Richard Neal

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. We are suggesting that Medicare and social security come first and then we can talk about tax cuts, or as the gentleman has indicated, I think, accurately so, what we are saying is, do not disturb the current economic growth that we have in anticipation of something that might not ever occur, massive budget surpluses.

Mr. NEAL of Massachusetts. I ask the gentleman, these suggestions are being made in advance of having solved the Medicare and social security problem; is that correct?

Mr. NEAL of Massachusetts. Madam Speaker, it seemed to me to be startling to suggest, and I agree with him, incidentally, that we would project surpluses for the next 10 to 15 years based upon current economic assumptions.

Mr. NEAL of Massachusetts. I yield to the gentleman from Massachusetts.

Mr. NEAL of Massachusetts. Madam Speaker, I would just like to question, if I could, the gentleman from Texas for 1 moment. I ask the gentleman, was it not the underlying assumption of the previous speaker, the gentleman from Florida (Mr. Stearns) suggesting that long-term economic projections are notoriously unreliable?

Mr. NEAL of Massachusetts. Madam Speaker, what we are essentially saying here on the Democratic side is this: we are not against tax cuts. We are simply suggesting that once we certify that social security and Medicare have been fixed for the next I think 65 years on the social security side and 35-plus years on the Medicare side, as certified by the trustees and actuaries of both those programs, then we are saying that we want to be able to entertain the notion perhaps of modest tax cuts, as proposed by President Clinton and the Democratic alternative.

Mr. NEAL of Massachusetts. As is always the case, it is a question of priorities, is it not?

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Madam Speaker, will the gentleman yield?

Mr. NEAL of Massachusetts. Madam Speaker, I would ask the gentleman from New York, is it his projection and the position of the Democratic minority that what we are really discussing is the repair of social security and Medicare first and debt reduction, and then tax cuts?

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I strongly support this rule and this legislation that we are about to take up today. This is a good bill, and it is a very important bill for Africa. I want to thank the gentleman from New York (Mr. Rangel) for the leadership that he has demonstrated on this legislation as well. I have no great personal interest in this legislation. I have no constituent or I have no company that is pressing me to support this bill. I am not ideologically driven by these trade issues, and I am sensitive to the concerns of the textile industry, having watched what happened in Massachusetts over a 50-year period. But I am supporting this bill because I do not believe, as alleged, that this bill will make African nations take any action that they would not otherwise take. I do not believe that imposing harsher than normal conditions on trade with the poorest countries of the world is fair or right, even if it is designed to create a precedent for other trade bills, and I do not believe that U.S. workers will be harmed by the minimal benefits of this legislation. What I do believe is that African countries want to expand their economies, put more of their citizens to work and be given the opportunity to sell their goods throughout the world, including the United States. This bill gives them an opportunity to help themselves. This is the right bill at the right time, and I urge all of my colleagues to support this rule so that we can move forward on final passage.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, Angelo Bertelli died on Saturday at the age of 78 years old. Angelo Bertelli was one of the great football players in the history of college football in America, and he played at Cathedral High School in Springfield. He was the son of Italian immigrants, and people like Nick Buoniconti and Joe Scibelli followed in that tradition at Cathedral High School as well. At Cathedral, he not only was a star in football, but he won all-State honors in baseball and hockey as well and served as senior class president. He entered Notre Dame, became college football's first T-formation quarterback under Frank Leahy. The T-formation became an immediate success and the legendary sports writer Grantland Rice called him the T-formation magician. He was voted to all-American teams in 1942 and 1943; and in the year 1943, he won the Heisman Trophy. He became a captain in the Marine Corps. He fought in Iwo Jima and Guam. He earned a bronze star and the purple heart. After World War II, he became a successful businessman in New Jersey; and he was elected to the College Football Hall of Fame in 1972. Mr. Speaker, it was my honor to have known Angelo Bertelli and to have known him as a perfect gentleman, a great father, a terrific brother and a wonderful husband, and an extraordinary citizen and a patriot. Last year, he gave me the opportunity to watch him as he addressed the football banquet at Cathedral High School for a team that had won the State championship. Angelo Bertelli never lost the special qualities that endeared him to America, and we regret his passing.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, on Sunday, June 27th, 1999, the Polish Women's Club of Three Rivers, Massachusetts will celebrate its 75th anniversary. Having the distinct pleasure of representing this community in the Congress, I take this opportunity to publicly congratulate the club's members on their 75 years of dedication and good work to their community. This anniversary is indeed a milestone; an achievement in which they should be proud. I also take this opportunity to enter into the Congressional Record today the complete history of the Polish Women's Club of Three Rivers. May the many years of service and good work of the club forever be remembered as a part of our nation's history. Polish Women's Club of Three Rivers, Three Rivers, Massachusetts, 1924- 1999--History On February 24, 1924, the Polish American Women's Citizens Political Club of Three Rivers and Thorndike was formed. There were 59 charter members. On March 30, 1924, Miss Anna Rusek became the first president. The purpose was: 1. To encourage women to become citizens and assist them in procuring citizenship papers by teaching them English and related subjects. 2. Take active part in politics and get proper recognition and positions on local, state, and federal level. 3. Support businesses owned by people of Polish extraction. In 1933 we joined the Massachusetts Federation of Polish Women's Clubs, Inc. This affiliation enables us to further foster our Polish culture and we have gained much through the years in this association. We have hosted their conventions in 1952, 1969, 1979, 1984, and 1989. Our activities within the framework of the Federation includes District V which comprises the Western Massachusetts area. We are very actively and continuously involved in holding various offices and directing the activities of this unit. On October 20, 1958, our name changed to the Polish Women's Club of Three Rivers. Our constitution was revised to foster our ethnic culture, encourage higher education, and exchange cultural ideals. This remains our purpose to this day. On May 8, 1949, we observed our twenty-fifth anniversary; on April 27, 1974, our fiftieth; on October 27, 1979, our fifty-fifth; on October 27, 1984, our sixtieth; on October 28, 1989, our sixty-fifth; on October 22, 1994, our 70th, and on June 27, 1999, our 75th. We also have held or still hold memberships in the United Polish American Organizations Council--Township of Palmer, Polish American Congress, and The Kosciuszko Foundation. Monetary contributions have been made to numerous organizations, such as The Blind Children of Poland; Child's Wish Come True, Inc.; Kosciuszko Foundation Renovation Fund, Palmer Ambulance Service Inc.; Palmer Library; Polish American Congress for the Polish Room, Museum of Immigration at Ellis Island; Pope John Paul II's Guest House in Rome and Endowment Fund; Pope John Paul II Cultural Center-- Washington, D.C., Saints Peter and Paul Church; Support of Solidarity in Poland; United Polish American Organizations Council--Township of Palmer; and Literacy Volunteers of America of Quaboag Valley. Observance of our 50th, 60th, 65th, and 70th anniversaries and the history of our club have been entered into the Congressional Record of the United States of America. We contribute our time, talents, and money to various worthwhile projects and causes in a very positive manner. Again, these are too numerous to mention. We have been able to develop and promote our Polish culture, receive scholarship grants for our daughters and members; have or children of Western Massachusetts take part in the statewide essay contests sponsored by the Federation; serve as executive officers and committee members in the various organizations we are affiliated with. We have been and are actively participating in religious, civic, political and community affairs. A scroll signed by members of our club was included on November 13, 1976, in the time capsule buried at that time as part of the commemoration of the 200th Anniversary of the Town of Palmer. The capsule will be reopened in the year 2076. Our membership today is 127-73 are 65 or over and 54 are under 65. Dues are $2.50 a year. Members 65 years and over are exempt from payment. We follow the calendar year for our meetings, January through December, with no meetings June, July, and August. Meetings are held on the fourth Wednesday of the month, at 7:00 p.m., at the St. Stanislaus Polish Home, Three Rivers. In order to keep our treasury healthy we hold one big raffle a year during the winter. Our members are to be commended for their enthusiastic response for contributions of prizes and selling of our raffle tickets. Past presidents: * Anna Rusek, * Mary Jajuga, * Sophie Zerdecki, * Nellie Motyka, * Anna Kulig, * Julie Midura, * Stephanie Kolbusz, Genevieve Janosz, and Edna Pytka. (* deceased) Officers--Year 1999: Helen Grzywna, President; Debra A. Geoffrion, Vice President; Betty Brozek, Treasurer; Sophie J. Valtelhas, Recording Secretary and Publicity; Phyllis Misiaszek, Financial Secretary; and Alice Pilch and Sophie Walulak, Auditors. Helen Grzywna has been president for twenty-eight years and the club has progressed under her leadership in many projects and causes too numerous to mention. The spirit that brought together in 1924 those fifty-nine courageous women is still carried on today. Teamwork is an important part of our organization and each member's contribution is highly valued. We are proud of our beginnings and of what we have accomplished since 1924 and as we commemorate this 75th anniversary we will continue our tradition of exemplary dedication and service to our religious, civic, political, and community establishments. 75th anniversary program Our 75th anniversary will be celebrated on Sunday, June 27, 1999, staring with a Thanksgiving Mass at 11:00 a.m. in the Saints Peter and Paul Church in Three Rivers. Our pastor, Reverend Stefan J. Niemczyk, will be celebrant, assisted by Reverend Mr. Edward Tenczar, concelebrant. Immediately after Mass, we will gather at the church's Parish Center for a 1:00 p.m. dinner catered by Tony and Penny. President Helen Grzywna will welcome everyone and then turn the program over to Toastmistress Mary E. Rusiecki, past president of the Massachusetts Federation of Polish Women's Clubs, Inc., who will have the honor of introducing the head table, officers, past presidents, and guests. The invocation will be given by Reverend Stefan J. Niemczyk. Greetings and best wishes will be given by Patricia C. Donovan, Board of Selectmen, Town of Palmer; Richard E. Neal, Second Congressional District Representative in U.S. Congress; Stephen M. Brewer, our State Senator, Worcester, Franklin, Hampden, and Hampshire District; Reed V. Hillman, Representative in General Court, First Hampden District; Pauline Dziembowski, President of the Massachusetts Federation of Polish Women's Clubs, Inc., and Christine Wurszt, Vice-president of District V, MFPWC. Principal Address will be by our member Suzanne Strempek- Shea, Author--Topic Our Counterpart 75 Years Ago. The St. Cecelia Choir under the direction of Michael Rheault, Organist and director of Music, at Saints Peter and Paul Church, will entertain us with their music. One of the songs they will sing is Polish Pride--Pope John Paul II (composed by Fred Brozek/music by Stephen Lebida). Barbara Marcinkiewicz will sing the American National Anthem and the Polish National Anthem to start our program and at the close of the program she will lead the audience in singing God Bless America and Boze Cos Polske. Reverend Mr. Edward Tenczar will give the benediction.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I would like to take this opportunity to recognize the efforts of the Region I chapter of the Voluntary Protection Participants' Association and the Safety Council of Western Massachusetts. I applaud the work of this group in combating the serious threat that work-related injuries pose to our communities. I want to pledge my support for the upcoming Occupational Safety and Health Awareness Days, June 16-17, 1999 organized by the Safety Council. I am pleased to see that the itinerary consists of both interesting and important presentations by local authorities on safety- related topics. I feel that it is very important to have events such as this to educate the public about what everyone can do to prevent on-the-job accidents and ensure a safe working environment for the people of Western Massachusetts. It is clear that the work of the Safety Council is invaluable in this regard. Finally I would like to thank the Safety Council for its tireless advocacy of occupational safety and health awareness. Along with the citizens of the Second Congressional District of Massachusetts, I express my most sincere gratitude and the hope that your important work will continue for years to come.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I rise today to congratulate the Glenwood School of Springfield, Massachusetts. The Glenwood School was recently included as one of 88 schools nationally awarded the Title I Distinguished School Award. This award recognizes schools operating in high-poverty attendance areas that have been successful in raising the level of achievement of their students. This award is a tribute to the collective efforts of the dedicated educators, parents, administrators, and most of all the students. The backbone of the operation is the principal of the school, Mr. Daniel J. Warwick. He worked in conjunction with United Cooperative Bank, the PTO, and volunteers to ensure that the students would be given the best opportunity to achieve such an academic turnaround. All parties involved displayed mutual hard work to earn this recongintion as an exemplary school nationwide. The steps taken at Glenwood School will help to lessen the gap of achievement between advantaged and disadvantaged students. The hard work that all the members of the Glennwood School community portrayed will help to show that all children can learn to high standards. This community has also shown a set of priorities that other schools with high concentrations of children in poverty can abide by.These priorities included an emphasis on challenging academic content and performance centers, a teaching/learning environment characterized by curricula aligned to standards and an assessment system, and a commitment to ongoing professional development, family, and community involvement. The Glenwood School has successfully overcome socioeconomic problems (82% poverty level) to achieve academic excellence. It has shown all children that they have the opportunity to learn and realize their true potential. By incorporating the entire student body and community the Glenwood School has overcome the odds. Their recent success should be commended. Mr. Speaker, I am proud to have such a hard working school in my district. Glenwood School's inaugural success has sparked a desire to continue moving forward. This sole reason perhaps more so than any other, deserves our respect and congratulations.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman for yielding me this time. I think on occasions like this it is important to ask ourselves, individually and collectively, how did we get to this moment? As we close the pages on this century, I think it is important to reflect upon two very important votes that were cast in this decade in this House. In 1991, the majority of Members of the Democratic Party voted for George Bush's budget. In retrospect, I think it is kind of sad that not only did we not have a majority of Republicans, we would have had only a small number who would have supported George Bush's budget. In 1993 we voted for President Clinton's budget, and we ask ourselves tonight, where did we arrive after those two critical votes? We went from running $300 billion plus deficits in the early part of this decade to projected surpluses in the area, and I emphasize the word ``projected'', of $4.4 trillion. That is what has allowed us to take up this debate. Now, while I am pleased that the Republican Party has taken this step, I think it is also important to ask, why not tie up or wall off the entire surplus until we fix Social Security and Medicare for the American people? Mr. Speaker, we sometimes speak in distant terms to our constituents, but we should remind ourselves today that Social Security is not an esoteric issue. It is a lifeline for millions and millions and millions of Americans. And even as I speak and Members sit here today, the ghost of Mr. Roosevelt hovers around this room, because we can take satisfaction from the fact that there has been no greater domestic achievement in this century than Social Security for the American people, and remind ourselves as well that Medicare is but an amendment to the Social Security Act. Mr. Speaker, I want to say as forcefully as I can that we are headed down the road eventually to another debate over this issue. On the Democratic side, I think our position is fairly clear: Wall off the surplus, do not do anything until we permanently fix Social Security and Medicare. But I want to predict this evening with certainty that we are going to be back here in the near future voting on a huge tax cut, because that is really where the majority wants to go on this issue. They want to have a massive tax cut for wealthy Americans who, by the way, to their everlasting credit are not even clamoring for a tax cut at this time, and that is where the American people are going to have to watch as to who defends Social Security. The history of Social Security has been one of initiative by the Democratic Party, and in addition, we have been its chief and sometimes exclusive defenders in this institution, and indeed in this city. We know what Social Security means for millions of widows in this Nation. We know what Social Security means for retirees. It is the difference for many of survival, to have that check from the Federal Government but once a month. Social Security has worked beyond the expectations of Mr. Roosevelt and Mr. Johnson in terms of Social Security and Medicare, beyond the wildest expectations of those who at the time opposed it. So keep your eyes on what we are going to do about Social Security in this Congress. Follow this debate with great care. Because I am telling my colleagues, we are coming back to a debate in the near future about a massive tax cut that clearly could undo precisely what we are talking about today. Mr. Speaker, there are many of us here in my age group that have already drawn social security benefits, survivor benefits. We know what social security is about. We know how it kept families intact. We know how it allowed millions of Americans to finish high school and to go to college. Social security is a critical issue. It is intergenerational. It is the best guarantee of the whole notion of community. What do we mean by community? We mean a place where no one is ever to be abandoned and no one is ever to be left behind.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I would like to take this opportunity to recognize a significant milestone in the life of Sidney Weiner. On June 22, 1999, Sidney was presented the 17th annual Humanitarian Award by Congregation Kodimoh. Sidney Weiner has spent his life volunteering on behalf of many organizations in the community, and I would like to make note today of his many accomplishments. Sidney was born in Worcester, MA, but moved to Springfield as a teenager. He attended Springfield public schools and eventually married Gert Levi at the old Kodimoh on Oakland St. in 1947. He operated many successful service stations and worked as an insurance agent before retiring in 1972. Sidney's volunteer service, in his adult life, has been unparalleled. He was a volunteer for the Pioneer Valley Red Cross, through which he recruited countless blood donors. He has also practiced what he has preached, being a 10 gallon donor himself. Sidney is a 32d degree mason and has been Master of the Chicopee Lodge and District Deputy Grand Master of the Chicopee 18th Masonic District. Since joining the Melha Temple Shrine in 1959, Sidney has chaired their blood program. He has also brought smiles to countless children through his membership and participation in the Melha Clown Unit. Sidney has been a volunteer at Baystate Medical Center for nearly 20 years. In 1990, he was elected the first male president of the Baystate Medical Center Auxiliary. Sidney has also been involved with the Ronald McDonald House. In fact, his involvement began even before the house was built almost 10 years ago. He has held many various titles there, and is currently the president of the board of directors. For the past 3 years, Sidney has been chairman of Parking for the Rays of Hope Walk, which raises funds each fall for breast cancer research. He and his wife, Gert, also spend every Sunday in July and August volunteering at Tanglewood. Sidney is a long-time member of Kodimoh and its Brotherhood, and is a regular minyanaire. He has also been a regular volunteer on various projects and committees with Kodimoh. Sidney and Gert's daughter, Nancy Squires, and her husband, Bill, and their three daughters, Maxine, Sarah, and Michelle, are also active members of Kodimoh. Mr. Speaker, allow me to pay tribute to the service, commitment, and character of Sidney Weiner. He has proven himself to be an indispensable member of his community through his service and leadership. Sidney Weiner is truly a role model for community involvement and pride in his faith. Kodimoh, and the entire Western Massachusetts community, has been blessed to have been touched by Sidney Weiner's involvement and service.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I would like to take this opportunity to recognize an impressive milestone in the history of The Milford National Bank and Trust Company. On April 30, 1999, The Milford National Bank and Trust Company began the celebration of the 150th Anniversary of its founding. The theme for this year long celebration, ``Building the Future on a History of Excellence,'' reflects the long- standing dedication and clear vision of Milford National's officers. The Milford National Bank and Trust Company is the oldest continually operating bank in Milford and holds one of the oldest national bank charters, still in force, in the country. The bank was founded on April 30, 1849, despite the lingering fear associated with recent financial panic. In 1865, as a response to the National Banking Act of 1864, the bank turned in its state charter and received National Charter 866. As the local economy began to flourish in the early to mid-1900s, The Milford National Bank helped create and sustain the growth of the area for generations of residents and businesses, both small and large. In the early 1900s, The Milford National Bank enjoyed unprecedented growth and prosperity. After the closing of two local banks, President, Chairman, and CEO Shelley D. Vincent III made the decision to grow the bank into a full-service commercial bank. Mr. Vincent acquired new branch offices, reorganized his senior management team, and began a total upgrade of the bank's technology systems. Mr. Vincent passed away in February 1997 and was succeeded by Mr. Robert J. Lewis, whom he had selected to carry on his vision for the bank. The bank was named ``one of the top three small business lending banks in the Commonwealth of Massachusetts'' in 1997 and has continued to add more services, products, and technological access to its repertoire. For 1999, there are plans to open a fifth banking office in Bellingham and add on-line internet banking for customers. The bank has created The Milford National Bank Charitable Foundation as a means to continue its long-standing support of local charities and civic activities, and awards four college scholarships to area students in memory of Shelley D. Vincent III. Mr. Speaker, The Milford National Bank and Trust Company has been building the future on a history of excellence for 150 years. Its service to the residents and businesses of the Greater Milford area and the Commonwealth of Massachusetts has been unyielding and greatly beneficial. Please join me in recognition of the 150th Anniversary of The Milford National Bank and Trust Company, an institution that stands as a shining example of charitable, cultural, and community service.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing legislation to prevent a transaction the goal of which is tax avoidance by means of converting ordinary income or short-term capital gains into income eligible for long-term capital gains rates. Since Congress enacted legislation to lower the capital gains tax below that of ordinary income, the press has written about a number of transactions that have been developed to recharacterize income primarily for the avoidance of tax. Congress closed one loophole in 1997 involving constructive sales or so-called ``short-against-the- box'' transactions. In those transactions investors were effectively selling an asset and receiving the benefits of a sale without calling it a sale for tax purposes. The Taxpayer Relief Act of 1997 termed these transactions constructive sales and restored the appropriate tax treatment, determining that if it looks like a sale and acts like a sale, it should be treated as a sale for tax purposes. Consistent with that approach, our former colleague Barbara Kennelly developed additional legislation in 1998 that could be termed ``constructive ownership'' legislation. In this case, an investor effectively purchases an asset and has the benefit of ownership, but does not pay taxes on income from the asset in the same way as if the investor owned it directly. The solution that was proposed was to treat that investment no more favorably than the treatment ownership in the underlying asset would have received. In addition, while this treatment would assure appropriate capital gains treatment, these transactions could still be attractive for deferring the recognition of ordinary income--in contrast to direct owners who pay taxes annually on ordinary income. To correct this, the bill imposes a deferred interest charge to recapture the benefits of deferral. As many in the industry will recognize, the legislation I am introducing today is based on the Kennelly bill, but makes several technical improvements which were suggested last year, primarily by the New York State Bar Association. Additional comments, of course, are certainly in order. Investors in a hedge fund (and other pass through entities) are required to pay taxes annually on their share of the income from the fund regardless of whether they receive a distribution. In the transaction covered by the bill, investors indirectly invest in the fund through a derivative that is economically equivalent to a direct investment. However, the derivative allows the investor to defer his tax liability. Invest in a hedge fund, and you pay taxes every year, and those profits are taxed at the higher short-term capital gains rate. Place that same money in a derivative wrapped around a hedge fund, and you pay taxes only at the end of the contract, and the profit is taxed at the lower long-term capital gains rate. The bill I am introducing today states that if an investor indirectly owns a financial asset like a hedge fund through a derivative, they cannot get more long-term capital gain than if they owned the investment directly. In addition, there is an interest charge to offset the additional benefit of the deferral. The effective date for this legislation is for gains realized after date of enactment. This is a more generous effective date than that contained in the Administration's budget. Still, some would argue that this is retroactive, because they signed contracts prior to the date of introduction of the Kennelly Bill and therefore were not on notice that a change in the law might occur. Since I announced my intention to reintroduce the Kennelly bill, it is my understanding that a number of contracts have been, and continue to be, signed under the theory that the legislation may not pass Congress, and if it did the transaction could simply be unwound. This may explain the recent comments of Robert Gordon, President of 21st Securities, as reported in this month's edition of MAR/Hedge, which states: ``Gordon says that the penalty is so low (in my legislation) that he would advise clients thinking about synthetic hedges (italics are mine) to go ahead. ``There is not a lot of cost if the bill does become retroactive, you just unwind the swap.'' The penalty is the difference between the two interest rates--the one charged in the swap by the dealer and the interest rate earned by money in the investor's hands. Because the interest today and the interest rate when the law changes, say several months from now, will be relatively small, it is a small penalty to pay.'' It is hard to be sympathetic to an investor who enters into a particular so-called ``synthetic'' transaction purely for purposes of tax avoidance. It is even harder to be sympathetic when the investor signs a contract after he was on notice that there was a legislative change under consideration. It is hardest of all to be sympathetic to an investor who deliberately signs a contract betting that the potential for tax avoidance far outweighs a potential loss attributed to unwinding a contract if the law does change, and then claims ``retroactivity'' in a last attempt to secure the benefits of tax avoidance. Nonetheless, the fact remains that some contracts were signed prior to the date of introduction of the Kennelly bill. I have therefore added a grandfather clause to this legislation that exempts all contracts from changes in this bill if the contracts were signed prior to the date of introduction of her bill on February 5, 1998. The grandfather clause would cease to exist if the contract was extended or modified. Mr. Speaker, all capital gains differentials invite attempts to recharacterize ordinary income or short-term capital gains into long- term capital gains. The transactions I am talking about are, of course, not available to the ordinary investor who must pay his fair share of taxes, but only to a small number of sophisticated wealthy investors. Any perception that being sophisticated and wealthy enough allows some to avoid paying their fair share of tax undermines the entire tax system, as well as the capital gains differential. I believe it is important to shut down tax shelters as we uncover them, and if we in Congress do not have the courage to do that, then maybe allowing the Department of the Treasury to have broader power to characterize tax shelters and shut them down through the regulatory process needs to be seriously considered.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing legislation to shut down a tax avoidance scheme available only to a few wealthy and sophisticated investors. Under current law, if one invests in a hedge fund they pay tax every year and those profits are taxed at a higher short-term capital gains rate, but if one places that same money in a derivative wrapped around a hedge fund, they pay tax only at the end of the contract and are taxed at a lower long-term capital gains rate. My bill states that if an investor indirectly owns a financial asset like a hedge fund through a derivative, he cannot get more long-term capital gain than if he owned the investment directly. In addition, there is an interest charge to offset the additional benefit of deferral. This tax shelter is not available to average workers or even to average investors. It is available only to the very wealthy, so that they can avoid paying taxes. It is important to shut down these tax shelters as we uncover them. Otherwise, we undermine the faith people have in our voluntary tax system. The Committee on Ways and Means is looking at tax shelters this year. This should be the number one issue on our list.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, let me begin by commending the gentleman from New Jersey (Mr. Smith) and certainly the gentleman from New York (Mr. Gilman), the gentleman from New York (Mr. Crowley) and the gentleman from New Jersey (Mr. Payne) and people who have been so faithful to this cause for so long. For the better part of two decades I have been immersed in the details of what life is like in Northern Ireland, particularly for the nationalist community, and we are reminded today that this conflict represents the longest standing political dispute in the history of the Western world. Once again, on occasions like this we are also reminded that it is the United States that lights the way for hope in terms of man and womankind. It is the United States, and its ability to shed light on inequities and injustices in other parts of the globe, that calls attention to events like the murder of Rosemary Nelson. I had the opportunity to meet Rosemary Nelson, and I can say that in an unbridled manner she was the champion of the rights of the nationalist community to stand in front of a court system that they do not always trust, but nonetheless to be treated in a manner that was fair and equitable. The killing of Rosemary Nelson reinforces my belief and the belief of millions of Americans that the criminal justice system in the north of Ireland, including policing, is in need of dramatic change and indeed reform and perhaps even abolition. Just last week, the United Nations' special investigator released a report that raises serious questions about the professional integrity and independence of the Royal Ulster Constabulary. The report documents cases of collusion between the RUC and the paramilitary groups. Let me picture this for the American people: The policing organization tips off members of the paramilitary loyalist groups who then, once the individual is fingered as a suspect, is not only subject to verbal intimidation and harassment, but as is the case of Rosemary Nelson, one may well be murdered for their beliefs. It draws attention to the fact that solicitors who choose to represent individuals in the nationalist community, like Rosemary Nelson and another friend of mine through his family, Pat Finucane, were always the targets of harassment and intimidation by the Royal Ulster Constabulary. Following the recommendations of organizations such as the British- Irish Watch, Amnesty International, and the Lawyers Committee for Human Rights, the U.N. Special Investigator demanded independent judicial inquiries into the deaths of Rosemary Nelson and Patrick Finucane. Mr. Speaker, if we do not say something in this Chamber, if we do not say something in the halls of this Congress, then typically these events are brushed under the carpet. It is only the United States, in its ability to call attention to these inequities, that in the end causes us to travel down the path of what might be a satisfactory system of justice. Ireland is closer today than it has been at any time in this century to the settlement of peace; as John Hume and Jerry Adams frequently say, an agreed upon Ireland. That should be the goal of all of us. We cannot have one part of the community, the policing organization, being seen as being part of the occupying force, and expect the minority or the nationalist community to accept that judgment. It is people like John Hume and Jerry Adams who for the better part of 30 years have stood for the rights of people in the nationalist community, to ensure that when someone stands in front of a judge, that they are not found guilty because of their religious beliefs or because of their ethnicity. That is what Jefferson and Madison gave us in America and that is what we ought to attempt, wherever we can, to export to the rest of the world. I must say that it will be the United States in the end that calls attention to these injustices, that could lead to a conclusion of swift justice to bring the perpetrators of the murderer of Rosemary Nelson and Patrick Finucane to the bar of justice.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I want to also thank the gentleman from New York (Mr. Crowley) and say that in the short period of time that he has been here he has been able to raise the profile of these kinds of issues. I think it is a testament to how successful and effective he has been in this short period of time. I certainly want to thank the gentleman from New Jersey (Mr. Smith) as well for the Rosemary Nelson, I think, opportunity where we could shed some light on that issue for the world to indeed see. While we celebrate the first anniversary of the Good Friday Agreement in the north of Ireland, an agreement which people in the north of Ireland and the Republic of Ireland have now offered their support for, we nonetheless, I think, have to call attention to the 1-year anniversary in this sense: The people voted for an agreement which is historic in nature. This problem, again the longest standing political dispute in the history of the Western world, begins in geography eight centuries ago, certainly was reinforced during the Reformation, but during the last 30 years it has been a battle about civil rights. What I think is significant about the Good Friday Agreement is that again both communities in the north of Ireland, both traditions, voted for the agreement. So we ask ourselves today, why has it not been implemented as the people voted? The answer is this: Because once again the unionist community has said the famous word ``no''. They are now suggesting that because decommissioning has not taken place from the Irish Republican Army, that in fact that is the reason not to proceed with the agreement. Now, let me say this. After both traditions voted for this agreement, decommissioning was supposed to take place simultaneously to, not in advance of, the institutions of governance being put in place. What is striking about this current disagreement is this: All parties agreed to decommission in the month of May in the year 2000. So now what we are seeing is, all parties have gotten to the goal line, and at the goal line David Trimble and the unionist community have essentially said, no, there was no touchdown scored; we are going to move the goalpost back. The signal that that sends to the nationalist community is the historic reinforcement that no matter what is done, it is not good enough; that if we are not arguing today about decommissioning we will be arguing tomorrow about how to fly which flag. We will be arguing again about what the schools are to be like, and just wait until we get to that issue of the role that Dublin is going to play in the day-to- day affairs of the north. If we think that we are now at impasse, believe me, that is the next unionist position that they will reinforce. David Trimble typically contributes to his own political problems by reminding everybody how difficult it is. If one wants to be the prime minister of the north of Ireland, one has to be the leader of all of the people. Forty-one percent of the people in America voted against Bill Clinton. He is still President of the United States. That is the notion of democracy. The greater number decide. That is precisely what we subscribe to here in our democratic ideals. So why is it after there has been an agreement and the public has ratified the agreement, bringing that island closer to peace than they have been at any time in the last 30 years, does one party once again have the ability to veto what people have voted for? I would call upon Prime Minister Blair, who by the way I think deserves some credit, the Taoiseach Bertie Ahern, and certainly Bill Clinton who deserves credit as well, to say to the unionist community, ``We are going to proceed with the implementation of this agreement. On a prescribed date, we hope you are on board, because this is what the people voted for.'' That is the path that we should be traveling down; not once again to say, ``Here is an agreement ratified by the public,'' only have to a small number of people say, ``That cannot be,'' after it has been duly ratified by the voting public. As those old visions and bad feelings sunset on that tiny island, I think we have an opportunity here to set an agenda where both traditions can live in accord. But we cannot do it if one party always says no. We cannot do it if one party simply says, yes, but. We cannot do it if one party says that our tradition somehow allows us to lord over the other tradition. In the end, that only generates bad feeling and it generates lasting feelings that cannot be overcome. Let me close on this simple note. John Hume said it best, the Nobel Prize winning John Hume. He said, at the end of the day, what we all ought to be able to come to accord on is an agreed upon Ireland, and that should be the goal of all of us. I thank the gentleman from New York (Mr. Crowley) and I thank the gentleman from New Jersey (Mr. Smith) and I thank the gentleman from New Jersey (Mr. Payne), who have traveled therewith, for their visionary leadership on this issue. Indeed, there is an opportunity to make the implementation of this historic accord stick.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I would like to take this opportunity to recognize the accomplishments of the Boys Varsity Football team and the Girls Varsity Soccer team of Cathedral High School in Springfield, Massachusetts. Their two teams demonstrated superb athletic excellence and great character in the fall season of 1998. Their exploits bring pride and joy to the City of Springfield and the many alumni of Cathedral High School. Their accomplishments deserve our recognition. The Cathedral High School Football team has a long and proud tradition. Undefeated seasons can be traced back to the 1930's. The Cathedral Football legacy includes the first Notre Dame player to win the Heisman Trophy, Angelo Bertelli. Mr. Bertelli was a member of Cathedral's 1939 undefeated squad. Another legendary graduate is Nick Buoniconti, a co-captain at Notre Dame and member of the back-to-back Super Bowl Champion Miami Dolphins of 1973-74. Mr. Buoniconti was a member of the 1955 undefeated Cathedral Panthers. The Cathedral Football team of 1998 capped an 11-0 season with the Western-Central Massachusetts Super Bowl Championship. Third year Head Coach Matt Ballard, and Assistants Tom Sheehan, Stefan Davis, and Greg Gebo, led a senior-laden squad back to the heights first reached by the likes of Bertelli and Buoniconti. Although the 1998 team was led by upperclassmen, Coach Ballard is looking forward to the return of 27 of his Champions next year. The members of the 1998 Super Bowl Champion Cathedral High School Football team are: Seniors: Michael Buoniconti, Timothy Dean, Phillip Gervais, Bartholomew ``B.J.'' Lawlor, Anthony Luvera, Christian McCollum, Christopher McDonald, Timothy McDaid, William Ostiguy, Bryan Picard, Michael Rivard, Jeffrey Santiago, Samuel Scott, Justin Simmions, Shawn Torres, and William Torres; Juniors: Vincente Buoniconti, Brett Cook, Sean Cox, Richard Cummings, Daniel Keyes, Jonathon Koldys, Derick Lamoureux, Taren Latta, Michael Martin, Brendan McDonald, John Piascik, and Matthew Yvon; Sophomores: George Bahlke, Michael Britt, Joseph Camerota, Shaun Carpenter, Michael Christman, Benjamin Dagenais, Matthew Gendron, Brandon Jones, Joseph Luvera, Timothy Manning, Jonathon Miller, Michael Ojunga, Devon Robinson, Steven Snow, and Liam Walsh. The accomplishments of the Cathedral High School Girls Soccer team are no less impressive. For the third straight year, the team was led by Head Coach Larry Kelly and Assistant Coach Laura Wray. Over these three years, the Panthers have amassed a record of 49-4-7 and three straight Western Massachusetts Championships. The 1998 team finished the season 21-2, ranker #12 in the nation, and became Massachusetts State Co-Champions with the #1 team in the nation, Winchester High School. The Panthers scored 115 goals, while letting in only 10. The girls were named a High School Academic All-America Team and Senior Mary McVeigh was named All-America, and Gatorade Player of the Year for Massachusetts. Although the 1998 squad was led by an extremely skillful group of seniors, Coach Kelly expects his tenacious underclasswomen to be ready for the challenges of 1999. The members of the 1998 Massachusetts State Co-Champion Cathedral Girls Soccer team are: Seniors: Kathryn Crisostomo, Lauren Downey, Casey Fitzgerald, Alison, LaMontagne, Christine LaValley, Cindy Lilly, Mary McVeigh, Melanie Mucha, Maura Neal, and Melissa Rowe; Juniors: Jamie Athas, Carissa Caulfield, Cathrine Kirwan-Avila, Katie Leydon, Kelly Quinn, Kady Robbins, Vanessa Saundars, Annie Tudryn; Sophomores: Jessica Bain, Kara Downey, Cristin Goodwin, Michelle Jette, Toni Pantuosco, Nicole Scibelli, Crystal Stanton, and Jenn Woytowicz; and first year student Shannon Donnelly.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from North Carolina for yielding me this time. Mr. Speaker, if the famous TV character George Costanza were watching this show today, he would say simply, ``This was a show about nothing.'' Nothing. It was a show about nothing when the other side demanded the line item veto to cut the budget be applied, and then screamed when the President used it, and they were relieved when the courts rejected it. It was a show about nothing when the other side demanded a constitutional amendment to balance the budget as the only way to solve our deficit problems. When it turned out that the real way to do it was the way the Constitution intended, all they had to do was vote for the President's budget in 1993, or for that matter, vote for George Bush's budget in 1991. It was a show about nothing when term limits were used as a campaign device, the problem being that many of the devotees must have meant that it should apply to somebody else other than to them. This is the latest show here about nothing. What they have got going at this moment is another government-like gimmick. We will hear today why this is bad legislation. It certainly undermines majority rule. It hearkens back to the Articles of the Confederation which we could not live under. It is even harsher than House rules that the other side passed a few years ago, which they also were not able to live under. It enshrines corporate tax loopholes which the Treasury Department recently pointed out are expanding at a tremendous pace. But what offends me the most about this is it is inconsistent with our Constitution. The Constitution requires a two-thirds majority in this House in only three instances: overriding a President's veto, submission of a constitutional amendment to the States, and expelling a Member from the House. This issue at this moment does not rise to the level of that seriousness. We should be doing some real work today on April 15. The other bill on the floor is a serious bipartisan bill. Yesterday I introduced a major simplification bill that the Committee on Ways and Means chairman last year accepted, at least in part. I would much rather be talking to my colleagues today about those issues. But there is one good thing we can say about this bill today, this proposal in front of us. We did not waste any time having any hearings on it. So I guess it was not quite that serious. No one can argue that we wasted too much time debating it, because it will be over this afternoon. But more than anything else, this constitutional amendment we have before us is a gimmick. The three items I cited earlier are very clear. Let us end this notion of having government by gimmick and get on with the real business of this Nation. As George Costanza might say, ``It was a show about nothing.''

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Madam Speaker, today I join with the gentlewoman from New Jersey (Mrs. Marge Roukema) and the gentleman from Pennsylvania (Mr. Phil English), cochair of the Real Estate Caucus, in celebrating the achievements of the mortgage interest deduction in America. Today the gentlewoman from New Jersey (Mrs. Roukema) is introducing her resolution opposing any further restrictions on mortgage interest deductions. Despite the fact that there is no current proposal on the table to cut back the homeowners deduction, this is an important effort that serves as a device for all of us to pause and remember how important this tax incentive is for the country. Currently 67 percent of the households in America live in homes that are owner-occupied. Even more amazing is the fact that 67 percent of foreign-born naturalized citizens who have been in this country for at least 6 years also now own their own homes. The greatest growth in home ownership today is among minorities and first-time homebuyers. Madam Speaker, I believe home ownership remains invaluable in our society, both in terms of our economy, but also in terms of how we think and organize ourselves as a society. I want to lend my support to the efforts of the gentlewoman from New Jersey (Mrs. Roukema) today, and urge other Members of the Congress to sign onto this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing the Individual Tax Simplificaiton Act of 1999, and invite all my colleagues to join me in sponsoring this legislation. It is fitting that this bill on tax simplification is being introduced on the day before April 15th. At this time of year, simplification is on everyone's mind--and wish list. While it may not fulfill everyone's wish, this bill will eliminate approximately 200 lines from tax forms, schedules and worksheets. My bill generally does this in a revenue neutral manner, and without moving money between economic income groups. As we all know, no more so than at this time of the year, the tax code is terribly complex, and has become dramatically more complex for average taxpayers during the past four years. A skeptic might argue that there is no constituency for simplification, but that is changing. A recent poll by ICR found that 66 percent said the federal tax system is too complicated. Three years ago slightly less than half agreed. I believe that with a little compromise, we can enact significant tax simplification. That is why I have made sure this bill is essentially revenue neutral, so it contains no tax increase. And that is why the bill does not try to change the tax burden between economic income groups. This is not an attack on the wealthy, nor anyone else. As with any change in the tax law, there are some winners and losers--but I want to stress that this is incidental to the objective of the bil-- which is simplification that benefits us all. The bill has three parts. The first is based on legislation I introduced last year and introduced again earlier this year regarding nonrefundable personal credits. The second part simplifies the taxation of capital gains. The third part repeals two hidden marginal tax rate on high income individuals, and repeals the individual minimum tax. Title I--Simplification Relating to Nonrefundable Personal Credits In recent years, much tax relief has been given to taxpayers in the form of nonrefundable credits, like the two education credits and the child credit. These credits are not usable against the alternative minimum tax. That means that more and more individuals will lose all or part of these credits, and will have to fill out the extremely complicated AMT form. Congress recognized this problem last year by enacting my proposal to waive this for the 1998 tax year. The other problem with nonrefundable credits is that the phase out provisions vary from credit to credit, causing unnecessary complexity. In addition, the same additional dollar of income can result in a reduction in more than one nonrefundable credit. It is fundamentally wrong to promise the American public tax relief, then take all or part of it away in a backhanded manner. This fundamentally flawed policy, enacted in 1997, will get worse each and every year as more American families find themselves to be AMT taxpayers simply because of the impact of inflation, or because of their desire to take advantage of the tax relief we have promised them. Not only that, this situation will also get worse an additional nonrefundable credits are approved by Congress, such as the President's proposals to assist taxpayers with long-term care needs, and the disabled workers tax credit. The bill addresses both concerns. First, it permanently waives the minimum tax limitations on nonrefundable credits, and on the refundable portion of the family (or child) credit which has the same problem with the AMT as nonrefundable credits. Second, the bill creates a single phase out range for the adoption credit, the family credit, and the education credits, replacing the current three phase out ranges. This part of the bill is paid for by reducing the income limitation on the family credit from $110,000 to $85,000 on a joint return, and from $75,000 to $58,000 for a single individual. This provides a slight increase in the income limits on the educaiton credits and the adoption credit, so about 85 percent of all families will be unaffected or receive tax reductions under this trade off. Title II--Simplification of Capital Gains Tax The second title of this bill is, essentially, Mr. Coyne's capital gains proposal from last year. Under current law, there are 5 different tax rates for long term capital gains, and a 54 line tax form that must be endured. Moreover, this part of the tax code is already scheduled to get worse because additional rates will take affect under current law in 2001 and 2006. The solution is clear. Replace this jumble of rates and forms with a simple 38 percent exclusion. Not only will this result in tremendous simplification (eliminating 36 of the 54 lines), but more than 97 percent of individuals would be eligible for modest capital gains tax reductions. This section of the bill pays for itself. Title III--Repeal of Certain Hidden Marginal Rate Increases, and of the Individual Minimum Tax The third title of the bill repeals the hidden marginal rate increases in current law, and repeals the individual minimum tax. Most of my colleagues understand the phrases, PEP and Pease. Under current law, itemized deductions are gradually reduced by 3 percent of adjusted gross income above approximately $124,000. This is known as the Pease provision. In addition, personal exemptions are phased out for incomes between approximately $187,000 and $309,000. This is PEP. If we did not hide the effect of these provisions of current law, more people would know that these provisions result in hidden marginal rate increases. These marginal rate increases begin at almost 1 percent for incomes above $124,000, and increases for those with incomes above $187,000 by about .78 percent for each dependent. The important point here is that current law has a hidden marginal rate increase, which gets worse as families grow larger. The second part of this title is complete repeal of the individual minimum tax. The minimum tax was intended to make sure that wealthy individuals did not overuse certain tax benefits and unfairly reduce their tax burden. It no longer accomplishes that goal. Most of the significant business related provisions have already been repealed. Since the AMT is not adjusted for inflation, more and more middle and upper middle income taxpayers are falling into the AMT. This is not what was intended, especially when you note that what pushes taxpayers into the AMT now, more often than not, are State and local income and property taxes, personal exemptions, and the nonrefundable credits. I repeat, this is not what Congress was trying to accomplish when the AMT was passed. My suggestion is to repeal it for individuals, and substitute a simple tax on adjusted gross income, and an increase in the current floor on miscellaneous itemized deductions. The current hidden tax is dropped, and is paid for with an explicit tax on the same individuals. They get simplification, and we convert a deceptive practice into an open one. Specifically, the replacement tax begins at 1 percent for adjusted gross incomes in excess of $120,000 on a joint return, and increases to 2.08 percent for income greater than $150,000, which is where the minimum tax exemption begins to phase out. The bill would also increase the floor on miscellaneous itemized deductions to 4 percent for adjusted gross incomes greater than $100,000. Conclusion Ironically, this simplification proposal must be complex, because it mirrors our current law. I want, therefore, to focus on what is important. This bill provides fairly dramatic simplification of the individual tax system. It eliminates approximately 200 lines on tax forms, schedules and worksheets. It is basically revenue neutral, so it can be accomplished during a year when there is no non-Social Security budget surplus to fund tax cuts. It does not attempt to shift money between income groups. The philosophy behind the bill is that those who benefit from tax simplification of the current code should offset any revenue loss involved. I have put the bill together this way to make this philosophy clear. While some families will be phased out of the child credit, the revenue raised is invested in other similar families for AMT relief and for increases in the adoption and education credits. The capital gains section of the bill is paid for internally to that section, so those who realize capital gains will have their current tax liability adjusted up or down slightly in order to achieve the simplification contained in the bill. Finally, those adversely affected by the hidden marginal rate increase of current law that worsens as a family gets larger, will have simplification and some relief offset by other better off taxpayers within their own economic group. It is estimated that this tax filing season will see 51 percent of individuals using tax return preparers, and that 16 percent will use computer software to prepare their return. Only about \1/3\ of individuals actually fill out their own forms. There is no excuse for that reality, and we should do something about it. Given the lack of resources to write a major tax bill, the reality that no one wants to pay for simplification no matter how much they support the goal, and the need to resolve the solvency issues surrounding Social Security and Medicare, I think the opportunity exists this year to solve some of the problems that bother all our constituents during this tax filing season in the manner that I have suggested. I am introducing this legislation to get this discussion going, and I hope it will be seriously considered by all parties.