William Roth

Mr. ROTH

Mr. ROTH. Mr. President, I am in the contradictory position of agreeing in substance with this amendment. There is no question in my mind that it is wrong to penalize married couples who pay more taxes than if they were single. As I have said, it is a matter that must be corrected. As chairman of the Finance Committee, I shall work mightily to see that this is accomplished. But the fact is that this is a revenue measure. If this amendment is adopted, it subjects the entire Treasury-Postal appropriations to a blue slip from the House of Representatives. Under our Constitution, revenue measures must originate in the House. If not, any Member--and, again, I emphasize any Member--of the House can raise an objection. The result would be that this appropriations bill dies. I do not think that is in anyone's interest. For that reason, I move to table the amendment. I ask for the yeas and nays.

Mr. ROTH. Mr. President, I rise to address the amendment offered by Senator Brownback. I appreciate the work he and others have done. I agree with the premise of this amendment. We need to provide much needed marriage penalty relief to American families. We all know how unfair the marriage penalty is. We have heard from our constituents. We see how it cuts into the family budget. We realize that it must be changed. Our laws should not penalize married couples and their families. Over the years, I have been a forceful advocate for marriage penalty relief. In fact, during the recent consideration of the tobacco bill, I cosponsored an amendment that would have provided such relief. I have also stated many times that marriage penalty relief should be included in any package of tax cuts. As chairman of the Finance Committee, I remain committed to that position. As we look to real and meaningful tax reform, we will take care of the marriage penalty. This will be one of our top priorities. But addressing this important issue must be done at the proper time and in the proper way. This is not the time, nor is this appropriations bill the appropriate vehicle to proceed with this amendment. This is a tax issue. It does not belong on this appropriations bill. It did not come through the committee of jurisdiction. That committee is the Finance Committee. I know many of my colleagues agree with me when it comes to the marriage penalty. They are seeking an opportunity, as I am, to address it and find a remedy as quickly as we can. This will be our objective in the future. We intend to take care of this in the right way. I ask our colleagues outside the committee to support it. Adoption of this amendment at this time would not only disrupt the proper order of things and result in the loss of appropriate and constructive debate within the Finance Committee, but, equally important, it would subject the entire Treasury-Postal appropriations bill to a blue slip from the House of Representatives. Revenue measures must originate in the House. If not, any Member--I emphasize ``any Member''--of the House can raise an objection. The result would be that this appropriations bill dies. And that is not in anyone's interest. While I completely agree with the objective and necessity of this amendment, while I remain a staunch ally of those who seek to provide marriage penalty relief, I cannot vote for this amendment. I ask my colleagues to vote with me. Allow the Finance Committee and the Senate to address this important issue in a way that is correct and will bring real and lasting tax relief to married couples and families. Mr. President, I understand the distinguished Senator from Texas wants to address this matter.

Mr. ROTH. Mr. President, I yield the floor. Mrs. HUTCHISON addressed the Chair.

Mr. ROTH

Mr. ROTH. Mr. President, I rise to express my profound respect and appreciation for Officers John Gibson and Jacob Chestnut, two men whose lives were tragically cut short on Friday as they stood watch in the Capitol--a building that is, as we have constantly been reminded this weekend, ``the People's House.'' Officer Chestnut was 58--a loving husband, a veteran of Vietnam, the father of five children, and the grandfather of another five. Officer Gibson was 42--a bright young man, full of energy and good works, who had dedicated his life to protecting others. Like Officer Chestnut, he, too, was a loving husband and the father of three. Today, both men are gone. We mourn their loss and express our deepest condolences to their families. We acknowledge that we will never fully understand what would motivate such a heinous act of violence against the innocent in a building that is the icon of Democracy, but we know that in stopping such brutality--in saving the lives of how many tourists, staff members and Congressmen we will never know--the names of John Gibson and Jacob Chestnut are etched forever in the pantheon of heroes. All who are indebted to them--myself included--will from this day forward speak their names in reverence. Their courage will inspire those who will hear told the tale of their sacrifices. While their children, their grandchildren and great grandchildren will stand tall-- living legacies of extraordinary men. In expressing our gratitude to these brave officers, we also acknowledge the skill, professionalism and dedication of the other 1,250 members of the United States Capitol Police force. They are among the most highly trained and well-respected law enforcement officers in the world. Members of Congress, congressional staff, tourists, and all those who come and go through these buildings are blessed to have these men and women on the ramparts. Our hearts are with them as well, as they mourn the loss of their two distinguished colleagues and friends. It is never easy, Mr. President, to weather a tragedy of this kind. There is little, if anything, that can be done to console loved ones and to reassure the children of men whose lives were lost that the principles and sense of duty for which their fathers stood are the very virtues which sustain life's goodness. But in time, they will be assured. They will come to discover--as we all discover--that such principles are eternal: service, selflessness, sacrifice. Their meanings resonate beyond mortality. And we come to acknowledge the simple truth written more than 2,000 years ago: Greater love hath no man than that he lay down his life for a friend.

Mr. ROTH

Mr. ROTH. Mr. President, throughout my career, I have been a strong proponent of tax reform. I have made no bones about the fact that the tax burden borne by Americans is onerous and counter-productive to real economic growth, jobs, and opportunity. I have made it clear that we stand in need of tax reform--a tax code that is simple and fair, placing the needs and growth of our families and communities before the needs and growth of the Federal bureaucracy. I am encouraged by the developing consensus for serious tax reform. As chairman of the Finance Committee, this is among my highest priorities. And I look forward to working closely with my colleagues toward building a promising new tax system that will open a world of possibilities as America moves into the 21st century. At this time, however, I caution my colleagues to not let the momentum we are gathering overtake our constructive endeavors. To sunset the current tax code without first structuring a better system would be something like quitting your job before first establishing where your new place of employment is going to be. While such a move may be satisfying and even exciting, when you have a mortgage, some personal debt, and a family depending on your income it is not only imprudent, but could result in devastating consequences. Prudence, control, and careful planning--that's what our tax reform efforts require from us. Sunsetting the tax code without an alternative in place would create pandemonium in the marketplace. What would it do to our credit rating? To our ability to meet current responsibilities? How would it be perceived internationally, among our economic partners, and in the global banking community? And how would it affect our families and business community? How do they plan? Where do Americans put their money for retirement, for pensions, for investment, for housing? What will happen to the home mortgage deduction? And how will that influence the real estate and homebuilding markets? Today the Dow Jones industrial average is down because of recent corporate earning reports and developments in the investigation into the President. Can you imagine what will happen when news hits that the tax code is going to be sunset without a consensus or even a blueprint for a replacement? If Congress votes to sunset the tax code and does not enact a replacement by December 31, 2002, what happens? We need a tax system-- despite how much I would prefer it to be otherwise. If there is no replacement by December 31, 2002--if Congress has not yet reached a consensus, if the decision--the best Congress can do--is to extend the tax code we have voted to sunset then that extension would, in effect, become the single largest tax increase in history! I do no want to be party to that. I don't think any of my colleagues do. To tear down the tax code before Americans know what will replace it is dangerous. We must work to change the current system. Toward this end, I pledge my every effort. We must eliminate the current code's complexity. We must bring relief to those who are bearing a back-breaking load. We don't need to fiddle at the edges of the current code. We can change the code altogether. We can create an innovative and promising code for a new century. But we must do it in an organized and orderly way. To vote for this amendment is to pass the buck to future Congresses. We can go home and declare victory for taking a strong stand for tax reform, but then the issue will still have to be addressed, a consensus will still have to be developed, Americans will still need to be included in such an important effort. I am sympathetic to this amendment. Emotionally, it appeals to me. But it is not right. It is not right analytically. It is not good public policy. And it, in fact, is not right Constitutionally. Only the House can originate a revenue measure. This vote would constitute a revenue measure, and--as such--would be subject to a blue slip. For these reasons, I encourage my colleagues to vote against this amendment and join me, and the many others who realize the importance of real tax reform, in working for a successful new code. Mr. President, I yield the floor. Mr. GRAMS addressed the Chair.

Mr. ROTH

Mr. ROTH. I thank the distinguished Senator from New York for yielding to me. I congratulate him and his colleague, Senator Sarbanes, for bringing this legislation before us. I want to take this opportunity to restate my support for Delaware's credit unions. As we all know, months ago, a Supreme Court decision placed the viability and future of credit unions in limbo. For that reason, I am particularly pleased that the Senate will be voting next week on H.R. 1151, a bill to ensure credit unions will be able to add new member groups. Mr. President, I support credit unions because I know how vital they are to the financial health of thousands of Delaware families and businesses. These nonprofit member-run institutions are unique. Their sole purpose is to provide financial services to their members at the best rates and under the most favorable conditions possible. Savvy consumers know that credit unions are often a great option. Their ATM fees are reasonable or nonexistent; single-digit credit card interest rates are common at credit unions; and your child's first savings account won't face a monthly low-balance fee. I don't think I mentioned, I say to my distinguished Senator from New York, you can also set up a Roth IRA. All Senators have undoubtedly heard from the thousands of credit union members in their States. Their message is one of self-sufficiency and of low-cost, low-fee consumer-based financial services. Credit unions are good for families, good for businesses, and they are good for Delaware. H.R. 1115 is necessary for these valuable institutions to thrive. Again, I want to thank the chairman of the Banking Committee and the ranking member for their role in bringing this legislation to this point. I look forward to voting for this legislation next Monday.

Mr. ROTH

Mr. ROTH. We have a question for the distinguished Ranking Member of the Transportation Appropriations Subcommittee. Is it the intent of this legislation that installation of the advanced civil enforcement systems be performed at the facility that has the expertise, capability, and prior experience to assemble and test cab signal equipment?

Mr. ROTH

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

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that Kathryn Quinn of the Finance Committee be permitted to be on the Senate floor for the rest of this day.

Mr. ROTH

Mr. ROTH. Mr. President, yesterday's 96 to 2 vote to reform the Internal Revenue Service was a victory for the American people. I am grateful for the cooperation we received from our colleagues. I am grateful for the support that came from our constituents. And I very much appreciate the willing participation that came from individuals within the Internal Revenue Service itself. From the beginning of our intensive investigation, and throughout our hearings, I made it clear that the IRS is filled with hard-working, honorable men and women. We depend on these individuals, on their integrity and expertise to carry out a complex and often thankless task--yet a task that is fundamentally important to the welfare and future of America. Had it not been for those within the IRS who were concerned about the abuses they witnessed--had they not come forward to speak with us--there would have been no hearing. There would have been no reform effort--no change. And the abuses would have continued. What our investigation focused on was the culture of the agency. It focused on an environment that had been allowed to establish itself because of rules that granted excessive license to those inclined to abuse power--an environment that lacked sufficient oversight. This was the culprit. And I am grateful that after an attempt early on in our investigation to circle the wagons concerning the Finance Committee's efforts, the IRS--under the fine leadership of Commissioner Charles Rossotti--determined to work with us, not against us. Two reports issued today speak volumes about the spirit of cooperation Commissioner Rossotti demonstrated. They validate each of the concerns raised in our investigation. They are filled with examples that support those that we heard from the courageous witnesses who addressed our committee. They remove any question concerning the appropriateness or necessity of the extensive investigation we undertook. And they make it clear that our conclusions, and consequently our legislative outcome, were right on target. I appreciate the honesty and candor that is contained in these two internal audits. Prepared by the agency's Chief Inspector's office at my request, they offer a thorough and objective analysis of serious problems within the agency's culture. Among other things, these reports paint a vivid picture of how the IRS' Examination Division used performance measures and statistics, compelling auditors and examination personnel to inflate taxpayer liabilities. They show how the Collection Division abused seizure authority, in one case turning a taxpayer's life upside down for the grand sum of four dollars and seventeen cents! The reports even documented the most troubling issue of how the Internal Revenue Service would often go after taxpayers who were most vulnerable--those suffering from medical problems or severe financial setbacks. According to the internal audits, ``the seizure[s] demonstrated insensitivity to the taxpayer's current situation or [were] conducted to enhance statistical measures.'' These reports are astonishing in the scope of the taxpayer abuse they confirm and in the fact that they come from the agency itself. In the case of the man whose business was seized and sold to net the IRS four dollars and seventeen cents, the report states clearly that, ``The revenue officer did not use sound * * * judgment when conducting this low dollar seizure.'' And this is only one of many such cases documented, Mr. President. In these two reports, Americans will find a stunning array of similar abuses. The reports make it clear that the agency's focus on goals and statistics come at the expense of quality service and fair treatment of taxpayers. They came at the expense of fairness to IRS employees. One report admits that a full 74 percent of group manager evaluations contained references to enforcement statistics. The evaluations cited dollars per hour, hours per return, and dollars recommended for collection. The reports make it clear that districts routinely communicated goals and enforcement statistics to group managers and employees. In fact, the agency admits that such statistics were ``communicated in all 12 districts through newsletters, monthly reports of Examination activity, group meetings, and similar methods. Enforcement statistics,'' the report continues, ``were often in referenced to how group managers and employees were doing in relation to district or group goals.'' Cast after case is cited in these reports to illustrate how these activities within the agency adversely influenced the lives of taxpayers. In one example, collections officers did not even attempt to contact the taxpayer prior to seizing his property. The revenue officer confirmed the taxpayer's address and ownership of assets two days before seizing them. And what did the IRS seize? The tools the taxpayer needed to provide for his family. Even the taxpayer's 11-year-old daughter pleaded with the collections officer to halt the action, but the activity proceeded--the seizure producing a measly net proceed of $20! Again, Mr. President, these stories are not coming from witnesses whose credibility might be challenged. They are admissions made by the Internal Revenue Service itself. Nearly half of the seizures examined in these reports indicate that improper or abusive tactics were used against the taxpayer. Not only does this validate our findings, but the very existence of these internal audits demonstrate that a new era is drawing on an agency that for far too long has been operating in darkness. It looks to be an era of openness--of cooperation--and accountability. I laud the current leadership, Commissioner Rossotti, and those who support him in what will be an historic turning point in the life of the agency. What a legacy they will leave! And again, I express my gratitude to colleagues who stood firm in our effort to change the way the IRS does business. Our reform legislation, which I expect will be signed by the President in the very near future, will go a long way toward preventing the types of abuses chronicled in these reports. We are increasing oversight of the agency and holding employees accountable for their actions. We are ensuring that taxpayers have due process protections in collections activities. We are prohibiting the IRS from using enforcement statistics. This is a moment in which we can all be proud. The successful passage of reform legislation yesterday, the bipartisan spirit that marked our investigation and subsequent debate, the willingness of the agency, itself, to cooperate--all of these are to be credited.

Mr. ROTH

Mr. ROTH. Mr. President, I rise in opposition to the Wellstone amendment as it will halt the momentum of welfare reform which has gained bipartisan acclaim for reducing the welfare rolls by 34 percent from the peak level in 1994. This amendment is a step backwards, and it will surely invite additional means of thwarting welfare reform. The Wellstone amendment has little to do with education. It will weaken the work participation requirements under welfare reform for which the States are to be held accountable. The Wellstone amendment will create three new loopholes through which States will be tempted to avoid their responsibility for helping families gain the work experience they need to achieve self-sufficiency. First, the Wellstone amendment will double the amount of time in vocational education from 12 months to 24 months that can be counted as meeting the work requirement. Second, it allows postsecondary education to be counted as work in the same manner as vocational education. And, finally, it removes parents up to age 20 from the 30 percent cap on the number of individuals who can be counted in educational activity. In other words, it will expand the number of people who can be in educational activities rather than in the workplace. This amendment will significantly weaken the work requirements which deserve some of the credit for the decline in the welfare rolls. And the effect of this amendment is to keep individuals on welfare for a longer period of time. If this amendment passes, many more variations on this theme will follow, and without restrictions on the number of individuals counted in nonwork activities, there will be no meaningful work participation rates. Raising these limits is another way of unraveling welfare reform. The grave injustice of weakening the work requirement is that it takes the pressure off the States to assist the hardest to serve, and it also requires an inequity among welfare recipients. A person who does not have a high school degree must work first. Only after such a person has worked 20 hours a week does any education count toward his or her work requirement. But a person who is in postsecondary education will not be required to work. Under this amendment, college will count from the very beginning of the work requirement but reading, writing, and arithmetic will not. One of the harshest indictments of the former welfare system is that it shrugged its shoulders at the indifference to welfare dependency. It did nothing to help those with little skills and education to find the path to independence. The key to forcing the States to serve this most needy population is the work participation rate. Every time the work participation rate is weakened, it simply makes it easier for the States to do nothing for those who are hardest to serve, and that is the effect of this amendment. And this we should not do. The work participation requirement on the States is an issue which the Senate has now acted upon four times in the past 3 years. The Senate has debated this issue at length, and there is no demonstrated need to reopen the bipartisan welfare reform agreement. The Wellstone amendment simply does not belong on the higher education bill. Make no mistake about this amendment, its purpose is not about providing education to welfare recipients; it will begin to unravel welfare reform. The picture emerging from the states is crystal clear: welfare reform is working and work is the key reason. In March 1994, a record 5.1 million families were on the old AFDC program. There are now 3.4 million families receiving welfare assistance, a decline of 34 percent. As the General Accounting Office found in its recent report to Congress on welfare implementation, the ``work first'' strategy has been a central feature of states' efforts to shift the emphasis from entitlement to self-sufficiency. This strategy is working. States and counties which found the education and training model to be unsuccessful in moving recipients into work and self-sufficiency in the past are now helping more families find employment. GAO reports that more families are participating in work activities than under the old JOBS programs and are able to keep more of their earnings while maintaining eligibility. Another sign of success is in growth in wages. Oregon is among the states which are following the progress of families that have left the welfare rolls. By matching job placements with data on employer-related wages, Oregon found that between 1993 and 1996, those former recipients who remained employed experienced a wage growth averaging 14 percent per year. The states and the families are making progress. This is no time to change direction. This amendment is not about helping individuals get off welfare. The Wellstone amendment is about keeping people on welfare, even people who are seeking college degrees. Let us make it clear that federal law allows a person to receive welfare while she is in vocational school or even in college. Under current law, welfare recipients can participate in vocational education training, job skills training, education directly related to employment, or attend school to earn a high school diploma or GED. All of these count as work activities. Indeed, the new welfare law allows states to use welfare funds to pay for expenses related to a person's education if they so choose. There is plenty of flexibility already built into the new welfare system if the states choose to make accommodations for individuals pursuing post-secondary education. A number of states have already created special programs to provide assistance to students while in college, so models are available. And, because of the decline in the welfare caseload, sanctions for failure to meet the work participation rate is not really an issue for all but a couple of states. From a very practical standpoint, the Wellstone amendment is not really needed. But it sends the wrong message at the wrong time. The Wellstone amendment is simply not needed to allow someone to pursue her educational training she chooses to advance. The evidence of this comes from the ``National Evaluation of Welfare to Work Strategies'' which was recently released by the U.S. Department of Health and Human Services and the U.S. Department of Education. This study, as conducted by the Manpower Demonstration Research Corporation, tracks over 55,000 individuals in seven sites across the country. The first report examines the outcomes of welfare recipients in Atlanta, Georgia, Grand Rapids, Michigan, and Riverside County, California. The studies include both individuals who are directed toward a ``work first'' approach and those who are assigned to educational activities. MDRC found that many individuals pursued their educational interests outside of the welfare programs which were offered. In Grand Rapids, Michigan, for example, MDRC found that about 34 percent of those in Grand Rapids ``work first'' approach reported they were already enrolled in an education or training program at the point they were randomly assigned to a research group. Moreover, MDRC found individuals were almost as likely, or more likely, to participate in basic education or college outside of the JOBS program as they were as part of JOBS. In other words, participation in basic education and college, was self-initiated. People are going to pursue educational opportunities if they believe that is in their best interest. Mr. President, the Wellstone amendment is simply another attempt to weaken the work participation requirements by excluding people from being counted under the cap on educational activities. Under the existing cap, no more than 30 percent of individuals engaged in work may be included in the calculation of work participation rates because they are in vocational training or in educational activities. The Wellstone amendment contains another feature which is troubling. It sends a very mixed message among those on welfare who are the hardest to serve. In general, if an individual is going to college or is in a two-year vocational educational program, that individual already has two advantages many welfare recipients do not--academic success and some means to support the pursuit of higher education. For these individuals, school alone meets the obligation to work 20 hours per week. But if you do not have a high school degree, you go to work first. For these individuals, the state receives credit for their basic education only after they work 20 hours per week. Mr. President, we have encouraging studies coming in which demonstrate that work requirements work. The ``National Evaluation of Welfare-to-Work Strategies'' has found that in terms of comparing a labor force attachment strategy to an education and training strategy, work wins. This study shows that an emphasis on employment leads to higher earnings for the welfare family, is less expensive to operate, and produces higher savings to the taxpayers. So, there is evidence to suggest while the education approach is good, work is better. But just as I do not believe that we should re- open welfare reform to impose even tougher work requirements on the states, neither should we adopt the Wellstone amendment. I simply do not believe the rules should be changed at this point in time. More importantly, by weakening the work requirements, we risk falling back into the same trap of the old welfare system in which it was all too easy for the states to do nothing for those who need the most assistance in finding the pathway to independence. The Wellstone amendment turns its back on the hardest to serve and should be rejected. Mr. Ford addressed the Chair.

Mr. ROTH

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

Mr. ROTH. Mr. President, I want to just take a few seconds to thank my colleagues for their support in this most important initiative. It has been less than a year that we have really been dealing with this problem. Today, we have seen the enactment of truly historic legislation. It is my firm conviction that because of this reform legislation, it will mean a new day for the American taxpayer. And the reason I think this legislation has had such broad support is that it is not only good for the American taxpayer, but it is good for the agency itself, it is good for the employees who work there. All we seek is an agency that provides service, stability, and fairness to the American people. I can tell you that we would not have succeeded in this effort if we had not had bipartisan support. I particularly want to pay my respect and thanks to the ranking member, Pat Moynihan, who is a joy to work with, and who always is able to help move along desirable legislation. It was not only due to his efforts, but to many others too many to enumerate. But I particularly want to thank the staff of the Finance Committee, both Republican and Democrat, and of the Joint Committee on Taxation for their contribution. I can tell you that much of the staff worked day in and day out, night after night, and on weekends to make this possible today. I, again, want to thank all those who contributed so much. We look forward to seeing an agency that is reformed become service-oriented. I believe, I say to Senator Moynihan, that we have given the tools to the new Commissioner, Rossotti, that will enable him to make the changes we all seek in a bipartisan fashion. Mr. MOYNIHAN addressed the Chair.

Mr. ROTH

Mr. ROTH. That is correct.

Mr. ROTH. We would have to create a new one. The distinguished Senator is absolutely correct. The other point I want to make, Mr. President, is that the 18-month holding period resulted from exactly the same process to which the distinguished Senator from North Dakota is objecting. But I recall no one from that side of the aisle objecting to the 18 months on the same grounds that it is objecting to the reduction of 12 months. So, again, what I am saying is that we are correcting something that was done a year ago. And for that reason, I must urge that----

Mr. ROTH. I will not yield for any more time. I think we have had the 4 minutes. I yield the remainder of my time and call for the regular order.

Mr. ROTH. Point of order.

Mr. ROTH. Parliamentary inquiry: How much time does the Senator from North Dakota have left?

Mr. ROTH. Yes.

Mr. ROTH. Mr. President, let me emphasize what I said earlier, that if his appeal should be sustained, there is no question but what it kills the conference report. That is a matter of great seriousness. For no one can guarantee, if we go back to the conference table, what will come out of that negotiation. I can assure my friends on both sides of the aisle that I objected and fought many other provisions, some of which I think they would feel just as strongly about, if not more strongly.

Mr. ROTH. Regular order.

Mr. ROTH. Mr. President, I do not wish to unnecessarily prolong the debate, but I would like to remind the Senate of the process by which the 18-month holding period became law. The 18-month holding period arose from the final negotiations between the congressional leadership and the administration on the conference agreement to the Taxpayer Relief Act of 1997. The 18-month holding period was not in either the House or the Senate bill. No House or Senate Member proposed this additional holding period. No hearing was held on its tax policy or compliance implications. Therefore, from the standpoint of process, today, we are reversing what was done about 1 year ago. In this conference agreement, we are eliminating a provision that was added in conference, a provision that was itself not contained in any House or Senate bill before its enactment. Mr. President, the most important factor to consider is this. If the point of order succeeds, the IRS conference report falls. All of the meritorious provisions that Members have addressed will also fall. One of the best chances to reform the IRS in over 40 years could well be lost if the appeal of the Chair's ruling succeeds. No one can guarantee what would happen if the distinguished Senator from North Dakota would prevail. Therefore, Mr. President, I move to table the motion made by the Senator from North Dakota, and I ask for the yeas and nays.

Mr. ROTH. I must object, Mr. President.

Mr. ROTH. Mr. President, I move to reconsider the vote by which the motion was agreed to.

Mr. ROTH

Mr. ROTH. Mr. President, if my colleagues' July Fourth recess was anything like mine, then they heard a great deal from their constituents concerning the bill that we bring to the floor today. The Internal Revenue Service Restructuring and Reform Act of 1998 is legislation that not only has the interests but the support of Americans everywhere, and with good reason. For far too long, the Internal Revenue Service has been allowed to consolidate immense power without the counterbalance of accountability. For far too long, the agency has been allowed to operate in darkness, hiding behind section 6103 authority, using authority granted them by Congress to, in some cases, bludgeon taxpayers. Last summer, the National Commission on Restructuring the IRS, following an extensive review of the IRS, issued a report that called for major changes to the agency. In September, the Finance Committee held 3 days of hearings which identified numerous additional problems and some terrible, even unconscionable taxpayer and IRS-employee abuses within the IRS. Those hearings were followed by others which demonstrated clearly that the Service was in need of serious reform. And we heard from taxpayers, tax collectors, tax practitioners. We heard from small business men and women. We heard from innocent spouses. And we listened to outrageous stories from innocent Americans who, for no valid reason, got caught in the crosshairs of an organization that was driven by quotas and lacking in oversight. Our outrage knew no partisan line. Colleagues on both sides of the aisle were offended by many of the stories. To the witnesses--many of whom testified without knowing what their efforts would bring--we apologized as best we could. We said that we would press forward, and we promised reform. That, Mr. President, is what we are delivering today. This is the bipartisan conference agreement on a plan that will effectively change the way the Internal Revenue Service does business. It represents the most comprehensive overhaul of the IRS ever enacted. It combines the House and Senate bills and incorporates the many good suggestions offered by the Agency's new Commissioner, Charles Rossotti. Let me be clear on just how important Mr. Rossotti has been to our efforts. Following our Finance Committee hearings, he had courage enough to release a report that validated the concerns we raised. Rather than try to throw up a wall or confuse issues, he made a commitment to reform. Every step we have taken he has taken with us. Commissioner Rossotti and I have met on many occasions, and he has testified before our committee. We have attended taxpayer service days together. He has advocated a new management plan that could revolutionize the way the Internal Revenue Service does business. I am also grateful for the taxpayers and the many current and former IRS employees who came before our committee. These were courageous individuals, and without them, there would be no reform. And they represent only a fraction of those who met with us, who wrote to us, who called, and, in the process, moved our investigation forward. Likewise, I am grateful to my colleagues--Senator Moynihan, a defining presence in the Senate, if ever there was one. I am grateful to Senators Charles Grassley and Bob Kerrey and their efforts on the National Restructuring Commission. Working with Congressman Portman, and others, they got the ball rolling early on, and were leaders in this effort. I thank Chairman Bill Archer for the work he did on the Ways and Means Committee, for the spirit of cooperation he brought to the conference, and for the success he had two weeks ago in getting this legislation approved overwhelmingly in the House. Now, the time has come, Mr. President, to pass it here--legislation that will open the door to real restructuring and reform of what can only be considered the most powerful agency in the United States government. This legislation is built on four principles: The first principle is to establish independent oversight of the agency to prevent abuses against taxpayers and against employees. One of the major concerns we heard throughout our oversight initiative was that the taxpayers who get caught in the IRS hall of mirrors have no place to turn that is truly independent and structured to represent their concerns. This legislation requires the agency to establish an independent Office of Appeals--one that may not be influenced by tax collection employees or auditors. Appeals officers will be made available in every state, and they will be better able to work with taxpayers who proceed through the appeals process. Mr. President, agency employees made it clear that there is no dependable and consistent mechanism in place to represent taxpayer interests. Just as this bill will give the appeals process greater independence, it will also make the Office of Taxpayer Advocate as well as local problem resolution officers more independent. In the future, the Secretary of Treasury, rather than the Commissioner will appoint the National Taxpayer Advocate. And the Taxpayer Advocate will be just that. Criteria to fill this position will include that the Advocate must not be an IRS employee two years before and five years after holding this position. In addition, this bill provides the Advocate with greater ability to issue an assistance order to help taxpayers. To ensure that independent review and accountability become part of the IRS culture--top to bottom--our legislation creates a nine-member IRS Oversight Board--a board composed of six experts from various professional fields in the private sector, the Commissioner, the Secretary of Treasury, and a full-time Federal employee, or a representative of employees. This board will be independent of influence from management and the senior executive corps. It will be able to monitor and hold managers and executives accountable for their actions, and the actions of their employees. Under our legislation, the Oversight Board will have broad responsibility and will ensure that the IRS has procedures in place to carry out its mission. I anticipate that the Board will be able to nip problems in the bud so that the IRS will not have to endure embarrassing Congressional hearings that expose systemic problems that should have been identified and addressed. These measures will go a long way toward protecting taxpayers and IRS personnel. To further protect IRS employees, this legislation creates a new Treasury Inspector General for Tax Administration. We heard far too often in our hearings that the current IRS Office of Chief Inspector does not have sufficient independence to adequately fulfill its obligation. Likewise, the current Treasury Inspector General lacks resources and has experienced problems of its own in providing seamless oversight of the agency. The new Treasury IG for Tax Administration will have greater independence than the IRS Chief Inspector. This provision is supported by Secretary Rubin and Commissioner Rossotti, and it will create a structure where the new Treasury IG for Tax Administration will not allow oversight to fall through the cracks. This new Treasury IG for Tax Administration will provide independent investigations of alleged IRS employee misconduct without management interference. The new Treasury IG will also respond in a timely manner to requests to investigate or audit made by the Commissioner or the IRS Oversight Board. Now, these measures will go a long way toward combating the intimidating culture that witnesses testified exists within the agency. They will provide independent protections and promote an agency that the public trusts--an agency that the employees can be proud of. The second principle incorporated in this legislation is to hold IRS employees accountable for their actions and to reward those who treat the taxpayer fairly. One of the problems we discovered in our hearings is that the Commissioner did not have the kind of authority that is necessary to streamline management and remove managers who contaminate the culture of the agency. Additionally, we found that the Commissioner does not have sufficient authority to hire those who will work toward making the kinds of changes that are necessary. This legislation changes that. It provides the Commissioner the tools he needs to hire top-flight managers who are experts in their field. It gives the Commissioner the wherewithal to transform the agency's work force by providing bonuses and other incentives, and to sufficiently discipline employees whose inappropriate actions harm the image and effectiveness of the agency. This bill requires the IRS to terminate an employee if it is proven that the employee willfully failed to obtain required authorization to seize a taxpayer's property, committed perjury material to a taxpayer's matter, or falsified or destroyed documents to conceal the employee's mistakes with respect to a taxpayer's case. It allows terminations to take place if an IRS employee engages in abuses or egregious misconduct. Conditions for which an employee can be dismissed include, but are not limited to, assaulting or battering a taxpayer or other IRS employee, violating the civil rights of a taxpayer or other IRS employee, or breaking the law, regulations, or IRS policies for the purpose of retaliating or harassing a taxpayer or other IRS employee. Our legislation also allows an employee to be fired for willfully misusing section 6103 authority to conceal information from Congress. As I have said before, an environment that allows employees guilty of these kinds of behaviors to continue to work within the system is not acceptable to me, the Finance Committee, or to the American people. We have heard enough excuses. The time has come for change. And this legislation allows needed changes to take place. The third principle advocated by this legislation is to ensure that taxpayers are protected, that they have due process during collections activities. This includes requiring the IRS to obtain court approval before seizing a home. It also ensures that the burden of proof be lifted off the shoulders of the taxpayer when it's appropriate and placed on the agency. It allows necessary and long-overdue reforms to the interest and penalty system. This will guard taxpayers against the outrageous and often overbearing financial liability that occurs when the agency moves too slowly. With this legislation, the burden of proof is shifted to the IRS if the taxpayer maintains records, cooperates with the agency, and provides credible evidence to the court. In addition, the IRS will have the burden of proving a taxpayer's income if it uses arbitrary statistics to determine that income. Another major taxpayer protection in this legislation is our provision to strengthen innocent spouse relief. Some of the most tragic stories our committee heard concerned innocent spouses whose lives have been ruined by the unrelenting pursuit of IRS collections officers. This legislation allows divorced or separated spouses to elect to limit their liability for a tax deficiency to the amount of the tax that is attributable to their income. In this way, they will not be held liable for income earned by their spouse. Beyond expanding innocent spouse relief, this legislation allows the Secretary of the Treasury to provide equitable relief if innocent spouse relief is otherwise unavailable. It makes relief retroactive to help those innocent spouses who are still being hounded by the IRS. Let me say, however, that relief will not be available in cases of fraud, or if the IRS proves the taxpayer claiming innocent spouse relief had actual knowledge of an item giving rise to the tax liability. Beyond this, with this legislation, we make necessary and important changes to how penalties and interest are applied. In order to prevent IRS employees from arbitrarily using penalties as leverage against taxpayers, this bill requires non-computer determined penalties to be approved by management. Furthermore, each notice to taxpayers which includes a penalty or interest must specify how the amount was calculated. If a taxpayer enters into an installment agreement, the monthly failure-to-pay- penalty is cut in half. Under this bill, if the IRS does not provide a notice of deficiency-- or other form of notification of the specific amount of taxes due-- within eighteen months after a return is timely filed, then interest and penalties will be suspended until the taxpayer is actually notified. This eighteen month period will be reduced to twelve months in the year 2004, as the agency improves its ability to notify taxpayers of their deficiencies. In this way it is the IRS, not the taxpayer, who bears the burden of IRS delay. These enhanced rights are meant to protect honest taxpayers. We do not excuse those who evade their responsibility or cheat on their income tax returns. The protections contained in this legislation exclude the failure to file, failure to pay, and penalties related to fraud. Finally, Mr. President, the fourth principle this legislation advances is to provide the Commissioner the tools necessary to take the IRS into the 21st century. It directs Commissioner Rossotti to eliminate the current national office, regional office and district office structure of the IRS. It gives him the authority to replace these antiquated management models with operating units that will directly serve particular groups of taxpayers, better meeting their needs and making the agency much more efficient and user-friendly. As I have said before, Commissioner Rossotti should be complimented on his tremendous work and managerial skills. His plan to restructure the agency is as bold as it is necessary, and this legislation gives him the authority he needs to move forward. And moving forward is what this legislation is all about--to usher the IRS into a new era of accountability--to provide taxpayers with the protections they deserve--to bring efficiency and modern management to an organizational structure that dates back to before the industrial age. With this legislation, we bring a promise of hope to honest taxpayers and hard-working employees who have waited far too long. We bring responsibility and greater openness. We focus on the need for service and fairness. With this legislation, Commissioner Rossotti will be able to transform the IRS, make it more effective and intolerant of corruption and abuse of power. I appreciate all the work that has gone into this bill--for the many hours and weekends given by Senators, Congressmen, and staff. Particularly, I want to thank Frank Polk, Mark Prater, Tom Roesser, Mark Patterson, Nick Giordano, and our committee investigators. I want to thank Lindy Paull, and the staff on the Joint Tax Committee--Barry Wold, Mel Schwarz, Cecily Rock and Mike Udell. Again, I am grateful to Senator Moynihan--for his leadership and dedication to this cause. I am grateful to my colleagues on both sides of the aisle who stood firm for legislation with teeth--who, in seeking change, demanded real change--real reforms. That's what we offer today. I am proud of this bill. Americans have every reason to celebrate. They have let their desire be known, and, Mr. President, they have been heard. Sec. 1101-IRS Oversight Board Mr. President, there has been substantial debate on whether a Treasury employees union representative should have a designated seat on the IRS Oversight Board. I agree with many of my colleagues that a representative of IRS employees should not be provided a position on the IRS Oversight Board because such member would be subject to a substantial conflict of interest. I did not include an IRS employee representative on the IRS Oversight Board in my original chairman's mark. However, the members of the Finance Committee voted to include an IRS employees representative on the board and to waive the criminal conflict of interest laws for this particular board member. Amendments to these provisions were considered by the full Senate and defeated. During conference negotiations, the Department of Justice opined that ``The employee-representative restriction in the bill would impermissiby limit the President's appointment power in violation of the Constitution.'' The Department of Justice suggested alternative language to avoid the Constitutional problem. In response to the Constitutional problems raised by the Department of Justice, the conferees agreed that one member of the IRS Oversight Board shall be a full time Federal employee or a representative of employees. The conferees also incorporated Justice's recommendation that this board member receive the same compensation as other board members who are not government employees. The Department of Justice also recommended that the employee representative should not be exempt from the conflict of interest laws. As a compromise, the conferees agreed to delete the provision which would exempt the employee representative from the conflict of interest laws. However, at the time of nominating this particular board member, the President could seek a waiver of the criminal conflict of interest laws to the extent such waiver is necessary to allow such member to participate in the decisions of the Board. Waiving criminal conflict of interest laws for one person is a very serious matter and should not be taken lightly. As such, the bill requires the President to submit a written intent of waiver along with the actual waiver language to the Senate with the nomination of such member. I anticipate that the President would seriously consider the ramifications of nonminating an individual with inherent conflicts of interests. If, in the President's judgment, such an individual must be on the IRS Oversight Board, the President must submit a written statement of intent to waive the criminal conflict of interest laws. To be effective, the waiver must be provided verbatim with the nomination of such individual. While I would have preferred the language in my original chairman's mark, this conference agreement addresses the competing concerns of my colleagues as well as the Constitutional problems raised by the Administration. In September 1997 and April 1998, the Finance Committee held several days of oversight hearings regarding IRS practices and procedures. These eye-opening hearing revealed improper and inappropriate IRS practices and in some situations violation of the law. I, along with those taxpayers who watched the hearings, was shocked and deeply troubled with the practices of the IRS. I believe that proper oversight by Congress and the Administration should have reduced or even prevented such activity from occurring. One of the most important functions of the IRS Oversight Board is to prevent taxpayer abuse. The Oversight Board must have access to information that will enable the board to reveal problems, bring problems to the attention of the Commissioner to address, and inform Congress if the Commissioner does not address problems. The Oversight Board should have ``big picture'' oversight authority over law enforcement activity, including examinations, collection activity, and criminal investigations. Taxpayers must be protected from improper and/or illegal activity. Hopefully, the Oversight Board, rather than a congressional committee, will nip problems in the bud and keep the IRS on a straight course. Sec. 1102--Commissioner and Other Officials The bill alters the reporting relationship between the IRS Chief Counsel and the Treasury General Counsel. The bill requires the IRS Chief Counsel to report directly to the Commissioner except for the extremely limited situations where an issue relates solely to tax policy. It is intended that ``tax policy'' would be limited to recommendations relating to tax legislation and the drafting of treaties. The Chief Counsel will report to both the Commissioner and to the Treasury General Counsel with respect to tax litigation and legal advice or interpretation of the tax law not relating solely to tax policy. In the rare circumstance where there is a dispute between the Commissioner and the Treasury General Counsel, the matter must be submitted to the Secretary or Deputy Secretary for resolution. The Commissioner, as the client, must be able to make a decision based upon the legal advice provided by the Chief Counsel. Neither the Treasury General Counsel nor any other Treasury official (other than the Secretary or Deputy Secretary) may overrule the Commissioner's decisions. The Secretary or Deputy Secretary may not delegate this authority to someone else. For example, the Commissioner should be able to decide whether to proceed with a litigation matter or recommend that a case be appealed. If the Treasury General Counsel disagrees, then the issue should be resolved only by the Secretary or Deputy Secretary. Furthermore, the Commissioner should have the ability to interpret the tax law and issue guidance in various forms. The Commissioner should be able to expeditiously issue guidance including regulations, revenue ruling and revenue procedures, technical advice and other similar memoranda, private letter rulings and other published guidance. Once again, if there is a disagreement between the Commissioner and the Treasury General Counsel, the issue must be resolved by the Secretary or the Deputy Secretary. sec. 1103--treasury inspector general for tax administration The bill transfers the IRS Office of Chief Inspector's function to a new Treasury Inspector General for Tax Administration which will provide more effective and efficient oversight over the IRS. The current system in which the Treasury Inspector General, with its limited resources and tax expertise, attempted to provide oversight along with the IRS Office of Chief Inspector which some believed lacked sufficient independence from management, simply did not provide adequate and independent oversight. I was appalled with the current system which allowed issues to fall through the cracks, included little or no ability to follow up on issues, or even to timely investigate media allegations of outrageous taxpayer abuse. The time has come to provide a new, credible Treasury Inspector General for Tax Administration which has the resources and expertise to independently audit and investigate problems within the IRS. Coupled with the IRS Oversight Board and a new more independent National Taxpayer Advocate, this provision in the bill will provide yet another check on the bureaucracy within the IRS to ensure that taxpayers and their problems don't slip through the cracks. While the vast majority of IRS employees are honest, hardworking, and law-abiding, enhanced oversight will help ensure that taxpayers are treated properly. Mr. MOYNIHAN addressed the Chair.