Richard Neal

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman for yielding to me, and I also wanted to thank the gentleman from Maryland [Mr. Cardin] for this opportunity. I want to clarify a couple of issues here. Perhaps the gentleman could help me seek that clarity. There have been many changes that appear to have been made to the President's education package. These changes to me appear to be detrimental to low- and moderate-income students and seem to benefit those in the higher income brackets. Do not the Republicans provide a reduced HOPE credit for the first 2 years in college in the case of students attending a low-cost institution?

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

Mr. NEAL of Massachusetts. Mr. Speaker, I am glad the gentleman raised that. I used to teach these courses. Under current law, graduate students, teachers, assistants, or researchers are not taxed on the amount of tuition waivers granted by the institution. The House bill would repeal this exemption and these students would have to pay taxes on the amount of those tuition waivers.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Chairman, what we have here is a continuation of the argument that began in 1993. Late in the evening hour, without one Republican vote, the Democratic Members of this House voted for a deficit reduction plan that worked. That is what has brought us here today to the position of where we can discuss tax cuts for the American people. I recall that evening because of the hand wringing that we heard from the other side. I remember the doomsday prophets who took on the well on the other side and predicted that the modern American economy would be wrecked because of what the President and the Democratic majority at that time were doing here in the House. What has been the result? Four years of unparalleled economic prosperity and economic growth where each quarter seems almost to get better than the previous quarter. It has almost defied modern imagination because the Democrats had the courage to take on the issue of deficit reduction in a real way. So today this is a continuation of that argument. This is not an argument about tax cuts. We all agree that this is the time for tax cuts. What we honestly bicker about today in this institution is simply this: Who is to get these tax cuts? Now, we can believe the people that gave us our Social Security and Medicare and the 8-hour workday and the notion that everybody in America ought to be able to try their hand at college, people like me, who went to college because of Social Security, or we can accept the arguments of those on the other side that now they are the champions of middle-class Americans because they favor tax cuts for the people who reside on Wall Street. The simple truth is that the Democratic substitute that we have today is not tax cut envy; it speaks to middle America. It assists 12 million Americans who are struggling with the costs of tuition. It does address the issue of estate tax relief. It speaks to capital gains. And we forced the issue of capital gains in this simple sense: We believe that for middle-income Americans the most capital asset they are ever going to have is their home. We argue on their behalf today that they need relief. We address the issue of middle-income tax relief in our Democratic alternative. Offer an affirmative vote. Vote for the Democratic alternative.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I rise in opposition to House Joint Resolution 79, disapproval of most-favored-nation trade treatment for China. Mr. Speaker, this is one of those fascinating arguments that confronts this institution, where there is some truth to what everybody says. But it is ironic that we opened this century with the Boxer rebellion and now we close the century with MFN; and it highlights how this relationship between our Nation and China has been mishandled for the better part of one century. I think that the issue for us today is really to take the long view of our relationship with China. Every year since 1980, Presidents have requested waivers from Jackson-Vanik in an effort to discuss MFN status as it relates to China. The Jackson-Vanik amendments were enacted to address the freedom of immigration issue. But through most of the 1980's, Presidents have indeed requested this waiver of MFN for China and the waivers, for the most part, were noncontroversial. Now, I acknowledge that after 1989 and the massacre of Tiananmen Square that the situation changed. But, as we all know, the United States-China relationship remains precarious, and we have to decide the best manner in which to improve this relationship. In May 1994, President Clinton decided to delink human rights from China's MFN status and to establish new programs to improve human rights in China. This decision was based upon the belief that linkage was no longer useful. I agree with President Clinton's decision. This does not mean that we have forgotten about the students in Tiananmen Square and we have not forgotten about China's human rights record. We constantly raise these issues with China, and the Tiananmen Square sanctions are still in place. We continue to enforce United States laws banning prison imports. But the sincere question in front of this House today is, how do we best engage China and to encourage those structural reforms that will retain and bring China further into the relationship of civilized nations? We have gotten away from the original intent of the Jackson- Vanik amendment. None of us endorse all of our actions as they relate to China. But if we want to improve our relationship with China, the best way to do it is to continue to engage them through current actions of trade. We are not asking to condone China's egregious actions of the past, but we need to remember that renewing MFN is not providing China with special trade provisions. MFN is the normal trade treatment we provide to almost every other country. I believe that if we engage China, we can make China take actions and move toward familiarizing them with international standards. In recent Chinese history, the worst human rights violations occurred in times of international isolation. Engagement is working. China is making improvements. Even though it seems as though these steps are baby ones toward conforming to international standards, these are steps in the right direction. I am going to close the way I opened. In this argument, there is truth to what everybody says in this institution. But let us not retreat today from MFN status for China.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, sometimes this institution suffers from collective amnesia. What we honor tonight in this concept is what happened in Hungary in 1956, what happened in Czechoslovakia in 1968 with Alexander Dubcek, and what happened in Poland just a decade ago. What we honor here today is a simple concept of those electricians and that trade unionist from Gdansk, Lech Walesa, who turned events as we proceeded to the next century, on their ear. Internationally we honor the commitment that they made, and I assure Mr. Frank's reservations about the manner in which costs are ascribed in these particular instances, but we cannot turn our backs on the heroism. And remember once again those Soviet tanks as they rolled into Hungary and Czechoslovakia and Jaruzelski threatened to put down those trade unionists. It represents the triumph of the human spirit nurtured in this very institution. I am pleased to lend my name in support of the concept of expanding NATO to include these republics.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Chairman, today we are debating a historic budget agreement which would balance the budget by 2002. The resolution we are voting on today just locks the numbers in place. There are still many details that have to be worked out before we vote on omnibus budget reconciliation legislation. This debate reminds me of the old saying ``the devil is in the detail.'' It is these details which could ruin the historic agreement. The resolution calls for $135 billion in gross tax cuts and $85 billion in net tax cuts over 5 years. There is no firm agreement on the design of the tax package. The elements to be included in the package are education tax provisions, capital gains estate taxes, a $500 family credit, and expanded IRAs. $35 billion of the tax cuts are geared towards education. We do not want a repeat of tax legislation which passed this House during the 104th Congress. Only 8 percent of the population realizes capital gains in any given year. Capital gains relief should be targeted and geared towards individuals. Indexing of capital gains will be a source of substantial complexity for taxpayers and open up loopholes in the tax code. New types of tax shelters could be created. Last Congress's capital gains relief was skewered to the wealthy. Seventy-six percent of the capital gains tax cut would have gone to taxpayers with income of $100,000 or more. Citizens for Tax Justice's analysis of last Congress's tax cuts found that 52.3 percent of the tax cuts go to 5.6 percent of Americans with income greater than $100,000 a year. Proportionally, middle-income families would benefit little from the proposed tax cuts. In fact 75 percent of all American families earn $75,000 of less per year. This group would have only benefited from one-fifth of the total tax cuts. Individuals making more than $200,000 annually would have received tax cuts averaging $12,600 a year. We cannot have these type of tax cuts. As we all remember, the President vetoed last years budget and part of this was due to the tax cuts. I do support tax cuts and they have to be targeted and benefit the middle class. The distribution of the tax cuts need to be balanced. The tax cuts cannot come at the expense of valuable tax expenditures. The earned income tax credit [EITC] should not be cut to pay for any provision of this budget agreement. It is our most valuable anti-provety program. It provides incentives which work to move individuals from welfare to work. I support compliance provisions recommend by the Treasury Department, but not a reduction in benefits. As the Mayor of the City of Springfield, I saw the benefits of the low income housing tax credit. I supported the President's efforts to make this permanent in 1993 and we cannot sunset such a valuable program. For a minute, let us remember how things were at the beginning of the Clinton administration. We were faced with an outrageous deficit of $290 billion. President Clinton pushed his economic package and it passed without one Republican vote. This package worked. The deficit is now at $67 billion and this is a 77 percent reduction. We have to build on what we did in 1993. We have to continue on our path of deficit reduction. We must stay on this path and we will not if we enact tax cuts that balloon after the year 2002. Let us work together in a bipartisan manner to pass a fair tax package that includes no budget gimmicks. We need to keep the devil out of the details.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I join with my colleagues in support of the seven Irish nationals residing in the United States who are currently facing deportation by the Immigration and Naturalization Service. While these individual cases and backgrounds may be different, they do share a number of important similarities. These seven Irishmen were convicted in British courts, with no juries. They have served their time and they are not wanted for any crime anywhere. They are now productive, law-abiding members of their communities, and most importantly, they pose no threat to anyone. Mr. Speaker, I have met personally with the Gaynors, the Morrisons, the Pearsons, the Megaheys, the McErleans, the Crossans and the Caufields, and they have told me what this decision will mean if they are deported at this time. The election of Tony Blair as Prime Minister of Britain has restored a sense of hope on both sides of the Atlantic that a just and lasting peace can finally be achieved in the north of Ireland. I urge the administration to give these seven Irish-American families renewed hope today by ending these foolish deportation proceedings and allow them to live their lives out in peace and tranquility as American citizen.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I rise today to congratulate the Minnechaug Regional High School girls basketball team on winning the Massachusetts Division I championship. Throughout the season, these young women's positive attitude distinguished them from their competition. On the way to 23 victories and only 2 defeats, their teamwork, selflessness, and the courage to never give up, propelled their success. Game after game, they rallied to victory after disappointing starts. This is the hallmark of a championship team. In winning their first State championship, first western Massachusetts championship, and the first championship by any western Massachusetts team in 4 years, I commend them. This is a milestone achievement. I hope that the members of the team, coach Dave Yelle, and the Minnechaug Regional High School community know that all of us in the second district join them in taking pride in their season. Congratulations, Falcons.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. I thank the gentleman from Pittsburgh for yielding me this time and for his good work. Mr. Speaker, today is a day that we all dread, and we know that it comes every year. As the old expression goes, ``You can be certain about death and taxes.'' But there is another thing that you should be certain about, and that is your privacy. As technology continues to advance and more of us surf the net, privacy becomes more difficult to protect. Information that individuals report on their tax returns should be kept confidential. Individuals have every right to expect that this information will remain confidential and that liberty should not be violated. Senator Glenn has worked diligently to correct browsing at the Internal Revenue Service. Browsing is unauthorized opportunities to peek at tax returns. In 1993, the IRS commissioner established a zero tolerance for such conduct. The IRS is working toward fair and private tax administration, and this is but another example. Commissioner Richardson has requested this legislation today, and we hope that it will eliminate browsing. I have been a cosponsor of this legislation, and I certainly believe that the IRS is correct in attempting to implement a zero tolerance policy. The purpose of this legislation is to clarify in the Tax Code criminal sanctions for the unauthorized inspection of tax information. Violators would be subject to significant criminal sanctions and dismissal from IRS employment. Criminal sanctions would apply to IRS employees, IRS contractors, and other Federal and State employees having access to Federal tax information. Tax information on paper and in computer data bases would be protected from browsing. Some of the browsing which has occurred at the IRS entailed the unauthorized viewing of celebrities' tax returns. We need to send a strong message to IRS employees that they should respect the rights of all citizens and taxpayers. IRS employees should not act on impulses based upon curiosity. It may be tempting to look at the tax files of such famous individuals as Lucille Ball, but everyone should have their expectation of privacy met. This legislation will provide a deterrent against IRS employees taking a quick look at tax returns for purposes not related to work. I commend the IRS for identifying this problem and taking corrective action immediately. Commissioner Richardson also should be noted for her work on this legislation, and today we will pass it in a bipartisan manner. This legislation is something positive that we can do for all taxpayers. We can ensure their basic right to privacy. While I urge an affirmative vote on the Taxpayer Browsing Protection Act, I also would point out to my colleagues in this institution and to members of the media as well that one of the most fundamental rights in this society is the basic notion of privacy. It is also the cornerstone of liberty.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today is a day that is dreaded by all Americans for one reason or another. Today, April 15, is commonly known as tax day but in deference to my friend who just spoke a moment ago, as he said, happy tax day, I think a more appropriate description of this initiative would be happy gimmick day. All that is missing would be to have that individual who used to stand in the well of the House with a TV Guide in his hand and an ice bucket on his arm talking about term limits after having served for 18 years, that 12 is good enough for the rest of us, and then we ought to talk about the balanced budget amendment, how everybody on that side was thankful that it was defeated. And then we talked about the line-item veto and they are once again in good shape because a Federal judge turned down that initiative. This is about another gimmick, Mr. Speaker. That is what this initiative is proposed for today. It is to call attention to the failure of the majority to administer the House. We should be speaking about balancing the budget today, and that is where our time should be more appropriately spent. We went through this exercise exactly 1 year ago today, because, thank goodness, rational minds prevailed and the resolution fell 37 votes short of the majority required to change the Constitution. Every time we do not like something around this institution during the last 4 or 6 years, we suggest that we ought to alter the Constitution for short-term political gain. Instead of holding this publicity stunt today, Mr. Speaker, we ought to be working on balancing the budget. This resolution is not going to help individual taxpayers. But a balanced budget would help all of us today. If we want to help taxpayers, we should be enacting legislation like an expanded individual retirement account. But instead we are debating an amendment to the Constitution. It ought to be done with these discussions in a serious manner. This proposal that we are offering today would offer a change in revenue if it is determined at the time of adoption in a reasonable manner prescribed by law, not to increase internal revenue by more than a de minimis amount. This resolution does nothing but compound our current budget stalemate and debate. Twenty years ago I was standing in a classroom teaching American history to high school students and to college students. I value the Constitution. I tried to pass that on to my students. The Constitution requires a two-thirds majority vote in the 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. These instances differ substantially from the issue before us today. Mr. Speaker, I have to tell my colleagues today as we begin this debate, this proposal is about the next election. It is not about balancing the budget. This proposal is how we once again can speak to the concerns and qualms of wealthy Americans at the expense of middle and lower income people. Time and again we have had opportunities to address this balanced budget necessity, but instead we come up with superfluous issues like the one that is proposed today. The Founding Fathers examined what majority rule meant. Why should one-third of the Members of this institution determine the fate of an initiative that is as important to the future of this country as this one? Why should one-third of the Members of this institution be allowed to veto the long-term interests of this Nation? I hear Members come to this well on that side and talk about the conservative virtues that made this Nation strong. And in the same breath, we have a constitutional amendment proposed here to address every political concern that they have. Our time would be better served today speaking to balancing the budget. Jefferson's most prized student, James Madison, reviewed the question of what constituted a majority in a legislative body. They concluded, based upon the bad experience of the Articles of Confederation where 9 votes were required of the 13 to raise revenue, that it was a bad idea. This proposal is about demagoguery, it is about dividing this Congress, but it goes to the main issue, the core issue, of any legislative body, and that is the right of the majority, the simple majority, to set responsibilities every single day. And by any objective standard, this proposal fails that measurement. We should be spending our time today focusing on balancing the budget and not upon these kind of superficial initiatives.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I join Representatives Shaw and Kennelly in cosponsoring legislation that would provide a tax credit for the rehabilitation of a historic home. This legislation would help those who rehabilitate or purchase a newly rehabilitated home and occupy it as a principle residence. This tax credit would provide an incentive for the revitalization of many neighborhoods by promoting economic stability and home ownership. I represent the city of Springfield which has many older communities which would benefit greatly from this bill. The city of Springfield and its surrounding communities have many beautiful older historic homes and this tax credit provides a great opportunity for individuals to restore and live in these houses. The credit is capped at $50,000 and it would be for 20 percent of qualified rehabilitation expenditures. The credit is not based on the individual's income. However, the property must be used as a taxpayer's principle residence. Single-family and multifamily homes would qualify for the credit. A developer may rehabilitate a qualifying property for sale and pass the credit through to the home buyer. Properties eligible for the credit are those listed individually on the National Register of Historic Places or on a State or local register, as well as contributing buildings in national, State, and local historic districts. This tax credit is essential for revitalizing historic districts of our older cities. We have many beautiful homes and neighborhoods in our older cities and we should do everything possible to preserve their unique beauty. This tax credit helps preserve our history. I urge my colleagues to cosponsor this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today, I join Congresswoman Lowey in cosponsoring legislation that furthers the education initiatives that President Clinton has promoted. The Partnership to Rebuild America's Schools Act of 1997 would provide much needed funding for the rehabilitation and construction of schools in this Nation. This act gives States and local communities increased flexibility with the financing of school construction. Specifically, the Act provides up to a 50 percent subsidy of interest of financing costs to school districts which will underwrite repairs to existing schools or construction of new schools. The subsidies provided for in this legislation are determined by criteria met by each school district and community, most importantly the need of the community and lack of resources to meet that need. The act appropriately targets those school districts that categorically are impoverished with the majority of their students living in poverty. The majority of the funds for subsidies apportioned by this act will be awarded to these communities by a formula based on the current ``Title I'' grant formula. Using this formula, the presently existing practice of providing educational assistance to the disadvantaged will continue. Education has been made the No. 1 priority of the present administration. Insuring that the children of this great Nation are afforded the opportunity to learn in an environment that is healthy, safe, well-equipped, and conducive to learning is a goal that we should strive to achieve. This act would assist our local communities in reaching this aim and would also provide local school districts with the capability of accommodating drastically growing levels of student enrollment. In my district, the city of Springfield has been designated as one of the many school districts in need of rehabilitation and construction. In order to compete in the global community, we must ensure that all children in this Nation have received the best education possible. The first step is to improve the now existing condition of the many schools that are rundown, overcrowded, and technologically ill-equipped and make them into sound structures to provide a strong educational foundation for all children and their futures. I urge my colleagues to cosponsor this legislation and show their support for our schools and the education that they provide.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, before I begin I would just like to make a brief comment about the gentleman from California's suggestion just a few moments ago that he was guided by principle when it came to shutting down the Government. The most telling quote about the Government shutdown came from that sage of wisdom in the Republican leadership on the Senate side when he looked at the House at that grim moment and said, ``It is time for adult leadership over in the House.'' For anybody to suggest that the Government shutdown ought to be used as an example for not getting the budget resolution out on time fails under any sort of scrutiny. As of last night in this institution, we had cast about 38 rollcall votes. We have been in session since the beginning of January and we have had few legislative days. Now I know we all would say that that is a welcome contrast to what we had done 2 years ago. But who even in this institution today speaks of the Contract With America? Who even remembers the term the ``Contract With America''? What I think is more telling is that there must indeed be a middle ground between what we did 2 years ago and what we are doing so far in the 105th Congress. It strikes me as being odd that while we have had, since January 3 or January 4, an opportunity to proceed with a budget resolution, that we have accomplished so little. I used to do a lot of contract negotiations. I can tell you that in successful contract negotiations, both sides offer up opening positions. To have meaningful, substantive accomplishment at the end of the day, we simply go back and forth until we reach a resolution that all might not love, but all can learn to live with. Have we seen any evidence of that from the other side? The flat response is, absolutely not. We should have seen some guidelines for spending. We have seen none on this occasion.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I support the legislation before us which grandfathers Ambassador Barshefsky from certain provisions of the Lobbying Disclosure Act of 1995. When this legislation was considered in the Senate, Ambassador Barshefsky was grandfathered as Deputy U.S. Trade Representative [USTR]. This resolution would extend that grandfather to Ambassador Barshefsky as she moves up to the position of USTR. I have served on the Subcommittee on Trade for 4 years and have had the opportunity to work closely with Ambassador Barshefsky. Prior to joining USTR, Ambassador Barshefsky specialized in trade law and policy for 18 years. She brings expertise to the position of USTR. In her 4 years at USTR, Ambassador Barshefsky negotiated many major bilateral and multilateral agreements. With respect to Japan, Ambassador Barshefsky has been the key policymaker and negotiator. Her work has resulted in agreements on the following issues: Government procurement of telecommunications equipment and services, Government procurement of medical equipment and technology, insurance, flat glass, and cellular phones and equipment and agreements. Ambassador Barshefsky was instrumental in reaching the intellectual property rights enforcement agreement with China. I admire her determination in reaching agreements when there were many skeptics. Several times it was down to the wire and she was able to come out with a solid agreement. I urge you to vote for this resolution. I look forward to working with Ambassador Barshefsky in her role as USTR.

Mr. NEAL

Mr. NEAL. Mr. Speaker, it gives me great joy to extend my congratulations to the Springfield Lions Club, one of the most prestigious organizations in my district, who will celebrate their 50th anniversary on March 29, 1997. With this in mind, I take this opportunity to enter the history of the club into the Congressional Record. In the Spring of 1947 a member of the Springfield Lions Club invited a group of men from Sixteen Acres to a meeting in the old brick schoolhouse on the corner of Parker St. and Old Acre Rd. At the meeting he described the purpose of a Lions Club and what being a member would entail. Fifty-three men signed up that day and a Lions Club was formed in Sixteen Acres. The Sixteen Acres Lions Club was organized April 25, 1947 and was chartered June 18th. Charter Night was held at Belli's with many members from other Lions Clubs in attendance. Meetings were held for a short time in the schoolhouse with a caterer providing the meals. The meetings were later held for long periods in Belli's and Foster Memorial Church and for brief periods at various area restaurants. While meeting in the original Foster Church building the members meals were prepared by their wives at home and then brought to the meeting. Meetings are not held at Church in the Acres. When the Club was formed a public dump existed where Duggan Jr. High now stands. Many people apparently found it more convenient to dump their rubbish at the side of the road. Under pressure from the Lions Club they had the rubbish removed. In the 1950's the club purchased a motion picture projector and screen and for several years movies were shown on Saturday afternoons in an upstairs room of the old schoolhouse. the purpose was to give the younger children a place to go during the winter months. A charge of ten cents was made to help defray the cost of the film. It should be noted, however, that no child was turned away due to lack of a dime. The Lions Orthoptic Clinic was originated in 1951 by the late Russell Koch, a past president of the Sixteen Acres Lions Club, who, with the approval of the club, enlisted the aid of other clubs in the district to get it organized. The clinic offers treatment of eye problems which have been referred to local ophthalmologists. A charge is made according to the patients ability to pay. A sport program was organized under the direction of Fred Hoarle. He was successful in developing a number of teams and getting area men to coach them. The program was expanded to include soccer, softball, and basketball as well as the baseball teams. For several years the club held a soccer tournament on Memorial Day weekend attended by soccer teams from as far away as Virginia. For 17 years the club has given food baskets to families at Christmas time. A week's food supply plus small toys for children are included in these baskets. For the past several years money for this has been raised by selling raffle tickets for a gift certificate for food at a local market. It has been extremely successful and appreciated venture. The club has also sponsored glaucoma and diabetes testing clinics, paid for eye examinations and eye glasses for needy families and supported eye research, emergency sight and hearing fund, LCIF and various other projects. It has sponsored community events like the Fourth of July and Halloween parades and parties, Easter egg hunts, pancakes and spaghetti suppers, tag sales, dances, light bulb sales and many other house to house sales. In 1986 the club embarked on a new fund-raising project. After many years of work by many members, L'il Toot was completed. L'il Toot is a locomotive train with two passenger cars which can be rented out to provide rides for children at fairs and carnivals. To date success seems assured. The Sixteen Acres Lions Club is proud to have four of its members elected district governor. Robert Scott, Fred Hoarle, John Ingalls and Richard Leary have each served as a district governor and are held in high esteem by their associates. The success of many projects was due to the dedication and hard work of its members. I wish to commend the Springfield Lions Club for their vital role in the Springfield area. The achievements of these men are a tremendous source of pride for not only the city of Springfield but the entire Second Congressional District. I am honored to represent such outstanding individuals and I join with the citizens of the Second Congressional District in offering a most heartfelt congratulations.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today we are debating a very serious piece of legislation. This legislation reinstates Federal aviation taxes which expired at the end of the year. Due to our failure to reach a budget agreement and only the willingness to enact short- term extensions, we are now faced with this serious situation. The House Committee on Ways and Means and the Senate Finance Committee, acting in a bipartisan manner, moved quickly on this legislation, and we have indeed offered what I think is a correction. But unfortunately there are those who will have people believe that this is a tax increase. This is an extension of a tax that expired because of the Congress' inability to promptly renew the tax. I do not think any of us here are in favor of raising taxes, and what we must remember is that this is not a new tax. One of the criticisms frequently leveled in this institution of tax increases as they are proposed is that they contribute to unnecessary spending and that there is no accounting of how indeed those dollars are spent. Well, that is certainly untrue of Federal aviation taxes. Revenue from these taxes are placed in the airport and airway trust fund, and I underscore the term trust fund. The fund provides 100 percent of the Federal funding for airport improvements, facilities, equipment, research, engineering, planning, and development projects and about 75 percent of the Federal Aviation Administration's operating funds. This fund is solely based upon aviation excise tax revenue. We ought to act promptly. Last week the FAA stopped all fiscal 1997 airport improvement grants, and in my State of Massachusetts this affects 14 projects. The extension of this Federal aviation tax is an issue which impacts all of our constituents, as we know, from time to time based upon a headline that grips all of us. We all benefit from safe and effective air transport. I have a letter from Chairman Saltmarsh of the Massachusetts Aeronautics Commission and I think a line from this letter succinctly summarizes this debate. If the aviation excise taxes are not reinstated quickly, the FAA fiscal crisis could result in a degradation of air transportation safety. We should heed this message and enact the reinstatement of the aviation ticket taxes. The extension through the end of this fiscal year serves all of our constituents well, and I currently serve on a task force which is reviewing all of these excise tax proposals. I urge my colleagues today to let common sense prevail. It is our responsibility to reinstate these aviation taxes. These taxes are of necessary purpose and provide a purpose and service which benefits all of us. I also think it is interesting that a year ago we were in the midst of a stalemate in this institution over how much authority the Secretary of the Treasury ought to have. Today the suggestion is being made in one quarter that we ought to refrain from action on this aviation tax proposal, and instead turn the authority for this issue over to the Treasury Secretary so that he might assemble a solution. That is not the role of the executive branch in this instance.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today Mr. Thomas and I are introducing the Super IRA bill. This bill is comprehensive individual retirement account [IRA] legislation. The main purpose of this legislation is to make it easier for individuals to save for retirement. Saving for retirement is an issue which we must address. The Super IRA legislation will help with retirement and we can do this in a bipartisan manner. The phase ``economic security'' has become part of our vocabulary. During this session of Congress, we should do as much as possible to make individuals more secure in their retirement. Statistics about retirement and our savings are not promising. Chairman Alan Greenspan of the Federal Reserve once stated that our low national savings rate is our No. 1 economic problem. Our national savings rate is only 1 percent of GDP. We are beginning to face what has been commonly referred to as the ``graying of America.'' Within 30 years 1 out of every 5 Americans will be over 65. In 15 years, the baby boomers will begin turning 65. The baby boomers generation consists of 76 million people and this will result in Social Security beneficiaries doubling by the year 2040. Less than half of American workers are covered by private sector pensions. The Super IRA legislation provides incentives for individuals to save for their own retirement. This legislation makes it easier for individuals to become personally responsible for their retirement. It will make all Americans eligible for fully deductible IRA's by the year 2001. Current law only allows those taxpayers who are not covered by any other pension arrangement and whose income does not exceed $40,000 to be eligible for a fully deductible IRA. The 10-percent penalty on early withdrawals would be waived if the funds are used to buy a first home, to pay educational expenses, or to cover any expense during periods of unemployment. These are necessary legitimate purposes. Otherwise these savings should just be used for retirement. The legislation creates a new type of IRA called the IRA plus Account. Contributions would not be tax deductible, but earnings can be withdrawn tax-free if the account is open for at least 5 years and the IRA holder is at least age 59\1/2\. These accounts provide another savings vehicle for individuals. Super IRA legislation is not a panacea for the social insecurity that we will inevitably face, but is a reasonable, concrete solution to make retirement savings easier. I urge you to become a cosponsor of this legislation. I look forward to working on the passage of the Super IRA legislation during this session of Congress.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today, Mr. Levin introduced legislation which makes permanent the tax deduction for employer- provided education. I am an original cosponsor of this legislation which would include graduate education. The Small Business Job Protection Act extended this deduction from December 31, 1994 until January 1, 1997. The provision only included graduate education until December 31, 1995. The Democrats of the Ways and Means Committee worked to have graduate education included until January 1, 1997. Unfortunately, our efforts fell short. The legislation introduced is extremely important as it would make this deduction permanent and include graduate education. We should do all that is possible to make education more affordable. Our economy is becoming more global and we need skilled workers in order to compete. Our job growth is occurring in fields which require high skilled workers. We need to provide employees and employers incentives to further their education. Recently, the General Accounting Office released a report on this provision. This report backs up my belief that this provision of the Tax Code is used in all fields of business. Large and small businesses take advantage of this provision. As a former professor, I have taught many students who have benefited from this provision. I urge my colleagues to cosponsor this legislation. Hopefully, we can make this valuable deduction permanent. This is the type of legislation we should all be able to support.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing legislation, the Middle Class Income Tax Relief Act of 1997, which provides a capital gains tax cut for working class Americans. This legislation provides a lifetime capital gains bank of $200,000. Any taxpayer throughout the person's lifetime would have a capital gains bank of $200,000. Under this legislation, a taxpayer could exclude up to 50 percent of the gain on the sale of a capital asset, up to the limit in the maximum tax rate of 19.8 percent. The benefit of lifetime capital gains tax bank would phase out as a taxpayer's income increases above $200,000. Under this legislation individuals who sold stocks saved for retirement or a second home, or elderly individuals, who have a large gain in the sale of their principal residence, would benefit. The proposal includes a 3-year holding period for the capital asset. Short-term stock speculators would not be able to qualify for the benefit. In addition, the bill allows taxpayers to index the cost of real estate for inflation. An inflation-induced gain is not a capital gain and should not be subject to tax. Lately, there has been much said about the necessity and benefits of a capital gain tax cut. A capital gains tax cut is a valid measure, but a capital gains tax needs to be economically feasible and to benefit the middle-class. A capital gains tax cut needs to be responsible. I believe the Middle Income Tax Relief Act of 1997 provides an appropriate capital gains tax cut. Mr. Speaker, I insert a summary for the Record. Summary of Middle Income Tax Relief Act of 1997 Individuals would have a lifetime capital gains ``bank.'' Bank limit would be $200,000 per person. All individuals would be entitled to the $200,000 bank: for example each spouse of a married couple would have a separate limit. Any individual who sold a qualified asset could exclude up to 50 percent of the gain on the sale, up to the $200,000 limit. Qualified assets would include all capital assets under the present law, except collectibles. Under the bill, the maximum tax rate on capital gains income would be 19.8 percent (i.e. \1/2\ of the maximum 39.6 percent rate). The full benefit would not be available in any year that a taxpayer had adjusted gross income in excess of $200,000. In the case of a sale or exchange of real property, taxpayers would be able to index their basis in the asset to the rate of inflation. Thus, no tax on inflation-induced gains. Example: taxpayer buys a house for $100,000 and sells it 9 years later for $200,000. Inflation was 5 percent per year over the 9-year period. Basis for measuring gain is $145,000 so gain is $55,000. A three year holding period would apply so that the deduction would not be available to any taxpayer who held the asset for less than 3 years.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I introduced legislation to correct an inequity in on our current tax system. Under current law, an individual over the age of 55 is allowed a one-time exclusion of capital gain on the sale of a principal residence. This one-time exclusion invokes a marriage penalty. This legislation would eliminate the marriage penalty for the one-time exclusion of gain on the sale of a principal residence. For example, two individuals over the age of 55 who decide to marry and sell their homes would only receive an exclusion for $125,000. Whereas, if they did not marry and sold their homes they each would be able to receive an exclusion for $125,000. This legislation addresses this problem. The legislation eliminates the marriage penalty by disregarding elections made before the date of marriage or elections made on homes sold after the date of marriage, but purchased before the marriage. Fairness is an important element of tax policy. The current policy on the one-time exclusion assists individuals who are approaching retirement and it is a valuable exclusion. Our Tax Code should be fair and not discriminate against basic values such as marriage. The decision to marry should not be based on financial reasons. I urge you to correct this inequity and support this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I support the action taken by United States Trade Representative Charlene Barshefsky on October 1, 1996, concerning Argentinean footwear. USTR announced the United States has filed a section 301 complaint with the World Trade Organization [WTO] against Argentina due to their practices concerning footwear and textiles. This action is necessary to curb Argentina's unfair trade practices. Argentina maintains specific import duties on textiles, apparel, and footwear that are above the 35-percent ad valorem tariff rate to which Argentina committed under the WTO agreements. USTR has decided to invoke WTO dispute settlement procedure. The WTO should take action to make Argentina comply with the WTO agreement. Argentina has taken action in the past and this action is unacceptable. USTR realizes the actions taken by Argentina are insufficient and inappropriate. Consultation with the WTO has become necessary. I commend Ambassador Barshefsky for taking the appropriate action. For companies in Massachusetts, this action by Argentina is dangerous. The action taken by USTR will help those businesses who have been discriminated against because of the unfair trade practices of Argentina. In Massachusetts, companies such as Reebok and thousands of Massachusetts employees, depend upon fair access to foreign consumer markets for their livelihoods. Once again, I congratulate Ambassador Barshefsky and offer my continuing support for firm steps to enforce our international trade treaties to benefit U.S. interests.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I would like to take a moment to pay tribute to a colleague, friend, and mentor--Sam Gibbons. Sam Gibbons was first elected to Congress in 1962 and he has been honorably serving the 11th District of Florida ever since he was first elected. I have been privileged to serve with Sam not only as Member of the House, but as member of the Committee on Ways and Means, the oldest Committee in the House. I had the opportunity to serve with Sam both in the majority and minority. I was amazed at the adjustment he made from the majority to the minority. During the Contract With America, there were many bleak days for the Democrats, especially those of us on Ways and Means. We were meeting everyday to work on agenda that we felt was the wrong direction for America. The manner in which Sam championed the rights of the elderly reminded me of the tradition of another great Representative from Florida, Claude Pepper. Sam kept on fighting and he inspired us all. We pulled together and rallied behind his energy to prevent enactment of drastic Medicare cuts. Not only did he champion the rights of the elderly, he watched out for our future by strongly advocating children's rights. I hope many of us do not forget the image of Sam Gibbons during the welfare debate wearing his ``Save the Children'' tie with a brightly painted school bus. His emotion reminded us of the gravity of the debate before us. Those of us who continue to serve should uphold the principles Sam Gibbons displayed. I was disappointed when I first heard the news of Sam's retirement. I remember reading his statement about how he was going to start another phase of his life and it is time to move on. I know at 76 years of age Sam has lots of fight left in him and I hope he continues to lead us and share his opinions. I wish you well in your new life after Congress. Bust most of all, I want to thank you Sam for showing us how to fight for our beliefs.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, Savings Bank Life Insurance [SBLI] was created as the brainchild of Louis Brandeis. The law allowed for the establishment of a system of over-the-counter life insurance sales though mutual savings banks in Massachusetts. Lower insurance costs resulted because of the elimination of commissions and other traditional selling expense. Similar laws were passed in New York and Connecticut. Massachusetts has passed a law which consolidates SBLI into non- public stock insurance company, while still allowing for the sale of its product through Massachusetts banking institutions. The law provided that the total surplus of the prior SBL insurance departments was to be paid out to current policyholders as an additional policy dividend over a 12-year period. Tax legislation is needed to clarify the Tax Code to assure that the 12-year dividend payout is treated as a deductible policy holder dividend as opposed to a non-deductible redemption of any equity interest. I have worked with Representatives Johnson and Houghton to address this issue. Unfortunately, the committee on Ways and Means was unable to complete action on a legislative proposal. It was determined such a proposal is noncontroversial. I have contacted Chairman Archer and requested the Committee on Ways and Means address this issue next year. I would like to submit for the record my letter to Chairman Archer and Chairman Archer's response. I hope Congress will be able to address this issue next year. Congress of the United States, House of Representatives, Washington, DC, September 27, 1996. Hon. Bill Archer, Chairman, Committee on Ways and Means, Washington, DC. Dear Chairman Archer: During the 104th session of Congress, I have contacted you about Savings Bank Life Insurance [SBLI]. Tax legislation is needed to clarify the tax code to assure that the 12-year dividend payout is treated as a deductible policyholder dividend as opposed to a nondeductible redemption of any equity interest. I have worked with Representatives Johnson and Houghton on this issue. The Department of Treasury has indicated that it has not objection to the proposal. I realize the Committee on Ways and Means was unable to address this issue this year. I hope we can work together to address this issue as earliest as possible in the 105th Congress. Thank you in advance for consideration of this matter. Sincerely, Richard E. Neal, Member of Congress.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, last November I was extremely concerned about the debt ceiling. I admired the manner in which Secretary Rubin handled the crisis. Secretary Rubin and his staff worked diligently to find a solution to the possibility of hitting the debt ceiling. Congress' failure to take action placed the Department of the Treasury in a precarious position. Congressional leadership was holding the debt ceiling hostage during the battle of the budget. Congress played chicken with the financial markets and the good name of our country. Secretary Rubin skillfully used every tool possible to save the credit reputation of the United States and to keep the United States from defaulting. The United States faced the real possibility of a default. Our credit rating had dropped. Secretary Rubin took courageous steps to keep the Government functioning and the markets stabilized and he was severely criticized. At one point, there was even talk of impeachment. Unfortunately, Secretary Rubin was criticized by many Members of this body. Many were concerned about the use of investments of Federal employment retirement funds. The General Accounting Office [GAO] has released a report on Treasury's handling of the debt ceiling. The GAO report concluded that Treasury conducted the Nation's debt management legally and properly during the debt ceiling crisis. Treasury's actions avoided a default and violation of the statutory debt limit. The GAO report reviewed all actions taken by the Treasury during the period leading up to and after the debt limit was reached, approximately October 1995, through March 1996. Treasury used extraordinary measures because the statutory limit was not raised until 5 months after the old limit was reached. The GAO report concluded Treasury used normal debt management procedures such as investment of trust fund assets. Also, Treasury acted in a proper and legal manner. Treasury's actions were designed to ensure full and prompt restoration of lost interest to uninvested trust funds within the limits of the law. I am pleased with the results of the GAO report. This report confirms my belief that Secretary Rubin acted properly and averted a serious and volatile crisis. Once again, I think we should commend the actions Secretary Rubin took this past winter.