J. Kerrey

Mr. KERREY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KERREY

Mr. KERREY. That is correct. A new public board, in fact, would make the hiring decision and create an independent taxpayer advocate. The current advocate, as you know, is an employee of the IRS and, as a consequence, although he has done a good job, in many ways has a conflict of interest because his performance is being judged by IRS managers.

Mr. KERREY. No question.

Mr. KERREY. The Senator is right. You are absolutely right. The culture, though, is not going to change at the IRS until we give the IRS Commissioner the management authority the manager needs to be able to run the agency with performance that is based upon something other than these quotas that have been set up. Although it has been a relatively small number of instances where we identified them, it still--relatively small--it is one too many.

Mr. KERREY. I could not agree with you more. There are actually 800,000 notices every single year of audits--excuse me, every month that goes out to----

Mr. KERREY. Yes, 800,000 a month of contacts to the IRS or audits or matters that are almost as serious as an audit that goes out to some taxpayers. There is no question, if we take this bill up that is lying right down there now that passed 421-4--probably pass here 100-0--there is no question that all of those taxpayers would have more power. They may still not like the outcome. They may have to pay more taxes, and not like it, but they would have a lot more power, a much more efficient agency, and a much more happy ending as a consequence. There are things that the IRS does that they ought not be required under the law to do, that nobody says they ought to be doing. Though I say again, the chairman of the Finance Committee, Senator Roth of Delaware, has quite accurately said, there are additional things we could do. But, for gosh sakes, given the burden the taxpayers have, given the difficulty they have, and given the broad support, after 12 public hearings, and after thousands of meetings with IRS employees and provider groups in the private sector, private sector companies that are offering competitive services, other nations' governments that have had similar problems that have gone through the similar process of trying to improve the operation of their tax collection agency--this is not something that was put together in a couple weeks' time in response to a problem identified. This has been something that has been debated well over a year and has broad bipartisan support and would unquestionably, for every taxpayer out there that might receive an audit or might receive a collection notice or might have to call the IRS and get a question answered--every single one of them would benefit if we could just pass this law.

Mr. KERREY. That is correct. They would get their attorney fees paid up; and if there was negligence, up to $100,000. And we establish assistance centers out there for the first time for taxpayers who are struggling to get questions answered.

Mr. KERREY. The Treasury Department and the administration support the bill that is lying right down there, that if there was no objection we would take up immediately here and pass in the Senate as well. Not only does the Treasury support it, but former Treasury Secretary Brady, former Treasury Secretary Baker, former Commissioner Richardson, and former Commissioner Goldberg. I mean, everybody that has looked at the law, they can say it could go further, do additional things, but nobody has lodged an argument that says the changes in this law would not stand a very good chance of improving the operational efficiency experienced by taxpayers who receive notices every day and by taxpayers who have questions and call up the IRS and try to get those questions answered.

Mr. KERREY. Right.

Mr. KERREY. I will be pleased to.

Mr. KERREY. No. Indeed, it is endorsed by almost every organization outside of the Government that has contact with the IRS. The National Federation of Independent Businessmen supports this legislation, as well as the National Treasury Employees Union supports this legislation. The accountants support the legislation. The enrolled agents support the legislation. I mean, groups that deal daily with the IRS are asking the Congress to change the law. There have been objections raised that it doesn't do something in addition; but, again, we can do all of that. We do not have to get every single thing done in order to change the law if we know that the change in the law will improve the operational efficiency of some agency of Government, especially one that sends out 135,000 notices every single day to taxpayers that they owe additional money.

Mr. KERREY. That is correct. One of the things that this law does in title II is deal with a new trend that all of us understand, which is electronic commerce. We see a lot of electronic commerce developing out there in the private sector. The IRS has been struggling to get electronic filing up and online. The significance of it is that when you file electronically, the error rate is less than 1 percent. Error is real money. You make a mistake on the Government side with a tax claim, and it could end up in court for years and years and years and cost the taxpayer and the Government tremendous amounts of money. So errors are real money. In the paper world, the rate of error is 25 percent. So we provide both incentives and resources to get to a much higher number of electronic filings which I think for taxpayers who pay to run the IRS, as well as taxpayers who are sending their money, is a tremendously important change in the law.

Mr. KERREY. An additional 800 pages in the code. Lord knows, this is good news to them compared to some years we don't pass a tax bill until about now, until they are almost always into their filing season. What we have to understand, what citizens need to understand is the IRS is managed according to law. So title I of this bill that is sitting down here at this desk passed 421 to 4 in the House. Title I of this bill deals with management and accountability. Who could possibly object to passing a piece of legislation that would give the Commissioner of the IRS the management authority to do what you just described? If the President of the United States calls up the Tax Commissioner, who he just appointed and we just confirmed, and says, ``I just heard Senator Bumpers on the floor say something really pretty smart, unusual. He said that when he was Governor of Arkansas, he told his revenue commissioner that anybody who is discourteous is going to be fired. I want you to do that.'' Do you know what Mr. Rossotti would say? ``That is a great idea, Mr. President, but the law doesn't give me that authority. I can't even hire my senior people. I can't manage this agency.'' The law doesn't give him that authority. It is not a corporation, it is a creature of law, and we have written this law so as to confine and make it difficult for the Commissioner to do the job. You would think the question the Senator from Nevada asked earlier, if he is going to have this new authority to hire and fire, certainly the employees must be against that. Absolutely not. The Treasury Employees Union supports this legislation. Why? They know the Commissioner can't manage the agency. They know the new provisions not only to manage the agency but to provide accountability and oversight, both with a new public board and with a restructured legislative oversight process, is necessary, is needed, in order to get shared consensus on what the strategic plan is going to be. That is what has been failing over the years. That is what has been missing over the years. By the way, I have only been here 8 years, but I have never heard a Commissioner get up during the middle of a tax debate and say, ``Gee, Mr. President, that's a great tax idea you have,'' or ``Senator'' whoever, ``that's a great tax idea you have, but this is what it is going to cost the taxpayer to comply.'' The taxpayers already spend $200 billion a year--$200 billion a year--just to fill out the forms. You say everybody in this body ought to be for simplification. I think the tax bill passed 90-some to 8. I know I voted for it. I think the distinguished Senator from Arkansas did not, so he can reclaim the floor and tell me what a fool I was, talking about simplification out of one side of my mouth and out of the other side of my mouth I voted for something that creates complexity. For the first time, we give the Commissioner the authority to be at the table when tax law is written for the taxpayer and say, ``This is what it is going to cost the taxpayer, this is what they are going to have to do to comply, Mr. President, or Mr. Chairman, of whatever.'' We would give under this law the Commissioner not just the authority to manage, not just a restructured public board that would give the citizens a view of what is going on inside this agency and restructuring Congress so there is more consistent oversight. The wonderful hearings the Finance Committee had, I was shocked to find out that was the first time in 20 years where the full committee had hearings of that kind. Some people criticize us saying we bash the IRS. I guess once every 20 years is all we are supposed to do. The law is what dictates what the IRS can and cannot do. The law does. We can't bash the employees, the managers of the IRS on the one hand while on the other hand we refuse to take up a piece of legislation that would give the Commissioner the authority to do everything that we say we want the Commissioner to do. So, as I said, it has been since Wednesday that the bill got down there. I have done this now three times on 3 straight days, and in that time, a quarter of a million taxpayers have received notices in the mail: ``Dear Mr. and Mrs. Smith, you owe us X amount of dollars.'' Another half a million people have called up their IRS service center or their IRS office and tried to get a question answered and haven't been able to do so. Again, I underscore, I hope my colleagues on both sides of the aisle understand that the Speaker may be successful in getting $30 million, up to $100 million of taxpayer money allocated to do a 14-question poll. If you look at these questions, you would say, ``My gosh, we can answer those questions without spending $30 to $80 million of taxpayers' money to get answers that are so obvious it is embarrassing to even ask them, even if it were for free.''

Mr. KERREY. I will be pleased to yield.

Mr. KERREY. I appreciate both the Senators' questions and statements. As a former Governor, I have commented right from the beginning that he could fire anybody who was a discourteous employee. Let me say again, for the record, we have a remarkable system of tax collection in the United States that is largely voluntary. One of the disturbing things about the current trend is we have gone from 93 percent voluntary compliance down to 83 percent in the last 30 years. That means 83 percent of our taxpayers voluntarily comply, and they are paying higher taxes as a result of the 17 percent who don't. There is a need to make certain there is a sufficient amount of law enforcement out there. The dilemma, though, is the current law, and I underscore this because we are a nation of laws, after all. The IRS is not a corporation. It is created by law, and it operates under law. Nobody doubts if their workload went up as a result of the balanced budget agreement we just passed. There is significant new complexity in there of, what, four or five different rates you are paying for capital gains.

Mr. KERREY. Indeed, the restructuring commission did a poll for $20,000.

Mr. KERREY. That is correct.

Mr. KERREY. I actually do not have an answer to your question, as to whether or not that is the case.

Mr. KERREY. What was the question again? Mr. President, I hope that in the next day or two, while we are deliberating in this world's greatest deliberative body, resolving all the terrible conflicts we have on a variety of things, I hope we are able to get consideration of this legislation. I believe it will pass almost unanimously, if not unanimously, in the Senate. I believe it could be conferenced very, very quickly with the House and be on to the President. I think all of us, once it is passed and signed by the President, will feel glad that we changed the law to give the Commissioner the kind of authority that the Commissioner is going to need to manage this rather difficult and troubled agency. I thank, again, my very patient chairman for waiting for this opportunity to respond. I appreciate, again, his leadership in conducting 3 days of public hearings, piercing the 6103 veil to be able to see inside this agency even further than what the restructuring commission did. I yield the floor. Several Senators addressed the Chair.

Mr. KERREY. I don't have an answer, specifically, to your question. I can say that one of the things that we have done with this legislation is to make the taxpayer advocate more independent. Very often that is what is missing. Let's say that you are one of the 135,000, or you are one of the 270,000 since we have asked for this bill to be taken up, who get a notice and you disagree with that notice. There is a dispute resolution officer who works for the taxpayer advocate that you can call up. You can say, ``Look, I have a dispute here. I think it is unfair. I would like to come in and talk to you.'' There is a mechanism under the Taxpayer Bill of Rights II to do that. And what we do is make that taxpayer advocate even more independent. Very often what happens is the law requires the revenue agent to collect, even though the revenue agents say this doesn't make any sense. There is no mechanism that enables the revenue agent to be overruled. What we do is, by giving that taxpayer advocate more independence and more power and more authority to overrule, I think we are going to reduce substantially the number of cases where a person looks at it and says, ``My gosh, why would you spend a quarter of a million dollars to collect 100 bucks, or something like that?'' These are cases that come all the time into our offices, and under the current law we are simply not able to do anything.

Mr. KERREY. I think it is fair to say that. There are some who will say I want the board to have more authority, a few odds and ends done, but I don't think anybody in the Chamber would object to changing the law to give the Commissioner the authority to manage this agency or do all the other things the distinguished Senator from Nevada has identified on behalf of taxpayers, like providing a public statement of the basis of audits--I don't think anybody could object to doing that. And anybody looking at it, I think, would say, ``Gee, that is not going to make things worse. That's going to make things an awful lot better for those taxpayers getting notices and those taxpayers calling the IRS.''

Mr. KERREY. I completely agree with the distinguished Senator from Nevada on that point. Again, as long as we are in session, I intend to continue to come to the floor and ask unanimous consent to take this legislation up. Not because I think it is controversial, but because I think it is not controversial. We are hammering out in back-rooms all over this Capitol all kinds of deals to try to get fast track, to try to get things that are extremely controversial. This one is not. It has extremely broad support, a large margin of victory when it passed: 426 to 4 in the House. It is going to conference very easily. I have been down here three times. I will continue to come down here and ask unanimous consent to proceed immediately to consideration of this legislation.

Mr. KERREY. Not only is that true but my guess is, if it were to be taken up, if no objection were placed against this unanimous-consent request, my guess is on final passage you would get 100 votes.

Mr. KERREY. You would be entitled to attorney's fees under this bill, yes.

Mr. KERREY

Mr. KERREY. Mr. President, I rise to discuss the situation in Iraq regarding the U.N. inspection regime and the refusal of the Iraqi Government to accept American inspectors and thus delay the inspections. The Iraqi purpose is clear: to attack the unity and will of the world community, and especially the members of the Security Council, concerning sanctions to Iraq; to weaken the authority of the United Nations by dictating terms of compliance to U.N. Security Council resolutions; and most important, to conceal and retain and build up the chemical and biological weapons programs of the Iraqi military. Once again we are in a crisis with Iraq; not of our making but of theirs. The question being debated here and in the United Nations is: What should we do? The crisis began a week ago on October 29, 1997 when Saddam Hussein sought to evict from Iraq Americans who are assigned to international inspection teams sent by the United Nations to enforce a cease fire agreement signed by Iraq on April 6, 1991, following the January 17 to February 28 war to liberate Kuwait known as Desert Storm. In the agreement Iraq promised to pay Kuwait for war damages, to destroy all its nuclear, biological, and chemical weapons capacity, and to allow inspectors into their country to verify compliance. On April 11, 1991, the U.N. Security Council officially declared an end to the war and to continuing the sanctions originally imposed on August 6, 1990. The Security Council created the Special Commission, also known as UNSCOM, to carry out the inspection of Iraqi installations in order to verify the destruction of nuclear, biological, and chemical weapons capacity. UNSCOM--originally expected to be in operation for several months--has been in business for 6 years. During these past 6 years the UNSCOM inspectors have met with success. They reduced the Iraqi stockpile of weapons of mass destruction more than the war itself. Iraq has considerably less capability than it had when Desert Storm ended. That is the goods news. The bad news is that they retain sufficient capacity to pose a real and serious threat to the people of the United States. The nature of this residual threat can be seen in a letter sent to the United Nations on Wednesday by Richard Butler, an arms control expert who heads the UNSCOM. According to Mr. Butler the Iraqis could easily adapt laboratory or industrial equipment to resume making prohibited materials. In his letter he says: ``For example, it would take only a matter of hours to adapt fermenters to produce seed stocks of biological warfare agents. Furthermore, it appears that cameras may have been intentionally tampered with, lenses covered and lighting turned off in the facilities under monitoring.'' The idea of biological weapons in the hands of Iraq's Saddam Hussein should strike fear in the hearts of every American. This man is dangerous to his own people, his neighbors, and to us. He is also clever. His latest ploy has produced more benefits for him than losses. Again, Mr. Butler is our guide. In his letter he says that, while we attempt to negotiate a right that was guaranteed under the peace agreement they signed, Iraq has been able to hide evidence and disable surveillance equipment. He specifically notes that we cannot monitor machinery that can balance missile guidance systems or equipment that could grow seed stocks of biological agents in a matter of hours. Mr. Butler calls our attention to two actions Iraq has taken during the week when inspectors were absent. First, significant pieces of equipment that had been under the view of video monitoring system have been moved out of range of cameras. Second, monitoring equipment has been tampered with in other areas. Even if inspections start again, Saddam Hussein has succeeded in making our work more difficult. We must reset and re-aim surveillance cameras. We must recheck the machinery or stocks of materials these cameras watch. And we should not be certain whether prohibited arms or components had been produced in crash programs and carried away to be hid. So, while we sit and wonder what we should do, Saddam Hussein sits and counts the ways he has benefited. A U.N. team sent by Secretary General Kofi Amnan has just returned with nothing to show for their efforts. The team leader, Mr. Lakhdar Brahimi of Algeria was quoted as saying the Iraqis were very nice. Well, why not be nice? After succeeding 2 weeks ago in defeating United States efforts to impose more intense sanctions at the Security Council, Iraq has now gotten the U.N. to send a special negotiating team to ask politely if Iraq will do what it promised to do 6 years ago when it was suing for peace. Mr. President, we cannot allow the situation in Iraq to continue to head in its current direction. Too much is at stake. American security and the security of our allies and interests hangs in the balance of our decision. For my part I have reached the conclusion that our policy of containment cannot succeed. We need an objective which will ensure our security. We need a goal which will guarantee the stability we seek for the region. As has always been the case, an outrageous act by Saddam Hussein has provoked a strong reaction in this country. Military responses are broadly discussed. Editorial pages talk of making sure our military response if a head shot at Saddam himself, as though assassination were a legal option for U.S. forces. At some point we may turn to a military response appropriate in scope and direction to achieve immediate and longer terms goals. A measured action, complete with the certainty of further response if necessary, may be what is called for in this situation. But I believe we need to ensure that our military actions, as well as our diplomatic and economic efforts, are part of an overall strategy toward Iraq which will attain a goal consistent with American ideals and interests. Today, the United States and the international community are considering whether the proper response to Saddam's actions is a limited military action targeting suspected facilities or continued talks aimed at a more diplomatic end to this impasse. These are tactical options which will enable the United States and the international community to continue to muddle through its current strategy of containment toward Iraq. While the containment of Saddam has brought limited success in disarming his military, this strategy has been ineffective in changing the behavior of the Iraqi Government and is in danger of becoming more ineffective with the passage of time. Some commentators state that the cohesion of the Persian Gulf coalition has naturally grown more tenuous as other nations rediscover the promise of Iraqi petrodollars. They believe that our former coalition partners will inevitably find Iraq's oil wealth so tempting as to overlook the risks involved in the reemergence of a military powerful Saddam. I believe this need not be the case, if United States can formulate a strategy with clear policy objectives instead of continuing with a strategy of simply reacting to the Iraqi dictator's latest violation. We need to change our goals, our strategy, and our tactics. I believe our policy toward Iraq should be open and direct--The United States seeks to remove the dictatorship of Saddam Hussein in Iraq and to replace it with a democratic government. Nothing more, nothing less. Our frustration with Saddam is understandable. Six years ago we thought we had him. He failed utterly, ruined his country and two neighboring countries, caused the deaths of hundreds of thousands of people, and by our political lights he should be gone. But by his politics, the politics of a terror rivaled in this century only by Stalin's, Saddam keeps his job and we are rightly frustrated. While Saddam rules, Iraq poses a threat to its neighbors and, by extension, to us. He still has SCUD missiles which could carry his chemical and biological agents to Israel, to Saudi Arabia, and to other nations in the region whose security is a vital American interest. He has ground forces which could invade Kuwait again or embroil any of his other contiguous neighbors in war. Those same forces threaten or oppress Iraq's Kurdish and Shiite minorities every day. If Saddam retains power and escapes from sanctions, the threat he will pose in a decade will be far greater. He will have intermediate range or even long range missiles to carry his deadly payloads, he may have developed a nuclear weapon, and he will again have many billions of dollars in oil income to modernize his Armed Forces. He will be a major threat to his country and in fact to the entire world. We simply cannot let it happen, and I am confident we will not. In considering how to respond to Saddam's latest outrage, President Clinton and the Congress need to take the long view, looking past the incident of the moment to determine the long-range outcome we want. Because we are the United States, and because we have already expended lives and treasure because of Iraq, I think our long-range goal should be ambitious. We know from Iraqi history that Iraq is predisposed to dictatorship. We also know the dictatorships from this unbalanced state will inevitably threaten their neighbors. So getting rid of Saddam is not good enough. We need to get rid of Iraqi dictatorship. Our long-range goal should be a democratic Iraq. Other countries may be tempted to do business deals with the Iraqi dictator and tactfully glance away from his abuse of his people. We Americans should settle for nothing less than democracy. An impossible, naive dream? I think not. The Iraqi people, despite the lobotomy Saddam has tried to give them, are a well-educated, skilled people. They know the horrors of dictatorship better than anyone else on Earth. When Iraqis tell me their heartfelt commitment to a democratic future for their country, I believe them. How do we turn this yearning for democracy into the reality of a free Iraq? Let me lay out a road map. First, we should maintain sanctions on Iraq and return to the inspection system which existed until October 29, when Saddam excluded American inspectors from the teams. If we have to use military force to get Iraqi compliance, fine. We should strive to have our coalition partners join us in this use because the power of the world community to bring an outlaw to heel is at issue here. If Iraq can thumb its nose at the Security Council today, some other rogue state will do the same tomorrow, and the system we and our allies have carefully built over 52 years will collapse. But even if some of our coalition partners don't join us, we should act militarily if Iraq won't back down. Second, we must convince our core European and Asian allies that democracy, not just the compliance of a dictator, is the right long- term goal for Iraq. We must show our allies the far greater benefits and reduced risks that will accrue to them as well as to us from a democratic Iraq. We must sign up our allies for the long term. Third, we must make the people of Iraq our allies, too. We must go beyond merely stating our support for democracy and instead put concrete encouragements on the table, solid indicators of Western commitment to Iraqi democracy. We should announce we will forgive Iraqi debt if a democratic regime takes power there and we should encourage our allies to do the same. We should state clearly the loan and foreign assistance preferences which a democratic Iraq would receive from United States and multinational institutions. We should discuss our preparations to supply immediate food and medical assistance to Iraq at the moment of Saddam's replacement by a regime which states its intention to hold free elections. And we should make sure, by means of Voice of America and commercial media, that every Iraqi knows about these encouragements to be democratic. Even before change comes, these steps will restore hope in Iraqi hearts. Fourth, we should openly and consistently state our goal of a free, democratic Iraq. To accept less and to say less is simply unworthy of our heritage. Let democracy, respect for human rights, and a free economy be our consistent mantra for Iraq, as it ought to be for every country, and some day, not far off, when Saddmam's prisons and graveyards and secret weapons sites are opened and the Iraqi people can tell the story of their suffering, we will be proud that we set a lofty goal. Mr. President, I yield the floor. I suggest the absence of a quorum.