David Pryor

Mr. PRYOR

Mr. PRYOR. Well, Mr. President, I am not controlling time.

Mr. PRYOR. Mr. President, I would like to ask the Senator from North Dakota if he would allow me to, through the Chair, address a question to my good friend from North Carolina and if he would yield to me for that purpose.

Mr. PRYOR

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. PRYOR. Madam President, I ask unanimous consent I may proceed as in morning business. I ask unanimous consent that the time that I use not be charged against either side managing the bill that is now the pending business of the Senate.

Mr. PRYOR. Mr. President, I thank once again the distinguished manager of the bill and my colleague from Rhode Island, who allowed me to go before him. I thank them.

Mr. PRYOR. Mr. President, I suggest the absence of a quorum.

Mr. PRYOR

Mr. PRYOR. Madam President, on December 27, 1994, while in Arkansas over the last Christmas holiday, I announced one of the most important legislative initiatives for the 104th Congress. I call it, Bringing Opportunity to Our Small Businesses and Taxpayers--or BOOST. BOOST is a five-point initiative that addresses problems faced by everyday individual taxpayers, small businesses, and family farms. Madam President, BOOST delivers a much-needed dose of fairness to small taxpayers, and it provides a clear path toward capitalizing on two of our country's greatest assets--small business and the family farm. Over these past 9 months, I have worked with my colleagues on both sides of the aisle to introduce the five bills which make up the BOOST package. Today, I am introducing these five important bills as a combined package. I believe this is important because it represents a collective vision for helping small business and the average individual taxpayer--one which we can do quickly with bipartisan support while causing very little drain, if any, or the Federal budget. We can act quickly because the Finance Committee will meet this week to consider tax legislation as part of the budget reconciliation package which will soon come to the Senate floor. Madam President, the issues raised by the BOOST package are not politically charged, in fact, they are all issues that can pull us together. The five bills I am referring to are as follows: First, the Taxpayer Bill of Rights II, S. 258, introduced by Senator Grassley and myself; Second, a bill to make the 100 percent health care deduction for the self-employed, S. 262, introduced by Senator Grassley, Senator Roth, and myself; Third, the S Corporation Reform Act of 1995, S. 758, introduced by Senator Hatch and myself; Fourth, the Pension Simplification Act of 1995, S. 1006, introduced by Senator Hatch and myself; and [[Page S 14884]] Fifth, the American Family-Owned Business Act of 1995, S. 1086, introduced by Senator Dole and myself. Madam President, each of these bills enjoys a broad base of support from small business and agriculture organizations; each has a balanced cosponsor list of both Republican and Democratic Senators; and each has been introduced in the House of Representatives with similar strong bipartisan support. The bills have three primary goals. The first is to create capital formation opportunities for American small business owners and their employees. The resulting payoff will be more jobs created in a sector that already creates over one-half of all new jobs in our country. The second is to simplify the rules that small businesses must comply with in dealing with the Internal Revenue Service, resulting in reduced cost to small business whose resources may be better spent on business expansion and their employees' retirement savings. And third, a very important goal of the BOOST package is to safeguard the rights of smaller taxpayers in their dealings with the IRS. The goal: to inspire greater taxpayer confidence in our tax system by making it more fair and more accountable. Of course, these are all goals that every one of us can support in principle. But it is important to point out that BOOST is more than just a set of worthy goals. It is an actual nuts and bolts proposal which has attracted strong and broad bipartisan support. And even more than that, it carries only a modest revenue cost in times when it is very difficult to act in light of our Federal budget deficit. Madam President, the enactment of BOOST will send a message that Congress can work together to achieve practical solutions to the very real problems faced by American small business and the individual American taxpayer. I hope we can enact this legislation very soon and send this message. Madam President, I do want to comment on each of the five-points of the BOOST package. taxpayer bill of rights ii On January 23 of this year, Senator Grassley and I came to the Senate floor and introduced the Taxpayer Bill of Rights II, along with 20 cosponsors--12 Democrats and 8 Republicans. The Taxpayer Bill of Rights II builds on the foundation laid by the original Taxpayer Bill of Rights passed in 1988 and is the next natural step in requiring the IRS achieve higher standards of accuracy, timeliness and fair play in providing taxpayer service. The Taxpayer Bill of Rights II achieves these new standards through 27 provisions, including: First, expanding the authority of the Taxpayer Advocate to prevent hardships on taxpayers. Second, requiring the IRS to abate interest when it has made an unreasonable error or delay, and enable the courts the power to review the interest abatement determination. Third, strengthen the code so a taxpayer can recover out-of-pocket costs incurred in a case in which the IRS position was not substantially justified. Finally, prohibit the IRS from issuing retroactive proposed regulations. Madam President, the Taxpayer Bill of Rights II contains many more commonsense provisions designed to safeguard the rights of taxpayers and instill some confidence into our system of taxation. Madam President, I would like to point out that the Taxpayer Bill of Rights II was passed twice in 1992 but was vetoed because it was included as part of two large tax bills with which President Bush did not agree. I believe the time is now to enact this legislation, and I am committed to work along with my friend Senator Grassley to push the Taxpayer Bill of Rights II into law. 100 Percent Deduction for Self-Employed The next important piece of the BOOST package is a bill, introduced by Senator Grassley, Senator Roth, and myself to make the health insurance premiums for the self-employed 100 percent deductible. Earlier this year, the Congress passed, and the President signed into law, H.R. 831 which restored the 25 percent care deduction in 1994, increased the deduction to 30 percent for 1995, and permanently extended the 30 percent deduction for all years in the future. This was an important and positive step. The fact that the Senate could move such a tax bill without amendment underscored the widespread bipartisan support and importance of this effort. It is now important to take the next step of making health insurance premiums 100 percent deductible for the self-employed. Madam President, large corporations now enjoy a 100 percent deduction, and on top of this, they typically pay smaller insurance premiums because they have a larger number of employees. So, the self-employed pay higher insurance premiums, and to compound it, they can only take a 30 percent tax deduction for premiums paid--a double penalty. These over 9 million self-employed small businessmen and women are innovators and job creators--people we should encourage, not penalize. That is why BOOST contains this important provision to make the deduction 100 percent. the s corporation reform act of 1995 On May 4, 1995, my friend and colleague, Senator Hatch, and I introduced the S Corporation Reform Act of 1995, S. 758. The bill is endorsed by the U.S. Chamber of Commerce, National Federation of Independent Business, the American Institute of Certified Public Accountants, and the members of the S Corporation Subcommittee of the American Bar Association. Today, we have 32 Senate cosponsors-- 12 Democrats and 20 Republicans. As you can tell, this legislation is the culmination of the efforts of many, and certainly represents a step Congress can and should take in order to capitalize on one of our country's most valuable resources--small business. Today, close to 2 million U.S. businesses are S Corporations, and these businesses are still subject to many of the oppressive restraints which date back to its original enactment in 1958. Madam President, it goes without saying that times have changed since 1958. The financial environment is far more complex, and the 1950's Sub S limitations restrict growth opportunities. Frankly, Sub S needs an overhaul. This legislation is the overhaul we need. It is an overhaul that is doable. And it is an overhaul that can give a boost to our economic recovery by creating more opportunities for capital growth and jobs in our country. Pension Simplification for Small business On June 30, 1995, Senator Hatch and I introduced the Pension Simplification Act of 1995. This legislation contains provisions that target complex and costly rules effecting pension plans offered by small businesses--and there is a very good reason for this action. In 1993, 83 percent of companies with 100 or more employees offered some type of retirement plan. In contrast, in businesses with less than 25 employees, only 19.6 percent of these employees had an employer- provided pension plan available to them, and only 15 percent of these employees participated in the plan. A major factor contributing to this dismal statistic is the sky-high per-participant cost of establishing and maintaining a pension plan for small business. This legislation alleviates the high cost barriers for small business by creating a tax credit which can be applied toward the start-up costs of providing a new plan for employers with 50 or fewer employees. Next, the bill slashes extensive annual nondiscrimination testing requirements for firms where no employee is highly compensated. These two provisions alone will significantly reduce the cost of starting up and maintaining a retirement plan for employers of small business. With these barriers lowered, we will be encouraging retirement savings for our Nation's small business worker. american family-owned business act The fifth point of BOOST was introduced on July 28, 1995, by Senator Dole and myself--we call it the American Family-Owned Business Act. Madam President, the impact of the estate tax on a family-owned business is devastating because of one simple fact--the rates are too high. The rates reach 55 percent of the value of an estate very quickly, and the tax bill comes due abruptly on the death of a loved one who also happens to be an invaluable asset to the family business. [[Page S 14885]] For families whose major asset is its business, many times these enterprises are literally forced out of business because of the imposition of the estate tax. The effect is a disruption in not only the family's life but the lives of the employees of the business and the community that depends on or enjoys the goods or services provided by the business. Contrast this scenario with the little to no impact the estate tax has on widely held businesses and you discover a disturbing reality in our current tax code--we place closely-held, family-owned businesses at a significant disadvantage when compared to widely held businesses. Senator Dole and I introduced the American Family-Owned Business Act with 44 cosponsors. Virtually every small business and agriculture organization in America has endorsed this bill. It carefully targets estate tax relief to family businesses whose major asset is its business and whose family members will materially participate in the business for years to come. The message of the American Family-Owned Business Act is that we will treat family businesses more fairly, and in doing so, we will foster an environment which encourages family entrepreneurship. I am proud to work with the Majority Leader on this effort and I look forward to its passage. pay-for Madam President, although BOOST package has only a moderate cost to the Federal Treasury, I do believe we must pay for these tax code reforms through cuts in spending. I propose to pay for these important reforms from the provisions from my bill, S. 573, the Spending Reductions Act of 1996, which would save $5.374 billion in fiscal year 1996. In order to achieve these savings, I first proposed a modest reduction in the Government's spending on Federal contractors. This is a broad topic I have focused on for over 14 years. But today, I am not proposing to address all of the problems involved with the Federal Government's extensive reliance on contractors and consultants. I simply want to address the concern expressed by the voters in the 1992 and 1994 elections to shrink the size of Government. The Congress only acted half-way in responding to this message when it voted to cut the number of Federal employees by 12 percent, because Congress has yet to order a corresponding reduction in the contractor work force. This contractor work force has been growing at a rapid rate over the past 10 years, while at the same time, the number of Federal workers has actually declined. In the early 1980's, the Federal Government spent roughly $40 billion on service contracts. Last year, in fiscal year 1994, the Federal Government spent $110 billion on service contracts. My proposal is to reduce this amount for 1996, a modest 4.5 percent. Madam President, this reduction will still permit agencies to get their work done, but it will also reduce some of the waste that comes from too much money being spent without adequate oversight. For example, at my request, the inspector general at the Pentagon has been looking at some contracts awarded by the star wars program. Listen to some of the problems they found with the three contracts they audited: First, cost overruns on the contracts totalled $3.1 million. Second, the contractor awarded prohibited subcontracts worth several million dollars. Third, one contractor charged the Government for 588 hours of work that it did not actually perform. I believe a reduction in spending, as I have proposed, will force agencies to spend money more wisely and eliminate such waste. My next spending cut proposal will reduce spending on Federally Funded Research and Development Centers [FFRDC's] at the Department of Defense. FFRDC's, like Mitre, Rand, and the Center for Naval Analysis are contractors who work solely for the Federal Government. While these contractors perform some valuable service, I believe it is appropriate to cut back a modest amount on these in-house consulting companies, as we have on the Federal work force and as I am proposing on service contracts. Madam President, our taxpayers should not continue being billed for the very high salaries and overhead being charged by these Government- run consulting firms. For example, the head of Aerospace made $230,000 in 1991 and $265,000 in 1992. I have no idea what they made in 1993 and 1994, but I imagine the increase has been alarming. This in-house Government contractor was making more than the President of the United States. My proposal would reduce spending on FFRDC's by $162.7 million from the amount authorized by the Department of Defense authorization bill. This would still leave over $1 billion for these companies. Madam President, my final proposal to reduce spending involves an issue that I have worked on for a number of years--the export of arms to countries around the world. I am not proud of the fact that the United States is the leading arms exporter. We sell 53 percent of all the arms in international trade. However, my proposal is not targeted at totally reforming this arms trade, that is a battle for the future. I simply propose that we reduce the spending in our foreign military financing program by $271.5 million from the total budget of $3.7 billion. Taken together, these spending reductions amount to over $5 billion in 1996. It is more than enough to cover the costs of the BOOST package for this year and to give the small family owned business and the family farmers a real break that they justly deserve. conclusion In conclusion, I would just like to say that--while some in Washington are consumed with passing or blocking the huge tax cuts reported on the front page of every newspaper, we, in Congress, should all be concerned with the practical, commonsense, and relatively inexpensive changes that will help the American taxpayer believe that Government can work for, not against, them. Also, to allow and to encourage those entrepreneurs to create jobs for people who will be paying taxes and who will be boosting our local communities. Our program, the BOOST program, is such a change. It offers an opportunity. It gives people a chance, it should give people hope where hope has not been present. It reaffirms a commitment to fairness for small taxpayers and capitalizes on one of our country's greatest assets--small business and the family farm. I am urging, Madam President, my colleagues to join me in supporting BOOST to be included in any tax legislation sent from this Senate. Madam President, I ask unanimous consent that a copy of the bill and a brief summary be included in the Record.

Mr. PRYOR

Mr. PRYOR. Madam President, on December 27, 1994, while in Arkansas over the last Christmas holiday, I announced one of the most important legislative initiatives for the 104th Congress. I call it, Bringing Opportunity to Our Small Businesses and Taxpayers--or BOOST. BOOST is a five-point initiative that addresses problems faced by everyday individual taxpayers, small businesses, and family farms. Madam President, BOOST delivers a much-needed dose of fairness to small taxpayers, and it provides a clear path toward capitalizing on two of our country's greatest assets--small business and the family farm. Over these past 9 months, I have worked with my colleagues on both sides of the aisle to introduce the five bills which make up the BOOST package. Today, I am introducing these five important bills as a combined package. I believe this is important because it represents a collective vision for helping small business and the average individual taxpayer--one which we can do quickly with bipartisan support while causing very little drain, if any, or the Federal budget. We can act quickly because the Finance Committee will meet this week to consider tax legislation as part of the budget reconciliation package which will soon come to the Senate floor. Madam President, the issues raised by the BOOST package are not politically charged, in fact, they are all issues that can pull us together. The five bills I am referring to are as follows: First, the Taxpayer Bill of Rights II, S. 258, introduced by Senator Grassley and myself; Second, a bill to make the 100 percent health care deduction for the self-employed, S. 262, introduced by Senator Grassley, Senator Roth, and myself; Third, the S Corporation Reform Act of 1995, S. 758, introduced by Senator Hatch and myself; Fourth, the Pension Simplification Act of 1995, S. 1006, introduced by Senator Hatch and myself; and [[Page S 14884]] Fifth, the American Family-Owned Business Act of 1995, S. 1086, introduced by Senator Dole and myself. Madam President, each of these bills enjoys a broad base of support from small business and agriculture organizations; each has a balanced cosponsor list of both Republican and Democratic Senators; and each has been introduced in the House of Representatives with similar strong bipartisan support. The bills have three primary goals. The first is to create capital formation opportunities for American small business owners and their employees. The resulting payoff will be more jobs created in a sector that already creates over one-half of all new jobs in our country. The second is to simplify the rules that small businesses must comply with in dealing with the Internal Revenue Service, resulting in reduced cost to small business whose resources may be better spent on business expansion and their employees' retirement savings. And third, a very important goal of the BOOST package is to safeguard the rights of smaller taxpayers in their dealings with the IRS. The goal: to inspire greater taxpayer confidence in our tax system by making it more fair and more accountable. Of course, these are all goals that every one of us can support in principle. But it is important to point out that BOOST is more than just a set of worthy goals. It is an actual nuts and bolts proposal which has attracted strong and broad bipartisan support. And even more than that, it carries only a modest revenue cost in times when it is very difficult to act in light of our Federal budget deficit. Madam President, the enactment of BOOST will send a message that Congress can work together to achieve practical solutions to the very real problems faced by American small business and the individual American taxpayer. I hope we can enact this legislation very soon and send this message. Madam President, I do want to comment on each of the five-points of the BOOST package. taxpayer bill of rights ii On January 23 of this year, Senator Grassley and I came to the Senate floor and introduced the Taxpayer Bill of Rights II, along with 20 cosponsors--12 Democrats and 8 Republicans. The Taxpayer Bill of Rights II builds on the foundation laid by the original Taxpayer Bill of Rights passed in 1988 and is the next natural step in requiring the IRS achieve higher standards of accuracy, timeliness and fair play in providing taxpayer service. The Taxpayer Bill of Rights II achieves these new standards through 27 provisions, including: First, expanding the authority of the Taxpayer Advocate to prevent hardships on taxpayers. Second, requiring the IRS to abate interest when it has made an unreasonable error or delay, and enable the courts the power to review the interest abatement determination. Third, strengthen the code so a taxpayer can recover out-of-pocket costs incurred in a case in which the IRS position was not substantially justified. Finally, prohibit the IRS from issuing retroactive proposed regulations. Madam President, the Taxpayer Bill of Rights II contains many more commonsense provisions designed to safeguard the rights of taxpayers and instill some confidence into our system of taxation. Madam President, I would like to point out that the Taxpayer Bill of Rights II was passed twice in 1992 but was vetoed because it was included as part of two large tax bills with which President Bush did not agree. I believe the time is now to enact this legislation, and I am committed to work along with my friend Senator Grassley to push the Taxpayer Bill of Rights II into law. 100 Percent Deduction for Self-Employed The next important piece of the BOOST package is a bill, introduced by Senator Grassley, Senator Roth, and myself to make the health insurance premiums for the self-employed 100 percent deductible. Earlier this year, the Congress passed, and the President signed into law, H.R. 831 which restored the 25 percent care deduction in 1994, increased the deduction to 30 percent for 1995, and permanently extended the 30 percent deduction for all years in the future. This was an important and positive step. The fact that the Senate could move such a tax bill without amendment underscored the widespread bipartisan support and importance of this effort. It is now important to take the next step of making health insurance premiums 100 percent deductible for the self-employed. Madam President, large corporations now enjoy a 100 percent deduction, and on top of this, they typically pay smaller insurance premiums because they have a larger number of employees. So, the self-employed pay higher insurance premiums, and to compound it, they can only take a 30 percent tax deduction for premiums paid--a double penalty. These over 9 million self-employed small businessmen and women are innovators and job creators--people we should encourage, not penalize. That is why BOOST contains this important provision to make the deduction 100 percent. the s corporation reform act of 1995 On May 4, 1995, my friend and colleague, Senator Hatch, and I introduced the S Corporation Reform Act of 1995, S. 758. The bill is endorsed by the U.S. Chamber of Commerce, National Federation of Independent Business, the American Institute of Certified Public Accountants, and the members of the S Corporation Subcommittee of the American Bar Association. Today, we have 32 Senate cosponsors-- 12 Democrats and 20 Republicans. As you can tell, this legislation is the culmination of the efforts of many, and certainly represents a step Congress can and should take in order to capitalize on one of our country's most valuable resources--small business. Today, close to 2 million U.S. businesses are S Corporations, and these businesses are still subject to many of the oppressive restraints which date back to its original enactment in 1958. Madam President, it goes without saying that times have changed since 1958. The financial environment is far more complex, and the 1950's Sub S limitations restrict growth opportunities. Frankly, Sub S needs an overhaul. This legislation is the overhaul we need. It is an overhaul that is doable. And it is an overhaul that can give a boost to our economic recovery by creating more opportunities for capital growth and jobs in our country. Pension Simplification for Small business On June 30, 1995, Senator Hatch and I introduced the Pension Simplification Act of 1995. This legislation contains provisions that target complex and costly rules effecting pension plans offered by small businesses--and there is a very good reason for this action. In 1993, 83 percent of companies with 100 or more employees offered some type of retirement plan. In contrast, in businesses with less than 25 employees, only 19.6 percent of these employees had an employer- provided pension plan available to them, and only 15 percent of these employees participated in the plan. A major factor contributing to this dismal statistic is the sky-high per-participant cost of establishing and maintaining a pension plan for small business. This legislation alleviates the high cost barriers for small business by creating a tax credit which can be applied toward the start-up costs of providing a new plan for employers with 50 or fewer employees. Next, the bill slashes extensive annual nondiscrimination testing requirements for firms where no employee is highly compensated. These two provisions alone will significantly reduce the cost of starting up and maintaining a retirement plan for employers of small business. With these barriers lowered, we will be encouraging retirement savings for our Nation's small business worker. american family-owned business act The fifth point of BOOST was introduced on July 28, 1995, by Senator Dole and myself--we call it the American Family-Owned Business Act. Madam President, the impact of the estate tax on a family-owned business is devastating because of one simple fact--the rates are too high. The rates reach 55 percent of the value of an estate very quickly, and the tax bill comes due abruptly on the death of a loved one who also happens to be an invaluable asset to the family business. [[Page S 14885]] For families whose major asset is its business, many times these enterprises are literally forced out of business because of the imposition of the estate tax. The effect is a disruption in not only the family's life but the lives of the employees of the business and the community that depends on or enjoys the goods or services provided by the business. Contrast this scenario with the little to no impact the estate tax has on widely held businesses and you discover a disturbing reality in our current tax code--we place closely-held, family-owned businesses at a significant disadvantage when compared to widely held businesses. Senator Dole and I introduced the American Family-Owned Business Act with 44 cosponsors. Virtually every small business and agriculture organization in America has endorsed this bill. It carefully targets estate tax relief to family businesses whose major asset is its business and whose family members will materially participate in the business for years to come. The message of the American Family-Owned Business Act is that we will treat family businesses more fairly, and in doing so, we will foster an environment which encourages family entrepreneurship. I am proud to work with the Majority Leader on this effort and I look forward to its passage. pay-for Madam President, although BOOST package has only a moderate cost to the Federal Treasury, I do believe we must pay for these tax code reforms through cuts in spending. I propose to pay for these important reforms from the provisions from my bill, S. 573, the Spending Reductions Act of 1996, which would save $5.374 billion in fiscal year 1996. In order to achieve these savings, I first proposed a modest reduction in the Government's spending on Federal contractors. This is a broad topic I have focused on for over 14 years. But today, I am not proposing to address all of the problems involved with the Federal Government's extensive reliance on contractors and consultants. I simply want to address the concern expressed by the voters in the 1992 and 1994 elections to shrink the size of Government. The Congress only acted half-way in responding to this message when it voted to cut the number of Federal employees by 12 percent, because Congress has yet to order a corresponding reduction in the contractor work force. This contractor work force has been growing at a rapid rate over the past 10 years, while at the same time, the number of Federal workers has actually declined. In the early 1980's, the Federal Government spent roughly $40 billion on service contracts. Last year, in fiscal year 1994, the Federal Government spent $110 billion on service contracts. My proposal is to reduce this amount for 1996, a modest 4.5 percent. Madam President, this reduction will still permit agencies to get their work done, but it will also reduce some of the waste that comes from too much money being spent without adequate oversight. For example, at my request, the inspector general at the Pentagon has been looking at some contracts awarded by the star wars program. Listen to some of the problems they found with the three contracts they audited: First, cost overruns on the contracts totalled $3.1 million. Second, the contractor awarded prohibited subcontracts worth several million dollars. Third, one contractor charged the Government for 588 hours of work that it did not actually perform. I believe a reduction in spending, as I have proposed, will force agencies to spend money more wisely and eliminate such waste. My next spending cut proposal will reduce spending on Federally Funded Research and Development Centers [FFRDC's] at the Department of Defense. FFRDC's, like Mitre, Rand, and the Center for Naval Analysis are contractors who work solely for the Federal Government. While these contractors perform some valuable service, I believe it is appropriate to cut back a modest amount on these in-house consulting companies, as we have on the Federal work force and as I am proposing on service contracts. Madam President, our taxpayers should not continue being billed for the very high salaries and overhead being charged by these Government- run consulting firms. For example, the head of Aerospace made $230,000 in 1991 and $265,000 in 1992. I have no idea what they made in 1993 and 1994, but I imagine the increase has been alarming. This in-house Government contractor was making more than the President of the United States. My proposal would reduce spending on FFRDC's by $162.7 million from the amount authorized by the Department of Defense authorization bill. This would still leave over $1 billion for these companies. Madam President, my final proposal to reduce spending involves an issue that I have worked on for a number of years--the export of arms to countries around the world. I am not proud of the fact that the United States is the leading arms exporter. We sell 53 percent of all the arms in international trade. However, my proposal is not targeted at totally reforming this arms trade, that is a battle for the future. I simply propose that we reduce the spending in our foreign military financing program by $271.5 million from the total budget of $3.7 billion. Taken together, these spending reductions amount to over $5 billion in 1996. It is more than enough to cover the costs of the BOOST package for this year and to give the small family owned business and the family farmers a real break that they justly deserve. conclusion In conclusion, I would just like to say that--while some in Washington are consumed with passing or blocking the huge tax cuts reported on the front page of every newspaper, we, in Congress, should all be concerned with the practical, commonsense, and relatively inexpensive changes that will help the American taxpayer believe that Government can work for, not against, them. Also, to allow and to encourage those entrepreneurs to create jobs for people who will be paying taxes and who will be boosting our local communities. Our program, the BOOST program, is such a change. It offers an opportunity. It gives people a chance, it should give people hope where hope has not been present. It reaffirms a commitment to fairness for small taxpayers and capitalizes on one of our country's greatest assets--small business and the family farm. I am urging, Madam President, my colleagues to join me in supporting BOOST to be included in any tax legislation sent from this Senate. Madam President, I ask unanimous consent that a copy of the bill and a brief summary be included in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, I rise today to voice my support for the Fulbright Program. This worthwhile program was established in 1946 by a great Arkansan, the late Senator J. William Fulbright. I was a great admirer of Senator Fulbright throughout his public and private life. He made significant contributions to my State, to our Nation, and to the world. The educational exchange program that bears his name is just one of many outstanding contributions to education and to world peace that Senator Fulbright made during his 30 years in the Senate. The Fulbright Program promotes understanding between the United States and other countries. It is the largest, best-known and most prestigious educational exchange program in the world. Mr. President, this program is a valuable addition to our foreign policy. It would be contrary to our national interests to make significant cuts to this program at this time. It is as relevant today as when it was founded. Over 200,000 students have participated in the program in some 100 countries over the years. It offers Americans invaluable preparation to succeed in a global economy. This program also provides those from other countries direct exposure to American society and to our political and economic systems. Many Fulbright scholars go on to key positions in Government, business, and education. The Fulbright program is a cost-effective means of advancing American interests around the world. It involves partnerships between our Nation and other countries. Many of these countries make substantial financial contributions to the Fulbright Program. In addition, a portion of the program costs come from private sources. Mr. President, the Fulbright Program has enjoyed bipartisan support from Presidents and Congress throughout its history This program helps maintain American leadership throughout the world. It merits our continued support.

Mr. PRYOR

Mr. PRYOR. Mr. President, today I have offered a sense-of-the- Congress resolution on behalf of myself and Senator Snowe and a bipartisan group of 18 cosponsors. I am happy that the managers of the bill have accepted the amendment. Our amendment puts the Senate on record in support of fiscal year 1996, House-passed appropriation level for the Economic Development Administration [EDA]. The House level of $348.5 million dollars is a 25-percent cut from the requested level, but a significant increase from the $100 million passed by the Senate Appropriations Committee. The $100 million is a 79 percent reduction that would devastate the EDA. Mr. President, I do want to applaud Chairman Hatfield for providing the $100 million in his committee, which was an improvement on the zero funding proposed initially. Before I describe the critical role of EDA and the streamlining that has occurred at EDA, I want to explain the spending dynamic in our amendment. Simply put, the House allocated more funds to the Commerce, State, Justice bill. This permits a higher EDA funding level without cutting other programs within the bill. Mr. President, the Economic Development Administration has been crucial to rebuilding distressed rural and urban communities in each of our States. Not by providing Government handouts, but by helping communities become economically self-sufficient. EDA's goal is to invest limited Federal dollars so that communities can attract new industry, spur private investment, and encourage business expansion. EDA gets more bang for the buck by creating partnerships with local, county, and State governments and economic development entities. These partnerships help to provide planning, financial, technical, and specialized assistance to help develop infrastructure and create jobs in these distressed areas. In fact, for every EDA dollar invested, more than $3 in outside investment has been generated. In the last 30 years, EDA has invested over $15 billion in local communities in need of financial assistance. This investment has resulted in the creation or the retention of more than 2.8 million American jobs. One of EDA's key functions is to help communities recover from natural disasters. EDA played a pivotal role in the State of Florida after Hurricane Andrew, in South Carolina and North Carolina after Hurricane Hugo, and in Nebraska, Kansas, Missouri, Illinois, Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin after the Midwest flooding of 1992. After the emergency management people leave, EDA is the only governmental agency that remains to help devastated communities rebuild. Perhaps the largest and best-known mission of EDA is in the field of defense conversion. EDA is life support for base closure towns searching for new direction and new life after the cold war. In 1988, 1991, and 1993 we closed 250 military bases across America. Just months ago, the 1995 Base Closure Commission recommended the closing or the realignment of another 130 bases. Communities surrounding these bases and defense factories being down-sized face massive revenue and job losses. EDA is often the only place cities and towns can turn for help in getting back on their feet. Since 1992, EDA has provided 173 grants, matched by local funds, totalling almost $288 million to these communities. But the value of EDA's contribution goes well beyond the dollars spent. A good example of how EDA helps military towns adjust is in my hometown of Camden, AR. In 1957, the Navy shut down Shumaker Naval Ammunition Depot, which was an old research and development facility. After Shumaker closed, Camden was challenged with finding a new direction and source of jobs for our people. Before long, the newly- created Economic Development Administration provided Camden with a $365,000 grant that helped create a new technical college on the old Navy property. Today, I am proud to say that the Southern Arkansas University's Technical Branch in Camden is alive and well, thriving as a national leader in the area of robotics research. It has been a magnet for defense contractor factories that now employ thousands of workers. Without EDA those thousands of jobs might not be available today. The Federal Government has a responsibility to step in and provide a helping hand to communities that face the loss of a military base or a defense production facility. Eliminating EDA's funding in the wake of the 1995 base closure round would spell disaster for the people and the businesses that helped us win the cold war but not suffer due to defense downsizing. Now, Mr. President, I have heard past criticisms about EDA's management and I am sure that some of my colleagues will mention them again today. However, I am here to say that EDA has reinvented itself. It is more effective and more efficient. The EDA has: First, trimmed application processing down to 60 days. Second, reduced regulations by 62 percent. Third, has cut the processing time for grant applications by 50 percent and delegated more decisionmaking responsibility to regional offices. Fourth, developed a single application form that can be used for all EDA programs. Fifth, reduced administrative expenses in half from 13.6 percent in fiscal year 1989 to 6.6 percent in fiscal year 1995. Sixth, in fiscal year 1996, the EDA will further reduce its staff from 350 to 309. On July 26, 1995, Congressman Hefley of Colorado introduced an amendment in the House of Representatives which would have eliminated the funding for EDA. This amendment failed by a vote of 315 to 110. By this vote, both Republicans and Democrats voiced their support for the many successes that the EDA has accomplished in communities across the United States and for EDA's management. Mr. President, I have letters of support for the Pryor/Snowe amendment from the National Association of Development Organizations and the National Association of Installation Developers that I would like included in the Record following my remarks. Again, I would like to thank the managers for accepting the amendment. It was clear to all that a much higher funding level for EDA is supported by a clear majority of the Senate. I ask unanimous consent that a list of cosponsors, and relevant letters be printed following my remarks.

Mr. PRYOR

Mr. PRYOR. Mr. President, I thank the distinguished Senator.

Mr. PRYOR. I have a question, Mr. President. And I am sorry, I was not in the Chamber. My question is, Mr. President, has the Senator from Texas propounded a unanimous-consent request and has that request been accepted at this point?

Mr. PRYOR. I will be glad to yield.

Mr. PRYOR. Mr. President, if I could respond to my colleague, my friend from Texas, I have no problem offering the amendment tomorrow if I have just as much certainty as possible in the time sequence, because I have three amendments that I must offer in the Finance Committee markup on Medicare-Medicaid, and I am just trying to sort of find out where I should be and which time I should be there. [[Page S 14519]]

Mr. PRYOR. Mr. President, I rise today in support of a program that is vital to each and every one of us. It is vital to the safety of our States, of our towns, of our communities. In 1994, Congress passed the omnibus crime bill. Among other things, this important legislation will put 100,000 more police officers on the street through the Community Oriented Policing Services Program--or COPS Program. Today, as I stand in this Chamber, there are over 25,000 officers that would not be out there--protecting citizens in communities across this country--if it were not for the COPS Program. If we eliminate this program and turn the fund over to the States in a block grant, as the Appropriations Committee has proposed, there is no guarantee that a single additional police officer will be hired. Not one. We made a commitment to the American people when we passed the crime bill. all of us, Republicans and Democrats alike, made a commitment to the citizens of this country that we would work with them to reduce crime. The COPS Program insures that more police officers will be on the beat in towns and communities across the country. Mr. President, of the 100,000 new police officers promised, almost 26,000 have already been hired--253 in Arkansas alone. Our police departments are made up of men and women who put their lives on the line every day to make our streets safer--not just in big urban areas, but in small towns and rural areas. With a block grant, funds may not filter down to small towns that desperately need the extra help. They are being asked to do more with less as crime rates continue to rise rapidly. Gangs and drug dealers are migrating out of the larger, more sizable cities and into the smaller towns at an alarming rate. It is our duty, Mr. President, to assist the prevention of crime in our country. The major law enforcement organizations in my State of Arkansas, as well as across the country, have united in support the COPS Program. They tell us that this program is working, that it is getting more officers on the streets. So why are we eliminating a program that is working? I have received phone calls and letters from police chiefs and sheriffs in towns, both large and small, throughout my State praising this program. For example, the Danville Police Department in Danville, Arkansas, has, through the COPS Program, been able to hire an additional officer to patrol the streets at night. In the month since Mike Pyburn has been hired, he has already made a drug arrest. As he was patrolling the streets one night, Officer Pyburn spotted and stopped a person with a warrant out on a misdemeanor. In this person's possession at the time of the arrest was 14 individually wrapped bags of marijuana. The COPS Program enabled this officer to be on the job and get these illegal drugs off the streets of Danville. This is one of many arrests this officer has made. Having additional night patrols has not only improved public safety, it has relieved the people's fears. The citizens of Danville can now sleep at night feeling a little safer because Officer Pyburn is on duty. Colonel John Bailey, the Director of the Arkansas State Police, put the importance of the COPS Program into simple terms. He said that ``This program puts the money where the problem is. In five years, anyone in Washington can come down and I'll say, `This is what your money provided for us. Here he is.' and introduce them to my new officer.'' You can't necessarily say that with block grant funds, Mr. President. This program is effective, and it is easy for law enforcement agencies to [[Page S 14532]] apply for the additional officers they so desperately need. Unlike most Federal grant programs, there are not pages and pages of complicated forms to be filled out, and extensive regulations to follow. For small towns, there is one page to fill out. That's it. One page. And it takes less than an hour to fill out. I have a letter from Larry Emison, the Sheriff of Craighead County in Northeast Arkansas. They also have used their COPS grant to add an additional deputy to their night patrol. He has been in place since April, but the community has noticed a difference and feels safer on the streets, particularly at night. Mr. President, this feeling of safety is due in large part to this officer made possible through the COPS Program. Chief Wiley White in DeValls Bluff has called this program ``a lifesaver for the community.'' He hired David Huggs, a former prison guard who he had been working with for years. Chief White told me that Officer Huggs has ``been a miracle for this town.'' I have a lot of these stories, Mr. President. Officer Rebecca Hanson was hired in Crittenden County, Arkansas, to investigate criminal sexual abuse to children. Officer Hanson has special training in interviewing children about the abuse they have suffered. In her first 5 months since being hired, Officer Hanson has handled a total of 42 cases, resulting in 7 arrests. We can only speculate as to what might have happened to these innocent children if it hadn't been for Officer Hanson's presence on the police force. The Morning News of Northwest Arkansas reported in July how valuable the COPS Program has been to the Rogers Police Department and the citizens of Northwest Arkansas. Two new officers have been added to their force. According to the article, Capt. Steve Russell of the Rogers Police Department said that the grant program has given them the opportunity to have additional personnel that they would not have had otherwise. Captain Russell said the COPS FAST grant program is an example of how the Federal Government can make it easier for local agencies to reap the benefits of Federal programs. I ask unanimous consent that the article be printed in the Record. I also ask unanimous consent that a few of the letters I have received on the COPS Program be printed in the Record.

Mr. PRYOR. Mr. President, if I may pose a question, I have an amendment that I would like to offer at some point. It can be done tonight, it can be done early in the morning, or any time. I am joined in that amendment by the distinguished Senator from Maine [Ms. Snowe]. It would be a sense-of-Congress resolution relative to the Economic Development Administration. I am just wondering at what point or what order we could try to factor this particular amendment into the list?

Mr. PRYOR. Mr. President, putting an additional 100,000 officers on the streets is a promise that this body made last year when it passed the crime bill. It is our duty to continue this vital program that represents an approximate 20 percent increase in the American police force. What the American people want is to feel safe in their homes and on the streets of their neighborhoods. They deserve this safety and the COPS Program is delivering it to them. I urge my colleagues to [[Page S 14533]] stand with me in protecting what is important to our country. I urge you to vote to save the COPS Program. legal services to Native Americans

Mr. PRYOR

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

Mr. PRYOR. Mr. President, I ask unanimous consent I may proceed in morning business for up to 20 minutes.

Mr. PRYOR

Mr. PRYOR. Mr. President, I ask unanimous consent that the article which I made reference to a few moments ago dated Tuesday, September 26, in the New York Times written by Mr. Robert D. Hershey, Jr., be printed in the Record.

Mr. PRYOR. Mr. President, I ask unanimous consent that a letter sent to me dated August 4 written by Margaret Milner Richardson, the Commissioner of the Internal Revenue Service, expressing her strong opposition and the Revenue Service's strong opposition to even considering this practice be printed in the Record.

Mr. PRYOR. Mr. President, I have no further items to submit. I have no further statement to make. Therefore, I yield the floor. I thank the President for recognizing me. Mr. DORGAN addressed the Chair.

Mr. PRYOR. Mr. President, yesterday, in the New York Times, on page 1, an article was written by Robert D. Hershey, Jr. I would like to extrapolate a few lines from this particular article, not only to bring it to the attention of our colleagues in the Senate, but also to bring it to the attention of the conferees who are now dealing with certain appropriations bills in conference at this time. That particular conference is certainly on the Treasury, Postal Service, and general Government appropriations bill. There is stuck in this appropriation a sum of $13 million. It does not sound like a lot when we start thinking about the billions and billions that we discuss on the floor of the U.S. Senate, but a $13 million appropriation to initiate a program to utilize private counsel law firms and debt collection agencies in the collection activities of the Internal Revenue Service, as we know it, the IRS. The first paragraph of Mr. Hershey's article in the New York Times yesterday states: Congressional Republicans are poised to pass legislation requiring the Internal Revenue Service to turn over some debt collection to commercial interests, thereby giving certain private citizens access to confidential taxpayer information for the first time. . .. The Republican initiative, which would be limited initially to a pilot program, has raised alarms throughout the agency. ``I have grave reservations about starting down the path of using private contractors to contact taxpayers regarding their delinquent tax debts,'' Margaret Milner-Richardson, the Commissioner of the I.R.S., said. This was a statement written in a letter signed by Margaret Milner- Richardson, the Commissioner of the Internal Revenue Service. For the last several years I have been one who has complained, I think fairly substantially and often, about some of the activities, and the heavyhanded activities, of the Internal Revenue Service. But I can say without reservation, this is an issue which Margaret Milner- Richardson, the Commissioner of the IRS, and myself, agree on 100 percent. On the 12th of September, I, along with Senator Alfonse D'Amato of the State of New York, wrote a letter to the conferees relating to this particular conference, which is now in session. Senator D'Amato and myself stated in the third paragraph, about this particular provision that now exists in the debate between the conferees--we wrote the following: We are writing to express our concern regarding the possibility of inclusion of the House provision in the final bill and respectfully request your assistance to eliminate any provision allowing private bill collectors to collect the debts of the American taxpayer. For over 200 years, when the Federal Government has imposed a tax, it has also assumed the responsibility and the blame for collecting [that tax]. In fact, we have an obligation to ensure that the privacy and the confidentiality of every American taxpayer is protected. Contracting out the tax collection responsibilities of government would be in contradiction of that duty, and would no doubt put the privacy of all American taxpayers in jeopardy. Senator D'Amato and myself continue by stating to the conferees: While we are very concerned about the impact of the House provision on the rights of American taxpayers in their dealings with these private bill collectors, the Commissioner of the Internal Revenue Service has also raised serious questions about the provision. We, therefore, urge you to be persistent in your efforts to keep such a provision out of the final conference report. The article, written in the New York Times yesterday, further States: Such concerns are in spite of the bill's requirement that the private debt collectors must comply with the Fair Debt Collection Practices Act and ``safeguard the confidentiality'' of taxpayer data. Mr. President, I have seen a lot of ideas in some 17 years in the Senate. But I have never seen a worse idea, an idea that was so misdirected, in my 17 years of service, as one that is being proposed to become the law of the land. I would like to pose, also--or at least to make an observation. This is not a new idea of basically farming out some of our tax collections to the private sector. But I would say, in over 200 years of our Federal Government, we have never turned over the business of collecting taxes to the private sector. But I must point out, as I did in a floor statement on August 4, in the U.S. Senate, that this is a dubious practice and it is as old as the hills, and it dates back to at least ancient Greece. This practice of private tax collection even has a name. It is called, ``tax farming,'' and its modern history is chronicled in a book authored by Charles Adams, a noted lawyer and a noted history professor. The book is named, ``For Good And Evil, The Impact of Taxes on the Course of Civilization.'' In this book, Charles Adams recounts many tales of how the world has suffered under the oppression of tax farmers. He specifically describes the tax farmers sent by the Greek kings to the island of Cos as thugs, and even the privacy of a person's home was not secure from them. He further notes that a respected lady of Cos around 200 B.C. wrote, ``Every door trembles at the tax farmers.'' In the latter Greek and [[Page S 14395]] Roman world, no social class was hated more than the tax farmer. The leading historian of that period described tax farmers with these words. The publican keepers of the public house certainly were ruthless tax collectors, and dangerous and unscrupulous rivals in business. They were often dishonest and probably always cruel. Tax farming flourished as a monster of oppression in many forms in Western civilization for over 2,500 years, until it finally met its demise after World War I. Tax farming brutalized prerevolutionary France. The French court paid the price during the reign of terror when the people were incensed. They rounded up the tax farmers, tried them in the people's courts and condemned the tax farmers to death. Accounts of this time tell of the taxpayers cheering while the heads of the tax farmers tumbled from the guillotine. In the 17th century, Mr. President, under Charles II in England, the King imposed a hearth tax assessing two shillings per chimney for each house. To collect it, the King did not have civil servants responsible to the King to collect from these private families. But he named individual tax collectors. They called them ``chimney men.'' They went throughout England. These chimney men were ruthless, and they were hated by the people of England. The hatred of the privately collected tax helped depose Charles' brother, James II. And as soon as the new monarchs, William and Mary, were installed, the House of Commons abolished the tax ending a bond of slavery upon the whole people that allowed every man's house to be entered and searched and at the pleasure of people unknown to him. Clearly, Mr. President, history has taught us that contracting out the tax collection responsibilities of a democratic government is not a good idea. These are the questions that I would like to respectfully pose to our colleagues from the Senate and the House who now make up the conference on this particular issue and who are now debating what issues to include and to exclude. These are the questions that I respectfully think should be asked. Who will these people be? Which debt collection services will be hired? How will they be hired? Who will hire them? Who will train them? Who will oversee them? Which taxpayers' cases will they work on? What arena of confidentiality? What standard, I should say, of confidentiality will be imposed upon these private debt collectors as they search through our private tax records? What type of taxpayer information will be made available to these tax collectors? How will that information be safeguarded, and how will the security and the privacy of these issues be retained? How, Mr. President--and what a key question this is--are these private bill collectors going to be paid? Will they be paid 25 percent, 50 percent, and will not this actually amount to a bounty hunter situation that we are creating within the Internal Revenue Service? In 1988, I sponsored, with the help of many of my colleagues, the Taxpayer Bill of Rights. It was passed into law. One of the provisions that we were proudest of in the Taxpayer Bill of Rights No. 1--and now we hope to expand it this year into the Taxpayer Bill of Rights No. 2-- in the Taxpayer Bill of Rights No. 1 was a provision that the Internal Revenue Service could no longer use quotas in which to promote or demote collection agents within the Internal Revenue Service. We said you have done it in the past but that day is over, and no longer can an IRS collection agent have his job or his salary or his position basically based upon how much he is collecting. So, Mr. President, what we have is we may be on the eve of making an enormous mistake. It could be a mistake that we could never fix. I am very hopeful that the conferees on the Treasury, Postal, and general Government appropriations bill will take heed and will realize what history has to teach us about private tax collectors being hired to collect Federal debt. Mr. President, I ask unanimous consent that the letter dated September 12 sent by Senator D'Amato and myself to Senators Shelby, Kerrey, and the other conferees be printed in the Record.

Mr. PRYOR

Mr. PRYOR. Therefore, pursuant to rule VI of the Senate, I ask unanimous consent that I might be excused from further business of the Senate on this day.

Mr. PRYOR. Mr. President, I thank the Chair and yield the floor. I thank my very good friend, Senator Leahy, from Vermont.