William Roth

Mr. ROTH

Mr. ROTH. Mr. President, I now ask unanimous consent that the Senate proceed to a period of morning business with Senators permitted to speak therein for up to 10 minutes each.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid upon the table, and a statement of explanation appear at this point in the Record.

Mr. ROTH

Mr. ROTH. Mr. President, upon convening at 9:15 a.m., the Senate will immediately resume debate on the Interior appropriations bill, with Senators Feingold and Bingaman in control of 15 minutes each to offer and debate their amendments. Following that debate, at approximately 9:45, the Senate will proceed to rollcall votes on the remaining amendments to the Interior appropriations bill, as well as on final passage. Following the disposition of the Interior appropriations bill, the Senate will begin the final four votes on the reconciliation bill. Therefore, Senators should be prepared to stay in the Chamber for up to 12 votes, with all votes after the first vote limited to 10 minutes each. For the remainder of the day, it is expected that the Senate will begin consideration of the Agriculture appropriations bill.

Mr. ROTH

Mr. ROTH. Mr. President, if there is no further business to come before the Senate, I now ask that the Senate stand in adjournment under the previous order.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until the hour of 9:15 a.m. on Tuesday, July 18. I further ask unanimous consent that on Tuesday, immediately following the prayer, the Journal of the proceedings be approved to date, the morning hour be deemed to have expired, the time for the two leaders be reserved for their use later in the day, and the Senate then resume consideration of the Interior appropriations bill under the previous order.

Mr. ROTH. Mr. President, further, I ask unanimous consent that the Senate stand in recess from 12:30 p.m. until 2:15 p.m. for the weekly party conferences to meet.

Mr. ROTH

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

Mr. ROTH. Mr. President, I further note that both my amendments would be deemed extraneous under section 313, the so-called Byrd rule of the Budget Act, because they increase the deficit beyond the years for which the Finance Committee has received reconciliation and instruction. Therefore, I move to waive the point of order against both my amendments pursuant to section 313(b)(1)(E) of the Congressional Budget Act of 1974, the House companion bill, and any conference report thereon.

Mr. ROTH. Mr. President, I ask unanimous consent with respect to the Grams amendment No. 3861, that it be in order for Senator Reid to offer a second-degree amendment and, immediately following the offering of that amendment, it be set aside in order for Senator Roth to offer a second-degree amendment.

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

Mr. ROTH. Mr. President, I send an amendment to the desk on behalf of Senator Stevens.

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

Mr. ROTH. Mr. President, we are now on the reconciliation bill authorized by the budget resolution we adopted in the spring. I would like to clarify for all Senators that nothing in the consent agreement covering the consideration of this bill precludes Budget Act points of order being raised against any amendment offered. Those points of order could be raised at the time of the votes on Monday night. I ask the Presiding Officer, is that correct?

Mr. ROTH. Mr. President, we will start with opening statements by myself and the Democratic manager. Subsequent to that, we will open it up to amendments. Mr. President, a little more than 3 months ago, I stood in this chamber to introduce the Marriage Tax Relief Act of 2000. At that time, I described that bill ``as the centerpiece of our efforts to reduce the tax overpayment by America's families.'' That is as it should be because families are the centerpiece of American society. Three months ago, I urged my colleagues to support the Marriage Tax Relief Act because it ``delivered savings to virtually every married couple in America--and it did so within the context of fiscal discipline and preserving the Social Security surplus.'' And that too, is as it should be, because if we act irresponsibly we are not giving relief to America's families, but grief to America's children. In the three months since I last spoke on this topic, we have discovered that American families' tax overpayment is even larger and our relief even more appropriate than we had imagined then. Despite the enormous benefits that the Marriage Tax Relief Act of 2000 would have brought to American families, we could never get the other side to agree to a procedure that would limit debate to relevant amendments. The Majority Leader's offer to limit debate to marriage tax issues was rejected and cloture votes failed. The Senate moved on to other business. But even as the Senate took up other important issues, we remained committed to delivering tax relief to America's families. We knew that the American people would not be satisfied with us shrugging our shoulders and saying that we tried. We knew that the American people would not be satisfied with us telling them that they'll have to wait for comprehensive marriage tax relief because the other side blocked our first attempt. And so we are back today. We have returned with ``The Marriage Tax Relief Reconciliation Act of 2000.'' Substantively, this bill is the same as the one that we sought to pass a few months ago. But there is one crucial difference between now and then. Today, we are proceeding under the Budget Act's reconciliation procedure. And that means that no one is going to delay us from passing this bill. We will have an up or down vote. We will see who supports the marriage tax relief in our bill. And we will see who thinks that American families are not entitled to this relief. Before I describe the specifics of our bill, I want to talk about how we got here. Our tax system has chosen to use the family as the unit for taxation. Unlike some other countries--where all individuals are taxed separately--here in the United States, we look to the household. In doing so, our tax system has tried to balance three disparate goals--progressivity, equal treatment of married couples, and marriage neutrality. And, I will remind my colleagues, it is impossible to achieve all three principles at the same time. The principle of progressivity holds that taxpayers with higher incomes should pay a higher percentage of their income in taxes. The principle of equal treatment holds that two married couples with the same amount of income should pay the same level of tax. And the principle of marriage neutrality holds that a couple's income tax bill should not depend on their marital status. The tax code should neither provide an incentive nor a disincentive for two people to get married. Our policy response differs depending on how we balance these different principles. For instance, if we want to ensure that when two singles get married their total tax bill will not rise--but we do not mind if two married couples with the same overall income level are treated differently, then we arrive at one result. However, if we want to make sure that two singles who marry do not face increased taxes-- and we want to make sure that two married couples with the same income level are treated evenly--then we arrive at a different result. Last year, the Senate position in the Taxpayer Relief Act of 1999 only embraced the first policy result. We focused on what people refer to as the marriage tax penalty--in other words, the difference between what two spouses would pay in taxes if they were single versus what they would pay in taxes if they were married. In developing the specific provision, we took aim only at one particular definition of a marriage tax relief penalty. We developed a system whereby a married couple would have an option. The couple could continue to file a joint return using the existing schedule of married filing jointly. Or the couple could choose to file a joint return using the separate schedules for single taxpayers. It was straightforward, and it was universal--we did not try to impose arbitrary income limits to cut off the relief. As I said last year, the separate filing option had a lot of good things about it. Most importantly, I liked the way that the plan basically eliminated the marriage penalty for all taxpayers who suffered from it. It delivered relief to those in the lowest brackets as well as to those in the highest brackets. However we should also remember that last year's approach was part of a larger package of tax relief. We should all remember this point: America's families were going to receive relief from other provisions in that bill. Last year's marriage penalty provision was part of a comprehensive tax bill directed towards American families. Other pieces of the bill--the cuts in the 15 percent rate bracket, the expansion of the child care credit--provided additional benefits to American families. So, the separate filing option should not be viewed in a vacuum; instead, it must be seen as part of a comprehensive tax relief package. In any event, as we all know, none of the pieces of last year's tax cut package--neither the marriage penalty relief nor anything else--made it into law. Because President Clinton vetoed that bill, America's families have been denied the tax relief that they deserve. This year I felt that we should take a different approach to marriage tax relief. As the Chairman of the Finance Committee, I am responsible for developing tax policy in a fair and rational manner. I am also responsible for working with members of my committee and of the full Senate. After listening to my colleagues' views on marriage tax relief, I came to the conclusion that the best approach this time is to build on the foundation that Congress has already approved. Last year, in the conference report of the Taxpayer Relief Act of 1999, Congress adopted three components of marriage penalty relief. These included an expansion of the standard deduction for married couples filing jointly; a widening of the tax brackets; and an increase in the income phase- outs for the earned income credit. A different part of that bill addressed the minimum tax issue. Earlier this year, the House passed a marriage penalty tax bill that included the first three components. And so the Finance Committee bill, the Marriage Tax Relief Reconciliation Act of 2000, uses these same building blocks. This is important--not just for purposes of building and maintaining consensus--but for policy reasons as well. You see, if we target relief only at the families that suffer a marriage penalty, we begin to violate another of the three principles that I described earlier. Since 1948, our tax system has adhered to the principle of treating all married couples with the same amount of income equally. In other words, each household that earns $80,000-- regardless of the breakdown of that income--would pay the same amount of tax. It does not matter whether one spouse earns all $80,000 while the other spouse works at home taking care of the children; and it does not matter whether both spouses work outside the home and earn $40,000 each. Each household with the same amount of income is treated the same for tax purposes. As we studied how best to solve the marriage penalty--to ensure that the tax code does not provide a disincentive to get married--we realized that it was extremely important to stick to this principle of equal treatment. In solving one penalty, we don't want to be creating a new penalty--a new disincentive for America's families. We did not think that the tax code should deliver a new, so-called ``homemaker penalty''--where a family with only one wage earner is treated worse than a family where both spouses work. This is what would happen if we used a separate filing option. Many people have argued that tax policy should not discourage one parent from staying at home and raising the family. It is a laudable goal and one that I strongly support. Retention of the equal treatment principle is especially important in a tax bill such as the one we have before us. Unlike last year's tax bill, this one does not include rate cuts or enhanced family tax credits. All America's taxpaying families have contributed to the tax overpayment in Washington today. All these families, therefore, deserve to receive some of the benefits that we are seeking to return to the American people. We should not pick out some married couples over others. We should not be picking winners and losers from America's families in some Washington game of musical chairs. And that is what we would do if we left out those families where one spouse works maintaining a home and a family. Under the proposal offered by Democrats in the Finance Committee, over 17 million homemaker families would be left out of tax relief. In my state of Delaware, over 30,000 homemaker families would be left standing at the altar by the Democrats proposal. Now let me take a few minutes and describe the provisions of our bill. First, we enlarge the standard deduction for married couples. Under current law, for the year 2000, the standard deduction for a single taxpayer is $4,400. The standard deduction for a married couple filing a joint return is $7,350. That means that for couples who use a standard deduction--and those are generally low and middle income couples--they are losing $1,450 in extra deductions each year. At a 28- percent tax rate, that lost deduction translates into an extra tax liability of $406 each and every year. The Finance Committee bill increases the standard deduction for married couples so that it is twice the size of the standard deduction for singles, and we do that immediately, in 2001. When fully effective, this provision provides tax relief to approximately 25 million couples filing joint returns, including more than 6 million returns filed by senior citizens. Increasing the standard deduction also has the added benefit of simplifying the Tax Code. Approximately 3 million couples who currently itemize their deductions will realize the simplification benefits of using the standard deduction. Second, the Marriage Tax Relief Reconciliation Act of 2000 addresses the cause of the greatest dollar amount of the marriage tax penalty-- the structure of the rate brackets. Under current law, the 15-percent rate bracket for single filers ends at taxable income of $26,250. The 15-percent rate bracket for married couples filing jointly ends with taxable income of $43,850, which one can see is less than twice the single rate bracket. In practical terms, that means that when two individuals who each earn taxable income of $30,000 get married and file a joint tax return, $8,650 of their income is taxed at the 28- percent rate rather than at the 15-percent rate that the income would have been subject to if they had remained single. The extra tax liability for that couple each year comes out to $1,125. The Finance Committee bill remedies that fundamental unfairness. The bill adjusts the end point of the 15-percent rate bracket for married couples so that it is twice the sum of the end point of the bracket for single filers. Recognizing that the rate structure hurts all married couples, the bill also adjusts the end points of the 28-percent rate bracket as well. When fully effective, this provision will provide tax relief to approximately 21 million couples filing joint returns, including more than 4 million returns filed by senior citizens. Third, the Marriage Tax Relief Reconciliation Act of 2000 addresses the biggest source of the marriage tax penalty for low income, working families--the earned income credit. This complicated credit is determined by using a schedule for the number of qualifying children, and then multiplying the credit rate by the taxpayer's earned income up to a certain amount. The credit is phased out above certain income levels. What that means is that two people who are each receiving the earned income credit as singles may lose all or some of their credit when they get married. In order to address that problem, the Finance Committee bill increases the beginning and ending points of the income levels of the phaseout of the credit for married couples filing a joint return. For a couple with two or more qualifying children, this could mean as much as $526 in extra credit. This provision would also expand the number of married couples who would be eligible for the credit. It will help almost 4 million families. Fourth, the Marriage Tax Relief Reconciliation Act of 2000 tries to make sure that families can continue to receive the family tax credits that Congress has enacted over the past several years. Each year, an increasing number of American families are finding that their family tax credits--such as the child credit and the Hope Scholarship education credit--are being cut back or eliminated because of the alternative minimum tax. Last year, Congress made a small downpayment on this problem, temporarily carving out these family tax credits from the minimum tax calculations. This year, we are building on that bipartisan approach, by permanently extending the preservation of the family tax credits. Because of this provision, millions of taxpayers will no longer face the burden of making minimum tax calculations for the purpose of determining the family tax credits they need. Finally, the committee included a provision to ensure that we complied with the Budget Act. Because we were not allowed to decrease revenues outside of the period covered by the budget resolution--which is 5 years--the bill sunsets all of the provisions in the bill after 2004. It goes without saying that I do not think it is good policy to sunset these tax benefits. They should be permanent and I expect that they will be permanent when this bill is signed into law. Accordingly, I will propose an amendment to strike the sunset. I expect all of my colleagues to join with me in supporting that amendment. How much does this marriage tax penalty relief help? It helps a lot. Over 45 million families will get marriage tax relief under this legislation. In my State of Delaware, over 100,000 families will benefit. Every family earning over $10,000 per year will see their tax bill fall at least 1 percent--except those at high income levels. The key to this legislation is that it helps the middle class. Sixty percent of this bill's tax relief goes to those families making $100,000 or less. Who are these people? They are two married civil engineers, or a pharmacist who is married to a school teacher. They are the policeman and his wife who runs a small gift shop in Dover. They are the firefighter who is married to a social worker, or a librarian who is married to an accountant. These are the families who will benefit. They will benefit even more, as you examine the impact this tax relief will have over time. Consider the effect if these tax savings were put away for their children's education and retirement. If a couple with two children making just $30,000 took their tax savings from this bill and put it into an education savings account like the one recently passed by the Senate, they would have $40,000 for those children's college education. Based on the stock market's historical rate of return, that is $40,000 if they did not set aside another penny. If the family was that of two elementary school teachers with two children and earning average salaries of $70,000 combined, they would have $65,000 after 18 years. If those two married school teachers then started to put their tax savings from this bill into a Roth IRA after 18 years, this same couple would have $224,100 when they retired 27 years later. By transforming these tax savings into personal savings, we see that these real tax savings translate into real opportunities for these families. And consider the effect on the economy. According to an analysis by the Heritage Foundation, in 2004 this marriage tax penalty relief legislation will result in additional jobs. It will increase the personal savings rate by three-tenths of 1 percent, which in turn will lower interest rates. According to estimates done by the economists at the Heritage Foundation, the favorable economic impact of the tax relief would increase overall disposable income by $45 billion in 2004. That means that the average family of four would see an additional $670 in income--just from the positive economic impact. So not only do married families gain, not only do their children gain, but the entire country gains. They gain more jobs, better jobs, and higher wages because of this marriage tax relief legislation. The marriage tax relief legislation I bring to the floor today amounts to just 3 percent of the total budget surplus over the next 5 years. It amounts to just 10 percent of the non-Social Security surplus over the next 5 years. It amounts to just 42 percent of the new spending provided for in this year's budget over the next 5 years. Finally, it amounts to just one third of the tax cut that has been allotted to the Finance Committee for tax cuts over the next 5 years in this year's budget. By any comparison or estimation, this marriage tax penalty relief is fiscally responsible. This bill does all these things for America's working families while preserving every cent of Social Security's surplus. These tax cuts do not have to pit America's families against America's seniors, nor does it extend a tax cut in a fiscally irresponsible manner. These tax cuts fit in this year's budget, along with the other Republican priorities that we have already passed for education, health care, and small businesses. Our priorities add up to what's good for America, and our numbers add up to what is fiscally responsible. It is time we stopped playing the politics of division. We do not have to pit one type of family against another type of family or families against seniors to do what is right. It is time we divorce the marriage penalty from the Tax Code once and for all. For too long Washington has been an unclaimed dependent in millions of America's families. I urge all my colleagues to support the Marriage Tax Relief Reconciliation Act of 2000. Mr. President, the earned income credit, or EIC, is an important antipoverty tool. It gives an incentive for families to help themselves. It provides low-income workers with a tax credit, thereby increasing their real wages. It gives poor and middle-class families an extra incentive to help themselves. While the program is by no means perfect, it has been one of the more effective Government programs in pushing families above the poverty line. The structure of the EIC is the largest source of the marriage penalty for low-income families. Our bill addresses this inequity by increasing the beginning and ending income phaseout levels of the credit for married couples by $2,500. Our proposal goes to families, just as the original EIC program was intended to do. Mr. President, I move to raise a point of order against section 4, from page 5, line 12, through page 7, line 3, of the bill, that it violates section 313 of the Budget Act. Mr. President, I furthermore move to waive all points of order under the budget process arising from the earned-income credit component in the Senate bill, the Moynihan substitute, the House companion bill, and any conference report thereon. Mr. REID addressed the Chair.

Mr. ROTH. I think the Senator from Texas has been seeking the floor.

Mr. ROTH. That is satisfactory.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent the bill be read a third time and passed, the motion to reconsider be laid upon the table, and that any statements relating to the bill be printed in the Record.

Mr. ROTH

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

Mr. ROTH

Mr. ROTH. Following morning business, the Senate will resume the Interior appropriations bill under the previous consent, with several amendments to be offered and debated throughout the day. However, any votes ordered with respect to the Interior bill will occur at 9:45 a.m. on Tuesday, July 18. As a reminder, there will be votes on the reconciliation bill on Monday at 6:15 p.m. This will include votes on amendments as well as on final passage of this important tax legislation.

Mr. ROTH

Mr. ROTH. That is satisfactory.

Mr. ROTH

Mr. ROTH. Mr. President, I move to reconsider the vote.

Mr. ROTH. Mr. President, I ask for the yeas and nays.

Mr. ROTH. Mr. President, I move to reconsider the vote.

Mr. ROTH. Mr. President, while I am sympathetic to the goals of the Santorum amendment and I strongly support some of its provisions, I must vote against it at this time. The amendment offered by the Senator is 251 pages long and has 12 titles. It includes new tax incentives and new authorization programs. Some of the incentives are new starters that have never been considered before. While the amendment is based on an agreement that has been announced by the Speaker's Office and the White House, that specific agreement has not been finalized, introduced, or considered by the House of Representatives. A few weeks ago, Senator Santorum introduced a slightly smaller version of his amendment as a bill. That bill, S. 2779, was referred to the Finance Committee. Our Committee has held no hearings on the bill and we have not marked it up. The Joint Committee on Taxation has not had a chance to offer its comments on the full package or formally to tell us how much it costs. The Administration has not provided us with its views. Since the bill was introduced, my staff has been contacted by a variety of groups asking for technical changes to make the tax incentives operate better. My colleagues know that I am a strong supporter of some of the provisions in the amendment. Increases in the low income housing credit cap and the private activity bond volume cap are long overdue. Tax credits for individual development accounts are a new and promising concept that I included in last year's tax bill. Nevertheless, I believe that the proper course is for the Finance Committee to take the time to review and evaluate all the provisions of this amendment. Accordingly, I will vote against it at this time. amendment no. 3838

Mr. ROTH

Mr. ROTH. That is correct.