William Roth

Mr. ROTH

Mr. ROTH. Mr. President, I rise to address one provision in the managers' amendment that has been adopted. The provision to which I am referring deals with the authority of the Federal Housing Finance Board to allocate authority to Federal Home Loan Banks to guarantee school construction bonds. The provision contemplates legislation that ``expressly'' authorizes the Federal Housing Finance Board to allocate such authority to the Federal Home Loan Banks. No inference should be drawn from this provision with respect to the Federal Housing Finance Board's current authority. I note that the general counsel of the Board has issued a legal opinion arguing that the Board has the implicit legal authority to allocate authority to Federal Home Loan Banks to guarantee school construction bonds. I ask unanimous consent that a copy of a letter from Deborah Silberman, General Counsel, Federal Housing Finance Board, dated March 3, 1999, be printed in the Record.

Mr. ROTH. Mr. President, in supporting this amendment, Senators do not necessarily agree or disagree with this legal opinion. What the Senate is stating is that if a bond issuer is to receive both the benefit of tax-exempt interest and a Federal Home Loan Bank guarantee, it can happen only if there is an express subsequent authorization enacted. Amendment No. 2874, As Modified

Mr. ROTH

Mr. ROTH. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

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

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

Mr. ROTH. Mr. President, it is somewhat fascinating to me that this week and today we are being accused of spending too much on education; that we cannot afford to dedicate something close to one-half of 1 percent to assure our American families the kind of education they need these days. Yet a few days ago, the legislation was belittled for not spending enough. We can't have it both ways. What I think is particularly important to understand is that No. 1, no matter is more important to the American family or to this Nation than a well-educated citizenry. I believe what is remarkable about this legislation as modified by my amendment is it takes a very little amount to accomplish so much. The continuing education of Americans is obviously critically important because of the continuing technological revolution we are enjoying. The new generation is going to be facing the need to continue their education to meet the challenges and opportunities of the future. I find it very puzzling when we recognize--and the administration, as well, recognizes--that over the next 10 years we will have nearly a $2 trillion surplus, and we cannot take a very small part of that to help assure American families of all backgrounds the opportunity to be well- educated citizens. I urge my friends and my colleagues to vote against the Graham amendment, the Senator for whom I have the highest respect. I think this is something for which we should use the surplus. I think there is nothing more important than American education. Let me point out once more that American families are paying higher taxes than any time since the end of World War II. Close to 20 or 21 percent of gross domestic product is going to Federal taxes. It is my solid belief that it is important we return part of that to the American family. One of the most important reasons for returning it is to assure they have the resources and are able to send their children not only to the schools of their choice but to college and graduate education as well. For those reasons, I urge my colleagues to reject the second-degree amendment and to support my amendment which would make permanent many of the benefits contained in this legislation. I yield the floor.

Mr. ROTH. I ask for the yeas and nays on the first-degree amendment, No. 2869.

Mr. ROTH. Mr. President, I rise in support of my amendment to S. 1134, the Affordable Education Act. First, my amendment makes this legislation a true tax cut bill for education. My amendment removes all the bill's tax increases. We should not be taxing away with one hand what we return with another in a time of Federal budget surplus. Americans should not be taxed again to pay for a national priority. Second, my amendment makes permanent the increase from $500 to $2,000 in the annual contribution amount for a kindergarten-to-college education IRA. Without these permanent increases in contribution limits and spending flexibility, both would end after the year 2003. My amendment removes that sunset because I believe that we should not be sunsetting our Nation's future, which is the education of our children. Education IRAs are extremely important. Not only does the increase to $2,000 I propose make these accounts more attractive to families who want to use them, but to institutions who want to offer them. And even more important than these additional incentives to adults is the one they give to children. As experts have testified, there is something special about knowing that money is being put away for your future education. It is an incentive to excellence for both today and tomorrow. Third, my amendment fixes a trap for the unwary. Currently, a student who takes money from an education IRA is not able to use the HOPE or Lifetime Learning Credit--even if they are for different education expenses. That is wrong, and it is downright deceptive to families who need both. My amendment allows parents to use both and to use both permanently. Finally, my amendment makes the tax-free treatment of employer- provided educational assistance permanent--both undergraduate and graduate. Something as important and necessary as continuing education should not be wrapped up in the uncertainty of frequently needed legislative action. Why is the permanency of my amendment's provisions so important? Because they would allow parents to contribute up to $2,000 annually toward their child's education--from the day of birth to the first day of college. Even that may not seem like a lot but, like a train, it may start slowly but it is very powerful. It will gain speed. It is a savings express to college. By putting their child on the savings express, after 18 years when that child is ready to go to college, the parents will have over $65,000. And that just assumes a 6-percent rate of interest--the rate on a government security. Of course, other investments could yield even more. Parents would have at least $65,000 toward their child's education. Twenty-nine thousand dollars of that would be solely due to the power of compounding interest. And every cent of that $29,000 would be tax-free--it would go straight into education. Maybe that still does not seem like a lot to some folks, but it sure seems like a lot to parents who are struggling today to insure college for their children tomorrow. The national average annual cost of college--tuition, room, and fees--is roughly $10,000 per year or $40,000 for the cost of college education. My amendment before us today will cover this. It will give parents and students peace of mind and a piece of the American dream. My amendment is a powerful incentive to save. It is an engine. It is the engine that can pull a long train of savings--and dreams. Like the ``Little Engine that Could,'' my amendment makes this legislation the ``Education Savings Plan that Will.'' Parents and children getting on this savings train, will get off at college to a better future. America has waited for this education savings plan for three long years. This legislation brings it home today. My amendment makes sure it stays there for families--not just for today, but for tomorrow and all the days that follow. It is time that the President got on board. I urge my colleagues to join with me in a bipartisan effort to make education affordable for America's families. Mr. President, I yield the floor.

Mr. ROTH

Mr. ROTH. Mr. President, I intend to offer a substitute amendment to S. 1134 later today. The underlying bill was reported out of the Finance Committee almost 1 year ago, in May 1999. My substitute amendment makes some important and necessary policy changes that were not done before--because of budget constraints 1 year ago. My amendment also updates the bill to account for the passage of time. When the committee originally considered this education bill, we were operating under last year's budget scenario. Since that time, the surplus numbers have increased dramatically. In today's economic environment, I believe that it is appropriate to use the surplus to provide education tax incentives for American families. Through their hard work, the American people created these favorable economic conditions and the resulting budget surplus. They should be entitled to take some of that surplus back. We should not have to raise taxes to offset these much needed education tax incentives. My amendment makes this legislation a true tax cut relief bill for education. With a growing Federal surplus created by their tax dollars, Americans should not be taxed again to pay for a national priority. Accordingly, my substitute amendment strikes all of the revenue raisers in S. 1134. The cost of my amendment is but a small percentage of the projected budget surplus over the next 10 years. Now let me explain some of the substantive changes that I make in the substitute amendment. First, the underlying bill increases the maximum contribution amount for an Education IRA from $500 per year to $2,000 per year. The underlying bill also allows contributions to an Education IRA to be used for kindergarten through high school education expenses. These are both important and needed changes. But the underlying bill sunsets both of those benefits after the year 2003. That is not good policy. Accordingly, my bill removes the sunset--it makes permanent both the increase in the contribution limit and the flexibility in the use of the accounts. Planning and saving for college should take place as early as possible. To help families make those important decisions, they need to know how much money they can put away and for what it can be used. Having provisions that sunset--and thus need to be renewed by Congress--takes away from that certainty. We need to make saving for college easier and more certain--not complex and uncertain. I can easily see why a family would not want to take their hard earned savings and put them in a program where the terms could change in a few years. My amendment helps to solve that problem. We should not sunset our future--the education of our children. Education IRAs are extremely important for a few reasons. First, they help families afford the escalating costs of higher education. The increase to $2,000 will make these accounts more attractive to families who want to use them and to institutions who want to offer them. Second, the existence of an education IRA gives an additional push to a student to attend college. Last month, the Senate Governmental Affairs Committee held a hearing on the rising cost of college tuition. One of the witnesses was Dr. Caroline M. Hoxby, an associate professor of economics at Harvard University. Commenting on the behavioral incentives of an Education IRA, Dr. Hoxby noted that for an eighth grader, there is something different about knowing that there is money being put away for your college education and that you will lose it and the opportunity to go to college if you do not continue to do well. It makes sense that a child who is aware that there is a fund being built up for his or her future education would think longer and harder about going to college. My amendment also fixes a trap for the unwary. Under current law, a student who takes a distribution from an Education IRA is not able to use the HOPE or Lifetime Learning Credit--even if different education expenses are allocated for the different tax benefits. Again, this is not right. We are providing these education tax incentives to families because they need them. We should not hold them out there--making people believe that they are available--and then take them away. Because of revenue constraints, the original Finance Committee bill fixed this coordination only for a few years. My amendment makes the coordination permanent, and makes sure that families continue to receive the full benefits from all these tax benefits. My amendment also makes the tax-free treatment of employer-provided educational assistance permanent. In last year's Extenders bill, Congress extended the current tax-free treatment for a few years. That was the right move, but it did not go far enough. First, something as important and necessary as continuing education should not be wrapped up in the uncertainty of extenders legislation. Workers and companies need to plan ahead, and they need to know how these educational expenses will be treated under the Tax Code. Second, we should reinstitute the exclusion for graduate education expenses. Especially in today's dynamic economy--which is marked by high technology and innovation--it is important that workers have access to graduate education. My amendment recognizes that fact, and so it makes permanent tax-free treatment of employer-provided educational assistance for both undergraduate and graduate level courses. Finally, my amendment updates the Finance Committee bill by changing the effective dates of the provisions. They would all be effective beginning in the year 2001. I should also note that my amendment takes into account the Senate's adoption of the Collins amendment yesterday-- and so will include that amendment as well as any others that have been adopted. Why are the permanent provisions in my amendment so important? Some Senators have tried to rationalize their opposition to this bill by claiming that it would not do enough to advance education. My amendment guarantees that this is simply not true. My amendment would allow parents to contribute up to $2,000 annually toward their child's education--from the day of birth to the first day of college. That is just $5.48 a day or $38.46 a week. That may not seem like a lot but, like a train, it may start slowly but it is very powerful. It will gain speed. It is a savings express to college. By putting their child on the savings express, after 18 years when that child is ready to go to college, the parents will have $65,200, and that just assumes a 6 percent rate of interest--the rate on a Government security. Of course, other investments could yield even more, but a U.S. Government security is the safest in the world. So parents would have at least $65,200 toward their child's education. $29,000 of that would be solely due to the power of compounding interest. And every cent of that $29,000 would be tax- free--it would go straight into education. Maybe that still does not seem like a lot to some folks, but it sure seems like a lot to parents who are struggling today to insure college for their children tomorrow. The average annual cost of college--tuition, room, and fees--in 1997- 1998, was $9,536. At the University of Delaware, it is $9,984 for this school year. So the national average total cost is roughly $10,000 per year or $40,000 for the cost of a college education. My amendment before us today will cover this. It will give parents and students peace of mind. My amendment is a powerful incentive to save. It is an engine. It is the engine that can pull a long train of savings--and dreams. Like the Little Engine that Could, my amendment makes this legislation the Education Savings Plan that Will. Parents and children getting on this savings train, will get off at college to a better future. I am amazed that some people are trying to overlook the train and just see the caboose. I promise you the American people are not. America has waited for this college savings plan for 3 years. This legislation brings it home today. It is time the President got on board. The measures in this bill are an important step forward. My amendment will not only take us another step forward but keep us on a permanent track to prosperity. I urge my colleagues to join in a bipartisan effort to make education affordable for American families. I yield the floor.

Mr. ROTH. Mr. President, let me remind my colleagues that we have already considered and rejected the President's school construction proposal in the past. In 1998, in connection with an education tax bill, Senator Moseley-Braun offered the President's package, and it was defeated by a vote of 56-42. Last year, my distinguished colleague, Senator Robb, offered this school construction plan, and it was defeated 55-45. We all agree on the need for well-built and well-maintained schools. There is no one in this body who wants our children to learn in a substandard learning environment. But the evidence shows the States are stepping up and meeting the challenge of providing schools for their students. We should not create a new Federal program that injects the Federal bureaucracy into additional State and local controls. For these reasons, I oppose the amendment, and I move to table it. Mr. President, I ask for the yeas and nays.

Mr. ROTH. Mr. President, I'd like to focus on the issue of school construction. All of us, Democrats and Republicans, recognize the need for well constructed and well-maintained school facilities. Nobody wants an inadequate learning environment for our children. Senator Robb has offered an amendment on school construction. His amendment, as I understand it, basically contains the administration's school construction package. I opposed this package last year, and I continue to do so today. Before I even talk about Senator Robb's amendment, I want to make a point that is often lost in this discussion. The Federal Government already provides a significant subsidy for school construction. Under current law, states and localities can issue debt that is exempt from federal taxation. This benefit allows them to finance school construction by issuing long-term bonds at a much lower cost than they otherwise could. The interest subsidy saves school districts money and allows them to stretch their resources to meet their needs. Now let me comment on the substance of Senator Robb's amendment. Among other things, it creates a new type of bond--called a ``qualified school modernization bond'' and authorizes the issuance of up to $23.6 billion of these bonds. Unlike regular tax-exempt bonds, for which the holder receives tax-exempt interest payments, holders of these new qualified school modernization bonds would receive a federal tax credit, in an amount to be set by the Treasury Department. This program involves a dramatic increase in federal bureaucracy, while at the same time striking at the heart of local control of education--which is the hallmark of our nationwide educational system. In order to qualify for these bonds, a state or local school district would need to secure the approval of the Department of Education. In giving its OK, the Department of Education is supposed to consider whether a comprehensive survey of the district's renovation and construction needs had been completed, and how the state or locality would respond to the construction needs. In other words, federal officials in Washington would be micromanaging a local school district's renovation plans--in effect, second guessing the decision of state and local officials. It just does not make sense for the Department of Education to get involved at this level. President Clinton himself stated in 1994 that ``the construction and renovation of school facilities has traditionally been the responsibility of state and local governments financed primarily by local taxpayers.'' In that respect at least, I agree with the President. While I am on the subject of local control, I want to point out that state and local governments have, in fact, responded to the need for school construction and renovation. On March 3, 1999, the Finance Committee had a hearing where we evaluated the appropriate federal role in school construction. At that time, Dr. Dennis Zimmerman of the Congressional Research Service explained that since the early 1990's, the approval rates for school bond issues and for total school construction dollars has increased substantially. From 1991 until 1998, the approval rate for new issues went from less than 50 percent to almost 67 percent. During those same years, the approval rates for new construction dollars went from about 48 percent to over 82 percent. Additionally, the inflation adjusted annual growth rate of school bond volume--measured in dollars--during the last 20 years is 7.7 percent. This compares to an annual school age population growth rate of only 0.2 percent and an annual increase of 4.1 percent in state/ local receipts. With respect to bond volume, in the first 6 months of 1996, voters approved $13.3 billion in school bonds, an increase of more than $4 billion over the first 6 months of 1995. The bottom line is that many states and localities are doing their homework, passing bonds, building and renovating schools, and enjoying favorable treatment under the existing Tax Code. They are stepping up and meeting the challenge--and they are doing so without a massive intrusion by the Federal Government. One of the witnesses at our hearing, Bill Manning, the president of a large school district in my little State of Delaware, told us that if we really wanted to improve education at the local level, we should diminish the federal role, rather than increase it. The package of school construction measures in the Finance Committee bill would retain state and local control, and would also work within the existing tax-exempt bond framework. The latter point is important because our purpose here is to provide state and local governments with incentives that they can use, and not concepts that are untested and uncertain. For instance, 2 years ago, Congress enacted a tax credit bond program for school construction. Called qualified zone academy bonds (``QZABs''), the law provided for an authorization of $400 million in 1998 and $400 million in 1999. According to the Bond Market Association, however, few QZAB transactions have taken place. Mr. President, in the extenders tax legislation last fall, we did extend the QZAB program through 2001. One of the reasons for this extension was to evaluate how this pilot program is performing. My point here is simply that setting up a big program with a high authorization does not always translate into a successful policy result. We need to look at how the program will play out in the real world--whether the rhetoric will translate into results. We need to look at how the program will play out in the real world. The proposals in the Finance Committee bill provide local school districts with the flexibility they need to address the needs of their constituents. On this point, does anyone really believe Washington, DC, bureaucrats really understand local school construction needs better than the local school board? How do we accomplish the objective of enhancing the financing of school construction activities, while maintaining local control, in this bill? The answer is several important school construction measures. The first proposal is directed at innovative financing for school districts. It expands the tax exempt bond rules for public/private partnerships set up for the construction, renovation, or restoration of public school facilities in these districts. In general, it allows states to issue tax-exempt bonds equal to $10 per state resident. Each state would receive a minimum allocation of at least $5 million of these tax-exempt bonds. In total, up to 600 million per year in new tax exempt bonds would be issued for these innovative school construction projects. This proposal is important because it retains state and local flexibility. It does not impose a new bureaucracy on the states and it does not force the Federal Government to micromanage school construction. The proposal also is important because it promotes the use of public/ private partnerships. Many high-growth school districts may be too poor or too overwhelmed to take on a school construction project themselves. With these bonds, those districts can partner with a private entity-- and still enjoy the benefits of tax-exempt financing. Mr. President, there is a second bond provision in this bill. That provision is designated to simplify the issuance of bonds for school construction. Under current law, arbitrage profits earned on investment unrelated to the purpose of the borrowing must be rebated to the Federal Government. However, there is an exception--generally referred to as the small issuer exception--which allows governments to issue to $5 million of bonds without being subject to the arbitrage rebate requirement. We recently increased this limit to $10 million for government that issue at least $5 million of public school bonds during the year. The provision in the Finance Committee bill increase the smaller issuer exemption to $15 million, provided that at least $10 million of the bonds are issued to finance public schools. This measure will assist localities in meeting school construction needs by simplifying their use of tax-exempt financing. At the same time, it will not create incentives to issue such debt earlier or in larger amounts than is necessary. It is a type of targeted provision that makes sense. Mr. President, I also want to make sure that my colleagues realize that the Robb Amendment strikes the language in the bill relating to K- 12 withdrawals from education savings accounts. This flexibility--the ability to use a family's savings for any of the family's education expenses--is a central component of this bill. Removing it sends the wrong message to American families and does nothing to help them meet the increasing need of education. For these reasons, I oppose this amendment and urge my colleagues to do so as well. Mr. President, I ask unanimous consent that the statement of Dr. Dennis Zimmerman of the Congressional Research Service and Mr. William Manning of the Red Clay Consolidated School District Board of Education be printed in the Record.

Mr. ROTH. Mr. President, I yield the remainder of my time.

Mr. ROTH. Mr. President, I yield myself such time as I may consume off of the Abraham amendment debate time.

Mr. ROTH

Mr. ROTH. Mr. President, I am extremely disappointed by the WTO appellate body's decision on the FSC. The panelists completely ignored economic reality. The FSC is not an export subsidy. It is a remedy for the competitive disadvantage our firms face in the marketplace due to the tax practices of other WTO members, particularly the members of the European Union. That said, the real problem here is not the appellate body's decision, but the underlying WTO rules. That, and the perverse decision by the European Commission, over the objection of many of its own firms and member countries, to reopen this trade dispute 20 years after we had reached a satisfactory settlement of these issues. Other WTO members, particularly in the European Union, employ a territorial-based tax system that does not tax foreign source income, including income from exports. That system affords a competitive advantage to firms operating in those jurisdictions that the U.S. tax system, based on worldwide reporting of income, does not. The WTO rules currently permit the use of territorial based tax systems, despite the competitive benefits they confer on products exported from those countries. That is what the FSC and the DISC before it were designed to offset. I want to be absolutely clear about my view on this. While I fully expect we will live up to our obligations, no resolution of this issue can leave our firms, our farmers, and the American worker at a permanent competitive disadvantage in the marketplace. Indeed, I thought we had put this issue to rest with our European counterparts 20 years ago. But, they saw fit to abrogate the agreement we had reached to resolve our prior dispute over the trade effects of their tax system and our attempts to redress those effects. That agreement included the understanding that, in the future, we would take our differences over tax policy to fora that were specifically designed for that purpose, and not the GATT or the WTO. The reason for that understanding was simple. The GATT and the WTO are essentially agreements to reduce trade barriers and avoid other discriminatory trade practices. Nothing in those rules was intended to force a member country to choose between competing tax systems. Yet, that is the net effect of the current ruling. The Europeans' action raises a far broader point about the conduct of their trade policy. The decision to abrogate our 20-year-old agreement and bring the FSC case, by all accounts, was not made at the behest of the EU member countries. Nor was it made at the insistence of EU firms complaining that the FSC somehow put them at a commercial disadvantage. That is because European firms understand that they already benefit from the territorial-based tax systems and the FSC was simply a way of providing equivalent treatment under our system of taxation. In fact, a number of those European-based firms have U.S. subsidiaries that take advantage of the FSC as well. The decision to bring the FSC case was made at the European Commission without consideration either for its political impact here or for its impact on the trading system. In that sense, the decision to bring the FSC case fits with the Commission's attitude on our disputes on bananas and beef and on other WTO disputes. The Commission seems to have forgotten that the European Union member countries are, along with the United States, among the principal beneficiaries of the WTO system and that the Commission bears the responsibility to shore the system up, rather than engaging in tactics designed to weaken it. Both the Commission's decision to flout the WTO rules in the beef and bananas disputes and the reckless decision to bring the FSC case are deeply inconsistent with that responsibility. This case was brought, not for any European constituency, but for the Commission's own petty political interest in balancing its losses before the WTO with a few wins, regardless of the larger consequences for the trading system. This issue must be made a top priority in discussions at the upcoming G-8 summit. President Clinton must make the political point to his European counterparts that they, not the Commission, are responsible for setting the course of the European Union's trade policy and that this issue needs to be resolved in terms that ensure a level-playing field for American workers, farmers, and firms. As chairman of the Finance Committee, I am committed to making that happen.

Mr. ROTH

Mr. ROTH. Mr. President, I am disappointed that we have failed to obtain a unanimous consent agreement to limit amendments with respect to S. 1134, the Affordable Education Act. I hope that we will move towards passage of this very significant bill. The importance of giving American families the resources and means they need to educate their children must be above politics. I will soon take a few minutes to walk through the various provisions of the bill. But before I get into the specifics, let me remind my colleagues that all of the concepts in this bill should be very familiar. This bill is an A+ for American education. Its concepts should be familiar because we have already endorsed them. The base provisions in the bill--which include the increase in the maximum allowable contribution to an education IRA, the use of the IRA for elementary and secondary school expenses for public and private schools, the tax-free treatment of State-sponsored prepaid tuition plans, and the extension of tax-free treatment for employer-provided educational assistance--all received bipartisan support from the Finance Committee in the Senate as part of the Taxpayer Relief Act of 1997. Despite this Senate support, these provisions were dropped from the bill during conference negotiations. Because of opposition from the administration, these particular elements failed to be included in the final version of the Taxpayer Relief Act of 1997. In addition, these proposals were included in legislation sent to the President in 1998. Unfortunately, the President vetoed that legislation. These bipartisan proposals were included in the Taxpayer Refund and Relief Act of 1999, which passed last year. Unfortunately, the President vetoed that legislation, as well. But we must not lose heart. The cause of affordable education is too important. I hope this time we can succeed for the American people. We are here today to show our commitment to affordable education and to enact what this body determines makes good sense for American families. It is important to note that this tax bill is not designed to answer all the education-related issues that face this country. Many issues are too varied and complicated to be addressed by the Federal Government. They need to be solved at the State and local level--by schools, by teachers, and by parents working together. Instead, this bill is designed to build on the innovative concepts that have been introduced in the last few years. Our goal is to fix the Tax Code so that it provides the necessary incentives to help American families help their children. These are much needed tools. From 1992 through 1998, tuition at a 4-year college increased by 234 percent. During that period, the average student loan increased by 367 percent. In contrast, median household income rose only 82 percent during that period and the Consumer Price Index rose only 74 percent. Our students, our families, need these resources to help them meet the costs and realize the opportunities of a quality education. I hope my colleagues continue to recognize just how important they remain. The American people are counting on us. Let me take a few minutes to describe the various provisions of the bill, to provide an overview, and to highlight some reasons these measures are so important. As I already mentioned, the bill increases the maximum education IRA contribution from $500 to $2,000. That increase is important on two levels. First, with the well-documented increase in education costs, it is essential that we provide American families with the resources to meet these costs. I have long argued that it is essential to change the savings habits of the American people. There are few things more important than the education of their children. Not only will saving in this way increase our investment capital, it will increase Americans' education capital as well. Anything that thwarts either of these objectives is shortsighted. By using the Tax Code to encourage individual responsibility for paying for educational expenses, we all benefit. The expansion of the education IRA will result in greater opportunities for individuals to save for their children's education. Besides being too low to give parents the necessary resources to pay for the cost of education, the current $500 limit fails from another practical perspective. As we all know, any banker or broker who provides an IRA account faces assorted administrative costs for each account. To ensure they can adequately cover their administrative costs, most brokers or banks impose a minimum account balance, and in many cases the maximum balance has been set well higher than $500. That reality of the marketplace has the effect of limiting the availability of the educational IRA to American families. Another reality is that confronted by a $500 limit. Many mutual fund companies find it is not worth their while to spend money on marketing the educational IRA. It is a fact of life that regardless of what we say or do in Congress, many families only know about the benefits of an educational IRA through the marketing efforts of their local mutual fund companies and banks. These businesses have been very successful in marketing IRAs with the higher contribution limit. If we want to maximize the involvement of American families in education IRAs, we need to ensure that the accounts make economic sense from the perspective of the companies offering them. The next major change this bill makes to education IRAs is that it allows withdrawals for education expenses for elementary and secondary schools and for both private and public schools. As we recognized last year, it is a fundamental principle that a parent should have the right and the ability to make decisions about his or her child's education, to decide basic questions such as how the child shall be educated and where the child should attend school. In 1997, for example, when Congress passed a variety of provisions targeted to higher education, we made no distinction between private and public schools. We did not say, for instance, that an education IRA or a HOPE scholarship would only be available if a student attended public school. We did not say that a student who attended the University of Maryland would receive a tax benefit but a student who attended George Washington University would receive nothing. This bill recognizes that, just as for higher education, we should not establish a priority system where some elementary and secondary schools are favored over others. We should not forget that it is the taxpayer who funds the educational IRA, that it is the parent who puts his or her hard-earned money into the education IRA. It seems a matter of common sense, therefore, that the parent should be able to choose how to spend that money and the parent should be able to choose where to send their children to school. Moreover, parents with students in elementary and secondary school need our help to cope with the costs. It is simply not true that only rich kids attend private elementary or secondary schools. For instance, recent data from the National Catholic Education Association indicate that almost 70 percent of the families with children in Catholic schools have income below $35,000, and almost 90 percent of those families have incomes below $50,000. Why should those children not have access to these accounts? Another provision in this bill makes State-sponsored prepaid tuition plans tax free, not simply tax deferred. This is a significant distinction because it allows students to withdraw the savings that accumulate in their prepaid tuition accounts without paying any tax at all. That means more money for children's education. It also means parents have the incentive to put money away today, and their children have the full benefit of that money without any tax tomorrow. As I have already mentioned, at least 43 States have prepaid tuition plans in effect. This means most Members of the Senate have parents and students back home who either benefit from the plan right now or will benefit from the plan soon. I am pleased to see my home State of Delaware has already acted in this area. Delaware parents can now save for college on a tax-deferred basis. But if this bill becomes law, these Delaware families will be able to save for a child's college education on a tax-free basis. The prepaid provision also covers networks of private college plans. This will enable still more parents and more students to save for college. The Finance Committee bill also extends tax-free treatment of employer-provided educational assistance for graduates and undergraduates through June 30, 2004. This particular program is a time-tested and widely used benefit for working families. Over 1 million workers across America receive tax- free employer-provided education. This allows them to stay on the cutting edge of their careers. It benefits not only them individually but their employers and, of course, the economy as a whole. With the constant innovation and advancing technology of our society, it is vitally important that we continue this program. The Finance Committee hearings demonstrated the crushing debt burden faced by students coming out of college. I can tell you about this debt burden from Delaware families. I am sure I am not alone. To this end, the Finance Committee restores the student loan interest deduction in the Taxpayer Relief Act of 1997. This bill goes another step further and simplifies and expands the deduction for more students. The Finance Committee does even more than address the cost of attending school. In response to concerns from Members on both sides of the aisle, the Finance Committee agreed on some measures to provide relief in the area of school construction. The first provision is directed at innovative financing for school districts. It expands the tax-exempt bond rules for public-private partnerships set up for the construction, renovation, or restoration of public school facilities in these districts. In general, it allows States to issue tax-exempt bonds equal to $10 per State resident. Each State would be guaranteed a minimum allocation of at least $5 million of these tax-exempt bonds. In total, up to $600 million per year in new tax-exempt bonds would be issued for these innovative school construction projects. This provision is important because it retains State and local flexibility. It does not impose a new bureaucracy on the States. It does not force the Federal Government to micromanage school construction. The provision is also important because it promotes the use of public-private partnerships. Many high growth school districts may be too poor or too overwhelmed to take on a school construction project itself. But with these bonds, these districts can partner with a private entity and still enjoy the benefits of tax-exempt financing. It is worth noting that there already is a significant Federal subsidy for school construction. Under current law, States and localities can issue debt that is exempt from Federal taxation. This benefit allows them to finance school construction by issuing long-term bonds at a lower cost than they otherwise could. Moreover, the evidence shows that States and localities are taking advantage of this benefit. In the first 6 months of 1996, voters have approved $13.3 billion in school bonds, an increase of more than $4 billion over the first 6 months of 1995. The bottom line is that many States and localities are doing their homework, passing bonds, building and renovating schools, and enjoying favorable treatment under the existing Tax Code. They are doing all this without significant Federal involvement. I do not have to remind colleagues that school construction has always been the province of State and local governments. President Clinton himself stated in 1994 that the construction and renovation of school facilities has traditionally been the responsibility of State and local governments, financed primarily by local taxpayers. In that respect, I agree with the President. Well, there is a second bond provision in this bill. That provision is designed to simplify the issue of bonds for school construction. Under current law, arbitrage profits earned on investment unrelated to the purpose of the borrowing must be rebated to the Federal Government. However, there is an exception, generally referred to as the small issuer exception, which allows governments to issue up to $5 million of bonds without being subject to the arbitrage rebate requirement. We recently increased this limit to $10 million for governments that issue at least $5 million of public school bonds during the year. The provision in the Finance Committee bill increases the small issuer exception to $15 million, provided that at least $10 million of the bonds are issued to finance public schools. This measure will assist localities in meeting school construction needs by simplifying their use of tax-exempt financing. At the same time, it will not create incentives to issue such debt earlier or in larger amounts than is necessary. That is a type of targeted provision that I believe makes good sense. Finally, as we all know, the Tax Code is too complex. As chairman of the Finance Committee, simplification of the Tax Code is one of my top priorities. This Finance Committee bill provides for coordination between education IRAs, prepaid tuition plans, the HOPE scholarship, and lifetime learning credits. This provision will mean that parents will not lose the benefit of the HOPE scholarship and lifetime learning credits when they use an education IRA or a prepaid tuition plan. It is clear that the Finance Committee bill contains numerous important provisions for the American family. As I have already said, many of these measures are ones the Senate passed last year. Anyone--students or parents--who is on the front line dealing with the cost of a quality education must have been disappointed in 1997, in 1998, and in 1999 when the President failed to agree to give any student or parent all the tools they needed. American families understand the need for these measures. American families have now been waiting for several years. Let us not disappoint them any further. Let's not keep them waiting any longer. Let's move forward. Let's pass the Finance Committee bill now. Mr. President, I yield the floor.

Mr. ROTH. Mr. President, I would like to point out that what we have before us is a matter within the jurisdiction of the Finance Committee. As I said in my opening remarks, this bill does not answer all problems of education. I am not one to try to base what I do on what a particular poll shows today or tomorrow. I am trying to help satisfy some of the pressing educational problems facing America. When I go home to my little State of Delaware, a matter of real concern to families, whether their children are teenagers, in secondary or in grammar school, is how the family can afford to send their children to quality colleges. This is a key problem facing the typical American family. Make no mistake about it. I defy any one of you to go home and talk to parents, talk to your neighbors who have children. Time and again they will tell you how difficult it is to have the funds necessary to pay for college education. So I do not apologize for bringing this kind of legislation before us. This is a matter within the jurisdiction of the Finance Committee. I might say, we have had this legislation reported out since last May. I am pleased and delighted we are having the chance to debate and vote on it. Yes, it does not settle the problems of teachers' training, the size of classes, or many of the other matters mentioned by my distinguished colleague from Massachusetts. I do not deny those are important problems, but they are matters within the jurisdiction of other committees. What I seek to do today is to bring to the Senate legislation that will be most helpful to the typical American family, meeting part of that great American dream of sending their children on to higher education. We have purposely tried to devise the kind of program that takes advantage of the miracle of compound interest. The question is not how much it costs the Government. The question is how much does this legislation help the typical American family? We all know the miracle of compound interest. If families will start when their children are small, saving in educational IRAs, up to $2,000, this will provide significant resources, tremendous amounts of money to help them send their children to school. Yes, this legislation does not answer all problems of education, nor was it intended to. That is not within the jurisdiction of my committee. But I do say it does seek and will address some of the most important problems facing the American family. Mr. President, I yield the floor.

Mr. ROTH

Mr. ROTH. Mr. President, I rise today on behalf of myself and Senators Murray, Bingaman, Edwards, Crapo, Dodd, Thomas, and Feinstein to submit a concurrent resolution stating the sense of Congress that China immediately release Rabiya Kadeer, her secretary and her son. On August 11, 1999 Ms. Kadeer was arrested on her way to a meeting with a group of Congressional staff visiting China under the auspices of a U.S. Information Agency program. Later, two of the sons and her secretary were detained as well. One son has since been sentenced to 2 years at hard labor and her secretary, 3 years. And we have received credible reports that in the aftermath of the Chinese New Year's celebrations, she herself faces imminent trial and sentencing. The crimes she is accused of committing remain unclear, despite letters from a number of us on Capitol Hill, and despite a series of requests to Chinese officials stretching back to August. Our attempts at quiet diplomacy, perhaps unsurprisingly, have failed. And so, with her trial and sentencing about to take place, it is vital that we try a different tack. That is why I am offering this resolution. Ms. Kadeer is a prominent member of an ethnic minority group in China called Uighurs. These people are Turkic-speaking Moslems, and they form the largest ethnic group in China's northwestern-most province. A few years back, Ms. Kadeer was lauded by the PRC for her promotion of business enterprises among women and for contributing to the economic and social development of her province. To honor her efforts, she was named by authorities to the China People's Political Consultative Congress and as a delegate to the United Nations World Conference on Women held in Beijing. But Ms. Kadeer began to fall out of favor with officials in Beijing after her husband emigrated to the United States in 1997 and became a commentator for Voice of America. Soon thereafter, her passport was seized and the assets of an organization she founded to improve opportunities for Moslem businesswomen were frozen. Then, in 1998, Ms. Kadeer lost her position in the Consultative Congress. Perhaps that is why five of Ms. Kadeer's children, three sisters and a brother are now living in the United States, in addition to her husband. And perhaps that is why Ms. Kadeer has expressed a desire to move to the United States herself. That desire, for the moment, has been quashed. Last summer, as she was on her way to the hotel where the Congressional staff delegation was waiting to meet her, Kadeer was arrested. The arrest is troubling enough, but the fact that it took place as she was attempting to have a simple conversation with staffers who work for the United States Congress, I believe, requires that we take a firm stand. Let's not forget that the PRC signed the International Covenant on Civil and Political Rights in 1998. Among other things, that Covenant requires signatories to guarantee their citizens the right to liberty and freedom of movement; the right to presumption of innocence until guilt is proven; freedom of thought, conscience, and religion; freedom of opinion and expression; and freedom of assembly and association. It also forbids torture, inhumane or degrading treatment, and arbitrary arrest and detention. In signing that Covenant on behalf of the PRC, China's Permanent Representative to the United Nations said, and I quote, ``To realize human rights is the aspiration of all humanity. It is also a goal that the Chinese Government has long been striving for. We believe that the universality of human rights should be respected * * *.'' Well, I don't think China has respected the human rights of Rabiya Kadeer, her son or her secretary. That's why this resolution calls on China to release them and give them the chance to move to the United States, if they wish. Mr. President, I urge my colleagues to support this resolution and move for its earliest possible passage as Ms. Kadeer's fate will soon be determined by a country that offers her little or no chance of a fair trial.

Mr. ROTH

Mr. ROTH. Mr. President, it is the Senate's responsibility to assure that only our Nation's most exceptional legal minds dispense justice during lifetime appointments to the Federal bench. This definition precisely describes Delaware's Thomas Ambro, whom we have just confirmed to serve as a Federal judge on the Third Circuit Court of Appeals. I have followed Tom's legal career from the time he served on my Washington staff while attending Georgetown University Law School. Following a clerkship with Delaware Supreme Court Justice Daniel Herrmann, Tom distinguished himself as a corporate law attorney with the law firm of Richards, Layton and Finger in Wilmington, Delaware. I have no doubt that Thomas Ambro's national reputation as a corporate bankruptcy attorney will soon be supplanted by a reputation as one of our wisest Federal judges. Congratulations to Tom on this significant day.

Mr. ROTH

Mr. ROTH. Reserving the right to object, we do have a number of people who want to speak. We only have an hour.

Mr. ROTH

Mr. ROTH. I yield 5 minutes.

Mr. ROTH. Mr. President, I am pleased with the progress we have made in two very important areas on issues that will affect the lives of Americans everywhere. This legislation--the Ticket to Work and Work Incentives Improvement Act of 1999--will go a long way toward improving the quality of life for millions of Americans with disabilities. At the same time, important provisions within this legislation--provisions that extend important tax and trade relief provisions--will bring meaningful relief and increased opportunities to individuals and families. The Ticket to Work and Work Incentives Improvement Act will help Americans with disabilities live richer, more productive lives. Its core purpose is to assist disabled individuals in returning to work. It removes the real risk many people with disabilities face of losing their health insurance, and it provides new ways of helping them find and keep meaningful employment. Is there any question how important this is? Millions of Americans with disabilities are waiting for the vote. They are waiting to be freed from a disability system that stifles initiative and thwarts productivity rather than rewarding them--a system that tells individuals with disabilities that if they leave their homes and try to find productive employment they will lose their access to health insurance. The current system isn't right, Mr. President. It isn't productive. And it certainly is not ennobling. Under current law, if a person with a disability wants to return to work--even taking a job with modest earnings--he or she will jeopardize access to insurance coverage through the Medicaid and Medicare programs. And as many individuals with disabilities have difficulties securing private sector insurance coverage, losing access to Medicaid or Medicare is not an option. In fact, it's a tragic consequence for many people with medical conditions that demand ongoing treatment. As a result, the only recourse these individuals have is to forego the opportunity to work--to build and grow professionally and personally-- and to stay at home. No one, Mr. President, should be forced to choose between health care and employment. Robbing an individual of the opportunity to work becomes a double tragedy in the life of someone who is living with a disability. It's been said that work is the process by which dreams become realities. It is the process by which idle visions become dynamic achievements. Work spells the difference in the life of a man or woman. It stretches minds, utilizes skills and lifts us from mediocrity. No one should have to choose between health care and work, and passage of the Work Incentives Improvement Act will make that choice unnecessary. By acting on this legislation today, the Senate will offer new promise to millions of Americans with disabilities. This legislation will help promote their independence and personal growth. It will help restore confidence and meaning in their lives--and greater security in the lives of their families. But this legislation is not about big government. We do not tell the states what they must do. There are no mandates. And we do not tell individuals with disabilities what they must do. We create options. We create choices. And choice is the essence of independence, isn't it? The unemployment rate among working-age adults with severe disabilities is nearly 75 percent. What a tragic consequence of errant public policy that discourages those who can and want to work from attaining their desires. It's my firm belief that this number will come down--it will come down dramatically as we pass this law allowing them to return to the workplace. My belief is based in part on the fact that over 300 groups of disability advocates, health care providers, and insurers endorse this change and are anxiously waiting for us to act. These groups and individuals are not the only Americans watching what we do here today. Along with them, are countless other who are looking to this legislation to extend important tax and trade relief provisions that are included in the work incentives bill. These provisions are ``must do'' business. Like appropriations, extenders are provisions that we have an obligation to address before we conclude this session. They are necessary fixes to our Tax Code, and will go a long way toward helping families and creating greater economic opportunity in our communities. Among the important provisions contained in these extenders is one that excludes nonrefundable tax credits from the alternative minimum tax (``AMT''). This change alone will insure that middle-income families receive the benefits of the $500 per child tax credit, the HOPE Scholarship credit, the Lifetime Learning credit, the adoption credit, and the dependent care tax credit. In this legislation, such relief is extended through December 31, 2002. Another important provision in this legislation extends and expands the tax credit for production of energy from wind and closed loop biomass. This important alternative energy provision expired on June 30, 1999. In this legislation, the tax credit is expanded to cover poultry litter-based biomass, and it is extended through December 31, 2001. For my home State of Delaware and many other poultry producing regions, this provision provides an important option for the disposition of poultry litter in a way that will be beneficial and productive. Other important expiring tax provisions included in this legislation are a 5-year extension and enhancement of the research and development tax credit and the tax-free treatment of employer-provided educational assistance. I can't overstate how important the R&D credit is to the high-tech community and many other important leading American economic sectors. The extension offered in this legislation will give businesses the certainty they need and will result in more and higher paid jobs for American workers. And as far as employer-provided educational assistance, I've made it clear that my goal is to make this provision permanent and expand it to graduate education. I know this is an important goal for Senator Moynihan as well. Over one million workers will benefit from this extension, and under this legislation, the provision is extended through the end of 2001 for undergraduate education. But, Mr. President, important extenders do not stop here. This legislation will also extend incentives designed to help Americans move from welfare to work through the end of 2001. These incentives include the work opportunity tax credit and the welfare to work tax credit. Other extenders include the active finance exception to Subpart F--a provision that puts our banks, insurance, and securities firms on equal footing with their foreign competitors in overseas markets--and five other important tax provisions that are scheduled to expire. These provisions, which are extended through the end of 2001, include the ``brownfields'' expansing treatment of environmental cleanup costs. In addition, the school repair and renovation costs of some school districts are met by an extension of the qualified zone academy bond program. But the provisions included in this legislation are not limited to tax relief. We also include some important trade issues. For example, we extend the Generalized System of Preferences, as well as Trade Adjustment Assistance programs. Both of these trade provisions are extended through the end of 2001. Beyond these, there are several revenue raising provisions that we've included. Most of these, I am pleased to report, close loopholes in the Tax Code raising some $3 billion in return. When all is said and done with this legislation, Mr. President, I am pleased that the tax relief in this bill amounts to a net tax of $15.8 billion over 5 years and $18.4 billion over 10. There's no question that what have before us is a dynamic piece of legislation. From providing hope and opportunity to Americans with disabilities to extending and expanding important tax provisions for individuals and families, this is a comprehensive package. It has been carefully constructed, debated, and addressed in conference. It include that efforts of many of our colleagues and countless hours of staff work. I want to thank several Senators who have worked closely with me over the past year to bring the work incentives bill to the floor--Senators Moynihan, Jeffords, Kennedy, and Bunning. Passage of the Work Incentives Improvement Act has been one of my top health care priorities during this Congress. It would have been impossible without close, productive, bipartisan cooperation. Likewise, the effort we've made to address the important tax and trade extenders. Without the work and cooperation of my distinguished friend and the Finance Committee's Ranking Democratic Member, Senator Moynihan, we wouldn't be here today with a conference agreement. In closing, let me also mention that there are two provisions in this bill outside the Finance Committee's jurisdiction, one dealing with the organ donor and the other dealing with a NOAA procurement matter. I ask my colleagues to join us in seeing that all of these important provisions are passed into law.

Mr. ROTH. I yield 5 minutes to the distinguished Senator from Vermont.

Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from New Mexico.

Mr. ROTH

Mr. ROTH. Mr. President, I rise in support of the bill now before the Senate, the Foster Care Independence Act of 1999. Before I describe this bill, let me point out that this measure is a tribute to the late Senator John Chafee. This legislation was Senator Chafee's last child welfare initiative in the Finance Committee. As members know, the well being of the nation's youth, particularly the most disadvantaged, was very important to John. This legislation will provide important assistance to the nation's foster care children. Each year about 20,000 teenagers must leave foster care because they have reached the age of 18. They are then left to their own devices, to make a life for themselves, often with no one to rely on for emotional and financial support. Not surprisingly, these young people are more likely to quit school, be unemployed, have children out of wedlock, and end up on welfare or in jail. With this bill, we show that this country has not forgotten these young people. As parents, we do certainly not cut off our children at 18. Indeed, children in foster care have more need than most for a helping hand if they are to succeed in adulthood. It is simply common sense and good policy to make a small investment to ensure that these young people become productive taxpaying citizens who can make contributions to society. The Foster Care Independence Act doubles the money available to the States for the independent living program, from $70 million to $140 million per year. This program helps young people make the transition from foster care to self-sufficiency. The bill expands the program by providing former foster children between 18 and 21 assistance in preparing for further education, planning a career, or training for a job. These programs also offer personal support through mentors, as well as financial assistance and housing. This bill encourages, but does not require, States to provide Medicaid to young adults who have left foster care. The bill also increases the amount foster children may save and still be eligible for foster care. Such savings will help prepare these young people for the day when they will be on their own. Lastly, the bill includes a number of reforms that will reduce fraud in the Supplemental Security Income program. The SSI program is on GAO's list of high risk programs. A childhood spent in foster care is a big enough challenge. Let us help these children find a brighter future. I urge my colleagues to support this legislation in the memory of John Chafee.

Mr. ROTH

Mr. ROTH. Mr. President, I yield 8 minutes to the Senator from Pennsylvania.