Wyden] to ensuring that the important health services that these centers provide are there for people in America. Mr. Speaker, H.R. 1747, the federally supported Health Centers Assistance Act of 1995, makes permanent, at no additional cost to taxpayers, a highly successful demonstration project offering malpractice coverage for the Nation's community, migrant, and homeless citizens under the Federal Tort Claims Act. H.R. 1747 will ensure that the maximum amount of the limited Federal funds supporting health centers are spent to provide quality patient care and services, rather than to pay for malpractice insurance premiums. The limited demonstration project saved health centers millions of dollars on malpractice insurance expenses over the past 2 years, allowing health centers to offer their services to an additional 75,000 patients. Federally supported health centers are nonprofit providers of health care to America's medically underserved. They serve the working poor, the uninsured, Medicare and Medicaid recipients, as well as high-risk and vulnerable populations. Today health centers provide cost-effective primary and preventive care to over 8.8 million people nationwide. Health centers are public- private partnerships, funded in part by grants under the Public Health Service Act, which enable health centers to employ health care professionals and operate over 2,200 health service delivery sites throughout our cities and towns. Private malpractice insurance has been a significant expense for these nonprofit centers. Prior to the FDCA coverage bill, health centers spent $40 billion annually of their grant funds for private malpractice insurance, yet they had very few claims. By permanently extending coverage for health centers under the FDCA, Congress will enable health centers to use more of their scarce Federal dollars for patient care instead of for malpractice premiums. For each $10 million saved in funds, health centers can serve an additional 100,000 patients with quality care. Mr. speaker, I am proud to have supported legislation ensuring that standards for health centers ranked among the highest in terms of certification, quality care, and accountability. These health centers have a remarkably low incidence of malpractice claims. Since the fall of 1993, only 30 claims have been filed against the 545 health centers approved for FTCA coverage, a rate consistent with the low rate of claims filed against health centers under private insurance. More than ever, America's health centers have growing responsibilities for the provision of health care to medically underserved populations and communities, yet your support for the permanent extension of FTCA malpractice coverage for health centers will enable health centers to make cost-effective use of limited Federal grant funds, and I urge the support of my colleagues for this legislation.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, today, at the direction of the Committee on Standards of Official Conduct, I have introduced a resolution which eliminates one of the few exceptions to House Rules regarding outside earned income. As you know, the Rules of the House now restrict the amount of outside income a Member or senior staffer may earn to $20,040 per year. However, copyright royalties and book advances are exempted from this restriction. A Member may publish a book and receive a large cash advance and unlimited royalties. The resolution introduced today would amend rule 47 of the Rules of the House of Representatives so as to prohibit advances and treat copyright royalties as earned income subject to the $20,040 yearly cap. The new restriction would apply to royalties earned after December 31, 1995, for any book published after the beginning of House service, and would prohibit the deferral or royalties beyond the year in which earned. It is the committee's hope that this resolution will be considered and approved this year. As with our necessary reforms, this proposal may cause some momentary financial hardship in individual cases, or even delay the communication of useful ideas. In the long run, however, this proposal, by preventing the perception that book contracts are offered or their terms altered in deference to a Member's position rather than as a reflection of the book's content, will bring added attention to whatever ideas we may put forth. As has passage of the gift rule resolution and, hopefully, other reform initiatives, this change in our House rules will assure that our actions--both in fact and perception--merit public confidence.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Chairman, I rise in firm opposition to this bill and remind my colleagues that late-term abortions are, in fact, legal only in very exceptional circumstances. I ask my colleagues to ask themselves this question. If their daughter and son-in-law or their son and daughter-in-law were faced with the extraordinary tragedy of discovering extreme fetal deformity late in pregnancy, or a life- threatening development, with abortion being the only [[Page H 11609]] alternative, could they, would they want her to have available the procedure that was least life-threatening, most protective of her future reproductive capability, and most respectful of the fetus and the need of the parents and their living children to mourn this early, this eagerly anticipated child? Mr. Chairman, this debate is not about the grossness of reducing the circumference of a fatally deformed fetus' head to allow vaginal delivery. It is about women facing terrible tragedy and their right to have the safest appropriate medical treatment. I am truly appalled at the flipness with which the proponents of this bill suggest she can have a cesarean. It is almost criminal. Women die every year of the complications of cesarean sections. C-sections have four times the fatality rate of vaginal births. Why? Why would my colleagues ask their daughter to shoulder this small but real risk of death for a fetus with no potential of life. We are talking about extreme deformity. I am not going to keep this up here because I do not want children watching, I do not want people to have to be burdened with the terrible anguish and tragedy we are talking about when we say extreme deformity that prevents life. That is what these families are facing. Another alternative? Cesarean section is one. The only other alternative to this kind of vaginal delivery through which a needle is used to reduce the circumference of the head so that the delivery can take place, the only other alternative is the old traditional alternative that this alternative was developed in order to avoid the terrible dangers to a woman's reproductive health and to her life that the other method posed. The other method I did not bring pictures of. I would not impose that on the world like my other colleague imposed his diagrams, but the other method is uglier. The other method also endangers the birth canal and, therefore, the future reproductive capability of the woman. Why would my colleagues endanger their daughter's reproductive future for a fetus that cannot eat, has no kidneys, no heart? Not one physician in this body has ever performed a late-term abortion. No obstetrician I know has ever done one. That is because they are very, very rare. They are five-tenths of 1 percent of all the abortions performed after 20 weeks. But of the 600 third-trimester abortions performed last year, 450 were done through this method. Mr. Chairman, what does that tell us? Why? Because it is the safest. Less bleeding, lower complication rate for the mother, less painful, and the geneticists can better determine what went wrong and counsel the couple for future pregnancies. Men and women of this Congress, if it were our daughters, would we want her life and reproductive hopes and dreams protected? Will we vote for a bill that for the first time in history criminalizes a single procedure that could preserve life and health? No medical organization supports congressional censorship of treatment alternatives. None. As a mother who lost a child, I can tell my colleagues that the tragedy of death is miraculously assuaged by the miracle of birth. Do not vote to let the tragedy of one death create the tragedy of another death and banish the renewing miracle of life. Vote no on this bill.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, I rise in strong opposition to this rule and urge my colleagues to defeat it. This will be the first time that this Congress will address the subject of abortion without clearly protecting the life of the mother. I went to the Committee on Rules with an amendment that would very narrowly protect the life of the mother. It was very clear. It would just allow the physician to take into account preservation of the life of the mother. Never have we addressed this issue without clearly protecting the life of the mother. We should not abrogate our allegiance to women, facing the most terrible personal tragedy any of us could be called upon to face, without protecting her life, without allowing her and her husband to protect her life. Voting ``no'' on this rule will not kill the bill. It will merely allow the Committee on Rules to return to this House a bill with a rule that will allow us to consider the two amendments that would assure that a woman's life and reproductive future can be taken into account as she and her physician and husband decide how best to deal with a level of tragedy most of us will never experience. Men and women of this Congress, if it were your daughter, would you not want her life, her reproductive hopes and dreams, protected? Would you compound her agony? Would you compound her peril? Vote ``no'' on this rule. The Committee on Rules can bring back the bill with the right rule, so that we will have an opportunity to discuss fully the issues that are at stake here both for the woman and for the child. I urge a ``no'' vote

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Chairman, what we are doing here today is passing the components of a program that over 7 years will balance this Nation's budget, but also put in place a tax policy that will assure that the jobs will be created that people need for their own security and that our Nation needs, to enjoy a level of economic growth that will make that balance possible. This overall bill also addresses many problems. It is the first time we have tried to put in place a policy that would protect people of all ages from the catastrophic cost of nursing home care. If we do not start now, we cannot succeed for future generations. But also within this bill are many, many detailed provisions that the public does not know about, but that will directly affect their lives. In the Taxpayer Bill of Rights section, a section that is bipartisan, that was developed in a bipartisan way, has bipartisan support, this bill builds on the work of the Hon. Jake Pickle of Texas, who spent many years trying to get this very legislation passed. I am proud not only have we adopted his work, but we have gone beyond it. Because through the Taxpayer Bill of Rights, we make the taxpayer now not a David who meets Goliath, but an equal who has an opportunity to be heard by the IRS, to have a fair shot at paying only their fair share of taxes. For the first time, this Taxpayer Bill of Rights will begin to look at the terrible and bad breaks that so many couples who are separated and divorced get when dealing with the IRS. For the first time we ask the IRS, for the first time in all of our history, to come back to us every year with the 20 most important problems that taxpayers face. For the very first time the IRS will have the responsibility for their taxpayer advocates to actually tell the Congress what are the 20 most serious problems the people face in dealing with their Government, and then we will be able to change those things. We do not allow for their suggestions to go through the IRS or the Department of the Treasury. They must come directly to us so that they cannot be filtered. We do many, many things in this bill to protect taxpayers from IRS actions and to put taxpayers on an equal footing with their Government. Mr. Chairman, I urge support of this legislation. Mr. Chairman, I want to draw our colleagues' attention to some very important provisions in the Ways and Means Committee title of H.R. 2517 which collectively are known as the Taxpayer Bill of Rights 2. For taxpayers who go up against the Internal Revenue Service, it is too often a David vs. Goliath contest. The IRS is Goliath and the taxpayer is David. The Ways and Means Committee title includes the recommendations developed by the Subcommittee on Oversight to increase the rights of taxpayers in dealing with the IRS. The campaign to safeguard taxpayer rights has a long history. The Taxpayer Bill of Rights 2 portion of title XIII will establish a new milestone in protecting taxpayers. Like the David in biblical history, the average taxpayer may be smaller than the rival IRS, but we are giving him some strong weapons with which to defend himself. The original Taxpayer Bill of Rights was enacted in 1988. While this action was a good first step, there was a consensus that more could be done to protect the rights of taxpayers. The Oversight Subcommittee developed follow-up legislation during the 102d Congress, but regrettably it did not become law. One of the early priorities of the Oversight Subcommittee in the 104th Congress was to protect the rights of taxpayers in dealing with the IRS. Despite the helpful effects of the 1988 legislation, the chorus of constituent complaints against the IRS convinced us that further action was needed. On March 24, 1995, the Subcommittee on Oversight held a hearing to investigate what additional safeguards were apprporiate to provide taxpayers more evenhanded treatment in their dealings with the IRS. The hearing opened our eyes to the many areas in which we need to act in order to protect taxpayers. For example, we learned of cases where the IRS began auditing a taxpayer's return and then the IRS employee conducting the audit was transferred to a new division, and the return sat for another year or two before the audit was completed. Under current law, the IRS has no authority to abate the interest which runs up during this period. The bill addresses this problem by giving the IRS authority to abate interest charges that accrue as a result of unreasonable delays caused by the IRS's own mistakes. The bill will also make it easier for taxpayers who win their cases against the IRS in court to collect attorney's fees. Under current law, not only does a taxpayer have to prevail against the IRS to collect attorney's fees, she must also prove that the IRS was not justified in pressing its case against her. Our bill would shift the burden to the IRS of proving that its position was substantially justified. This is consistent with the judicial principle that the party in control of the facts should bear the burden of proof. Another major problem area is the treatment of separated or divorced taxpayers. Under current law, couples who file a joint tax return are each fully responsible for the accuracy of the return and for the full tax liability, even though only one spouse may have earned the income which is shown on the return. This is called joint and several liability. Spouses who wish to avoid joint and several liability may file as a married person filing separately. The Oversight Subcommittee learned of many instances where divorced taxpayers who signed a joint tax return during their former marriage were treated harshly when the IRS later disputed the accuracy of the return. Far too often, the IRS tried to collect the entire amount due from the wife, even though the omitted income or erroneous deductions which caused the tax deficiency were attributable solely to her former husband. In some cases, the person pursued for payment of the taxes due was not even aware that a tax return filed during the marriage had been audited or the additional taxes were due. In an era where almost 50 percent of marriages end in divorce, this problem is contributing to the perception that the tax system is unfair. The time has come to reexamine the joint and several liability standard and to consider replacing it with a proportionate liability standard, under which each spouse would be responsible for the tax on that portion of their income which he or she earned. In order to fully consider the ramifications of such a change, our bill requires the Treasury Department and the General Accounting Office to conduct detailed studies examining possible changes to the joint and several liability standard designed to better protect the interests of separated and divorced couples. This is an area that we definitely intend to revisit after the studies are complete. The Subcommittee on Oversight met on September 12, 1995, and unanimously approved a package of recommendations to address the taxpayer problems which we had identified from our hearing and from the numerous communications we had received from taxpayers. The recommendations for a Taxpayer Bill of Rights 2 were introduced on September 14, 1995, as H.R. 2337. The full Committee on Ways and Means included in its reconciliation title a Taxpayer Bill of Rights 2 subtitle which is virtually identical to the work product of the Subcommittee on Oversight. I am gratified at our action for two reasons. First, we have acted forcefully to protect the rights of taxpayers in dealing with the IRS. Second, the subcommittee's action was bipartisan, it was strongly supported by Members of both parties. I hope this will set the example for all the activities of the Oversight Subcommittee. Mr. Chairman, the Nation's taxpayers probably will never enjoy paying their taxes, but they should not feel powerless in dealing with the IRS. The taxpayer Bill of Rights 2 will help to better safeguard the rights of taxpayers. Until Congress implements fundamental reforms of the tax system, the next best approach is to make the current system operate in a way which treats taxpayers more fairly. Finally, the following is a brief outline of the Taxpayer Bill of Rights two provisions which are included in title XIII of H.R. 2517: 1. Creation of Independent Taxpayer Advocate. (a) Statutorily establish the position and office of the Taxpayer Advocate within the Internal Revenue Service (IRS); (b) require the IRS to make annual reports to the tax-writing committees describing the 20 most serious problems taxpayers encounter when dealing with the IRS, along with the Taxpayer Advocate's recommendations for administrative and legislative actions to resolve such problems; and (c) require the IRS to provide that regional problem resolution officers will actively participate in the selection and evaluation of local problem resolution officers. 2. Expand Taxpayer Assistance Order (TAO) Authority. Provide the Taxpayer Advocate with broader authority to intervene on behalf of taxpayers. 3. Authority to Review a TAO. Provide that a TAO may be modified or overturned only by the Commissioner, Deputy Commissioner, Taxpayer Advocate, or Regional Problem Resolution Officer, and require a written explanation for modifications or reversals of TAOs. 4. Improved Notification of Installment Agreement Changes. (a) Require the IRS to notify taxpayers 30 days before modifying or terminating installment agreements (except in jeopardy cases) and to include in such notification the specific reasons for the action taken; and (b) require the IRS to establish an administrative appeals process in the case of modifications or terminations of installment agreements. 5. Expand Abatement-of-Interest Authority. (a) Provide the IRS with expanded authority to abate interest resulting from erroneous or dilatory ``managerial acts'' (e.g., for cases where the assessment or collection of a deficiency has been unreasonably delayed as a result of IRS's loss of tax records, or IRS personnel management decisions, including the termination, transfer, training, and the granting of leave for any reason to IRS employees responsible for the handling of the taxpayer's case); and (b) give the U.S. Tax Court the jurisdiction to review the IRS's failure to abate interest on an abuse of discretion standard for taxpayers who meet the net worth criteria of section 7430. 6. Extend Interest-Free Period for Remitting Tax. Extend the interest-free period provided to taxpayers for the payment of tax liability reflected in the first notice from 10 days to 21 days, if the total tax liability shown on the notice of deficiency is less than $100,000. 7. Study of the ``Joint and Several'' Liability Standard. Require the Treasury Department and the General Accounting Office to conduct studies, to be submitted to the tax-writing committees within six months of the date of enactment, analyzing: (a) the effects of changing the current standard of ``joint and several'' liability for married couples to a ``proportionate'' liability standard; (b) the effects of requiring the IRS to be bound by the terms of a divorce decree which directly addresses the responsibility for the tax liability arising from joint tax returns filed during the former couple's marriage; (c) proposals for expanding the ``innocent spouse'' relief of IRC section 6013; and (d) the effects of overturning the application of Poe v. Seaborn for income tax purposes in community property states. 8. Election to File Joint Return Without Making Full Payment. Repeal the provision that requires full payment of tax liabilities as a precondition to taxpayers switching from married-filing-separate status to married-filing-jointly status. 9. Improved Treatment of Separated or Divorced Spouses. Upon written request, require the IRS to inform either spouse as to whether the IRS is making any attempt to collect the tax liability from the other spouse; the general nature of the collection effort; and, the amount collected. 10. Authority to Withdraw Notice of IRS Liens. Provide the IRS with authority to withdraw a public notice of tax lien prior to payment in full by the indebted taxpayer when it is ``. . . in the best interest of the taxpayer and the Government'' and require that in the case of an erroneous lien, upon taxpayer request, the IRS must make reasonable efforts to notify major credit agencies and financial institutions of the erroneous filing of the lien. 11. Authority to Return Levied Property. Provide the IRS with authority to return the proceeds of levies, without prejudice against future reinstatement of the levy, if it is ``. . . in the best interest of the taxpayer and the Government.'' 12. Increase the Protections of Taxpayers from IRS Levy Actions. Increase the exemption level on fuel, furniture and personal effects to $2,500, and index it thereafter for inflation. 13. Offers-in-Compromise. Provide that offers-in-compromise which reduce tax liabilities by less than $100,000 do not require a written opinion from the Office of the Chief Counsel. Offers in compromise which would reduce tax liabilities by $100,000 or more would continue to be subject to approval by a written opinion from the Office of the Chief Counsel. 14. Civil Damages for Fraudulent Filing of Information Returns. Create a federal cause of action for a person who has been victimized by a willfully filed fraudulent information return to recover the greater of $5,000 or actual damages from the person(s) who filed the fraudulent information return. 15. IRS Responsibility to Verify Accuracy of Information Returns. In cases where a taxpayer asserts reasonable dispute about the accuracy of an information return, the IRS would be required to take reasonable steps to investigate the accuracy of the information return and would bear the burden of producing reasonable and probative information to corroborate the return. The reasonable steps which the IRS must take to corroborate the disputed information return would vary in response to the facts and circumstances of each case. The objective is to meet the standard outlined in Portillo v. Commissioner, 932 F.2d 1128 (1991). 16. Expansion of Attorney-Fees Provisions. (a) In cases where a taxpayer substantially prevails over the IRS in a tax dispute, switch the burden of proof from the taxpayer to the IRS to establish that the IRS was substantially justified in maintaining its position against the taxpayer; (b) increase the hourly rate of the attorney fees eligible for reimbursement from the current rate of $75 to $110, and index this amount after 1996; (c) clarify that the taxpayer's failure to extend the statute of limitations shall not be considered to be a failure to exhaust the administrative process; and (d) repeal the current prohibition which denies the reimbursement of attorney fees in some court actions for a declaratory judgement. 17. Taxpayer Reliance on IRS Guidance. In determining whether or not the IRS was ``substantially justified'' in maintaining its position against the taxpayer, the fact that IRS employees did not follow its own published guidance (e.g., revenue rulings, revenue procedures, and information releases) in examining the taxpayer, will create a rebuttable presumption that the IRS's position was not substantially justified for the purpose of applying section 7430. 18. Increased Damage Awards to Taxpayers Harmed by Reckless IRS Collection Actions. (a) Increase the ceiling on damages to $1 million; and (b) give the courts discretion to reduce a damage award because of the taxpayer's failure to exhaust the administrative remedies in the collection process, rather than a mandatory denial. 19. Modification of the Penalty to Collect and Remit Payroll Taxes. (a) Require the IRS to issue a preliminary notice 60 days in advance of any demand for payment of the 100-percent penalty imposed by section 6672, except in jeopardy cases; (b) in cases where the IRS is seeking to hold a person responsible for payroll taxes under section 6672, the IRS would be required to share with such person the identities of other persons who the IRS also asserts are responsible for the taxes and the collection activities which it has pursued against those persons; (c) create a federal cause of action for a person who may be held liable for the collection of tax under section 6672 to seek contribution from other persons who have a similar liability under the law, but who have not yet contributed their proportionate share of the liability for the collection of the tax. The ``responsible person'' seeking a contribution would proceed by bringing an independent action against the third parties; and (d) provide that the IRS will not impose the 100-percent penalty under section 6672 on unpaid, volunteer trustees or directors of tax-exempt organizations if such persons serve solely in an honorary capacity, do not participate in the day-to-day or financial operations of the organization, and do not have actual knowledge of the failure to remit payroll taxes to the IRS. 20. Enrolled Agents as Third-Party Record Keepers. Add ``enrolled agents'' to the list of third party record keepers to whom section 7609 applies. 21. Safeguards Related to Designated Summons. (a) Require that IRS regional counsel review any designated summons before it is issued against a taxpayer; (b) limit the issuance of a designated summons to taxpayers being audited as part of the IRS's Coordinated Exam Program (about 1,600 of the largest corporate taxpayers); (c) prohibit the IRS from issuing a designated summons for the purpose of third-party information gathering, except in circumstances where the taxpayer being examined has transferred its books or records to a third party; and (d) require the IRS to submit an annual report to Congress describing the designated summonses issued by the IRS during the preceding year. 22. Relief from the Retroactive Application of IRS Regulations. Provide that the effective date of any temporary, proposed, or final regulation shall not be before the earliest of: (a) the date the regulation is filed in the Federal Register; (b) in the case of a final regulation, the date of the temporary or proposed regulation to which it relates was filed with the Federal Register; and (c) the date on which any notice substantially describing the expected contents of any temporary, proposed, or final regulation is issued to the public. However, this limitation will not apply: (a) where the regulations are issued within 12 months of the enactment of the statutory provision to which the regulation relates; (b) where the Secretary of the Treasury determines that the regulation should be retroactive in order to prevent abuse; (c) where the regulation is directed at correcting procedural defects in an earlier regulation; (d) where the regulation relates to the internal policies, practices, and procedures of the Treasury Department; (e) where the taxpayer elects to have the entire regulation apply retroactively, i.e, back to the date of the underlying statute; or (f) in cases where Congress grants authority to the Secretary to prescribe the effective date of a regulation. 23. Report on IRS Pilot Program for the Appeal of Enforcement Actions. Require the IRS to submit a report to the tax-writing committees, by March 1, 1996, about the scope and results of its pilot program for the appeal of enforcement actions, including lien, levy, and seizure actions, together with any recommendations for legislative actions which may be necessary to facilitate the implementation of a permanent process for appeals of such enforcement actions. 24. Phone Numbers of Payors on Form 1099. Require that the providers of information returns include the phone number of the payor's service representative on the form 1099. 25. Notification to Taxpayers of Overpayments. Require that the IRS make a reasonable attempt to notify, within 60 days, those taxpayers who have made payments which the IRS cannot properly post to the taxpayer's account. 26. Damage Claims for Taxpayers Injured When the IRS Uses Improper Informants. Create a civil cause of action allowing a taxpayer to sue the Government for the lesser of $500,000 or actual damages (plus costs) in cases where any Federal Government employee intentionally compromises the collection of any tax due from an attorney, accountant, or enrolled agent representing a taxpayer in exchange for information supplied by the taxpayer to such a professional for the purpose of obtaining tax advice. 27. Annual Reminders of Outstanding Tax Liabilities. Require the IRS to send out annual reminders to taxpayers with outstanding delinquent accounts that are not in active collection status. 28. Extension of Authority for IRS Undercover Operations. The Anti-Drug Abuse Act of 1988 exempted IRS undercover operations from certain statutory restrictions controlling the use of Government funds (which generally provide that all receipts be deposited in the general fund of the Treasury and all expenses be paid out of appropriated funds). This exemption expired on December 31, 1991. In general, the exemption permits the IRS to ``churn'' the income earned by an undercover operation to pay additional expenses incurred in the undercover operation. Extend the IRS ``churning'' authority to December 31, 2000. 29. Disclosure of Form 8300 Information on Cash Transactions. Amend IRC section 6050I to allow form 8300 information to be disclosed for either civil or criminal enforcement or regulatory purposes under the same rules applicable to Currency Transaction Reports. This would permit form 8300 information to be used at various levels of government to identify targets for investigation of possible nontax related crimes. 30. Simplified Disclosure Procedures. Amend IRC section 6103(c) to delete the word ``written'' from the requirement that ``written consent'' from the taxpayer is necessary for the disclosure of taxpayer information to a designated third party. 31. Study on Interest Netting. Require the Secretary of the Treasury to conduct a study of the manner in which the IRS has implemented Congress's directions regarding the netting of interest on overpayments and underpayments and the policy and adminstrative implications of global interest netting. Before submitting the report of such study, Treasury would be required to hold a public hearing on global interest netting to receive comments from interested parties. The record of these hearings should be included in the report.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Chairman, will the gentleman yield?

Mrs. JOHNSON of Connecticut. Mr. Chairman, I thank my colleagues for their support of our reforms of the earned income tax credit, reforms that are reasonable, that are fair, and that are needed; but also to their pointing to a problem that exists in that reform, in that it does actually disadvantage a small group of people who need that earned income tax credit. We are working on that problem. We are delighted to have the gentlemen work with us. We will have some of that problem before this becomes law. I thank the gentlemen for their interest, concern and leadership.

Mrs. JOHNSON of Connecticut. Mr. Chairman, some of my colleagues believe we should be discussing here today merely a budget bill. I believe that would be inadequate to meet today's demands or our Nation's needs over the next 7 years. I am proud that we are offering here today a budget plan that includes numerous tax reforms that together will help our companies compete in an intensely competitive international market and so assure the millions of jobs these companies provide. It will help small companies grow by providing them better expensing rights, restore the home office deduction, and make it easier for them to provide pension plans for their employees. The tax provisions in this bill will help middle-class families and put in place the only solution through which we can guarantee our seniors, ourselves, and our children freedom from the fear of the catastrophic costs of long-term care. This bill expands people's opportunity to gain the education they need to increase their economic power. We extend the right of employers to subsidize the education of their employees. We create the right to develop American dream saving accounts with its flexible rules allowing the use of these savings for education, tax-free. And we create a new research and development tax credit that will help start-up companies, collaborative research efforts, and old-line defense companies create the products of the future. These tax provisions are pro-education, pro-technology, pro-economic growth, pro-family, pro-health care reform. These tax provisions are just as essential to the well-being of the Nation over the next 7 years as the specific budget provisions of our proposals. Together they plan a path for our Nation to reach a balanced budget by the year 2002 with a healthy economy, strong families and enlightened health and education policy.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Right.

Mrs. JOHNSON of Connecticut. Right.

Mrs. JOHNSON of Connecticut. I thank the gentleman for the opportunity to join him at this special order to discuss the Republicans' approach to reforming Medicare in order to secure for current seniors and to ensure that it is going to be there for future retirees. I wanted to pick up on what the gentleman is talking about. One of the things that was very distressing about the debate this afternoon was the claims by opponents that we could not fund a premium that would buy a good plan in the market. When we look at what is really happening out there right now already, the Medicare premium that seniors are paying would buy much more for them than Medicare is giving them. In the Boston area, there were two HMO's. Seniors have the right to choose to join an HMO. Not everybody wants to be in an HMO. If you do not like the staff or the doctors in the HMO, you cannot go outside. I personally am not high on joining an HMO, but they had two very good HMO's in the market in Boston. One of them was the Harvard Health Plan, and the other was the Fallon Plan. Each of those HMO's had developed quite large senior participation, but they were not growing. Well, into the market came three new managed-care plans offering not only all Medicare services, but additional services, for a zero premium. That is just the Medicare premium. Now thousands of seniors every month are joining one of these five plans because what did the Harvard plan do? They dropped their premium from $89 a month to $15 a month. What did the other plan do? Its premium was over $50. They dropped their premium to zero. Now the seniors in the Boston area have the choice of four plans, four zero-premium plans, the Harvard $15-a- month plan, and for that they get all Medicare services plus copayments and deductibles plus some other, in some cases, prescription drugs, in some cases preventive-care coverage.

Mrs. JOHNSON of Connecticut. Absolutely. Not only do seniors really save, but they choose these plans, they choose to go to a system that they believe serves their needs better, and they are choosing at such a rapid rate that while Medicare managed care used to be 5 percent of that market, it is now 10 percent Now what does that tell you about our plan? Some people have been concerned, including some of our colleagues, that if our plan does not save as much as we think it will, we will have to make deeper cuts later on. Well, our Budget Office thinks that over 7 years only 15 percent more seniors will choose MedicarePlus plans like this. Ten percent are in HMO's now, and they think that, when we offer them all these choices, Medicare-plus plans, medical savings accounts, that only 15 percent more over 7 years will join. In Boston they have already increased it in 2 years by 5 percent. I mean the Budget Office cannot take into account human choice and human motivation, and so they use old data to make old projections, and then they try to force us to make irrational decisions.

Mrs. JOHNSON of Connecticut. Beyond that, every single year you can get out, every single year you get a new choice, and you can stay in the plan you are in, you can change plans, or you can go back to Medicare, and in every single market there are medigap insurance plans that do not discriminate so you can always go back to that combination of Medicare and medigap if you prefer it. So this is a totally voluntary choice plan that we are providing, and we do have overwhelming actual experience that shows that the Medicare- plus plans will be able to provide a lot more benefits for the same dollar, and if I could just add one thing before unfortunately I have to catch a plane, it is [[Page H 10481]] that, you know, both for the people who stay in Medicare and for the people who choose MedicarePlus, we are going to increase funding for both the premiums and for the fee-for-service system by $2,000 per recipient in the next 7 years. That is exactly as much as we increased it in the preceding 7 years. So we are planning a healthy, reasonable, responsible, practical increase in spending in Medicare. We are simply not going to overpay for fraud and abuse. We are not going to overpay for unnecessary care. We are not going to overpay because, if we overpay in Medicare, then people who are working have higher taxes.

Mrs. JOHNSON of Connecticut. Thank you. It is interesting for the people who are watching to see the gentleman from Illinois [Mr. Hastert] is a member of the Committee on Commerce, I am a member of the Committee on Ways and Means, two committees that have direct responsibility for Medicare and Medicaid. The gentleman from Oklahoma [Mr. Coburn] is also a member of the Committee on Commerce, but he is a physician. He brings a special perspective. The gentleman from New Mexico [Mr. Schiff] is a member of the Committee on the Judiciary. He brings special knowledge of the fraud and abuse problems. And my colleague, the gentleman from Connecticut [Mr. Shays], is from the Budget Committee, and he has the responsibility to look at these issues in the context of America's future and how do we get to a balanced budget in 7 years, and he, of course, is on the Health Subcommittee of the Committee on the Budget and, therefore, is a special part of our team. This is the first time in Congress' history that there has been this level of integrated committee cooperation and action to solve a major problem that we face, and right here amongst the five of us you can see that whole body of the Congress, and how it has come together to think about this problem and produce an answer that we know is going to serve our seniors. So I am proud to have joined you for a few minutes and regret I have to leave.

Mrs. JOHNSON of Connecticut. Correct.

Mrs. JOHNSON of Connecticut. Correct.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Chairman, the goal of this bill is very simple. It is to preserve Medicare for current retirees and for future retirees. Why do we want to do this? Because the twin pillars of retirement security for American seniors are Social Security and Medicare, and believe me, when the Trustees of Medicare say next year they are going to pay out more money than they are going to take in and in 5 years after that they are going to use up all their savings and be broke, I think that is a crisis. I think that is a problem. I think delaying addressing that problem is going to make it harder, not easier. So I am proud to support a bill that says simply we have a crisis, that to preserve Medicare we have to fix it, and we can do it. It is actually not very hard. It means reducing the rate of growth in Medicare from 10 percent down to 6.5 percent. Why do we think we can do this? Because the private sector has already reduced the rate of health care cost growth to 3 percent. We can preserve Medicare by reducing its growth rate to twice that of the private sector. We [[Page H 10353]] can do that, and we can do that in a way that opens up new opportunities for seniors because Medicare is an old-fashioned program that does not provide prescription drugs nor cover prevention, all of which can save money. Right in Boston today we have two plans open to Medicare seniors offering all Medicare services, prescription drugs, and a number of other services, for zero premium. That is a zero-premium choice. That means for the same dollar we are investing into Medicare, these folks in Boston, our senior citizens, are going to get choices that buy better than Medicare benefits. That is what this is all about. It is about controlling costs in Medicare by opening up to seniors the kinds of plans that in the private sector have preserved benefits and reduce the rate of medical inflation in this country. And how do we get the $270 billion? This is how we get it. We reduce the rate of growth in hospital reimbursement rates and doctor reimbursement rates so they go up 6.5 percent instead of 10 percent. You Democrats keep jumping up and saying ``We are cutting funding to hospitals''. Mr. Chairman, I ask Members to ask their kids if they can pay more than the 19 percent of payroll that they are now paying for Social Security and Medicare so we can let those hospitals grow at 10 percent instead of 6.5 percent. Ask them that. They will tell us they cannot afford it. Yes, we can guarantee Medicare to our seniors by slowing the rate of growth in reimbursements to hospitals and physicians, and by getting tough on fraud and abuse. Incidentally, if the Members on that side of the aisle do not like our fraud and abuse provisions, why didn't they propose tougher laws when they were in the majority for 40 years? We get $2 billion more in revenues from our fraud and abuse provisions because we are tougher than we have been in the past. So, the $270 billion comes from slowing the rate of growth in reimbursements to doctors and hospitals, cracking down on fraud and abuse and, yes, requiring seniors to continue paying premiums to cover 31 percent, just what they are paying today, and, though the Members on that side never mentioned it, in our plan requiring rich seniors to pay more. We are proud of our plan. It preserves Medicare and protects seniors.

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Speaker, on rollcall No. 727 I was inadvertently detained, but had I been present, I would have voted ``yes.''

Mrs. JOHNSON of Connecticut

Mrs. JOHNSON of Connecticut. Mr. Chairman, it will not work. You cannot increase benefits, you cannot tell the American people you will increase benefits, cut premiums, and save Medicare. Medicare is insolvent next year. It is bankrupt 5 years thereafter. To get up here with a program that says ``We are going to do this for you, that for you, and add benefits, but we are going to cut premiums, folks, and we are going to save Medicare,'' the American people do not want those kinds of answers anymore. Let us look at this premium issue. What do the Republicans do? We say listen, you seniors out there, you have to keep with the level of burden you are carrying now. You are carrying 31 percent, just the part B costs. You keep carrying it. Seniors with $75,000 retirement incomes are going to carry more. What is this rich-poor business? Not one word of support for raising premiums on seniors who have a retirement income of $75,000 or more. All we say to seniors is to save this program, keep doing what you are doing, and if you can afford it, do a little more if you have over $75,000 in income. What the Democrats say, we are going to cut it to 25 percent. We are going to give you a break. We are going to give you more benefits and lower premiums. Do you know what that does? That makes people working hard day in, day out, earning $30,000, $35,000, and $40,000 pay more taxes. Six of the last ten years they have increased Medicare taxes. This is a back-ended, under-the-ground, surreptitious tax increase, because they are going to make the taxpayers pay more of the part B costs than they are currently paying, as costs are rising. The second deceptive aspect of the plan the Democrats are offering, and it is more of the same, they only fix part A. Part B is in just as much trouble. Mr. Chairman, we have to save Medicare, not part A of Medicare.