Arlen Specter

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition today to introduce legislation designed to permit certain youths, those exempt from attending school, between the ages of 14 and 18 to work in sawmills under special safety conditions and close adult supervision. I introduced identical measures in the past three Congresses. Similar legislation introduced by my distinguished colleague, Representative Joseph R. Pitts, has already passed in the House in the 105th and 106th Congresses. I am hopeful the Senate will also enact this important issue. As Chairman of the Labor, Health and Human Services and Education Appropriations Subcommittee, I have strongly supported increased funding for the enforcement of the important child safety protections contained in the Fair Labor Standards Act. I also believe, however, that accommodation must be made for youths who are exempt from compulsory school-attendance laws after the eighth grade. It is extremely important that youths who are exempt from attending school be provided with access to jobs and apprenticeships in areas that offer employment where they live. The need for access to popular trades is demonstrated by the Amish community. In 1998, I toured an Amish sawmill in Lancaster County, PA, and had the opportunity to meet with some of my Amish constituency. In December 2000, Representative Pitts and I held a meeting in Gap, PA with over 20 members of the Amish community to hear their concerns on this issue. On May 3, 2001, I chaired a hearing of the Labor, Health and Human Services and Education Appropriations Subcommittee to examine these issues. At the hearing the Amish explained that while they once made their living almost entirely by farming, they have increasingly had to expand into other occupations as farmland has disappeared in many areas due to pressure from development. As a result, many of the Amish have come to rely more and more on work in sawmills to make their living. The Amish culture expects youth, upon the completion of their education at the age of 14, to begin to learn a trade that will enable them to become productive members of society. In many areas, work in sawmills is one of the major occupations available for the Amish, whose belief system limits the types of jobs they may hold. Unfortunately, these youths are currently prohibited by law from employment in this industry until they reach the age of 18. This prohibition threatens both the religion and lifestyle of the Amish. Under my legislation, youths would not be allowed to operate power machinery, but would be restricted to performing activities such as sweeping, stacking wood, and writing orders. My legislation requires that the youths must be protected from wood particles or flying debris and wear protective equipment, all while under strict adult supervision. The Department of Labor must monitor these safeguards to insure that they are enforced. The Department of Justice has raised serious concerns under the Establishment Clause with the House legislation. The House measure conferred benefits only to a youth who is a ``member of a religious sect or division thereof whose established teachings do not permit formal education beyond the eighth grade.'' By conferring the ``benefit'' of working in a sawmill only to the adherents of certain religions, the Department argues that the bill appears to impermissibly favor religion to ``irreligion.'' In drafting my legislation, I attempted to overcome such an objection by conferring permission to work in sawmills to all youths who ``are exempted from compulsory education laws after the eighth grade.'' Indeed, I think a broader focus is necessary to create a sufficient range of vocational opportunities for all youth who are legally out of school and in need of vocational opportunities. I also believe that the logic of the Supreme Court's 1972 decision in Wisconsin v. Yoder supports my bill. In Yoder, the Court held that Wisconsin's compulsory school attendance law requiring children to attend school until the age of 16 violated the Free Exercise Clause. The Court found that the Wisconsin law imposed a substantial burden on the free exercise of religion by the Amish since attending school beyond the eighth grade ``contravenes the basic religious tenets and practices of the Amish faith.'' I believe a similar argument can be made with respect to Amish youth working in sawmills. As their population grows and their subsistence through an agricultural way of life decreases, trades such as sawmills become more and more crucial to the continuation of their lifestyle. Barring youths from the sawmills denies these youths the very vocational training and path to self- reliance that was central to the Yoder Court's holding that the Amish do not need the final two years of public education. I offer my legislation with the hope that my colleagues will work with me to provide relief for the Amish community.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition today to introduce legislation designed to improve the Department of Transportation's Essential Air Services program and reinstate Lancaster, PA's eligibility to receive subsidized air service. The Essential Air Services program provides operating subsidies to airlines, enabling them to serve smaller markets which would otherwise be unable to attract or retain commercial flights. To be eligible to receive such a subsidy, the community where the airport is located must be greater than 70 miles from the nearest large or medium hub airport. If the airport is located within 70 miles of a hub airport, the Secretary of Transportation may use his or her discretion to award a subsidy if the most commonly used highway route between both places is greater than 70 miles. It is up to the Department of Transportation to determine what route is used in making this mileage determination. Residents and businesses in many rural and smaller communities throughout the United States rely heavily upon air service to provide a necessary link to larger cities. Lancaster, PA is one such community which had been designated as an Essential Air Services city since the Airline Deregulation Act of 1978. Up until the events of September 11, when the Airport faced a sharp decline in passenger revenue, Lancaster had never required a subsidy under this program. When Lancaster ultimately found it necessary to seek a subsidy for its three daily flights to Pittsburgh, the Department of Transportation issued an Order to Show Cause on March 8, 2002, stating that Lancaster was not eligible for an Essential Air Services subsidy because it was located within 70 miles of Philadelphia International Airport. The Secretary of Transportation declined to use his discretion to award the subsidy because the Department identified a driving route of less than 70 miles between Lancaster City and Philadelphia Airport. While there is no question that such a route exists, it is by no means the most commonly used highway route as required by law. The route selected by the Department of Transportation is one which the average person would never travel, via back roads and seldom used streets. In making its distance determination, the Department used a 66 mile route along Route 30 which would take over three hours to drive. The more commonly used highway route to the Philadelphia International Airport would be along US 222 to the Pennsylvania Turnpike, and then on to I-76, which is over 70 miles. The legislation I am introducing today addresses this issue by designating an area's local metropolitan planning organization, rather than the Department of Transportation, as the organization responsible for determining the most commonly used highway route. If no such organization exists, the Governor of the State in which the airport is located, or the Governor's designee will make the determination. I believe that a local entity, not the Department of Transportation, is better suited to identify the route most travelers would drive. In such cases where that route exceeds 70 miles, the Department should be required to designate a community as eligible to receive subsidized air service. My legislation will not place too great a burden upon the Essential Air Services program by allowing additional airports to participate. I am advised that there are only eight other communities, including Lancaster, which could become newly eligible to receive subsidized air service as a result of the changes I am proposing. Further, I would note that of the $113 million the program received in Fiscal Year 2002, there was an excess of $10.9 million which remained unspent and which carried over into Fiscal Year 2003. Lancaster Airport's only commercial air carrier, Colgan Air, ceased operations on March 23, 2003, because it could not sustain service without a subsidy. The loss of commercial air service has already had a serious impact upon the Lancaster community. I am confident that my legislation will not only reinstate Lancaster's eligibility for subsidized air service and allow for the return of commercial air service, but it will also provide for a greater level of fairness for other communities which rely so heavily upon this important program.

Mr. SPECTER. Mr. President, I have sought recognition today to introduce legislation designed to permit certain youths, those exempt from attending school, between the ages of 14 and 18 to work in sawmills under special safety conditions and close adult supervision. I introduced identical measures in the past three Congresses. Similar legislation introduced by my distinguished colleague, Representative Joseph R. Pitts, has already passed in the House in the 105th and 106th Congresses. I am hopeful the Senate will also enact this important issue. As Chairman of the Labor, Health and Human Services and Education Appropriations Subcommittee, I have strongly supported increased funding for the enforcement of the important child safety protections contained in the Fair Labor Standards Act. I also believe, however, that accommodation must be made for youths who are exempt from compulsory school-attendance laws after the eighth grade. It is extremely important that youths who are exempt from attending school be provided with access to jobs and apprenticeships in areas that offer employment where they live. The need for access to popular trades is demonstrated by the Amish community. In 1998, I toured an Amish sawmill in Lancaster County, PA, and had the opportunity to meet with some of my Amish constituency. In December 2000, Representative Pitts and I held a meeting in Gap, PA with over 20 members of the Amish community to hear their concerns on this issue. On May 3, 2001, I chaired a hearing of the Labor, Health and Human Services and Education Appropriations Subcommittee to examine these issues. At the hearing the Amish explained that while they once made their living almost entirely by farming, they have increasingly had to expand into other occupations as farmland has disappeared in many areas due to pressure from development. As a result, many of the Amish have come to rely more and more on work in sawmills to make their living. The Amish culture expects youth, upon the completion of their education at the age of 14, to begin to learn a trade that will enable them to become productive members of society. In many areas, work in sawmills is one of the major occupations available for the Amish, whose belief system limits the types of jobs they may hold. Unfortunately, these youths are currently prohibited by law from employment in this industry until they reach the age of 18. This prohibition threatens both the religion and lifestyle of the Amish. Under my legislation, youths would not be allowed to operate power machinery, but would be restricted to performing activities such as sweeping, stacking wood, and writing orders. My legislation requires that the youths must be protected from wood particles or flying debris and wear protective equipment, all while under strict adult supervision. The Department of Labor must monitor these safeguards to insure that they are enforced. The Department of Justice has raised serious concerns under the Establishment Clause with the House legislation. The House measure conferred benefits only to a youth who is a ``member of a religious sect or division thereof whose established teachings do not permit formal education beyond the eighth grade.'' By conferring the ``benefit'' of working in a sawmill only to the adherents of certain religions, the Department argues that the bill appears to impermissibly favor religion to ``irreligion.'' In drafting my legislation, I attempted to overcome such an objection by conferring permission to work in sawmills to all youths who ``are exempted from compulsory education laws after the eighth grade.'' Indeed, I think a broader focus is necessary to create a sufficient range of vocational opportunities for all youth who are legally out of school and in need of vocational opportunities. I also believe that the logic of the Supreme Court's 1972 decision in Wisconsin v. Yoder supports my bill. In Yoder, the Court held that Wisconsin's compulsory school attendance law requiring children to attend school until the age of 16 violated the Free Exercise Clause. The Court found that the Wisconsin law imposed a substantial burden on the free exercise of religion by the Amish since attending school beyond the eighth grade ``contravenes the basic religious tenets and practices of the Amish faith.'' I believe a similar argument can be made with respect to Amish youth working in sawmills. As their population grows and their subsistence through an agricultural way of life decreases, trades such as sawmills become more and more crucial to the continuation of their lifestyle. Barring youths from the sawmills denies these youths the very vocational training and path to self- reliance that was central to the Yoder Court's holding that the Amish do not need the final two years of public education. I offer my legislation with the hope that my colleagues will work with me to provide relief for the Amish community.

Mr. SPECTER. Mr. President, I have sought recognition to join Senator Tom Harkin, my colleague and distinguished ranking member of the Appropriations Subcommittee on Labor, Health and Human Services and Education, which I chair, in introducing the ``Medicaid Attendant Care Services and Supports Act of 2003.'' This creative proposal addresses a glaring gap in Federal health coverage, and assists one of our Nation's most vulnerable populations, persons with disabilities. In an effort to improve the delivery of care and the comfort of those with long-term disabilities, this vital legislation would allow for reimbursement for community-based attendant care services, in lieu of institutionalization, for eligible individuals who require such services based on functional need, without regard to the individual's age or the nature of the disability. The most recent data available tell us that 58.5 million individuals receive care for disabilities under the Medicaid program. The number of disabled who are not currently enrolled in the program who would apply for this improved benefit is not easily counted, but would likely be substantial given the preference of home and community-based care over institutional care. Under this proposal, States may apply for grants for assistance in implementing ``systems change'' initiatives, in order to eliminate the institutional bias in their current policies and for needs assessment activities. Further, if a state can show that the aggregate amounts of Federal expenditures on people living in the community exceeds what would have been spent on the same people had they been in nursing homes, the state can limit the program. No limiting mechanism is mandated under this bill, And finally, States would be required to maintain expenditures for attendant care services under other Medicaid community-based programs, thereby preventing the states from shifting patients into the new benefit proposed under this bill. Let me speak briefly about why such a change in Medicaid law is so desperately needed. In 1999 the Supreme Court held in Olmstead v. L.C., 119 S. Ct. 2176 (1999), that the Americans with Disabilities Act, ADA, requires States, under some circumstances, to provide community-based treatment to persons with mental disabilities rather than placing them in institutions. This decision and several lower court decisions have pointed to the need for a structured Medicaid attendant-care services benefit in order to meet obligations under the ADA. Disability advocates strongly support this legislation, arguing that the lack of Medicaid community-based services options is discriminatory and unhealthful for disabled individuals. Virtually every major disability advocacy group supports this bill, including ADAPT, the Arc, the National Council on Independent Living, Paralyzed Veterans of America, and the National Spinal Cord Injury Association. Senator Harkin and I recognize that such a shift in the Medicaid program is a huge undertaking--but feel that it is a vitally important one. We are introducing this legislation today in an attempt to move ahead with the consideration of crucial disability legislation and to provide a starting point for debate. The time has come for concerted action in this arena. I urge the Congressional leadership, including the appropriate committee chairmen, to move forward in considering this legislation, and take the significant next step forward in achieving the objective of providing individuals with disabilities the freedom to live in their own communities.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to join Senator Tom Harkin, my colleague and distinguished ranking member of the Appropriations Subcommittee on Labor, Health and Human Services and Education, which I chair, in introducing the ``Medicaid Attendant Care Services and Supports Act of 2003.'' This creative proposal addresses a glaring gap in Federal health coverage, and assists one of our Nation's most vulnerable populations, persons with disabilities. In an effort to improve the delivery of care and the comfort of those with long-term disabilities, this vital legislation would allow for reimbursement for community-based attendant care services, in lieu of institutionalization, for eligible individuals who require such services based on functional need, without regard to the individual's age or the nature of the disability. The most recent data available tell us that 58.5 million individuals receive care for disabilities under the Medicaid program. The number of disabled who are not currently enrolled in the program who would apply for this improved benefit is not easily counted, but would likely be substantial given the preference of home and community-based care over institutional care. Under this proposal, States may apply for grants for assistance in implementing ``systems change'' initiatives, in order to eliminate the institutional bias in their current policies and for needs assessment activities. Further, if a state can show that the aggregate amounts of Federal expenditures on people living in the community exceeds what would have been spent on the same people had they been in nursing homes, the state can limit the program. No limiting mechanism is mandated under this bill, And finally, States would be required to maintain expenditures for attendant care services under other Medicaid community-based programs, thereby preventing the states from shifting patients into the new benefit proposed under this bill. Let me speak briefly about why such a change in Medicaid law is so desperately needed. In 1999 the Supreme Court held in Olmstead v. L.C., 119 S. Ct. 2176 (1999), that the Americans with Disabilities Act, ADA, requires States, under some circumstances, to provide community-based treatment to persons with mental disabilities rather than placing them in institutions. This decision and several lower court decisions have pointed to the need for a structured Medicaid attendant-care services benefit in order to meet obligations under the ADA. Disability advocates strongly support this legislation, arguing that the lack of Medicaid community-based services options is discriminatory and unhealthful for disabled individuals. Virtually every major disability advocacy group supports this bill, including ADAPT, the Arc, the National Council on Independent Living, Paralyzed Veterans of America, and the National Spinal Cord Injury Association. Senator Harkin and I recognize that such a shift in the Medicaid program is a huge undertaking--but feel that it is a vitally important one. We are introducing this legislation today in an attempt to move ahead with the consideration of crucial disability legislation and to provide a starting point for debate. The time has come for concerted action in this arena. I urge the Congressional leadership, including the appropriate committee chairmen, to move forward in considering this legislation, and take the significant next step forward in achieving the objective of providing individuals with disabilities the freedom to live in their own communities.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition today to introduce legislation designed to improve the Department of Transportation's Essential Air Services program and reinstate Lancaster, PA's eligibility to receive subsidized air service. The Essential Air Services program provides operating subsidies to airlines, enabling them to serve smaller markets which would otherwise be unable to attract or retain commercial flights. To be eligible to receive such a subsidy, the community where the airport is located must be greater than 70 miles from the nearest large or medium hub airport. If the airport is located within 70 miles of a hub airport, the Secretary of Transportation may use his or her discretion to award a subsidy if the most commonly used highway route between both places is greater than 70 miles. It is up to the Department of Transportation to determine what route is used in making this mileage determination. Residents and businesses in many rural and smaller communities throughout the United States rely heavily upon air service to provide a necessary link to larger cities. Lancaster, PA is one such community which had been designated as an Essential Air Services city since the Airline Deregulation Act of 1978. Up until the events of September 11, when the Airport faced a sharp decline in passenger revenue, Lancaster had never required a subsidy under this program. When Lancaster ultimately found it necessary to seek a subsidy for its three daily flights to Pittsburgh, the Department of Transportation issued an Order to Show Cause on March 8, 2002, stating that Lancaster was not eligible for an Essential Air Services subsidy because it was located within 70 miles of Philadelphia International Airport. The Secretary of Transportation declined to use his discretion to award the subsidy because the Department identified a driving route of less than 70 miles between Lancaster City and Philadelphia Airport. While there is no question that such a route exists, it is by no means the most commonly used highway route as required by law. The route selected by the Department of Transportation is one which the average person would never travel, via back roads and seldom used streets. In making its distance determination, the Department used a 66 mile route along Route 30 which would take over three hours to drive. The more commonly used highway route to the Philadelphia International Airport would be along US 222 to the Pennsylvania Turnpike, and then on to I-76, which is over 70 miles. The legislation I am introducing today addresses this issue by designating an area's local metropolitan planning organization, rather than the Department of Transportation, as the organization responsible for determining the most commonly used highway route. If no such organization exists, the Governor of the State in which the airport is located, or the Governor's designee will make the determination. I believe that a local entity, not the Department of Transportation, is better suited to identify the route most travelers would drive. In such cases where that route exceeds 70 miles, the Department should be required to designate a community as eligible to receive subsidized air service. My legislation will not place too great a burden upon the Essential Air Services program by allowing additional airports to participate. I am advised that there are only eight other communities, including Lancaster, which could become newly eligible to receive subsidized air service as a result of the changes I am proposing. Further, I would note that of the $113 million the program received in Fiscal Year 2002, there was an excess of $10.9 million which remained unspent and which carried over into Fiscal Year 2003. Lancaster Airport's only commercial air carrier, Colgan Air, ceased operations on March 23, 2003, because it could not sustain service without a subsidy. The loss of commercial air service has already had a serious impact upon the Lancaster community. I am confident that my legislation will not only reinstate Lancaster's eligibility for subsidized air service and allow for the return of commercial air service, but it will also provide for a greater level of fairness for other communities which rely so heavily upon this important program.

Mr. SPECTER

Mr. SPECTER. Very briefly, Mr. President, I frankly expected more from the Senator from North Dakota. When he says, and I read his words, adopt a budget formulated in the Budget Committee, there was nothing in the Feingold amendment about a budget formulated in the Budget Committee. When the Senator from North Dakota recites a long list of categories and then says they provide a framework, there were no categories in the Feingold amendment. There was no framework there. When the Senator from North Dakota says it was not a full budget resolution, he really ought to say there was no budget resolution at all because that is the fact.

Mr. SPECTER. Will the Senator yield for a question?

Mr. SPECTER. Mr. President, there has now been an opportunity to obtain the vote referenced by the Senator from North Dakota, and it was not a resolution for a 2-year budget at all. It was an amendment made by Senator Feingold which would set caps for 2 years. But that is not a 2-year budget resolution. The idea of a 2-year budget resolution has been discussed widely in this body for many years and has been advocated by the distinguished Senator from New Mexico, Mr. Domenici, who chaired the Budget Committee for many years. It is a proposal that I have long supported. I, frankly, did not remember any resolution for a 2-year budget coming to the floor when it was mentioned by the Senator from North Dakota. But if it had come to the floor, if there had been a resolution for 2 years, I would have supported it because of my longstanding sense that the Congress does an inadequate job of oversight, finding out what is happening in the executive branch, because we spend so much time on the budget and then on the appropriations process. As chairman of the Subcommittee on Labor, Health and Human Services, and Education, it occupies months of time. So if it can be done in 2 years, then it would be a big savings. But I recall very well when the Feingold amendment was offered. And there was a major effort by appropriators, significantly, to adopt it, which would set a cap. I refused to back that because I thought it was inappropriate to have a way out for the Budget Committee, which had not established a budget. The budget law was passed in 1974, and for 27 years, this body has had a budget--until last year. And if the Budget Committee could avoid or evade its responsibility in coming up with a budget, and then have a simple cure by having an amendment offered which would set a cap, what motivation would there be for a budget? To set a cap is not to have a budget resolution. A cap simply means what the total expenditure will be. It does not mean what the budget will allocate for various categories of expenditures. We spend a protracted period of time in establishing a budget, and we have many votes. In the last, during what we called a vote-a-rama, we voted dozens of times on specific amendments. So you do not have a budget resolution when you establish a cap. I ask unanimous consent that the Record Vote Analysis be printed in the Record--this is compiled by the staff of the Republican Policy Committee--and that a similar document be printed in the Record, provided to me by the Senator from North Dakota, which repeats that the Feingold amendment establishes discretionary spending caps for fiscal year 2003 and fiscal year 2004, which is the same 2-year period.

Mr. SPECTER. If I may proceed to question one step further. I think the Senator from North Dakota talked about apples and oranges. This body does not have to go to a 2-year budget, if it does not choose to, to produce the 60 votes when the customary practice is a 1-year budget. I don't recollect with precision, but my instinct is that I supported the 2-year budget. I have supported votes to try to get this to conference to be resolved. When the Senator from North Dakota says probably it was a wise decision, there is a lot of disagreement about that. I believe it is the duty of the majority party to bring a budget to the floor. I admire an effort to bring the 2-year budget. I think we ought to have a 2-year budget so we can spend more time on oversight, a subject sorely neglected. If that does not succeed, it does not take 59 votes to bring a 1-year budget to the floor. That is the duty of the party that controls the Senate. When you talk about a majority of the appropriators agreeing to stick to the budget, or unanimous among the appropriators, that does not mean a whole lot because that does not bind the Senate to the figure. I note the presence of the distinguished Senator from South Dakota on the floor. Might I inquire if the Senator from South Dakota would care to respond as to why we did not have a budget?

Mr. SPECTER. Mr. President, my followup question is, Would the Senator from North Dakota identify who made the decision? The distinguished Senator from South Dakota is on the floor now. Was the decision made by Senator Daschle, the majority leader?

Mr. SPECTER. Mr. President, when the Senator from North Dakota says there was ``almost no difference,'' $2 billion, I respectfully disagree with him that that means ``almost no difference.'' Regrettably, around the Senate Chamber, and the House Chamber, we think $2 billion does not amount to very much. The question I have for the Senator from North Dakota is in a context where the 2-year budget was turned down and there had been a 1-year budget prepared by the committee, as articulated by the Senator from North Dakota who was the chairman last year and who specifies differences between the House and the Senate where there were different assumptions made and many differences; that is what a conference is about. If the Senate had passed a budget, having failed on a 2-year budget, and had gone back and brought to the floor a 1-year budget with differences, that is what a conference is about. Why didn't the distinguished Senator from North Dakota, then-chairman of the Budget Committee, proceed to get a budget, take it to the House, and have a conference so we could have a budget?

Mr. SPECTER. And I conclude, Mr. President, by asking the Senator from North Dakota if establishing caps for 2 years amounts to a budget resolution for 2 years.

Mr. SPECTER. Mr. President, I have sought recognition to comment about the pending budget resolution. I was very much impressed with the comment by the distinguished Senator from North Dakota who really questioned if anybody is listening. I think the answer to that question is generally no. The positions in this Chamber are really frozen. We are looking at a 50-50 vote to be broken by the Vice President, and, realistically, we are going through the motions of a debate. Then the Senator from North Dakota says: Let's have a debate. We have been having a debate today. We have debates lots of days, but most of the time we talk right by each other. The proliferation of charts adds more confusion than clarity. I do not know that there are very many viewers on C-SPAN2 who even flick on their sets with the monotony of the kind of debates which we have in the Senate, which I would say is a blame attached universally on all sides and to all Members. The one factor I think is most important is that we get a budget just to get a budget. We have a lot of argument about tax increase, no tax increase, what is the amount of the tax increase. An arrangement has been worked out really to sort of save face with all parties involved here so we could come to some terms and move on. Last year, we did not have a budget. When the Democrats were in control of this Chamber, there was no budget resolution offered on the floor of the Senate, and I do not say that in a partisan way. I think too often there is debate and there are arguments which are partisan Democrats versus Republicans bickering, much to the dissatisfaction of the American people. But not having a budget resolution was very detrimental to the whole appropriations process where we could not curtail spending and have a discipline. For those who may be listening on C-SPAN2 or for a few people in the galleries, there are no Senators on the floor to listen, 60 votes are required to increase spending beyond the budget allocation if there is a budget. Sixty votes are hard to come by, but if only 51 votes, or a majority of those present, are required, then spending goes up. I visited Israel earlier this year, and the Palestinian Authority has a new finance minister. I was delighted to learn that the Palestinian Authority has a budget. I exchanged views with him that the Palestinian Authority had something the Senate did not have. The Senate did not have a budget. It was not reported out last year by the Budget Committee. It is vital we have a budget. I yield the floor.

Mr. SPECTER. I discussed this informally with the Senator from North Dakota, and he handed me a vote, which I read from, which was the Feingold amendment which established caps for 2 years. The Conrad amendment had nothing to do with what the Senator from North Dakota handed me. But these will be in the Record, and people who read the Record can come to a conclusion themselves. I think there is absolutely no doubt not only that this is not a full budget resolution but that it is no budget resolution at all. I yield the floor.

Mr. SPECTER. Mr. President, when the Senator from North Dakota said the amendment put in limits, he is correct. The Feingold amendment did seem to put in limits. When he says that is what a budget resolution does, he is correct also. A budget resolution does put in limits. But a budget resolution does much, much more. A budget resolution specifies categories. It is an elaborate document that specifies categories of expenditures, and that was not in the Feingold amendment.

Mr. SPECTER

Mr. SPECTER. Madam President, I rise to speak about the subject of taxation from a little different perspective, a legislative proposal which, if adopted, would add very considerably to productivity in America, and that is a proposal for a flat tax. In the fall of 1994, Richard Armey of the House of Representatives introduced a flat tax. I studied it, then in the spring of 1995, I introduced a flat tax for the Senate. That was the first one introduced. I have introduced it in successive years. I usually pick April 15, because April 15 is tax filing day. But this year we are going to be in recess for the spring break. I had thought today would be the last day we would be in session. That is open to debate at this point. I just came from a conference of the Appropriations Committee, and there are a great many unresolved issues. I posed the question to my colleagues on the Appropriations Committee: What time do we vote on Sunday? Some of my colleagues may be listening on C-SPAN2, and that will give them a jolt: What time do we vote on Sunday? Or we might not vote as early as Sunday. We might pick a time on Monday. I got the attention of the clerks, too, by talking about something important: When are we going to finish the business of the Senate? The distinguished Parliamentarian is nodding his head in chagrin as to what is happening here. Some suggestions have been floated around the Appropriations Committee of a way to solve this impasse between the House and the Senate on appropriations, the impasse between the House and the Senate on the budget, and that is a constitutional amendment for a unicameral legislature. That would be a shocker. For anybody watching C-SPAN2, that means one chamber. Then the question would come up: Which chamber will it be? Nobody is going to go to a unicameral legislature, and I do not know when we are going to conclude the business of the Senate. I may be offering this flat tax legislation on the wrong day. Perhaps I ought to wait, because we may still be here on April 15, which would be next Tuesday. In all seriousness, we have the most extraordinarily complex system for filing taxes ever devised. In the midst of an overwhelming bureaucracy and a regulatory system in Washington, DC, nothing compares to the Federal tax code. The Federal tax code has grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages at the present time. A study showed that more than 13 hours are consumed by the average American--rather, more than 13 hours are consumed on average--there is no such thing as an average American--on average by taxpayers in filling out the principal Form 1040. And if one goes to the various schedules, it can be another 5\1/2\ hours or 7\1/2\ hours. I just finished filling out my tax return, and it is inordinately complicated. It is insufficient to be a Philadelphia lawyer to understand the Federal tax code, and then the State taxes, and then city taxes, the wage tax, the property tax, and the real estate tax. It is a nightmare. It is possible to change all of that by going to a flat tax, and then the tax return would be on a postcard. The wonders of television. People can see the postcard. It will take about 15 minutes to fill out a postcard, which would identify the individual, specify the total compensation, specify the allowance, the number of dependents, and in the course of 15 minutes it would be finished. This tax would be calculated on a flat rate of 20 percent. It would be very beneficial to people at all levels of the income strata except for those who engage in tax shelters. The average American today, or in the middle income, a family of four, which does not itemize deductions, pays taxes on all income over $19,850. Under this flat tax, there would be a personal exemption of $27,500 for a family of four, and taxes would be paid only over that amount. After having just criticized charts, my staff has brought me a chart which they prepared. I certainly would not want to omit the showing of this chart. The writing is too small for reading on C-SPAN2, but it specifies the identity of the person, the total compensation, the personal allowance, and it can be filled out in the course of 15 minutes. A superior depiction, in my opinion, is the postcard. People can deal more easily with postcards than they can with charts. I have provided for two deductions which I am maintaining, deductions on interest and charitable contributions. It may be that ultimately we will have a totally flat tax, which would reduce another percent down to 19 percent. I have included interest on home mortgages because it is so prevalent, and I believe Americans might be very surprised not to be able to deduct their interest on home mortgages. That interest on home mortgages has been a great stimulus for housing construction and also a great encouragement for people to own their own homes. That is very important as a societal matter. I have also retained the deduction on charitable contributions, which remains very important. That was reinforced by the Senate earlier this week by providing an increase in charitable contributions deductibility looking toward faith-based initiatives. What I would like to do most emphatically would be to get the debate started. This body, the House, and the Treasury Department have never seriously considered a flat tax. It ought to be seriously considered. Whether it would be accepted or not would be the outcome of the debate. The flat tax proposal which I am bringing to you today, which is modeled after the outline by Professor Hall and Professor Rabushka of Stanford University, has been very carefully thought through. It is a neutral tax scheme. An analysis of people at various income levels shows that it is universally beneficial for all except those who engage in tax shelters and pay no tax at all. The greatest benefit would be the savings to the American people of some 5.8 billion hours a year and some $194 billion in preparation expenses. I have actually seen estimates on the cost of tax compliance as high as $800 billion. Again, these estimates are such that nobody really knows, but as lawyers say in litigation, the pain and suffering that goes with filing these returns, or the cruel and unusual punishment involved in making these computations and the study involved, it would be a great relief to the American people. It would be win, win, win. There would be great savings in time. There would be savings in individual taxes, and there would be a tremendous stimulus to the economy so that so many corporations and businesses would no longer have to have a special office, which is the practice in many places, for the tax collector who comes in to conduct the audit on a yearly basis. To reiterate, in less than one week, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings poring over page after page of IRS instructions, going through their records looking for information, and struggling to find and fill out all the appropriate forms on their Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 325 possible forms, not to mention the instructions that accompany, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to the Tax Foundation, American taxpayers, including businesses, spend more than 5.8 billion hours and $194 billion each year in complying with tax laws. That works out to more than $2,400 per U.S. household. Much of this time is spent burrowing through IRS laws and regulations which fill 17,000 pages and have grown from 744,000 words in 1955 to over 6.9 million words in 2000. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words. The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the estimated preparation time listed on the forms by the IRS, the 2002 Form 1040 is estimated to take 13 hours and 10 minutes to complete. Moreover this does not include the estimated time to complete the accompanying schedules, such as Schedule A, for itemized deductions, which carries an estimated preparation time of 5 hours, 37 minutes, or Schedule D, for reporting capital gains and losses, shows an estimated preparation time of 7 hours, 35 minutes. Moreover, this complexity is getting worse each year. Just from 1998 to 2002 the estimated time to prepare Form 1040 jumped 96 minutes. It is no wonder that well over half of all taxpayers, 56 percent according to a recent survey now hire an outside professional to prepare their tax returns for them. However, the fact that only 29 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk--Congress made about 9,500 Tax Code changes in the past 12 years. And we are far from being finished. Year after year, we continue to ask the same question--is there not a better way? My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present Tax Code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness, and economic growth. My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations, and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families instead of poring over tax tables, schedules, and regulations. My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair and designed to maximize prosperity for all Americans. A summary of the key advantages are: A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 5.8 billion hours they currently spend every year in tax compliance. The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages currently. It would also allow us to slash the mammoth IRS bureaucracy of 117,000 employees. Economists estimate a growth of over $2 trillion in national wealth over 7 years, representing an increase of approximately $7,500 in personal wealth for every man, woman, and child in America. This growth would also lead to the creation of 6 million new jobs. Investment decisions would be made on the basis of productivity rather than simply for tax avoidance, thus leading to even greater economic expansion. Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings. Americans would be able to save up to $194 billion they currently spend every year in tax compliance. As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually. Simplification of the tax code will allow us to save significantly on the $7 billion annual budget currently allocated to the Internal Revenue Service. The most dramatic way to show what the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out. At my town hall meetings across Pennsylvania, the public support for fundamental tax reform is overwhelming. I would point out that in those speeches that I never leave home without two key documents: 1, my copy of the Constitution; and, 2, a copy of my 10-line flat tax postcard. I soon realized that I needed more than just one copy of my flat tax postcard. Many people wanted their own postcard so that they could see what life in a flat tax world would be like, where tax returns only take 15 minutes to fill out and individual taxpayers are no longer burdened with double taxation on their dividends, interest, capital gains and estates. This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2002 tax year, the standard deduction is $4,700 for a single taxpayer, $6,900 for a head of household and $7,850 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,000. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $19,850-- these are personal exemptions of $12,000 and a standard deduction of $7,850. By contrast, under my flat tax bill, that same family would receive a personal exemption of $27,500, and would pay tax on only income over that amount. The tax loopholes enable write-offs to save some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the tax code, the taxpayer being able to find out exactly what he or she owes. This bill is modeled after legislation organized and written by two very distinguished professors of law at Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, S. 488. On October 27, 1995, I introduced a Sense of the Senate, resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced this legislation in the 105th Congress with slight modifications to reflect inflation- adjusted increases in the personal allowances and dependent allowances. I re-introduced the bill two Congresses ago on April 15, 1999--income tax day--in a bill denominated as S. 822. More recently, I introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill. The amendment was not adopted. Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our Nation's Tax Code and the policies which underlie it. I began the study of the complexities of the Tax Code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operations for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.'' The Hall-Rabushka model envisioned a flat tax with no deductions whatever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With only those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible. In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality of the Hall-Rabushka proposal, which uses a 19- percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions. This proposal taxes business revenues fully at their source so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the Tax Code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans. The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts. Professors Hall and Rabushka have projected that within 7 years of enactment, this type of a flat tax would produce a 6-percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system. I ask unanimous consent that the bill, be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Madam President, I rise to speak about the subject of taxation from a little different perspective, a legislative proposal which, if adopted, would add very considerably to productivity in America, and that is a proposal for a flat tax. In the fall of 1994, Richard Armey of the House of Representatives introduced a flat tax. I studied it, then in the spring of 1995, I introduced a flat tax for the Senate. That was the first one introduced. I have introduced it in successive years. I usually pick April 15, because April 15 is tax filing day. But this year we are going to be in recess for the spring break. I had thought today would be the last day we would be in session. That is open to debate at this point. I just came from a conference of the Appropriations Committee, and there are a great many unresolved issues. I posed the question to my colleagues on the Appropriations Committee: What time do we vote on Sunday? Some of my colleagues may be listening on C-SPAN2, and that will give them a jolt: What time do we vote on Sunday? Or we might not vote as early as Sunday. We might pick a time on Monday. I got the attention of the clerks, too, by talking about something important: When are we going to finish the business of the Senate? The distinguished Parliamentarian is nodding his head in chagrin as to what is happening here. Some suggestions have been floated around the Appropriations Committee of a way to solve this impasse between the House and the Senate on appropriations, the impasse between the House and the Senate on the budget, and that is a constitutional amendment for a unicameral legislature. That would be a shocker. For anybody watching C-SPAN2, that means one chamber. Then the question would come up: Which chamber will it be? Nobody is going to go to a unicameral legislature, and I do not know when we are going to conclude the business of the Senate. I may be offering this flat tax legislation on the wrong day. Perhaps I ought to wait, because we may still be here on April 15, which would be next Tuesday. In all seriousness, we have the most extraordinarily complex system for filing taxes ever devised. In the midst of an overwhelming bureaucracy and a regulatory system in Washington, DC, nothing compares to the Federal tax code. The Federal tax code has grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages at the present time. A study showed that more than 13 hours are consumed by the average American--rather, more than 13 hours are consumed on average--there is no such thing as an average American--on average by taxpayers in filling out the principal Form 1040. And if one goes to the various schedules, it can be another 5\1/2\ hours or 7\1/2\ hours. I just finished filling out my tax return, and it is inordinately complicated. It is insufficient to be a Philadelphia lawyer to understand the Federal tax code, and then the State taxes, and then city taxes, the wage tax, the property tax, and the real estate tax. It is a nightmare. It is possible to change all of that by going to a flat tax, and then the tax return would be on a postcard. The wonders of television. People can see the postcard. It will take about 15 minutes to fill out a postcard, which would identify the individual, specify the total compensation, specify the allowance, the number of dependents, and in the course of 15 minutes it would be finished. This tax would be calculated on a flat rate of 20 percent. It would be very beneficial to people at all levels of the income strata except for those who engage in tax shelters. The average American today, or in the middle income, a family of four, which does not itemize deductions, pays taxes on all income over $19,850. Under this flat tax, there would be a personal exemption of $27,500 for a family of four, and taxes would be paid only over that amount. After having just criticized charts, my staff has brought me a chart which they prepared. I certainly would not want to omit the showing of this chart. The writing is too small for reading on C-SPAN2, but it specifies the identity of the person, the total compensation, the personal allowance, and it can be filled out in the course of 15 minutes. A superior depiction, in my opinion, is the postcard. People can deal more easily with postcards than they can with charts. I have provided for two deductions which I am maintaining, deductions on interest and charitable contributions. It may be that ultimately we will have a totally flat tax, which would reduce another percent down to 19 percent. I have included interest on home mortgages because it is so prevalent, and I believe Americans might be very surprised not to be able to deduct their interest on home mortgages. That interest on home mortgages has been a great stimulus for housing construction and also a great encouragement for people to own their own homes. That is very important as a societal matter. I have also retained the deduction on charitable contributions, which remains very important. That was reinforced by the Senate earlier this week by providing an increase in charitable contributions deductibility looking toward faith-based initiatives. What I would like to do most emphatically would be to get the debate started. This body, the House, and the Treasury Department have never seriously considered a flat tax. It ought to be seriously considered. Whether it would be accepted or not would be the outcome of the debate. The flat tax proposal which I am bringing to you today, which is modeled after the outline by Professor Hall and Professor Rabushka of Stanford University, has been very carefully thought through. It is a neutral tax scheme. An analysis of people at various income levels shows that it is universally beneficial for all except those who engage in tax shelters and pay no tax at all. The greatest benefit would be the savings to the American people of some 5.8 billion hours a year and some $194 billion in preparation expenses. I have actually seen estimates on the cost of tax compliance as high as $800 billion. Again, these estimates are such that nobody really knows, but as lawyers say in litigation, the pain and suffering that goes with filing these returns, or the cruel and unusual punishment involved in making these computations and the study involved, it would be a great relief to the American people. It would be win, win, win. There would be great savings in time. There would be savings in individual taxes, and there would be a tremendous stimulus to the economy so that so many corporations and businesses would no longer have to have a special office, which is the practice in many places, for the tax collector who comes in to conduct the audit on a yearly basis. To reiterate, in less than one week, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings poring over page after page of IRS instructions, going through their records looking for information, and struggling to find and fill out all the appropriate forms on their Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 325 possible forms, not to mention the instructions that accompany, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to the Tax Foundation, American taxpayers, including businesses, spend more than 5.8 billion hours and $194 billion each year in complying with tax laws. That works out to more than $2,400 per U.S. household. Much of this time is spent burrowing through IRS laws and regulations which fill 17,000 pages and have grown from 744,000 words in 1955 to over 6.9 million words in 2000. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words. The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the estimated preparation time listed on the forms by the IRS, the 2002 Form 1040 is estimated to take 13 hours and 10 minutes to complete. Moreover this does not include the estimated time to complete the accompanying schedules, such as Schedule A, for itemized deductions, which carries an estimated preparation time of 5 hours, 37 minutes, or Schedule D, for reporting capital gains and losses, shows an estimated preparation time of 7 hours, 35 minutes. Moreover, this complexity is getting worse each year. Just from 1998 to 2002 the estimated time to prepare Form 1040 jumped 96 minutes. It is no wonder that well over half of all taxpayers, 56 percent according to a recent survey now hire an outside professional to prepare their tax returns for them. However, the fact that only 29 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk--Congress made about 9,500 Tax Code changes in the past 12 years. And we are far from being finished. Year after year, we continue to ask the same question--is there not a better way? My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present Tax Code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness, and economic growth. My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations, and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families instead of poring over tax tables, schedules, and regulations. My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair and designed to maximize prosperity for all Americans. A summary of the key advantages are: A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 5.8 billion hours they currently spend every year in tax compliance. The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 6.9 million words and 17,000 pages currently. It would also allow us to slash the mammoth IRS bureaucracy of 117,000 employees. Economists estimate a growth of over $2 trillion in national wealth over 7 years, representing an increase of approximately $7,500 in personal wealth for every man, woman, and child in America. This growth would also lead to the creation of 6 million new jobs. Investment decisions would be made on the basis of productivity rather than simply for tax avoidance, thus leading to even greater economic expansion. Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings. Americans would be able to save up to $194 billion they currently spend every year in tax compliance. As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually. Simplification of the tax code will allow us to save significantly on the $7 billion annual budget currently allocated to the Internal Revenue Service. The most dramatic way to show what the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out. At my town hall meetings across Pennsylvania, the public support for fundamental tax reform is overwhelming. I would point out that in those speeches that I never leave home without two key documents: 1, my copy of the Constitution; and, 2, a copy of my 10-line flat tax postcard. I soon realized that I needed more than just one copy of my flat tax postcard. Many people wanted their own postcard so that they could see what life in a flat tax world would be like, where tax returns only take 15 minutes to fill out and individual taxpayers are no longer burdened with double taxation on their dividends, interest, capital gains and estates. This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2002 tax year, the standard deduction is $4,700 for a single taxpayer, $6,900 for a head of household and $7,850 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,000. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $19,850-- these are personal exemptions of $12,000 and a standard deduction of $7,850. By contrast, under my flat tax bill, that same family would receive a personal exemption of $27,500, and would pay tax on only income over that amount. The tax loopholes enable write-offs to save some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the tax code, the taxpayer being able to find out exactly what he or she owes. This bill is modeled after legislation organized and written by two very distinguished professors of law at Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, S. 488. On October 27, 1995, I introduced a Sense of the Senate, resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced this legislation in the 105th Congress with slight modifications to reflect inflation- adjusted increases in the personal allowances and dependent allowances. I re-introduced the bill two Congresses ago on April 15, 1999--income tax day--in a bill denominated as S. 822. More recently, I introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill. The amendment was not adopted. Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our Nation's Tax Code and the policies which underlie it. I began the study of the complexities of the Tax Code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operations for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.'' The Hall-Rabushka model envisioned a flat tax with no deductions whatever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With only those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible. In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality of the Hall-Rabushka proposal, which uses a 19- percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions. This proposal taxes business revenues fully at their source so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the Tax Code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans. The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts. Professors Hall and Rabushka have projected that within 7 years of enactment, this type of a flat tax would produce a 6-percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system. I ask unanimous consent that the bill, be printed in the Record.

Mr. SPECTER

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

Mr. SPECTER. Mr. President, I yield to the distinguished chairman.

Mr. SPECTER. Mr. President, I yield to the Senator from Mississippi.

Mr. SPECTER. Mr. President, I yield 5 minutes to the distinguished chairman of the Appropriations Committee.

Mr. SPECTER. Mr. President, how much of my 15 minutes remains?

Mr. SPECTER. Mr. President, by way of a brief reply and comment on the arguments that have been made, I agree with a great deal of what has been said. It would be highly desirable to put in more money, but what we have seen today are efforts on the other side of the aisle to add funds, and a response on this side of the aisle, pretty much on party-line votes, to deny the addition. I have sought to find a figure that is significant, such as $600 million, which will be agreed to by votes significantly on this side of the aisle, and with some votes on the other side of the aisle. When the Senator from New York, Mrs. Clinton, made the comment that there are features of Senator Schumer's amendment that expedite the disbursement of the funds, that is not included in my amendment because we don't really know what the formula should be. When Secretary Ridge testified before the Appropriations Committee on March 27, he agreed that the current formula on a population basis was inappropriate, that high-risk areas need more money. At the moment, we do not have a determination as to what those costs are. We have directed the Secretary to make that determination. Once he makes that determination, then we can make an allocation. I certainly would like to see more money. I agree totally with the comments made about the bravery of the firefighters and of the police officers, and the threat of terrorism that has to be fought domestically as well as overseas. What I am looking for in my amendment is the art of the possible--to come up with a figure, and $600 million is substantial. It is true, as the Senator from Louisiana points out, money has been taken in other lines for $300 million. But we have gotten the managers to agree to an additional $200 million, so it is a matter of priorities. If you look at the high-risk areas, such as New Orleans, it is in the interest of the State of Louisiana to have this allocation. How much of my time remains?

Mr. SPECTER. Mr. President, there is no doubt that major cities, such as Philadelphia, with airports and seaports and Independence Hall and the Liberty Bell, have much higher costs than cities which do not have these facilities. I have discussed the issue with Mayor Street. The letter which I have had printed in the Record is a succinct summary, so we can observe this very short time limit which has been agreed to. Similarly, I have conferred with Mayor Tom Murphy of Pittsburgh, who, again, makes the comment about the additional costs. I have had an opportunity--actually, I was called by Mayor Bloomberg of New York City about the very substantial increases in costs there, and during the markup in the Appropriations Committee earlier this week commented about these factors and have sought to increase the funding from the $100 million for high-risk urban areas to a total of some $600 million. Again, it would be highly desirable if we had more money, as suggested by Senator Schumer, but that simply cannot be accommodated within the current budget constraints. In the conversations with Mayor Bloomberg, he pointed out about the fact that police cost some $5 million a month, and there are other costs in the range of $8 million a month for the United Nations, with a very heavy imposition of costs on New York City, commenting in a way very similar to the mayors of Philadelphia and Pittsburgh. There is no doubt these costs really ought to be borne principally by the Federal Government. In the bill, language was inserted by Senator Gregg and language by myself which would require the Secretary of Homeland Defense to make a report to the Congress within 60 days to identify what are the costs in safeguarding airports, seaports, landmarks such as Independence Hall, such as the Liberty Bell, and to make a recommendation as to an allocation by the Federal Government, and whether such costs, in part, should be borne by other entities. That will enable us to make a determination as to how this $600 million will be spent, and to have a rationale for what the expenses will be with the specification of the costs involved and an allocation between the Federal Government and other governmental agencies if it is determined that would be appropriate. Exhibit 1 City of Philadelphia, Office of the Mayor, Philadelphia, PA, April 2, 2003. Hon. Arlen Specter, 9400 Federal Building, Philadelphia, PA. Dear Senator Specter: In Fiscal Year 2002, the City of Philadelphia spent $21.2 million in increased domestic security costs. These costs include overtime incurred by the Police, Fire and Public Health employees associated with the formation of Rapid Assessment Teams. These teams, consisting of employees from each department responded to all critical incidents citywide. Additionally, $8 million was allocated for security improvements to city facilities. These improvements include installations of bollards around the perimeter of City Hall, installation of security access and surveillance systems in the One Parkway Building and installation of security cameras and metal detectors at other facilities. The Police Department enhanced coverage in Center City and provided enhanced security staffing at the Philadelphia Stock Exchange, Red Cross Headquarters and the City's Emergency Operations Center. An intensive training was given to a team of police officers and supervisors that may be called upon to respond to a hazardous materials incident. Going forward, the Police Commissioner formed the Bureau of Counter-Terrorism absorbing the Detective Bureau's Organized Crime Unit as its foundation. The 76 member Bureau is developing new methods and initiatives to pursue counter- terrorism preparedness. These initiatives include strategic and tactical training, equipment purchase, inter-agency and regional cooperation and coordination, and community outreach. The Bureau meets regularly with task forces such as the FBI's Joint Terrorism Task Force, the US Attorney's Anti- Terror Task Force and the US Coast Guard Task Force to keep current with the latest counter-terrorism strategies. These initiatives are likely to cost about $10 million annually. Sincerely, John F. Street, Mayor.