Rob Portman

Mr. PORTMAN

Mr. PORTMAN. Reclaiming my time, I do want to take this opportunity to say that I have a bigger concern here which is whether the IRS has the resources available to it today to properly implement the laws that Congress is passing. Let me talk specifically about the resources necessary to implement the historic restructuring reform act that this Congress passed only 2 years ago providing the most sweeping reforms of the IRS in 46 years. My colleagues will recall that the Clinton administration initially opposed this effort but ultimately an overwhelming bipartisan majority of this House on both sides agreed that reform was needed. The RRA, Restructuring and Reform Act, required a number of major reforms, including a taxpayer friendly total reorganization of the entire Internal Revenue Service to improve customer service for every taxpayer. We also directed the IRS to undertake a desperately needed computer modernization effort. Every Member of the House has heard horror stories from their constituents about erroneous computer notices received by constituents; where the left hand does not seem to know what the right hand is doing. The only way to get at this is by investing in improved IRS technology. This House made a commitment to do that. Mr. Chairman, we need to protect our constituents from these very kinds of computer problems. The RRA also took steps to reduce IRS paperwork by moving toward taxpayer-friendly electronic filing, but there is an initial cost to that. We know there is a 22 percent error rate with paper returns, but only a 1 percent error rate with electronic filing. That is why we mandated that the IRS move to 80 percent electronic filing by 2007. We are just beginning to see some improvements in the IRS, just beginning to see some progress. Yet, here, we are not funding the IRS at adequate levels. Earlier this year, the GAO reported that the processing time for tax returns on paper this year was 14 percent faster than last year. Electronic filings increased about 17 percent this year. The IRS assistance lines are being answered at a higher rate, although not nearly at the private sector rate, and it is not nearly adequate. The point is that we are making some progress. There also have been some bumps along the road. Among other things, we desperately needed the IRS oversight board that the administration has dragged its feet on. Although I agree that Commissioner Rossotti is doing a good job at trying to turn the agency around. He cannot do it without adequate resources. We need to continue funding the IRS at an adequate level to ensure that we do not jeopardize the very reforms that again so many Members of this House supported so enthusiastically just 2 years ago. I hope, Mr. Chairman, as we move forward with this legislation that the House and Senate will be able to work together to find the needed funds to provide the taxpayers service improvements that we require in our IRS reform package. Mr. Chairman, I commend the gentleman from Arizona (Chairman Kolbe) for his help with regard to the RRA; he was a big part of it. I commend the gentleman from Maryland (Mr. Hoyer), the ranking member as well, for the difficult job both of them have done now in pulling together this legislation before us today and making sure it fits within the budget caps. I know how committed both of them are to ensuring that the IRS modernization effort works for taxpayers. I would hope that the gentleman from Arizona (Chairman Kolbe) will work with the colleagues in the Senate to attempt to adequately fund the IRS restructuring and reform effort. Again, I would say to the gentleman from Vermont (Mr. Sanders), my friend, this amendment before us, I think, is probably unnecessary, but my bigger concern is whether the IRS has the resources to be able to follow the very requirements that we put in place through the IRS Restructuring and Reform Act.

Mr. PORTMAN. I yield to the gentleman from Maryland.

Mr. PORTMAN. Mr. Chairman, I yield myself such time as I may consume. This is a rather unusual amendment offered by the gentleman from Vermont. It is unusual because by its own terms it says the IRS shall not use the funds appropriated to it under this bill to violate specific provisions of the Internal Revenue Code, ERISA and the Age Discrimination in Employment Act. I hope this is unnecessary. Under current law, the Internal Revenue Service is required to interpret and enforce the law and is prohibited from acting in contravention of the law. It is also unusual in that we are in the appropriation process and this addresses tax policy. I do not see any particular harm in the amendment, I just think it is a little unusual.

Mr. PORTMAN. Mr. Chairman, I do rise in opposition to the amendment.

Mr. PORTMAN. I yield to the gentleman from Maryland.

Mr. PORTMAN

Mr. PORTMAN. Mr. Speaker, I thank my friend, the gentleman from Georgia (Mr. Collins), for yielding me this time; and I appreciate the opportunity to speak on the legislation today. Mr. Speaker, our Tax Code has gotten so complex and so Byzantine, so difficult to figure out, that it rewards and penalizes behavior in very unusual ways. For example, at a time when I think this Congress, I think everyone in this Congress, is concerned about promoting family values, strengthening families, our Tax Code actually penalizes people just because they choose to get married. That is what we are trying to address here today. That is what the debate is all about. The penalty is really a quirk in the tax law. It affects 25 million couples nationally. In my own district I represent in Ohio it affects 62,000 couples. They pay more just because they are married. Nationally, the average is $1,400. Now that may not seem like much by Washington standards; but that $1,400 could go to a 401(k) contribution, an IRA contribution, help for retirement security, help for education. Regardless of what someone might do with it, the principle here is that the Federal Government should not be keeping that $1,400 just because people choose to get married. At a time when our country is suffering high divorce rates, Congress should be doing just the opposite. We should be encouraging marriage, not slapping a penalty on it; and, of course, our tax laws should never be written in a way to discourage people from playing by the rules. That is what this debate is about today. Now, we have heard some discussion about how one might address the marriage penalty. I like the approach we have before us today. I like it for two reasons. One, it is simple. It is very simple because what it does is double the standard deduction. It doubles the 15 percent income tax bracket, and it expands the earned income tax credit. All of these are relatively simple as compared to a more complicated approach one could take to avoid any possibility that somebody who was not now penalized was getting some tax relief. What would one have to do? They would probably have to have the taxpayer make three calculations in terms of their income tax liability. Now, again, my friends on the other side who have expressed concern that some stay-at-home moms may get some tax relief from this, and we can talk about whether or not that is appropriate or not, but I would just ask them to look at how complicated it would be. We already talked about the complexity of our Tax Code. If there was not some spill-over to help some of those folks who may be stay-at-home moms who do not get a tax penalty now. I would also make the obvious point that the Democrat alternative also provides tax relief to some people who do not have a marriage penalty. I would love to hear a response to that. The other reason I like this legislation is because by doubling the 15 percent bracket and expanding EITC, it is going to help, despite what we have heard today and the charts we have seen about the overall so-called Republican tax proposals, and I am not sure what proposals are included or not and I am not sure what analysis it is, but because it doubles the bracket and because it expands the EITC, it will provide relief to millions of low-income and middle-income Americans. So my hope today is that all of us who are opposed to the marriage penalty will come together, will vote for this legislation, send a message down to the White House, get the President to sign it, and provide this year relief to those millions of couples in this country who currently bear the burden of an unfair penalty.

Mr. PORTMAN

Mr. PORTMAN. Mr. Speaker, I demand a recorded vote.

Mr. PORTMAN. Mr. Speaker, I want to thank the gentleman from Texas (Chairman Archer) for his leadership over the years, and all he has done to expand saving options for all Americans, and in particular, his personal commitment to moving this bill to the floor today. Without his help and his support, we would not be here. I would also like to thank my colleague, the gentleman from Maryland (Mr. Cardin) on the other side of the aisle, who has been a true partner over the past 3 years as we have developed this bipartisan legislation before us today. In the face of some very real political pressure from the administration and others, the gentleman from Maryland (Mr. Cardin) has remained committed to doing what he believes is right to help people save for retirement. He deserves great credit for that. I rise in very enthusiastic support of H.R. 1102, the legislation before us today. This is great legislation, because it allows all workers to put more aside in a 401(k) type plan, a traditional pension plan, or in an individual retirement account, an IRA. It makes it easier for employers to offer plans and maintain and establish them, and it makes it easier for workers to roll over their retirement nest egg from job to job. Let us look at the problem that we face today. Seventy million Americans, that is half the American work force, today do not have a pension, either a 401(k) or any kind of a pension plan. The problem, of course, is much worse in American smaller businesses. In fact we are told that only 19 percent of businesses with 25 or fewer employees have any kind of pension at all today. Unbelievably, there has been virtually no growth in pension coverage for the past 2 decades. Retirement savings in general is so low that many experts believe that most older baby-boomers have not put nearly enough away for their retirement. The estimates are that they have put away only 40 percent of what they will need to have a comfortable retirement. Part of the problem has been right here in Congress. Over the past 20 years this Congress has done the wrong thing, not the right thing, with regard to pensions. We have lowered the contribution and the benefit levels. We have made pensions more costly by, yes, increasing the number of rules and regulations and mathematical tests and the burdens and costs of establishing and maintaining a pension plan. What impact did that have? Let me give some specific examples. First, from 1982 to 1994, the limits on defined benefit plans, these are the wonderful traditional guaranteed defined benefit plans, the limits on these plans were repeatedly reduced by Congress from 1982 to 1994 and new restrictions were added, primarily I am told for purpose of generating more Federal revenue. As these cutbacks began to take effect, the number of traditional defined benefit plans insured by PBGC dropped from 114,000 plans in 1987 to only 45,000 plans in 1997. Those are the facts. Let me share another example. Within a year after Congress reduced the compensation limit from $235,000 to $160,000 in 1993, the percentage of companies offering so-called non-qualified plans, these are non-insured plans, focused on higher-paids, went from 20 percent of companies to 67 percent of companies. These non-qualified plans basically ensure that highly-paid executive and managers have retirement coverage, but they do nothing to help lower- and middle-level income employees. That is the record. Yes, in this legislation we do believe strongly that we ought to increase those limits, at least restore them back to where they were 20 years ago. Yes, we believe strongly that we ought to do something to reduce some of the costs and burdens of establishing and maintaining these plans. Over the past two decades, overall pension coverage has remained stagnant. It is time for Congress to now take these steps to reverse the trend. This bill before us today does just that. It is a comprehensive approach. It has been developed over the past 3 years, after careful consultations with small business people, who we want to have offer more of these plans, with labor organizations, with pension law experts in the private sector, in academia, in the administration, at the Treasury Department, at PBGC, at the Department of Labor, and most importantly, with workers themselves and individuals who will be affected by these changes. They have been fully vetted. These proposals have been through the wringer. In fact, most or the great majority of them have now passed this House twice. About 200 Members of this House, just over 200 as of this morning, almost equally divided between Republicans and Democrats, have now cosponsored this bill. More than 85 outside groups, business groups like the Chamber and the NFIB, labor organizations like the Building and Construction Trades Council of the AFL-CIO, have endorsed this legislation. The approach is fiscally responsible. It is also straightforward. First, again, we allow all workers to set aside more for their retirement in 401(k) type plans. We address union multi-employer plans. We made those plans fairer for all working union Members. We raise limits for defined benefit plans and for other pensions, as well as for IRAs, moving from $2,000 to $5,000. Again, what we are really trying to do is at least restore these limits back to where they were in the 1980s. In some cases, we do not even go that far. This $2,000 to $5,000 increase in the IRA limit, incidentally, is right about where it would be had we simply indexed in 1974 the IRA limits. We also allow special catch-up contributions for those workers who are 50 years old or older. This is done, this accelerated contribution, so older workers, especially women who will be returning to the work force, have the opportunity to build up that retirement nest egg more quickly at a time in their lives when they need it the most and frankly can afford to put some money aside. Second, after the contribution increases, we are modernizing pension laws to adapt to what we have learned about the realities of an increasingly mobile work force. So we make defined contribution plans portable so workers can roll over their retirement nest egg between various types of qualified plans, 401(k)s, 403(b)s, and 457 plans for public employees. We require employers to allow workers to become vested in their plans more quickly. Instead of 5 years, we move it down to 3 years. This lets workers get a piece of the action earlier. Finally, yes, we listened to those in the trenches. We paid attention to the surveys out there that are very clear, clearly demonstrating that if we do not reduce the complexities and the burdens in our current very complex, very burdensome pension laws, we are not going to be able to expand pension opportunities for those who work in small businesses, which is where most lower-paid and middle-income workers now find their jobs. That is why we make it easier for employers, particularly small businesses, to establish and maintain plans by reducing the costs and the liabilities, including modernizing outdated laws, streamlining complex rules. Yet, we keep in place the very important protections to ensure fairness in our pension system. My friend, the gentleman from Massachusetts (Mr. Neal) talked a while ago about his concerns about these provisions. I would love to have a debate over these specific provisions. There are many people, including the President's ERISA Advisory Council, that reported to the Department of Labor, that said we should repeal the top-heavy rules that were discussed a moment ago. In fact, there are many on my side of the aisle who would like to do that. We do not do that. The changes we make in the top-heavy rules are minor, but yes, they will help the small businesses to be able to offer and maintain a pension plan. We keep in place the 3 percent contribution limit. We keep in place all the fundamentals of the top- heavy rules. Yet, we do go into them, we roll up our sleeves, as the gentleman from Maryland (Mr. Cardin) and I will hope to have a chance to talk about in more detail, and we do make it easier to offer these plans. We keep the nondiscrimination tests in place. Again some in the business community would like for us to have gone further. We think it is important that every time a pension is offered to a higher-paid worker, it must be offered right down the line to workers of all incomes. That is why we keep the rules in place. We do change them a little. The major change is, we say after you have gone through all the incredibly complicated mathematical computations and tests, then the Department of the Treasury would have the discretion in some cases to look at a plan and say, even though you seem to have failed this extremely complicated mathematical test, when we look at your plan, if it retains fairness to workers in that business, we will let you continue with this plan. Is that too much to ask, to give a little discretion, so that it is not all based on computations and mechanical tests? I have to tell the Members, I think this is the least we can do to try to get at what we know is the problem, which is the cost, the burdens, and the liabilities that small businesses face today if they want to offer pension plans. Unless we want to have a mandate and tell every business in America, you have to offer a plan, and I do not think anybody is advocating that here today, we have to deal with the reality. I have to tell the Members, I am surprised that the Clinton administration continues, despite this broad bipartisan support, despite a 3-year vetting process, despite going through a process of consultation with all the outside groups, including the Department of the Treasury, that they continue to oppose this legislation. It is amazing to me. They have brought out the tired class warfare argument again over the last 24 hours, saying this is somehow tax cuts for the rich. That is wrong. Americans who are struggling to try to meet their retirement needs do not think they are rich when they make less than $62,000 a year, which is the cap on IRAs, and they are told they can now go from $2,000 to $5,000 a year. It is hard to build up an adequate retirement putting $2,000 aside, less than 200 bucks a month. That is hard. Yes, we think it ought to be indexed to inflation, which means it goes up above $5,000, letting more people save. I have got to remind people here who benefits the most from this. Seventy-seven percent of the American workers who participate in pension plans today make less than $50,000 a year. So much for tax cuts for the rich. These are the people who need it most. We ought to be getting out of the way and helping them save for their retirement, not creating more obstacles for them to be able to have a comfortable retirement. Again, I want to thank Members on both sides of the aisle who contributed so much over the years. I see the gentleman from North Dakota (Mr. Pomeroy) here who has been a leader on the portability provisions which are so commonsensical. I see the gentleman from Maryland (Mr. Cardin), who we talked about earlier who is here. The gentleman from California (Mr. Gallegly) and the gentleman from Kansas (Mr. Moore) who have taken the lead on the IRA contributions. I see the gentleman from California (Mr. Gallegly) is here, and I hope he will speak in a minute about his wonderful legislation that is incorporated as part of this legislation as well. The gentlewoman from New Mexico (Mrs. Wilson) and the gentleman from Maryland (Mr. Wynn), both of whom I hope will talk later today. There are so many, many others who I do not have time to mention, but who have been part of this process and have contributed to it in valuable ways. I want to end by urging my colleagues to join us in this crusade, in this movement to try to expand retirement savings for all Americans. This should be bipartisan today. It should be a very strong message. I hope we can get well over a veto-proof majority of the House, Republicans and Democrats together, because if we do not, we probably will not be able to send a strong enough message to the Senate, to the White House and the administration that we are committed to getting this done, not next year, not in some new Congress, but getting it done this year for people who need it badly. We need to provide this retirement security. We need to provide the peace of mind that Americans deserve in their retirement years. I hope we will send that strong message today with a strong bipartisan vote. Mr. Speaker, I reserve the balance of my time.

Mr. PORTMAN. Mr. Speaker, I withdraw my reservation of objection. I think we ought to agree with the gentleman and give him unanimous consent.

Mr. PORTMAN. Mr. Speaker, I yield 3 minutes to my friend, the gentleman from California (Mr. Gallegly), who has been a leader on IRS expansion. In particular, he has added valuable contributions to this legislation on increasing the limit and indexing IRA contributions. (Mr. GALLEGLY asked and was given permission to revise and extend his remarks.)

Mr. PORTMAN. Mr. Speaker, I yield 3 minutes to my colleague, the gentlewoman from New York (Mrs. Kelly), for the purpose of a colloquy.

Mr. PORTMAN. Mr. Speaker, I thank the gentlewoman from New York for yielding, and I tell her that absolutely, her interpretation is correct. Indeed, the provisions that she mentioned are in the bill with the intent that we will be able to expand pension coverage and protections for American workers who are in defined benefit plans.

Mr. PORTMAN. Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. Weller), my colleague on the Committee on Ways and Means, who played a big role in putting together not only the multiemployer provisions but also the catch-up provisions on the 401(k) and IRA side. (Mr. WELLER asked and was given permission to revise and extend his remarks.)

Mr. PORTMAN. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to thank my friend from Minnesota (Mr. Gutknecht) for his help on the cash balance issue. As the gentleman knows, in this legislation we expand disclosure and expand information provided so we improve the cash balance situation. I appreciate his help in getting us to that point and tell the gentleman that he is welcome to come to this side to get time any time he wants. Mr. Speaker, I would also say at the end here that we need to be clear, that this legislation is not only bipartisan, it has not only been fully vetted over a 3-year period, but it does strike the right balance. It is fair. Most of those lower- and middle-income workers we are all concerned about work in these small businesses that do not offer any kind of pension coverage today, that is precisely where this bill is targeted; that is what we are trying to do. We are trying to reverse what this Congress has done over the past couple of decades in terms of restricting pension access to all workers. Mr. Speaker, I would encourage all of my colleagues on the both sides of the aisle to support the legislation before us.

Mr. PORTMAN. Mr. Speaker, I yield 2 minutes to the gentleman from New Hampshire (Mr. Bass), my colleague who has been very helpful on the small business provisions of this legislation.

Mr. PORTMAN. Mr. Speaker, I understand we have about 3 minutes remaining.

Mr. PORTMAN. Mr. Speaker, who has the right to close?

Mr. PORTMAN. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from New York (Mr. Lazio), my colleague who has been a leader on this legislation and in expanding retirement security.

Mr. PORTMAN. Mr. Speaker, I yield back the balance of my time. Amendment In the Nature of a Substitute Offered by Mr. Neal of Massachusetts

Mr. PORTMAN. Otherwise, we would be gutting the catch-up provisions in the Democrat substitute, which none of us want to do.

Mr. PORTMAN. Mr. Speaker, reserving the right to object, I would just like to get a quick explanation of the legislation.

Mr. PORTMAN. I yield to the gentleman from Massachusetts.

Mr. PORTMAN. Is this on the catch-up provisions?

Mr. PORTMAN. I think this House ought to give unanimous consent to this. This essentially, as I understand it, would move the Democrat substitute into a similar position of where the underlying legislation is with regard to catch-ups. Is that correct?

Mr. PORTMAN. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Pennsylvania (Mr. English). The gentleman from Pennsylvania (Mr. English) has been a leader on the multiemployer plan provisions in this bill, which help section 415.