Jon Kyl

Mr. KYL

Mr. KYL. What I might do then, Mr. President, since we want to handle this in a way agreeable to the chairman, if there is no one else to present an amendment right now, rather than defer business, I will go ahead and describe the amendment but do it briefly and then, when the chairman is ready to proceed with other business, lay it aside and handle it in that fashion, if that is agreeable with the chairman.

Mr. KYL. And ask for its immediate consideration.

Mr. KYL. Mr. President, if it is in order, I would like to send an amendment to the desk.

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

Mr. KYL. Mr. President, might I ask of the distinguished chairman whether this would be an appropriate time to discuss briefly the amendment or whether we should lay it aside and move to other business? What would be the chairman's pleasure?

Mr. KYL

Mr. KYL. Mr. President, the purpose of this bill, ``The Identity Theft and Assumption Deterrence Act'', is to address one of the fastest growing crimes in America, identity theft. Losses related to identity theft have nearly doubled in the last two years. Today, 95% of financial crimes arrests involve identity theft. Trans Union, one of the country's three major credit bureaus, says calls to its fraud division have risen from 3,000 a month in 1992 to nearly 43,000 a month this year. This is more than a troubling trend. Indeed, with increasing frequency, criminals--sometimes part of an international criminal syndicate--are misappropriating law-abiding citizens' identifying information such as names, birth dates, and social security numbers. And while the results of the theft of identification information can be devastating for the victims, often costing a citizen thousands of dollars to clear his credit or good name, today the law recognizes neither the victim nor the crime. The bill, as reported unanimously by the Judiciary Committee, does both. It recognizes the crime by making it unlawful to steal personal information and enhancing penalties against identity thiefs. It recognizes victims by giving them the ability to seek restitution for all costs involved in restoring lost credit and reputation. In addition, my bill provides real time relief to victims by directing the Federal Trade Commission to set up a centralized complaint center to provide information to consumers, refer cases to law enforcement, officially acknowledge complaints, and relay that acknowledgment to credit bureaus. And while section 1028 of title 18 currently prohibits the production and possession of false identification documents, it does not make it illegal to steal or possess another person's personal information. By amending section 1028, this bill will help current law keep pace with criminals' exploitation of information technology. The substitute I am offering today with Senators Leahy, Hatch, Feinstein along with Senators DeWine, D'Amato, Grassley, Abraham, Faircloth, Harkin, Warner, Murkowski, and Robb reflects two small but important improvements over the bill reported out of committee. Both changes were recommended by the Department of Justice. First, the substitute further refines the scope of the offense and applicable punishments by deleting the term ``possession'' from the offense and penalty sections of the reported bill. As explained by the Department, the term ``possession'' is overbroad as applied to identity theft offense added to the criminal code by this legislation. The second change simply adds standard forfeiture procedure to the existing criminal forfeiture penalty in the reported bill. Without a procedure attending the forfeiture penalty, the Department considers this penalty unenforceable. There are numerous private entities and federal law enforcement agencies that supported and contributed to this bill through its redraftings to its present form that I would like to thank. On the private side, thank yous go to the American Bankers Association, the Associated Credit Bureaus, Visa and Mastercard, the American Society of Industrial Services, and the United States Public Interest Research Group. Public agencies which lent important support to this legislative effort are the: Federal Bureau of Investigation, Federal Trade Commission, and the U.S. Postal Inspectors. Special thanks goes to the Secret Service and the Department of Justice for the great deal of time and effort they have expended to help make this bill the well drafted piece of legislation it is today. In conclusion, I also thank Senators Leahy, Hatch and Feinstein for lending their valuable support and input to this bill.

Mr. KYL

Mr. KYL. I thank the Senator. tax code termination Mr. SMITH of New Hampshire: Mr. President, I rise today in support of the Tax Code Termination Act, which had been proposed as an amendment to the Treasury-Postal Appropriations Act. This measure, which I cosponsored with Senators Hutchinson and Brownback, would sunset the Federal Tax Code by the end of 2002. Our current Tax Code, with its many rates, deductions and exemptions, needs to be replaced with a simpler, fairer system that will eliminate the bias against savings and investment and promote economic growth. Consider these facts: The Tax Code is made up of about 7,500 pages. All the Internal Revenue Service regulations, rulings and tax court decisions add tens of thousands more pages. By contrast, when the income tax was enacted eighty-five years, the Tax Code was under twenty pages long. By the most conservative estimate, the total cost of collecting taxes, including the value of the 4.5 billion hours that taxpayers spend preparing tax returns, is $75 billion per year. Other estimates are several times higher. The cost of complying with some provisions exceeds what the government collects in taxes. I can think of no more fitting commentary on the tax laws that are on the books today than The Federalist Papers, and I quote: ``It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.'' Is there any doubt that our current Tax Code is too voluminous to be read or too incoherent to be understood? There probably is not a single accountant who understands the Code in its entirety. Not even the IRS, which employs about 110,000 people and is twice as big as the CIA, seems to have a complete grasp on the Code. In 1993, for example, the IRS provided an estimated 8.5 million incorrect or incomplete answers to taxpayer inquiries, and taxpayers were overcharged an estimated $5 billion in penalties. Another measure of the Code's complexity is the number of disputes it generates. As many as 40 percent of major corporate audits end up in administrative or legal disputes. Some last for years. The Tax Code is so burdensome that it encourages tax evasion and distorts investment. the IRS has reported that there are hundreds of people who pay no taxes on incomes of more than $200,000 per year. Remember Leona Helmsly, the New York real estate magnate who spent eighteen months in jail for tax evasion? According to her former housekeeper, Leona said: ``[w]e don't pay taxes. Only the little people pay taxes.'' Taxpayers who can afford to pay for tax planning have a strong incentive to invest in schemes to avoid paying taxes instead of investing in productive enterprises that will help the economy thrive. Up to 30% of individuals reporting business income are not complying with the Tax Code, according to the IRS. Small wonder that many small businesses are not in compliance, when we consider the Code's complexity. For every $100 they paid in income taxes, small businesses with net profits paid an estimated $377 in accounting fees and other costs to comply with the tax laws, according to a 1996 Tax Foundation report. If the current tax code were not so complex, perhaps we would not be facing the enforcement problems that we brought to light by the Finance Committee in its April 1998 IRS oversight hearings. Critics of the Tax Code Termination Act maintain that it would be irresponsible to sunset the Tax Code until a substitute is prepared. But there are already a number of other federal programs on the books that contain sunset language; and why should the Tax Code by any different? This legislation simply sets a fixed date by which the Tax Code will have to be reauthorized, thereby forcing the President and Congress to engage in a meaningful dialogue on the issue. Mr. President, I urge my Senate colleagues to take the first step toward meaningful tax reform by setting a date when the Tax Code will expire. We should discard the current maze that is our Tax Code and enact a new tax system that is simple, fair and does not discourage savings or investment.

Mr. KYL. Mr. President. I would like to take a few minutes to describe the importance of HIDTAs, and specifically the creation of a new Central Arizona HIDTA. As you know, HIDTAs are an effective mechanism for fighting drugs and especially for combating the increase in methamphetamine use and meth labs. Arizona has a huge problem with meth and meth lab cleanup. In April, I held a field hearing in Phoenix on this issue and I heard first-hand about the magnitude of the drug problem in urban and rural areas of the state. For example, I heard testimony that the Maricopa County HIDTA Meth Lab Unit presently dismantles an average of three labs per week and that, during fiscal year 97, it seized 137 meth labs. Projections for seizures this year are expected to reach 200. Moreover, the DEA testified that clandestine lab seizures in Arizona have increased 910 percent since 1994. The formation of a new Arizona HIDTA, the Central Arizona HIDTA, is a cooperative effort among three Arizona counties--Maricopa, Pinal, and Mohave--representing both rural and urban interests. Designating new HIDTAs where a need can be demonstrated and where law enforcement has joined together is key to stopping the spread of drugs. I look forward to working with you to ensure that new HIDTAs, like the Central Arizona HIDTA, receive funding.

Mr. KYL

Mr. KYL. Mr. President, there are a lot of things wrong with our nation's Tax Code, but two things in the code that have always struck me as particularly egregious are the steep taxes imposed on people when they get married and when they die. Today, we will have a chance to vote to end the marriage penalty. All of us say we are concerned that families do not have enough to make ends meet--that they do not have enough to pay for child care or college, or to buy their own homes. Yet we tolerate a system that overtaxes American families. According to Tax Foundation estimates, the average American family pays almost 40 percent of its income in taxes to federal, state, and local governments. To put it another way, in families where both parents work, one of the parents is nearly working full time just to pay the family's tax bill. It is no wonder, then, that parents do not have enough to make ends meet when government is taking that much. It is just not right. The marriage penalty alone is estimated to cost the average couple an extra $1,400 a year. About 21 million American couples are affected, and the cost is particularly high for the working poor. Two-earner families making less than $20,000 often must devote a full eight percent of their income to pay the marriage penalty. The highest percentage of couples hit by the marriage penalty earns between $20,000 and $30,000 per year. Think what these families could do with an extra $1,400 in their pockets. They could pay for three to four months of day care if they choose to send a child outside the home--or make it easier for one parent to stay at home to take care of the children, if that is what they decide is best for them. They could make four to five payments on their car or minivan. They could pay their utility bill for nine months. Mr. President, it seems to me that if couples need advice about their decision to marry, they should be encouraged to look to their minister or rabbi, or their family, not their accountant or the Internal Revenue Service. This amendment represents an effort to strengthen families and give them a chance to spend their hard-earned money in the way they best see fit. Given that federal revenues as a share of the nation's income, as measured by Gross Domestic Product, will set a peacetime record this year--a whopping 20.5 percent of GDP--and given that we are anticipating a budget surplus of more than $63 billion, it seems to me that there is no excuse for the Senate to allow the marriage-penalty tax to continue any longer. I urge my colleagues to join me today in voting to end the egregious marriage-penalty tax.

Mr. KYL

Mr. KYL. Mr. President, I thank the National Association of Attorneys General, especially Attorney General Dan Lungren and Attorney General Jim Doyle, and Thomas Gede, Traci Sanders, Alan Kesner, and Stephen Higgins, of my staff, and Andy Vermilye of Senator Bryan's staff for their assistance in the bill which we have just passed. I appreciate their efforts very, very much.

Mr. KYL. The Senator is correct. information assisting in placing a bet or wager

Mr. KYL. Senator McConnell, you are welcome. I am very pleased that we have been able to work together to protect legitimate, law abiding interests who make significant contributions to the nation's economy.

Mr. KYL. Thank you, Mr. President. Mr. President, I thank everyone for the last vote. The point is, if you are going to ban an activity because the public policy of all 50 States is that their children and the families in those States should be protected from this activity, if you ever allowed one exception, then because of the nature of the Internet, you wouldn't have a bill. I appreciate that, and I think that clears the way for passage of the Internet Gambling Prohibition Act. I note for the Record some of the organizations that support this legislation: Ralph Nader's Public Citizen, the Christian Coalition, the Focus on the Family and Family Research Council, National Coalition Against Legalized Gambling and Against Gambling Expansion.

Mr. KYL. Yes, assuming each facility that participates in the pools is duly licensed by the State or approved by the laws of the foreign jurisdiction in which it operates. As I states earlier, the location of the totalizator or other similar system used to process parimutuel wagers is irrelevant if the parimutuel pools are transmitted to or from facilities each of which is licensed by the State or approved by the laws of the foreign jurisdiction in which it operates.

Mr. KYL. Mr. President, the Senator from Idaho wishes to close. Therefore, let me reiterate the key points that the Senator from New Jersey, and also the Senators from Wyoming and Nevada, have made; that is, that you cannot have any exceptions to a national prohibition on Internet gambling if you want the policy to work, because if anyone can do it, then the gambling can occur in the homes, in the privacy of the homes around this country by children, by problem gamblers, or by anyone else if there is any exception because the Internet reaches across interstate boundaries. It knows no boundaries. It reaches into any State. And no State can protect its citizens and protect its public policy of outlawing this activity. I want to make it very clear that this activity is not being conducted legally today. In a letter written by the State attorneys general, including the attorney general of Idaho on this precise point, the attorneys general said, If Internet gaming is allowed to facilitate the remote placing of bets on an Indian gaming activity, the ultimate absurdity would result. The logical consequence of such a position is that any off-reservation telephone, computer with a modum et cetera, would become a gambling device by which the consumer could communicate with the tribe for the purpose of gambling. And they specifically refer to the Coeur d'Alene Tribe in Idaho, which is the tribe that the Senator from Idaho wants to permit to gamble. I urge a vote against the Craig amendment. Mr. CRAIG addressed the Chair.

Mr. KYL. Again, so long as the person placing the wager is doing so using a ``closed-loop subscriber-based service'' the person is not required to be physically present at a facility that is open to the public to make a lawful wager.

Mr. KYL. I yield 1 minute 20 seconds to the Senator from Nevada.

Mr. KYL. Mr. President, I inquire how much time remains.

Mr. KYL. Mr. President, I am pleased to yield 1 minute to the Senator from New Jersey.

Mr. KYL. Mr. President, I yield time to the Senator from Wyoming.

Mr. KYL. Mr. President, since Senator Craig is not here, without impinging on the time, I ask unanimous consent that the Presiding Officer, Senator Coats, as well as Senators Enzi, Bond, and McConnell, be added as cosponsors of the amendment of the Senator from Nevada and myself.

Mr. KYL. Mr. President, perhaps Senator Craig would like to call for a vote on both his amendment and the underlying amendment. I ask for the yeas and nays on my amendment.

Mr. KYL. Yes.

Mr. KYL. Yes, assuming the interactive account wagering system meets the requirements for a ``closed loop subscriber-based service'' as defined in section 3 of the bill.

Mr. KYL. Yes, such a system is an allowed agent, assuming, of course, the interactive account wagering system meets the requirements for a ``closed-loop subscriber-based service that is wholly intrastate.''