Richard Neal

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. I thank the gentleman for yielding. By the way, you were up for reelection last year, were you not, Mr. Chairman?

Mr. NEAL

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

Mr. NEAL. Mr. Speaker, I thank the gentleman from Massachusetts for yielding time to me. Mr. Speaker, I rise in opposition to the rule for H.R. 831. This legislation would restore and make permanent the 25 percent tax deduction for health insurance premiums for the self-employed. The deduction is paid for by a very controversial tax change. This rule makes in order one and only one substitute. The markup originally scheduled on this Committee on Ways and Means was to restore the 25 percent deduction for 1994. It was my understanding at that time that the committee wanted to act on this legislation quickly in order to prevent individuals from filing amended returns. We are fast approaching the tax filing deadline for 1994, and in fact for farmers the tax filing deadline is on March 1. It is also my belief that at a later date the committee was to address the issue of making the deduction permanent and increasing the amount of the deduction. However, the day before the markup we received notice that the markup was to make the deduction permanent, and it would be paid for with two tax provisions. One of the revenue provisions, the repeal of Code section 1071, gives the Federal Communications Commission the authority to grant tax certificates deferring capital gains taxes on the sale or exchange of broadcast facilities to minority individuals or minority-controlled entities. I am pleased the committee took action on restoring the 25 percent deduction for 1994. However, I am very concerned that the 25 percent deduction should be made permanent, but we should move on this very quickly with additional changes that the gentleman from Maryland [Mr. Cardin] and I have proposed. The deduction should be increased. During the committee markup, the gentleman from Maryland [Mr. Cardin] and I offered a specific amendment to restore the deduction for 1994 and to increase the deduction to 80 percent for 1995 and 1996. This proposal would be financed by the same revenue offsets. Mr. Speaker, we have testified in front of the Committee on Rules about our amendment. The Committee on Rules did not make our amendment in order, although they gave us a very courteous hearing, and there seemed to be general sympathy in the committee on both sides for our proposal. This legislation is very straightforward. The amendments presented to the Committee on Rules by Committee on Ways and Means members were germane and substantially related to 831. This was not a situation where there were complicated issues in the legislation, or the amendment contained new revenue offsets. The 25-percent deduction is extremely important as an issue for the self-employed. One quarter of self-employed Americans, 3.1 million farmers, and craftsmen, professionals, and small business proprietors have no health insurance. The self-employed are one and a half times more likely to lack essential health care coverage. Mr. Speaker, the Tax Code should encourage the self-employed to pursue health insurance. The deduction would allow businesses to spend more on health care. There are approximately 41 medically uninsured. We need initiatives to encourage working people to provide for health care coverage. An individuals's employment should not determine the tax treatment of their health insurance. Most importantly, on this occasion, this full House is fully capable of debating this issue tonight. This is important to self-employed Americans across this Nation, and we should not have been denied the opportunity to offer the amendment proposed by the gentleman from Maryland and I. Mr. Speaker, I firmly oppose this rule, and I urge those on both sides to proceed with a full debate and vote against this rule this evening.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Let me ask the gentleman a specific question if I might. I just want to say that in 7 years here I have never received a more courteous hearing from anybody on my proposals, when members on both sides of that committee agreed entirely with the proposal, at least verbally, that the gentleman from Maryland [Mr. Cardin] and I offered, and then, despite the fact that everybody said, ``Yes, this is the correct posture, this is the right position, you're demonstrating the right attitude,'' and then we were told we could not offer our alternative. Everybody there in that room that day agreed with us, I say to the gentleman from New York [Mr. Solomon]. Then they said, ``No, but you can't offer it.'' But I do thank the gentleman for receiving me in a courteous manner.

Mr. NEAL of Massachusetts. You are so confident, you do not have to worry about reelection. Those of us on our side, we have to worry about it.

Mr. NEAL

Mr. NEAL. Mr. Speaker, today Mrs. Johnson, Mr. Jefferson, and I are introducing legislation which will repeal an unintended tax on hard- working, middle income Americans--truckers, long-haul bus drivers, train conductors, and other people regulated by the Department of Transportation. The Omnibus Budget Reconciliation Act of 1993 [OBRA] contained a provision which reduced the deductible portion of business meals and entertainment expenses from 80 percent to 50 percent. This legislation would allow employees who are required by Federal law and regulations for safety reasons to make mandatory rest periods away from home. Simply, this legislation restores the deduction to 80 percent for truckers, long-haul bus drivers, train conductors, and others regulated by the Department of Transportation. When the meals deduction was reduced from 100 percent to 80 percent, the crews of commercial vessels and people working on oil rigs were exempted. The reason for this exemption was that these individuals are required by law to be away from home and ``eat out.'' This reasoning should continue to apply because those required by Federal law and regulations for safety reasons to take mandatory rest benefits away from home should be allowed to deduct these expenses. These meals are for safety reasons, not social reasons. We need to pass this legislation to correct this tax injustice. This legislation allows the deduction of legitimate expenses required by Federal regulations. These are ordinary and necessary businesses, not lavish or extravagant expenses. I urge you to support this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Chairman, I thank the gentleman for yielding to me. Mr. Chairman, it is not bad enough that H.R. 7 represents a radical assault on the ability of the President of the United States to conduct foreign policy. But here we are, after all these years, revisiting the issue of star wars when there is no appetite across this land for taking up the star wars mechanism at this particular time. I find it astounding that the Joint Chiefs of Staff could suggest that this proposal is ill-conceived, and ill-timed and at the same time we are bringing it up here tonight. I am proud to stand here tonight in support of the amendment of the gentleman from Texas [Mr. Edwards]. He has spoken time and again in support of a strong national defense system in this country, as have other speakers tonight. At the same time, they both have suggested that this proposal is unwise and unwarranted.

Mr. NEAL

Mr. NEAL. Mr. Speaker, yesterday Mrs. Johnson, Mr. Matsui, Mr. Herger, and I introduced legislation to make permanent the Research and Development [R&D] tax credit. U.S. based R&D is critical to our continued economic growth. The R&D credit provides a significant incentive for U.S. companies of perform valuable R&D in the United States providing high-skilled, high-paid jobs for American workers. The R&D credit was enacted in 1981 to provide an incentive for companies to increase their spending on U.S. R&D. The credit requires companies to increase their current year R&D spending above a predetermined base before they are eligible to receive the credit. Since 1981, the credit has been extended five times and changed to reduce the benefits available to certain companies. The current R&D credit expires on June 30, 1995. Failure to make the credit permanent has substantially reduced its value to business. Research and Development projects are generally long-term efforts, often spanning 5-10 years. Corporate research planners can not rely on the incentive provided by the R&D tax credit if it is extended for only 12-18 months at a time. I believe New England would substantially benefit from a permanent R&D credit. New England is still trying to recover from difficult economic times. A permanent R&D credit will provide a signficant incentive for New England companies to perform R&D in New England. The technological innovations perfected through R&D are necessary to assist New England companies that are undergoing defense conversion to compete in the market place. R&D will help rebuild our economy. I urge you to support this legislation.

Mr. NEAL

Mr. NEAL. Mr. Speaker, today is day 29 of the Contract With America. We have passed the quarter mark for the first 100 days. Until day 27, we heard nothing about child support being included in the contract. Why was child support not included in the contract? How could such an important issue be ignored? I have carefully reviewed the Personal Responsibility Act and it includes no child support provisions. On day 27, we heard that the Republicans will include child support enforcement provisions in the Personal Responsibility Act. We had to wait until day 27. Where were the child support provisions? It is day 29 of the Contract With America. It is time for us to start talking about the details of child support enforcement. This will send the American people the message that we are serious about welfare reform. A tough child support system requires both parents to live up to their responsibilities. How could we have welfare reform without child support enforcement provision? Child support is welfare prevention. For every $1 spent on administrative expenses, $4 is collected in child support. Paying child support is also the ultimate measure of personal responsibility. The potential for child support collection is estimated at $48 billion per year. Only $14 billion is actually paid. This leaves an estimated collection gap of about $34 billion. This gap needs to be closed. Yet it was not until day 27 that the Republicans decided to address the issue of closing this $34 billion gap. One in four children now lives in single parent homes. Without better child support enforcement, too many of these children will not have the support they need and deserve. In 1992, 17.6 million children lived in single parent homes. We need to improve these statistics now. My home State of Massachusetts has been very successful with child support enforcement and would serve as a role model for the rest of the country. Massachusetts has increased its child support collection rate from 51 to 67 percent over a 3-year period. But Massachusetts is only one State, we must make an improvement on the Federal level. Child support is one area in which State flexibility is not needed. States should be uniform on this issue. We should be able to collect child support awards across State lines. Successful child support enforcement includes streamlining the paternity-establishment process. We should give States performance- based incentives for improving paternity-establishment rates. Out-of-wedlock births have increased at an outrageous rate. In 1991, approximately 30 percent of all children born were born to unwed mothers. These children need to be given a fighting chance. Remember, there is no such thing as an illegitimate baby. We need to collect awards that we owed. We need States to establish a central registry and centralized collection and disbursement capability. We need to establish a national commission to study State guidelines and the desirability of uniform national guidelines. We need to ensure fair award levels. Awards are generally set too low. If awards were modified to current guidelines, an additional $7.3 billion--22 percent of the gap--could be saved. It is day 29 of the contract. Child support is finally starting to receive the recognition it deserves. Let's not stop now. We have to work together to close this $34 billion gap. Paying your child support is the ultimate measure of personal responsibility.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today is day 28 of the Contract With America. We have passed the quarter mark for the fist 100 days. Until day 27, we heard nothing about child support being included in the contract. In the past, we heard child support is important and would possibly be addressed at a later date. Why was child support not an original provision of the Contract With America? How could we possibly delay acting on such an important issue? I was under the belief the contract was to benefit all Americans. If we are going to benefit all Americans we really have to have provisions which help our children because they are our future. I have carefully reviewed the Personal Responsibility Act and there are no child support provisions. As I have stated before, welfare reform cannot be successful without child support. Child support is the cornerstone of welfare reform. Strong child support enforcement provisions are necessary. When I reviewed the Personal Responsibility Act, my initial reaction was the legislation punished women and did not require men to face up to their responsibilities. Without taking action on child support, we would require young mothers to be responsible while we give fathers a free ride. This is the wrong message to send. We have to send a message to the American people that we are serious about welfare reform. A tough child support system requires both parents to live up to their responsibilities. On day 27, we heard the Republicans will include child support enforcement provision in the Personal Responsibility Act. We had to wait until day 27. Where were the child support provisions? What message was being sent to the American people? Was the message, Fathers do not really need to be responsible? How could we have welfare reform without child support enforcement provisions? Child support is welfare prevention. For every $1 spent on administrative expenses, $4 is collected in child support. On day 27 we heard child support would be included in the Personal Responsibility Act. I am pleased the Republicans have finally recognized the importance of this issue. Today, 63 percent of absent parents contribute no child support. We can and need to do better than this. The potential for child support collection is estimated at $48 billion per year. Only $14 billion is actually paid. This leaves an estimated collection gap of about $34 billion. This gap needs to be closed. It was not until day 27 that it was decided to address the issue of closing this $34 billion gap. One in four children now live in single parent homes. Without better child support enforcement, too many of these children will not have the support they need and deserve. In 1992, 17.6 million children lived in single parent homes. We need to improve these statistics now. My home State, Massachusetts, has been very successful with child support enforcement and would serve as a role model for the rest of the country. Massachusetts has increased its child support collection rate from 51 to 67 percent over a 3-year period. We must make an improvement on the Federal level. On day 27 we heard child support enforcement was going to be included in the contract. It is day 28 and we do not know what type of child support provisions will be included. A comprehensive child support strategy is necessary to help parents become less dependent on AFDC and stay in the work force. A comprehensive child support strategy needs stronger requirements for paternity establishment. Out-of-wedlock births have increased at an outrageous rate. In 1991, approximately 30 percent of all children born were born to unwed mothers. These children need to be given a fighting chance. There is no such thing as an illegitimate baby. It's day 28 of the contract. Let us work together to address the issue of child support enforcement. We need to work to establish awards in every case. We need to streamline the paternity process. We need full cooperation from the mother. We need to ensure fair award levels. Awards are generally set too low. If awards were modified to current guidelines, an additional $7.3 billion, 22 percent of the gap, could be saved. We need to establish a national commission to study State guidelines and the desirability of uniform national guidelines. We need to collect the awards that are owed. We need States to have a central registry and centralized collection and disbursement capability. to the American people that we are serious about child support enforcement. Ignoring child support enforcement sends the wrong message. It says that the noncustodial parent who is one-half responsible for the birth of a child does not have any responsibility for supporting that child. We cannot send this message. We need tough new penalties for those who refuse to pay such as wage withholding, suspension of drivers' and professional licenses, and property seizures. It is day 28 of the contract. Child support is finally starting to receive the recognition it deserves. Let us not stop now. We have to work together to close the $34 billion gap.

Mr. NEAL

Mr. NEAL. Mr. Speaker, today is day 24 of Contract With America. I have reviewed the contract and I have asked myself what is in the contract for children. I have carefully reviewed the Personal Responsibility Act and there are no child support provisions. Child support is the cornerstone of welfare reform. We cannot have successful welfare reform without strong child support enforcement provisions. It is time to address this issue head on. It is day 24 of the contract. We need to set goals on child support enforcement legislation now. We need to send a message to the American people that we are serious about welfare reform. A tough child support system requires both parents to live up to their responsibilities. Out-of-wedlock births have increased. There is no such thing as an illegitimate baby. We need to send a message to the noncustodial parent who is one-half responsible for the birth of the child. The parent needs to know of his obligation to support the child. Massachusetts has been very successful with child support enforcement and should serve as a role model for the rest of the country. Massachusetts has increased its child support collection rate from 51 percent to 67 percent over a 3-year period. We need child support enforcement legislation at the Federal level. Unfortunately, child support enforcement is not adequately addressed in the contract. It is day 24. Where is child support in the contract?

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am reintroducing legislation to amend the Internal Revenue Code of 1986 to repeal the special $15,000,000 limitation on the amount of a tax-exempt bond issue which may be used to provide an output facility. The intent of this legislation is to treat public power in the same manner as other public facilities. Traditionally, States and local governments and other public entities have relied on the issuance of municipal tax-free bonds to finance construction of a wide range of essential public facilities, including schools, roads, water and waste water treatment systems, electric and gas utilities, hospitals, health centers, prisons, and public transit. The Tax Reform Act of 1986 included numerous provisions restricting the use of tax exempt bonds. These provisions were enacted in order to curb abuses in the bond community and to increase revenue to reduce the Federal budget deficit. One of the changes made in 1986 was the extent to which private parties could benefit from the use of facilities financed by tax-exempt bonds. Pre-1986, up to 25 percent of facilities constructed through the issuance of tax-exempt bonds could benefit from the use of facilities financed by tax-exempt bonds. The Tax Reform Act of 1986 reduced this restriction to 10 percent for all Government bonds. However, a further limitation was imposed on public power and public natural gas transmission facilities. The private use test for public power is the lesser of 10 percent of $15 million. No other entities are subject to the $15 million private-use test. The removal of the $15 million cap would place public power on equal footing with other power hampers the ability of these entities to buy and sell power in the open market. In addition, the restriction constrains public power entities from building units of a size which allow them to gain economies of scale. In 1989, the Anthony Commission on Public Finance, chaired by former Rep. Beryl Anthony issued a report entitled ``Preserving the Federal- State-Local Partnership: The Role of Tax-Exempt Financing.'' The Commission recommended the elimination of the $15 million public power limit. The bottom line is that this restriction is not only discriminatory, but it drives up the cost of power to consumers of public systems. On June 23, 1993, the U.S. Department of Treasury testified before the Subcommittee on Select Revenue of the Ways and Means Committee and addressed this legislation. Leslie B. Samuels, Assistant Secretary for Tax Policy said, ``There does not appear to be a reason to treat (these) output facilities more harshly than other output facilities. As a practical matter, the $15 million output limit of current law may have little effect other than to create an incentive for public power issues to operate inefficiently.'' The legislation will remove the $15 million cap and treat public power like other public facilities and I urge my colleagues to join me in cosponsoring this legislation.

Mr. NEAL

Mr. NEAL. Mr. Speaker, today Mr. Thomas and I are introducing the Savings and Investment Act of 1995, commonly referred to as the Super IRA bill. Since I have been a Member of Congress, I have been very concerned about our low national savings rate. I share the belief of chairman Alan Greenspan of the Federal Reserve that our low national savings rate is our number one economic problem. The savings rate has declined significantly since the 1950s. In 1993, U.S. net national saving was only 2.7 percent of net national product, compared to 12.3 percent in 1950. In a recent study, Professors R. Glenn Hubbard and Jonathan Skinner concluded raising the Individual Retirement Account (IRA) contribution limit would increase net national savings by $4 for every dollar lost in government tax revenue. Professors Hubbard and Skinner believe the decline in the national savings rate is a cause for serious concern because of the links between saving, capital formation, productivity, and American living standards. I believe the purpose of this legislation is to increase our national savings rate. IRAs are a proven tool to boost our savings. Most contributions to IRAs are made by middle income families. All Americans should be able to contribute to IRAs. We need to provide individuals with an incentive to save for their retirement. The U.S. personal saving rate dropped from 5.2 percent of GDP in 1960-1980 to 3.4 percent in 1991-1994. Under this legislation, all Americans would be eligible for fully deductible IRAs. Current law only allows those taxpayers who are not covered by any other pension arrangement, and whose income does not exceed $40,000 ($25,000 singles) to be eligible for a fully deductible IRA. These limits would be gradually lifted over time. The $2,000 contribution limit will be indexed for inflation in $500 increments in the year in which the indexed amount exceeds the next $500 increase. The legislation creates a new kind of IRA option. Taxpayers will be offered a new choice of IRA. Under this new type of IRA, contributions will not be deductible, but if the assets remain in the account for at least 5 years, all income will be tax free when it is withdrawn. A 10 percent penalty will apply to early withdrawals, unless one of the five exceptions is met. The legislation includes a provision which I believe is very important. The bill allows spouses who work at home to contribute up to $2,000 to their own IRA to the extent of their own income. In addition, the legislation waives the 10 percent penalty on early withdrawals if the funds are used to buy a first home, to pay educational expenses, to cover catastrophic health care costs, during long periods of unemployment, or to purchase of long-term care insurance. Similar penalty withdrawal rules will apply to 401(k) and 403(b) employer- sponsored plans. We have to encourage individuals to save for their retirement. I believe this legislation is a step in the right direction. I urge you to support this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I rise today to pay tribute to Rose Fitzgerald Kennedy, the matriarch of America's most celebrated political family, who passed away on Sunday surrounded by family and friends at her home in Hyannis Port, MA. She was 104. Her remarkable life spanned a century and saw great triumph and despair, but through it all Rose Kennedy always carried herself with the characteristic grace, style, and dignity that became her trademark. Born in 1890, Rose Elizabeth Fitzgerald was introduced to politics at an early age by her father, the former Congressman and mayor of Boston, John F. ``Honeyfitz'' Fitzgerald. A gifted student who spoke several languages, she graduated from Convent of the Sacred Heart in Boston and at age 24 married businessman Joseph Patrick Kennedy. In the next 18 years Joseph and Rose Kennedy had nine children. One would be elected President of the United States. Two served in the Senate. And another became Ambassador to Ireland. But with every great victory, there always seemed to be an even greater loss--in Dallas in 1963, and again in Los Angeles 5 years later. It was during these times of great sorrow that Americans saw the strength of Rose Kennedy, the deep convictions, and the intense and unyielding dedication to her faith. In her quiet manner she inspired millions of Americans, and helped us overcome our collective grief. She will be remembered as an outgoing daughter, a caring wife, a loving mother, grandmother, and great-grandmother. In the words of her son, John Kennedy, ``She was the glue that held the family together.'' She is being buried in Boston today. May she rest in peace.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, I rise today to introduce a piece of legislation that is of particular importance to me: the Marion Malley Walsh Drunk Driving Act of 1995. Marion Malley Walsh was a professional artist--a commercial fashion illustrator and successful pastel portrait painter--a mother and grandmother, who lived in Longmeadow, MA. On June 23, 1993, while driving with her sister Loretta to a family reunion on Lake George, Marion was killed by a drunk driver who was fleeing the scene of a hit- and-run accident. Mr. Speaker, drunk driving is a problem that plagues our Nation. In 1992, 17,699 innocent people were killed in this country by drunk drivers. That's an average of one alcohol-related fatality every 30 minutes. Drunk driving crashes cost the U.S. health care system approximately $6 billion in 1993, and American businesses and workers approximately $25 billion in lost wages. The Marion Malley Walsh Drunk Driving Act follows the lead that was set in Massachusetts and in a few other States--setting a zero- tolerance level for drivers under the age of 21, and lowering the legal alcohol limit to .08 percent. States that do not comply with the Marion Malley Walsh Drunk Driving Act will still receive Federal highway moneys--only some of these funds will be earmarked for specific programs related to drunk driving. Most importantly, however, the Marion Malley Walsh Drunk Driving Act doesn't cost the tax payers an additional dime--it can be done within our current system. Mr. Speaker, in the memory of Marion Malley Walsh, and for her family and all the other families that grieve the loss of a loved one caused by a drunk driver, I urge my colleagues to support this important legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing legislation, the Middle Class Income Tax Relief Act of 1995, 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 1995 is an appropriate capital gains tax cut. Mr. Speaker, I insert a summary for the Record. Summary of Middle Income Tax Relief Act of 1995 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 each have a separate limit. Any individual who sold a qualified asset could exclude up to 50% 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% (i.e. \1/2\ of the maximum 39.6% rate). The full benefit would 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% per year over the 9-year period. Basis for measuring gain is $145,000 so gain is $55,000. A 3-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, prior to December 1993, self- employed business owners were allowed to deduct 25 percent of the cost of their health insurance and this deduction has expired. I am introducing legislation that will make the cost of health insurance deductible for self-employed business owners. The purpose of this legislation is to restore and to make permanent the 25 percent deduction and to gradually increase the deduction to 100 percent. The bill phases in the 100 percent deduction over a period of 4 years. For calendar years 1994 and 1995, health insurance would be 25 percent deductible; in 1996 and 1997 it would become 50 percent deductible; and in 1996 and thereafter health insurance would become 100 percent deductible. Increasing the deduction to 100 percent would provide small businesses with an incentive to provide expanded health insurance coverage. Also, corporations are permitted to deduct 100 percent of the cost of providing health care insurance. One of the major problems facing small businesses is the high cost of health insurance. Increasing the deduction would allow business owners to spend more on health care. This legislation provides businesses with an incentive to purchase health care insurance. Congress can immediately begin to reduce the cost of health care coverage by extending the 25-percent deduction for self-employed individuals' health insurance. The high cost of health care insurance is one of the impediments to health care access. I urge you to support this legislation.

Mr. NEAL of Massachusetts

Mr. NEAL of Massachusetts. Mr. Speaker, today I am introducing the Individual Retirement Options Improvement Act of 1995. This legislation makes changes to the Internal Revenue Code to improve Individual Retirement Accounts [IRA's]. The purpose of this legislation is to increase our national savings rate. The legislation consists of two major components which are to encourage savings by increasing the amount of deductible contributions which may be made to an individual retirement account and to allow homemakers to be eligible for the full IRA deduction. First, the legislation allows an individual who is an active participant to deduct the allowable amount and to deduct 50 percent of the excess amount for that taxable year. This provision increases the deductible amount which individual taxpayers are currently allowed for IRA's. The legislation does not increase the $2,000 limit. Second, the legislation addresses the spousal IRA issue. The legislation allows homemakers to make the The purpose of this legislation is to increase our national savings rate. IRA's are a proven tool to boost our savings rate. This legislation increases the amount that can be deductible in an IRA. Taxes are just deferred. The focus of this proposal is savings for retirement. A new analysis commissioned by Merrill Lynch on the financial wealth of American families shows that half of American families currently have below $1,000 in net financial assets. Action needs to be taken to improve this statistic. Allowing homemakers to contribute the full amount to an IRA corrects an inequity and creates an incentive for savings. Increased retirement savings will result in economic growth and help retirees become financially independent. We have to encourage individuals to save for their retirement. This legislation is a step in the right direction. I urge you to support this legislation.