Don Nickles

Mr. NICKLES

Mr. NICKLES. Mr. President, section 310(c)(2) of the Congressional Budget Act, as amended, provides the chairman of the Senate Budget Committee with authority to revise committee allocations, functional levels, and budgetary aggregates for a reconciliation conference report which fulfills an instruction with respect to both outlays and revenues. The chairman's authority under section 310(c) may be exercised if the following conditions have been satisfied: 1. The conferees report a bill which changes the mix of the instructed revenue and outlay changes by not more than 20 percent of the sum of the components of the instruction, and, 2. The conference agreement still complies with the overall reconciliation instruction. I find that the conference report on H.R. 2, the Jobs and Growth Tax Relief Reconciliation Act of 2003, satisfies the two conditions above and pursuant to my authority under section 310(c), I hereby submit revisions to H. Con. Res. 95, the 2004 Budget Resolution. The attached tables show the revised committee allocations and budgetary aggregates. I ask unanimous consent they be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, pursuant to section 313(c) of the Congressional Budget Act of 1974, I submit for the Record a list of material in the conference agreement on H.R. 2 considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313. The inclusion or exclusion of material on the following list does not constitute a determination of extraneousness by the Presiding Officer of the Senate. To the best of my knowledge, H.R. 2, the Jobs and Growth Tax Relief Reconciliation Act of 2003, contains no material considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313 of the Congressional Budget Act of 1974.

Mr. NICKLES

Mr. NICKLES. Mr. President, I object. Mr. President, I compliment our colleague from Alaska for trying to pass a clean, simple extension. This is the same language Senator Clinton and I passed last January. It is the same language Senator Fitzgerald passed with us, I believe January 7 or 8. It is the same language we passed a couple of times for a clean extension. It is not a doubling of the program. It is not taking a 13-week Federal program and turning it into a 26-week program. It is not expanding the definition of uninsured or unemployed to include part-time workers, or to include a whole variety of people who, frankly, the States don't now cover. I will tell my colleagues that we are not going to double the program. We are not going to triple the program. The Senator from Alaska offered to extend the current program which we have been using for the last 2 or so years. That is the proposal she will make today and, I would expect, the proposal she will make tomorrow. That is the only proposal, in my opinion, that will pass. People want to try to make political statements. We had a vote on it in the budget. I will not yield. We had a vote on it in the budget. It didn't pass. We had a vote on it last week on the tax bill. It didn't pass. Some people want to double or triple this program. It is not going to work. The Senator from Alaska says she is trying to extend the program so people won't lose their benefits beginning next month. A clean extension of the Federal program of 13 weeks can pass, or rather may pass. But colleagues who want to continue to double or triple the program jeopardize helping the very people they say they want to help. I compliment my colleague from Alaska. I hope our colleagues will give fair consideration and ultimately agree to a simple extension of the program for 6 months, as proposed by our colleague from Alaska. I yield.

Mr. NICKLES. Mr. President, just for the information of our colleagues, to make sure we make the record straight, my very good friend from the great State of Massachusetts has mentioned: Let people have a vote. Well, we have not had one vote--we have had three votes this year. We had a vote on the appropriations bill earlier this year. We had a vote on the budget. We had a vote on the tax bill. They did not win. They tried to double the program two or three times, unsuccessfully, and so they are now trying again. Frankly, we have a DOD authorization bill, we have a tax/economic growth package, we have a debt limit extension, and we need to pass UI. We have a lot of work to do in the next few hours. Some of us--let me rephrase that--this Senator is going to do what I can to make sure we are not going to double or triple this program. We have already had three votes on the proposal to double it. We are not going to do that. I don't know how many votes people think they need. They may think they are winning on the votes, but they are not winning on the issue. I think we may have consent to pass a clean extension. It takes unanimous consent. I tell my colleagues on the other side, who are playing this game, this will not work legislatively. And it may jeopardize a clean extension. So I would be very cautious, especially when you get late in the game, and close before a break, and people want to go home, I would not take for granted that you can pass a clean extension--but I compliment my colleague from Alaska, Senator Murkowski, for trying to do so. I believe we can do so. We have had three votes already, and it did not win. It will not win on the fourth vote. So I urge my colleagues: The way to do this is let's pass a clean extension, the same extension that my colleague from New York and I passed one or two times on the floor of the Senate. Let's do that again, and let's help the people who need the help. If people play other games, they jeopardize even a clean extension. I think people should be on notice of that not everybody might want a clean extension. So the effort to double the program may mean that some people will get zero. Instead of getting 13 weeks, they might get zero because of this effort to double the program. Mr. President, I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I wish to make a few comments regarding the bill. First, I compliment the chairman of the Finance Committee for his leadership. Passing a budget has not been an easy process. If we had not passed a budget, we wouldn't be passing a tax bill. Senator Grassley was a very strong supporter of us getting a budget. He showed great courage in doing that. Some people criticised him for it. I take issue with that. Senator Grassley, in bringing to the floor the tax provision reconciliation bill that we are going to be voting on tomorrow, frankly, made a commitment, as any chairman would, that he didn't want to bring a bill back to the floor of the Senate that wouldn't have the necessary votes to pass. He is exactly right. He, as I, count votes. We are passing the biggest, best growth package we could get through the Senate. Both of us would like for it to be more. We met with our colleagues in the House. They would like for it to be more. The President would like for it to be more. This is the best we can do with the votes we have. With the package, I think we have done a good job, which we have, in loading up front, doing the best job we can to create jobs and create growth in our economy. I compliment Senator Grassley because if he hasn't shown leadership, we wouldn't have a budget and we wouldn't be voting on a tax bill. Tomorrow, we will be passing one of the best that this Congress has passed--maybe not just this Congress but in a long time. I wish to talk about some of the provisions that are in the tax bill. Senator Grassley complimented Senator Miller. Senator Miller and I introduced the President's tax bill several months ago. It was $696 billion. The tax bill we are voting on tomorrow, most people say, is $350 billion. Actually, the tax portion of it is significantly less than that. It is closer to $315 billion. Somebody might ask, What is the difference? There are outlays. We had to pay for the outlays. When we passed this bill in the Senate, we passed $430 billion worth of tax cuts. We had some offsets, user fees, and other things that were extended to make the bill come out at a net of $350 billion, which was consistent with the budget resolution. Now, let me just make a couple other comments. I have heard some of our colleagues say that $350 billion is outlandish, such a large tax cut. It is $350 billion over 10 years when the total revenue to be received by the Federal Government will probably be $25, $26, maybe $27 trillion, so it is really a very small percent, maybe 1.3 percent or thereabouts. Granted, we loaded more of it upfront so it is a greater percentage the first couple of years. We did that because we wanted to have more positive impact on the economy. We want to grow the economy. We want to create jobs. The economy is very soft, some people would say very stagnant. It is not growing to near the potential we want it to be. We have lost a lot of jobs, so we want to do some things, and we believe we can do some things, in the Tax Code that will create an environment that will be a lot more conducive to creating jobs. I have been in the Senate a long time. I have seen us pass tax bills that encouraged growth, and I have seen us pass tax bills that, frankly, discouraged growth. I might touch on those just for a minute. But I remember, in 1997--frankly, the Clinton administration was not in favor of it at the time--I remember negotiating this provision reducing the capital gains rate from 28 percent to 20 percent. President Clinton eventually signed the bill. By doing that, we created a lot of jobs. That created a lot of economic activity. That was a positive thing to do. That generated revenue. That helped our economy. That is just an example. If you go back a little further in history, when Ronald Reagan came into office, in 1981, the maximum tax rate was 70 percent. When he left, 8 years later, it was 28 percent, and we had one of the longest periods of economic growth in our Nation's history and created millions of jobs. Phenomenal. Incidentally, the Government revenues increased substantially over that period of time. Well, what are we doing in the tax bill today that will help this economy of ours grow? There are several provisions in it. I look at this bill, and I am amazed we were able to do as much as we did. I compliment our friends and colleagues in the House. We worked together, and we fashioned a pretty good bill. I will also say, it is not perfect, and it is not exactly what I would have written, but we make compromises to pass legislation in legislative bodies. I think the Senate reported out a good bill. I am proud of the bill we reported out on the floor of the Senate just last week. We have compromised with the House. I will touch on several of these provisions. Both the House and the Senate accelerated the rate reductions we passed in 2001. What does that mean? It means somebody who was paying the maximum rate of 38.5 percent will be paying 35 percent. It just so happens 35 percent is the same rate that General Electric pays, corporations pay. Why should individuals--many of them have their own business--why should they be paying personal rates higher than the largest corporations in America? So that was a positive stop. I have heard some of our colleagues say: Wait a minute, these are tax cuts for the wealthy and the rich, and so on. For the wealthy, the maximum tax rate was 39.6 percent. We passed that in 2001. To date, it has only been reduced 1 percentage point, from 39.6 percent to 38.6 percent. Now, we will finally get it to 35 percent, the same rate as corporations. People who were paying 35 percent will pay 33 percent; people who were paying 30 percent will pay 28 percent; people who were paying 27 percent will pay 25 percent; and a lot of the people who were paying 15 percent, when we passed the bill in 2001, will have a rate reduction to 10 percent. So they got the entire rate reduction in 2001 retroactive. I just mention those facts so people will be aware of them. We put in a provision to allow small business expensing. We raised that from $25,000 to $100,000. I used to own and operate a small business. This will help a lot of small businesses. We had that in the Senate bill. The House had it in their bill. That sunsets after a couple years. Bonus depreciation was not in the Senate bill. It was in the House bill. I compliment the House. That increased the bonus depreciation segment we had in the 2001 tax bill from 30 percent to 50 percent through the end of next year. This will encourage all corporations, large and small, to make more significant investment. When they make significant investment, they will be able to recoup half that investment over a much shorter period of time. We also did something that dealt with dividends and capital gains. The bill that passed the Senate was basically a 100-percent exemption for dividends for 4 years. Some people say: Wait a minute, it was only 50 percent the first year. That was for 2003 that we passed in the Senate. Frankly, we are halfway through 2003, so I am looking at this, and at least from this point on it would have been a total elimination of double taxation on dividends for the remainder of 2003, 2004, 2005, and 2006. I thought that was superior to the House provision that said: Let's tax dividends at 15 percent. What came out of conference was the House provision. Again, we make compromises. The House provision has a lot of merits. It says: Let's tax capital gains and dividends at 15 percent. Well, for capital gains, that are presently taxed at 20 percent, to go to 15 percent is a 25- percent reduction. That is pretty significant. I mentioned earlier in my statement, when we reduced capital gains from 28 percent to 20 percent, we reduced the tax on financial transactions, and we turned over a lot more transactions. That had a very positive impact on the economy. I expect we will have a positive impact on the economy by reducing the rate on capital gains again. And I think there is a lot of merit in saying we should have the tax on dividends be the same as the tax on capital gains. That was the House provision. That is a 15-percent rate. That is maybe a little more than a 50-percent exclusion. Now, if you looked at the chart--I do not have the chart with me today--we tax dividends higher than any other country in the world. If we want to create a climate that is going to be productive for investment, we should not tax the proceeds or profits from those investments higher than anybody else in the world. We consider ourselves the ``free enterprise mecca'' of the world, but yet we tax the distribution of those profits higher than anybody. We are basically tied with Japan for taxing corporate dividends higher than anybody. We tax them higher than Great Britain, we tax them higher than France, and we tax them higher than Germany. It makes no sense. Well, this is going to be a big step toward probably putting us about in the middle range of countries as far as taxation is concerned. It still has double taxation. I still would much prefer the Senate provision. We did not prevail in conference. Again, it's the art of compromise. This is a giant step forward. If you asked me 3 months ago, could you get a 50-percent exclusion, I probably would have said: Let's take it. That is a giant step forward. Let me just give a couple of personal examples on corporate dividends. I think a lot of people have tried to construe this as only benefiting the wealthy, and so on. That is hogwash. That is absolute hogwash. Over half of Americans today have some ownership of stock. Maybe they own it. Maybe they don't own the shares in their name, but they are participants in a retirement plan. Maybe they are in a teachers retirement plan. Maybe they are in a retirement plan for firemen. Maybe they are in a Teamsters retirement plan. Maybe they are in a civil service Federal employees retirement plan. Maybe they have a portion--maybe all, maybe some--of their retirement based in stocks. A lot of those stocks pay dividends. This is going to help the value of their account. This will cause the market to go up. The stock market has been on a significant decline for the last 3 years. Some people want to say: Well, that was President Bush's recession. I hate to remind them, but the stock market collapse or decline--rapid decline--started in March of 2000. The Nasdaq fell by 50 percent between March of 2000 and the end of 2000. So we have seen a precipitous decline in the stock market. I believe the proposal we have before us--certainly the one that passed the Senate, and I also believe the one that we will be passing tomorrow--will help the stock market. It will be positive because we are not going to tax the proceeds or distributions from gains in an investment so high. We are basically going to cut the tax rate on those investments in half. That is a positive, giant step forward. So I again compliment our colleagues. I think we are doing something that will encourage investment, not discourage it. Let me give you another example. I used to run a corporation. A corporation makes money. It wants to distribute some of the proceeds or profits of that money to their stockholders. In doing so, let's just say the figure is $100,000. If they do so today, they have to pay corporate tax on it. That is $35,000. Then they have $65,000 left to give to their stockholders. They give the $65,000 to the stockholders and--guess what--they are taxed today, and they might be taxed at 38 percent, they might be taxed at 30 percent. Regardless, you add the two rates together and they are taxed at about 65 percent, in some cases 70 percent, in some cases more than 70 percent. So out of that $100,000, the Government is getting about $60,000, and the owner of the corporation is getting about $30,000. That is not a good deal. That is not a prudent investment. As a matter of fact, as a result of that, anybody who is managing a corporation says: wait a minute, let's not give money to the owners through dividends. Let's do it in the form of bonuses or through other means. And you come up with a lot of schemes--some are very legitimate; some are not so legitimate--to avoid this enormous Government take on the proceeds of distribution of gains from a corporation. They should be taxed once. Once is enough. Thirty-five percent is enough. Again, our provision, which will hopefully pass tomorrow, is a giant step in the right direction. This provision cuts capital gains from 20 percent to 15 percent and, I might mention, from 8 percent to 5 percent for lower income taxpayers. Again, this is a 25-percent reduction, and it eliminates the long-term/short-term capital gains. If you want income tax in capital gains simplification, we do it. Right now you have long-term and short term capital gains. Anybody who has an investment in anything, they have to keep track: How long did you own this? Does it qualify for a 20-percent or 18-percent rate? We are saying we will not do that. The rate for capital gains is 15 percent, and it has to be the same rate on dividends. There is another advantage to this. If somebody who has a portfolio invests today, the present Tax Code says, let's make a lot of investments in growth stocks because they pay capital gains, and the tax rate on capital gains is 20 or 18 percent. That is about half of the present rate on dividends, on ordinary income tax. That is the present law. A lot of people, because of the Tax Code, were encouraged to go to more growth-oriented stocks, i.e., stocks that don't pay dividends, to make their investments. Many of those stocks are a lot more volatile, a lot riskier, a lot more subject to variations in prices. Again, having a policy that at least taxes dividend distribution and capital gains on an equal basis will take the bias out that presently exists for growth stocks as compared to dividends or more oriented stocks that pay dividends. That is good. That will change corporate behavior, and that is good. So when you add all these things together, we have done some things for families. Somebody says, this is just going to benefit corporations and small businesses. That is not correct. We have done something for families. Individuals and married couples who have kids are going to get a $1,000-per-child tax credit. Present law is $600. That is a $400 increase. If you have four kids, that is an increase of $1,600. I have four children. My kids are a little old so they don't qualify, but this will help families all across America. That is $1,000 per child that they don't have to pay in taxes. Frankly, most families need that extra money to raise their kids. So it is family friendly. We did something on marriage penalty. We doubled, basically, the 15- percent bracket for couples. Let me give an example. It is kind of wonkish. People move from a 15-percent bracket in present law to a 27- percent bracket. I think now it is $28,000. So if they have taxable income above $28,000, they move from a 15-percent bracket to a 27- percent bracket. That bracket is almost twice as high. So what is the bracket for couples? If you look at couples, under our provision we say we should double the individual bracket for couples. So if the break line of going from 15 percent to 27 percent under current law is $28,000, we say it should be $56,000 for a couple. Right now it is 40- some thousand. The difference of that is about $1,200. Let me make sure people understand that. If you have a married couple who has a combined taxable income of $56,000, their savings under this provision is $1,200. If they have two kids, that is an additional savings of $800. That is over $2,000 that a family of four with income of $56,000 will save. That is significant. That is family friendly. That eliminates the marriage penalty for those couples. Again, we have some positive measures in this bill, positive for families, positive for companies, positive to grow the economy, incentives for people to hire, for people, frankly, to make investments because they can recoup them earlier. Instead of amortizing over 10 years, they might be able to amortize them immediately or maybe half in the first year. Those are significant, positive changes. We will eliminate at least partially this very high rate of double taxation in current law for corporate distribution. Both the House and the Senate have done some good work. I compliment Senator Grassley for his leadership. It has not been easy. It has not been easy through the budget or tax process. When we marked up this tax bill last week, we had, I believe, 33 or 34 amendments. I believe the majority of those amendments were decided by one vote. Senator Grassley is to be complimented for his leadership. This tax bill, unlike many, is 43 pages. We have seen tax bills before that are hundreds of pages. So this is simple. It is clean. It does not have a lot of Members' add-ons that touch on one page and deal with rewriting the Tax Code. This is simplified. We make it much simpler on capital gains. We will tax capital gains and dividends at the same rate. It is simplified because we will accelerate the rate cuts already in the tax law so somebody won't defer income from one year to the next year so there will be a lower tax rate. It is simplified because we will allow small business to be able to expense items in some cases 100 percent of the cost of the item up to $100,000, so they don't have to amortize it over years. There are a lot of positive things in here that will help the economy, help American families, and create a much better environment both for investment and creating jobs. I thank my colleagues, particularly Senator Grassley and Senator Miller, for their support and their hard work. The American taxpayer and the economy will be a lot better off by passing this legislation. I yield the floor.

Mr. NICKLES. I suggest the absence of a quorum.

Mr. NICKLES

Mr. NICKLES. Mr. President, the FY2004 budget resolution adopted last month includes a provision to uncover waste, fraud and abuse in Federal Government spending. Today marks the beginning of a transparent and deliberative process that will be undertaken by Committees in the House and Senate to control Federal spending. Specifically, the budget resolution requires the Chairman of the Committee on the Budget in both the House and Senate to place in the Congressional Record specified levels of savings for each authorizing committee. Chairman Nussle and I have developed a joint set of targets that requests each authorizing committee to report back with recommended savings proposals amounting to 1 percent of the committee's total mandatory spending. I will work with Senate committees to ensure that the savings target meaningfully represents the opportunities to find improvements in the programs under each committee's jurisdiction. Pursuant to section 301(b) of H. Con. Res. 95, I submit the following specified levels of savings for Senate Committees. Given these savings targets, the budget resolution further requires committees to submit, by September 2, 2003, to the Budget Committee their findings that identify changes in law within their jurisdiction that would produce the specified savings. The reports submitted by committees will guide us in the preparation of future budget resolutions and will help us all improve program oversight. It is my hope that the committees will enthusiastically join Chairman Nussle and me in this effort to root out waste, fraud and abuse. As trustees of taxpayer dollars, Members of Congress must insist that limited resources not be squandered. Federal spending has been growing at unsustainable levels. Congress cannot become lax in its duty to perform the necessary oversight on Federal spending. Often we find that Federal programs--ignored over time--become susceptible to waste, fraud or abuse. For example, according to a General Accounting Office report released in January of this year, Medicaid has been added for the first time to the GAO's high-risk list, ``owing to the program's size, growth, diversity, and fiscal management weaknesses.'' Limited oversight has afforded States and health care providers the opportunity to increase Federal funding inappropriately. States are able to take advantage of funding schemes which supplant State Medicaid dollars with Federal Medicaid dollars by overpaying State-owned facilities and requiring the local government to transfer the excess back to the State. These dollars are then siphoned away from Medicaid patients and often are used for other purposes. Without proper oversight this and other program abuses can persist for years. Other recent examples of abuse include a finding by the Inspector General of the Department of Education that nearly 23 percent of student loan recipients whose loans were discharged due to disability claims were gainfully employed. Additionally, the Office of Management and Budget has estimated that more than $8 billion in erroneous earned income tax payments are made each year. These situations are unacceptable. The work that the Senate and House will undertake will result in reforms in these and other instances of misspent Federal resources. Chairman Nussle and I have put in place a project specifically designed to draw upon the knowledge and experience of Senate experts in these programs. The savings resulting from this effort will not be arbitrary; they will be developed through sound and thoughtful considerations by those who know the programs best. I look forward to working with all the committee chairmen who will be reporting their findings and am committed to making this a success. I ask unanimous consent that the above-mentioned spending levels be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, I ask unanimous consent to be added as a cosponsor.

Mr. NICKLES

Mr. NICKLES. I suggest the absence of a quorum.

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

Mr. NICKLES. I send an amendment to the desk and ask for its immediate consideration.

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

Mr. NICKLES. I ask unanimous consent to add Senator Domenici and Senator Allard as original cosponsors.

Mr. NICKLES. I ask for the yeas and nays.

Mr. NICKLES. The amendment I sent to the desk on behalf of myself, Senator Miller from Georgia, Senator Kyl, Senator Lott, Senator Frist, and others, would do several things. It would make this dividend package and make the growth package a lot more robust. It would accomplish the President's objective of eliminating double taxation of dividends. We tax dividends higher than any other country in the world. We are tied with Japan. We would eliminate double taxing. We would have 50-percent exclusion on dividend income in 2003, and 100 percent in 2004, 2005, and 2006. This would have a very significant, positive impact on the stock market, on individuals' 401(k)'s, on people who have teacher retirement accounts, and others. It would help them dramatically. Some estimate 5 percent, some say 10 percent, some say 20 percent, some say more. I encourage my colleagues to vote for it. We also would adopt the House provision dealing with expensing. This is a much more accelerated and more upfront accelerated expensing provision than what we had in the Senate bill and certainly over present law. Current law is $25,000. This goes to $100,000 of expensing and would last for 5 years. The Senate bill we have before the Senate has $75,000 and goes over 10 years. This encourages a lot of companies, and bigger companies, companies that have an annual investment of $400,000, would get to be able to deduct in 1 year $100,000. It is more robust in the expensing provision and more robust in the dividend provision. It would encourage investment; it would encourage jobs; it would encourage growth. I encourage our colleagues to vote in favor of this amendment. I reserve the remainder of my time.

Mr. NICKLES. Mr. President, I urge our colleagues to vote in favor of this amendment. It is much more robust than in the underlying bill, and it is what the President wants. I think it will grow the economy and create jobs. I urge my colleagues to vote in favor of the amendment.

Mr. NICKLES

Mr. NICKLES. I thank the distinguished Senators from Maine and Nebraska for raising this issue again. They have carried the torch for the States throughout the debates on the budget and an economic growth package. I am pleased to provide the assurances that my colleagues seek. The intent behind my amendment is not to add to the fiscal plight of States, and I will do all I can to ensure that any dividends language that emerges from conference does not cause States to lose tax revenues.

Mr. NICKLES. Mr. President, pursuant to section 313(c) of the Congressional Budget Act of 1974, I submit for the Record a list of material in S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003 reported by the Finance Committee on May 13, 2003, considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313. The inclusion or exclusion of material on the following list does not constitute a determination of extraneousness by the Presiding Officer of the Senate. To the best of my knowledge, S. 1054, the Jobs and Growth Tax Relief Reconciliation Act of 2003, contains no material considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313 of the Congressional Budget Act of 1974.

Mr. NICKLES

Mr. NICKLES. Mr. President, I thank my friend and colleague, the manager of the bill, chairman of the Finance Committee. I want to make a few comments concerning unemployment compensation. It is my understanding that the chairman said he would not object to and he is trying to facilitate a clean extension of the current unemployment compensation program. That is what the Senator from New York, Senator Clinton, and I did twice on this floor. We did it last December and early this year. The first piece of legislation we passed this year was the clean extension of the unemployment compensation program. That is a 13-week Federal program. Senator Kennedy is being consistent. He is trying to make a 13-week program into a 26-week program. That costs $12.7 billion. A clean extension costs $5.6 billion. We will agree with a clean extension. We will not agree with doubling the program. Keep in mind this is a 13-week program. Current law is a 13-week Federal program on top of up to 26 weeks of State benefits. That is a total of up to 39 weeks. That is a total of 9 months. If we adopted Senator Kennedy's amendment, that would be a 26-week State program, and a 26-week Federal program, the second part of it paid 100 percent by the Federal Government. That is a year. In addition to that, there are additional weeks for high unemployment States. This is not going to pass. It was tried several times on the floor of the Senate last year and it never passed. It is not going to pass this year. We are not going to double the program. We will be happy to work with our colleagues to extend the current law. We will not double or triple this program. I appreciate the work of the chairman of the Finance Committee and other Members who want to truly give assistance to people who are unemployed and who need temporary assistance. But we don't want to turn it into a year-long program. If we did that, frankly, the trust fund would be running out of money if another extension was passed. That would be very foolhardy. I also tell my colleagues that a budget point of order lies against Senator Kennedy's amendment. A germaneness point of order lies against Senator Kennedy's amendment. We should be trying to work to create jobs. That is really the essence of what the President's proposal is-- and the chairman of the Finance Committee--to help create jobs and not just write checks for the unemployed but create an environment that will be more conducive towards investment, more conducive to encourage people to make investments to create jobs. That is what we are trying to do. We do that several different ways. One is to reduce tax rates. Somebody says that is a tax cut for the wealthy. I disagree. By the time we are finished, the maximum rate is 35 percent. I believe that is still more than a third--still a lot more than 31 percent--which was the maximum rate when President Clinton was elected. In 2001 they cut taxes for the wealthy and reduced the maximum rate from 39.6 to 38.6, 1 percentage point. President Clinton raised it, and many in this Congress raised it from 31 percent to 39 in 1 year retroactive. By the time we are done, the rate is going to be 35 percent, which is still almost 20 percent higher than it was when President Clinton was elected. I just want to make a few additional points. Also in the chairman's mark we have expensing for small business. They will be able to expense items up to $75,000. We are looking to maybe even accelerate that similar to a provision in the House. That will create an incentive for small business so people can write off that investment in the year that investment is made instead of amortizing over years. That will create jobs because more people will make that investment. We are also talking about eliminating this very unfair double taxation on dividends. Why should we tax distribution of corporate profits at the second highest rate in the world? That makes no sense whatsoever. The President has proposed that we eliminate double taxation. President Carter said in the past we should eliminate the double taxation of corporate dividends. I hope we will be able to do that, and I expect we will be presenting an amendment to enhance or strengthen the dividend proposal that is before us today which would actually eliminate the double taxation of dividends. We tax dividends now at the second highest rate in the world, higher than France, Belgium, and Italy. We don't need to do that. We can fix that in this bill today. By doing so, we will be encouraging a much better environment for investment, and encourage, I think, a much greater prospect for the stock market. I think the stock market would improve substantially and as a result, therefore, there would be more equity, more equity investments, more private sector jobs. That ultimately should be our goal. I urge our colleagues not to be mislead by Senator Kennedy's amendment. Let's pass a clean extension of the unemployment compensation program. We can do that by unanimous consent. We passed the previous one by unanimous consent, or we can have a recorded vote. We can do that outside the reconciliation bill. We can do that and have it on the President's desk, and extend the present law. I yield the floor.

Mr. NICKLES. I thank my friend and colleague from Iowa for his leadership and chairmanship of the committee. I am going to briefly describe an amendment that Senator Kyl and myself, Senator Grassley, Senator Lott, and several others will be offering tomorrow to enhance the dividend portion of this bill. The dividend portion that we now have in the bill is for 10 years; $500 per person would be excluded from taxation, plus for the first 5 years, an additional 10 percent; in the second 5 years, an additional 20 percent on top of 500. I stated publicly that I think that leaves a lot to be desired. So the amendment we will be offering tomorrow will enhance that, improve that. It would say for all taxpayers, for dividend exclusion, our effort is to eliminate double taxation of dividends. Unfortunately, we find ourselves presently where we tax dividends more than almost any other country in the world. Now we are, as a free enterprise, as capitalistic as anybody in the world, but we tax the distribution of profits, i.e., dividends from corporations, higher than almost anybody, i.e., dividends, higher than Great Britain, France, and Italy. Japan is basically tied with us. We tax dividends at 35 percent of the corporate level and whatever the individual taxpayer's rate is. So if the taxpayer is at 38.6, it is that amount plus 35. So their tax is 73 percent; almost three-fourths of the distribution of profits is taxed. That makes no sense. Many people, including President Jimmy Carter, said that is wrong and it needs to be changed. I believe several people--Democrats and Republicans--have said that is unfair and is too high of a tax and it needs to be fixed. Now we have a President who said we should fix it. There are different ways of doing it. He is proposing that we exclude it from income for individuals. Unfortunately, the bill that came out of the Finance Committee didn't do that. It said let's exclude the first $500 for individuals plus 10 percent, then 20 percent. I think we can do a lot more. I think we can do a lot better. If we do a lot better, we will have a much more positive impact on the stock market and on the economy. When I say the stock market, certainly I believe what we are proposing will have a significant increase on the stock market--maybe 10, 15, 20 percent. That is positive and real. Why would that be? If somebody is investing in stock under present law and they own a company and they get a distribution and it is taxed on top of being taxed at the corporate level, they may realize it is not a very good investment. A lot of people buy growth stocks that pay very little, if any, in dividends because they don't want to go through this scenario. They don't want to pay capital gains. The House at least said let's tax capital gains and stock dividends equally. They reported out a bill and said let's tax capital gains and stocks at 15 percent; and for some lower incomes, maybe lower than that, at 5 percent. That is a significant step in the right direction. The President said let's eliminate double taxation of dividends. The proposal we are going to be offering tomorrow says let's do that. In year 2003, let's exclude 50 percent. In year 2004, 2005, and 2006-- for the next 3 years--let's make it 100 percent. We can do that. Then we sunset it. This is sunset after 4 years. If I am wrong and the stock market doesn't react positively--if it is not a positive thing, we will know it after 4 years. It makes sense to try it. The President has a proposal and many economists have said you should eliminate double taxation of dividends, and this is a way of doing it. We can do it. We will have a provision, also as part of this amendment, to adopt the House provision dealing with expensing items. You might say, what does that mean? The present law is that a small business that invests basically $200,000 or less per year can expense $25,000. The Finance Committee said let's raise that to $75,000 and allow people with a much greater income to qualify as a small business. They said let's triple that, up to $75,000, and we will do that for 10 years. The House said let's try this, make it $100,000, and do it for 5 years. In other words, if a business wanted to write off 100 percent of their investments, up to $100,000, they could do so if it is done in the first 5 years. It doesn't cost much over 10 years because it sunsets after 5 years. Somebody might say we did that when we did the bonus depreciation and it generated positive economic investment. This is another way of encouraging small business, and we increase the level up to $400,000 for this 5-year period. That is what the House has done. The House passed it. I think there is wisdom there. Every once in a while, we can say they did something right and we can emulate it. I think they have a good provision. I used to be a small businessperson. I owned a janitorial service, and I used to have a manufacturing company. I believe these provisions will create jobs. So we are proposing in our amendment that we adopt the House expensing provision, the so-called section 179. And they also have created a new dividend proposal that will have a 50-percent exclusion in 2003 and 100 percent in the years 2004, 2005, and 2006. I thank my friend and colleague, Senator Kyl, and several other members, Democrats and Republicans, who have had significant input. I believe it will help make a significant economic impact. When you step back and say, what are we doing in the bill that will help the economy, shake it up, improve it, and create jobs, I believe the two things I mentioned, in addition to the acceleration of rates, are the three things that will positively create jobs, have a positive impact on the stock market, on wealth, investment, and will encourage people to make investments, get money out of banks or CDs that are not paying any interest to speak of and put it to work, help it create jobs. I believe all three of these provisions will do so. I am speaking tonight before it is introduced because it looks as if all debate should be transpired on the amendments tonight because we are going to have significant votes tomorrow. I thank my colleague again, the chairman of the committee, for his work and cooperation, for his leadership on this bill, and for his support in helping us to try to come up with a more robust package that would create more jobs in the process. That is what we are trying to do--have a jobs creation bill. I think by adopting this amendment tomorrow we will help improve it dramatically.

Mr. NICKLES

Mr. NICKLES. Mr. President, section 310(c)(2) of the Congressional Budget Act, as amended, provides the chairman of the Senate Budget Committee with authority to revise committee allocations, functional levels, and budgetary aggregates for a reconciliation bill which fulfills an instruction with respect to both outlays and revenues. The chairman's authority under 310(c) may be exercised if the following conditions have been satisfied: One, the reconciled committee reports a bill which changes the mix of the instructed revenue and outlay changes by not more than 20 percent of the sum of the components of the instruction, and, Two, the reconciled committee still complies with the overall reconciliation instruction. I find that the Jobs and Growth Tax Relief Reconciliation Act of 2003, as reported by the Senate Finance Committee on May 13, 2003, satisfies the two conditions above and, in addition, satisfies the condition imposed by section 202 of H. Con. Res. 95, which limits the cost of a reconciliation bill initially considered by the Senate to no more than $350 billion over the 2003-2013 period. Pursuant to my authority under section 310(c), I hereby submit revisions to H. Con. Res. 95, the 2004 Budget Resolution. The attached tables show the revised committee allocations and budgetary aggregates. I ask unanimous consent they be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, section 421 of H. Con. Res. 95, the 2004 Budget Resolution, requires the Chairman of the Senate Budget Committee to make appropriate adjustments in the appropriate allocations and aggregates to reflect the difference between Public Law 108-11--the Emergency Wartime Supplemental Appropriations Act, 2003--and the corresponding levels assumed in the resolution. As enacted, the Emergency Wartime Supplemental Appropriations Act of 2003 contains changes in new budget authority, outlays and revenues that differ from those assumed in the budget resolution. For fiscal year 2003, the supplemental provides $4.432 billion in budget authority, $3.745 billion in outlays, and $2 million in revenues above the amounts assumed in H. Con. Res. 95. The supplemental also provides $215 million in additional new budget authority and $332 million in additional outlays for fiscal year 2004; over the period of fiscal years 2004 through 2013, it provides an additional $888 million in budget authority and $1.406 billion in outlays over the amounts assumed in the resolution. I am therefore inserting a set of tables into the Record which show the revised allocations and aggregates, reflecting the adjustments I am making pursuant to section 421. These revised allocations and aggregates are the appropriate levels to be used for enforcement of the 2004 Budget Resolution. I ask unanimous consent to print the above- referenced tables in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce legislation to simplify the taxation of life insurance companies. I am joined by my colleague from North Dakota, Mr. Conrad, and my colleague from Kentucky, Mr. Bunning. Our legislation repeals Sections 809 and Section 815 of the Internal Revenue Code. These provisions are no longer relevant given the significant changes in the life insurance industry over the past 25 years, and repeal will simplify the tax code. Section 809 was enacted in 1984 as a part of major revisions to the laws governing life insurance companies. It was intended to ensure that mutual life insurance companies do not have a competitive tax advantage over stock life insurance companies. At that time, mutual life insurance companies dominated the market. Now, however, mutuals account for only 10 percent of the industry, and there are very few large mutuals in existence. Section 809 reduces the amount of policyholder dividends a mutual insurance company can deduct according to a complex formula based on the previous 3 years' earnings of stock companies. Section 809 is burdensome and raises very little revenue. Because its original purpose is no longer valid, our bill would repeal the provision permanently. In last year's economic stimulus bill, Congress temporarily suspended Section 809. In addition, President Bush included in his fiscal year 2003 budget submission a proposal to repeal Section 809 permanently. Section 815 has an even longer history, dating back to 1959. Tax changes in 1959 created an accounting mechanism called a ``policyholder surplus account'' for stock life insurance companies. Stock companies were permitted to defer tax on one-half of their underwriting income as long as that income was not distributed to shareholders. This income was accounted for through the policyholder surplus account, PSA. In 1984, Congress eliminated deferral of tax on underwriting income, but did not address the issue of PSAs. The amounts in these accounts, which are just an accounting entry, and do not contain real money, remain subject to tax if certain triggering events occur. Because virtually no company is willing to ``trigger'' the tax on the account, Section 815 also raises little or no revenue. It does, however, directly inhibit the business decisions of stock companies with PSAs. Congress has worked hard over the last few years to modernize laws governing the financial services industry to encourage growth and enhance competitiveness. Elimination of outdated tax provisions such as Sections 809 and 815 will complement this effort and provide more rational taxation of life insurance companies. I urge my colleagues to join us in this initiative.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce legislation to simplify the taxation of life insurance companies. I am joined by my colleague from North Dakota, Mr. Conrad, and my colleague from Kentucky, Mr. Bunning. Our legislation repeals Sections 809 and Section 815 of the Internal Revenue Code. These provisions are no longer relevant given the significant changes in the life insurance industry over the past 25 years, and repeal will simplify the tax code. Section 809 was enacted in 1984 as a part of major revisions to the laws governing life insurance companies. It was intended to ensure that mutual life insurance companies do not have a competitive tax advantage over stock life insurance companies. At that time, mutual life insurance companies dominated the market. Now, however, mutuals account for only 10 percent of the industry, and there are very few large mutuals in existence. Section 809 reduces the amount of policyholder dividends a mutual insurance company can deduct according to a complex formula based on the previous 3 years' earnings of stock companies. Section 809 is burdensome and raises very little revenue. Because its original purpose is no longer valid, our bill would repeal the provision permanently. In last year's economic stimulus bill, Congress temporarily suspended Section 809. In addition, President Bush included in his fiscal year 2003 budget submission a proposal to repeal Section 809 permanently. Section 815 has an even longer history, dating back to 1959. Tax changes in 1959 created an accounting mechanism called a ``policyholder surplus account'' for stock life insurance companies. Stock companies were permitted to defer tax on one-half of their underwriting income as long as that income was not distributed to shareholders. This income was accounted for through the policyholder surplus account, PSA. In 1984, Congress eliminated deferral of tax on underwriting income, but did not address the issue of PSAs. The amounts in these accounts, which are just an accounting entry, and do not contain real money, remain subject to tax if certain triggering events occur. Because virtually no company is willing to ``trigger'' the tax on the account, Section 815 also raises little or no revenue. It does, however, directly inhibit the business decisions of stock companies with PSAs. Congress has worked hard over the last few years to modernize laws governing the financial services industry to encourage growth and enhance competitiveness. Elimination of outdated tax provisions such as Sections 809 and 815 will complement this effort and provide more rational taxation of life insurance companies. I urge my colleagues to join us in this initiative.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce legislation to provide that restaurant buildings are depreciated over 15 years instead of the current-law 39 years. My legislation will ensure that the tax laws more accurately reflect the true economic life of restaurant buildings. Under current law, real estate property and any improvements thereto generally must be depreciated over 39 years. However, restaurant buildings undergo excessive wear and tear, and are renovated on average every 6 to 8 years. Requiring restaurant owners to depreciate these renovations over 39 years leads to a mismatch of income and expenses, thereby increasing the tax consequence of making such improvements. The long depreciation period simply makes no economic sense. In recent years, Congress has changed the depreciation schedules for competitors of owner-occupied restaurants. For example, convenience stores are depreciated over 15 years. In addition, leased properties, including leased restaurant space, can take advantage of the temporary bonus depreciation incentives contained in the 2001 economic stimulus bill. I believe that our tax laws should be updated to treat restaurant property in a more rational manner. That is why I am introducing legislation to reduce the depreciable life of restaurant property from 39 years to 15 years. My legislation would ensure that all restaurants, either leased or owner-occupied, are treated equally. It would also ensure a level playing field between restaurants and their competitors. By reducing the time period over which all restaurants are depreciated, my bill will more accurately align a restaurant's income and expenses. According to the National Restaurant Association, enacting this legislation would generate an additional $3.7 billion in cash flow for restaurants over the next 10 years. This is money that could be reinvested and, in turn, generate new jobs. I look forward to working with my colleagues to enact my legislation that will provide more rational tax-treatment of restaurants on a permanent basis. by doing so, we will take an incremental step toward modernizing the tax code's outdated depreciation rules.