J. Kerrey

Mr. KERREY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KERREY. Mr. President, I yield the floor. I suggest the absence of a quorum.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KERREY. Mr. President, I ask unanimous consent to be able to speak as if in morning business to introduce legislation.

Mr. KERREY. I thank the Chair. (The remarks of Mr. Kerrey and Mr. Kennedy pertaining to the introduction of S. 2049 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. KERREY. Mr. President, I had an amendment earlier that I had withdrawn that would increase the amount of oversight, or actually create in statute a requirement for annual hearings by the Finance Committee, and I would prefer to merely in a colloquy with the chairman of the Finance Committee get this matter settled without having to put it into law. I would like to express again my concern and interest in making certain that congressional oversight is increased. I think it is a little bit like preaching to the choir here, asking this particular chairman to do it, but I would like to declare that I think we should be having a yearly hearing hosted by the Senate's Finance Committee with the IRS Commissioner, with the chair of the new oversight board created in this new law, the National Taxpayer Advocate, and the new Treasury Inspector General for Tax Administration; as the four witnesses. The purpose of the hearing would be to review overall progress by the IRS in serving the needs of taxpayers. I would simply ask as part of this colloquy whether or not the chairman would be willing to hold such a hearing on a yearly basis?

Mr. KERREY. I thank the distinguished chairman of the Finance Committee. Mr. President, I do believe in this kind of oversight where we ask four key people, three of whom are new creations under this law, to come and tell the oversight committee how well this new law is doing and if there is any additional changes in the law that are necessary. Again, I appreciate very much the Senator's comments in this regard and will, once again, state my appreciation for the Senator's diligence and perseverance in making certain that IRS does the job the American taxpayers want it to do.

Mr. KERREY

Mr. KERREY. Mr. President, this is a good amendment, and I also urge its adoption.

Mr. KERREY. I move to reconsider the vote.

Mr. KERREY. Mr. President, it is a good amendment, and I urge its adoption.

Mr. KERREY

Mr. KERREY. Mr. President, in response to the statement of the distinguished Senator from Wisconsin, might I say, first of all, I appreciate very much his constructive involvement in this legislation, improving it and making it a better piece of legislation. The Senator's voice was heard by the Finance Committee on several key points. I would like to give some additional information that my colleague probably already has, so I am being redundant about it, on this issue of tax simplification. Today, it is estimated that taxpayers spend about--somewhere, actually, between $70 billion and $100 billion to comply with the Tax Code, $70 to $100 billion a year to comply with the Tax Code. The IRS budget is about $7 billion, so we spend about $7 billion on the IRS to have them collect our taxes. There is another side to the coin of this complexity. Again, I don't want to revisit this education IRA that just passed on the Senate floor; I don't want to argue that specific objective. But, in order to implement that, the other side of the coin is, the IRS actually becomes more invasive. So a lot of the horror stories that we have heard came as a consequence of the IRS insisting that the taxpayer do X, Y, and Z. They are insisting that they do X, Y, and Z because we passed a law here that will require it, a specific one, which is the 64th change in the tax law since 1986--64 times. Last year, after the Balanced Budget Act of 1997--ask anybody what schedule D looks like out there in the country as to capital gains and they will tell you how complicated and how costly and how difficult it is to comply. On the education piece, the IRS, in order to make certain that the taxpayer is following the law, will have to insist that the taxpayer produce documents, insist the taxpayer produce receipts to be able to demonstrate that the expenditures are going to education-related purposes; not only education-related purposes, but purposes that have been required by the school in which the child is enrolled. It is going to be a very difficult set of compliance requirements, A, that the taxpayer is going to have to do, and that the IRS is going to have to make certain the taxpayer has done in order to make certain that they qualify for this tax credit. In addition to the cost, anywhere from $70 to $100 billion annually the taxpayers spend to comply, in addition to that, there is the other side of the coin, which is the IRS. As a consequence of us using income as a basis of determining what the tax is going to be, the IRS has to come out and request the receipts and the documentation and all sorts of other things. That produces the invasive mood that many people on this floor have talked about over and over and over as one of the problems with the IRS. So I would just say to the Senator from Wisconsin, he is dead right; the next debate has to be, How do we organize this Tax Code to begin with? I am excited that some of the provisions the Senator has added to this bill will increase the likelihood that this debate will go forward. The Taxpayer Advocate that is in title I is going to change the dynamic, because not only are they a Taxpayer Advocate, they are a National Taxpayer Advocate and they will have a tremendous amount of independence. They will be a National Taxpayer Advocate in the State of Wisconsin, of Nebraska, of Ohio. They will have a separate phone number, a separate fax; they will not be operated by the IRS, they will be independent. They are told by this law that they are to come back to this Congress and say: ``Here are items that are repetitive problems with the taxpayer, causing us problems every single year, and they are part of the law. We recommend you change the law.'' Second, as the Senator from Wisconsin knows, because he strengthened the provision, the Commissioner of the IRS will be at the table when tax laws are written. Unlike the education IRA, unlike the Balanced Budget Act last year, where the tax commissioner is silent--the best test of this is, ask yourself, when is the last time you heard an IRS Commissioner say, ``Mr. President that's a great tax idea but here's what it's going to cost the taxpayers to collect''? When is the last time you heard the tax commissioner say, ``Senator Blowhard, that's a great tax idea, but here is what it's going to cost the taxpayers to comply''? We, under this law, say to the Commissioner, you are empowered to tell the American people and to tell us what it is going to cost and we, as well, require, as a result of the simplicity index, some kind of evaluation, as we do with regulation, as we do with all regulation-- some kind of evaluation to inform the Congress as to the cost to comply. Last, I would say one of the reasons that I felt very strongly about having an employee representative on this board is that the Commissioner is granted, under this legislation, the authority--indeed, directed--to reorganize the IRS along functional lines. I can tell you, of all the things in this bill, I would put that in the top five things that I think taxpayers will notice immediately. Today, what you have is a three-tiered system: National, regional, and district organization. It is very complicated and very difficult for the taxpayer to figure out how this organization occurs. Under the new organization, what you will have is taxpayers organized by category: Individual payers, small business, large business, and nonprofit, all with special problems, all with different needs. The Commissioner has already said that he intends to follow up on some of the suggestions the National Restructuring Commission made, which is that it may be that for both the individual and especially small business, there will be entire categories where the Commissioner will say: ``The small business community spends $2 billion a year complying with this particular provision of the code. We generate, with $2 billion worth of cost, nothing. All we have is cost. There is no revenue coming in. We recommend that large categories of people actually be exempt from having to go through all the compliance requirements.'' I believe what you will see as a consequence of this is a lot of exciting changes being proposed by the Commissioner of the IRS to this Congress that will enable the taxpayer, with its individual small business, large business, or nonprofit, to say, ``I still may not like paying my taxes. I still may think they are too high. But it has gotten a heck of a lot easier. You have gotten rid of some of the things that don't make any sense at all.'' As a consequence, the customer satisfaction is going to increase. So I applaud the distinguished Senator from Wisconsin. His amendments, his suggestions, his input have improved this bill. And I especially point out that he is right on target, talking about simplification. Not only is there a cost but there is also an invasion that occurs as a consequence of the complexity of the code. Mr. President, I yield the floor. Mr. DOMENICI addressed the Chair.

Mr. KERREY. Mr. President, the distinguished Senator from Iowa, Senator Grassley, is not on the floor, but I am certain he is going to want to speak on this. However, I think it will be fine if we urge adoption of the amendment at this time.

Mr. KERREY

Mr. KERREY. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. KERREY. How much time remains on this side?

Mr. KERREY. I think I will go for about 27 minutes and yield back 28 seconds. Mr. President, 30 seconds, and then I will yield it all back. Likewise, I have great respect for the Senator from Florida. I believe his amendment is well intended but, if it is accepted, it will significantly weaken this board. This board needs to be more than advisory; it needs to have a sufficient amount of authority and power when it meets with Congress and we pay attention to it. If it advises and works with the IRS Commissioner, the IRS Commissioner, as well, listens and pays attention. So, this amendment will weaken the board. I understand what the Senator from Florida is trying to do, but I hope this amendment will be defeated. I yield back the remaining time.

Mr. KERREY

Mr. KERREY. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. KERREY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. KERREY. Mr. President, this amendment has been agreed to on both sides. It strengthens the electronic filing section, title II of this bill. I appreciate very much the Chairman's support.

Mr. KERREY. I thank the Senator.

Mr. KERREY. I ask for the yeas and nays on this amendment.

Mr. KERREY. Earlier we did request that. We have some Members who will leave at 11 o'clock, so I asked Senator Byrd if he would speak after the rollcall vote. Does the Senator still want a rollcall vote on this amendment?

Mr. KERREY. Mr. President, I ask unanimous consent that the reading of the amendments be dispensed with.

Mr. KERREY. Mr. President, I move to reconsider the vote.

Mr. KERREY. Mr. President, I am hopeful that on the Republican side, Members will come down and start talking to us or, if we can't work them out, get them offered. Senator Faircloth has an amendment which he is going to offer just as soon as I get two accepted that we have worked out with the chairman. I think we can run through this relatively rapidly. The previous amendment that was just defeated is one of the controversial ones. Senator Faircloth has one that is controversial. I think Senator Mack does. There are a few others. After that, most of the controversy is out of this bill. I am hopeful we can get Members to come down here so we don't end up, as the majority leader said, staying here longer than is warranted, given the general agreement that is on the legislation. Amendments Nos. 2358 and 2359, en bloc

Mr. KERREY

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