7:27 PM EDT

Robert J. Portman, R-OH 2nd

Mr. PORTMAN. Mr. Chairman, I yield myself such time as I may consume. This is a rather unusual amendment offered by the gentleman from Vermont. It is unusual because by its own terms it says the IRS shall not use the funds appropriated to it under this bill to violate specific provisions of the Internal Revenue Code, ERISA and the Age Discrimination in Employment Act. I hope this is unnecessary.

Under current law, the Internal Revenue Service is required to interpret and enforce the law and is prohibited from acting in contravention of the law. It is also unusual in that we are in the appropriation process and this addresses tax policy.

I do not see any particular harm in the amendment, I just think it is a little unusual.

7:28 PM EDT

Steny Hoyer, D-MD 5th

Mr. HOYER. I thank the gentleman for yielding. I am not going to oppose the amendment for the same reason that the gentleman mentioned. I have discussed with the gentleman from Vermont, but not the gentleman from Ohio yet. But I would hope that the amendment is not necessary because I believe that the IRS is following the law. I understand that that is the purpose of the amendment, however, and we are not going to oppose it.

7:28 PM EDT

Robert J. Portman, R-OH 2nd

Mr. PORTMAN. Reclaiming my time, I do want to take this opportunity to say that I have a bigger concern here which is whether the IRS has the resources available to it today to properly implement the laws that Congress is passing.

[Time: 19:30]

Let me talk specifically about the resources necessary to implement the historic restructuring reform act that this Congress passed only 2 years ago providing the most sweeping reforms of the IRS in 46 years.

My colleagues will recall that the Clinton administration initially opposed this effort but ultimately an [Page: H6691]

overwhelming bipartisan majority of this House on both sides agreed that reform was needed. The RRA, Restructuring and Reform Act, required a number of major reforms, including a taxpayer friendly total reorganization of the entire Internal Revenue Service to improve customer service for every taxpayer.

We also directed the IRS to undertake a desperately needed computer modernization effort. Every Member of the House has heard horror stories from their constituents about erroneous computer notices received by constituents; where the left hand does not seem to know what the right hand is doing. The only way to get at this is by investing in improved IRS technology. This House made a commitment to do that.

Mr. Chairman, we need to protect our constituents from these very kinds of computer problems. The RRA also took steps to reduce IRS paperwork by moving toward taxpayer-friendly electronic filing, but there is an initial cost to that. We know there is a 22 percent error rate with paper returns, but only a 1 percent error rate with electronic filing. That is why we mandated that the IRS move to 80 percent electronic filing by 2007.

We are just beginning to see some improvements in the IRS, just beginning to see some progress. Yet, here, we are not funding the IRS at adequate levels. Earlier this year, the GAO reported that the processing time for tax returns on paper this year was 14 percent faster than last year. Electronic filings increased about 17 percent this year.

The IRS assistance lines are being answered at a higher rate, although not nearly at the private sector rate, and it is not nearly adequate. The point is that we are making some progress. There also have been some bumps along the road. Among other things, we desperately needed the IRS oversight board that the administration has dragged its feet on.

Although I agree that Commissioner Rossotti is doing a good job at trying to turn the agency around. He cannot do it without adequate resources. We need to continue funding the IRS at an adequate level to ensure that we do not jeopardize the very reforms that again so many Members of this House supported so enthusiastically just 2 years ago.

I hope, Mr. Chairman, as we move forward with this legislation that the House and Senate will be able to work together to find the needed funds to provide the taxpayers service improvements that we require in our IRS reform package.

Mr. Chairman, I commend the gentleman from Arizona (Chairman KOLBE) for his help with regard to the RRA; he was a big part of it. I commend the gentleman from Maryland (Mr. HOYER), the ranking member as well, for the difficult job both of them have done now in pulling together this legislation before us today and making sure it fits within the budget caps.

I know how committed both of them are to ensuring that the IRS modernization effort works for taxpayers. I would hope that the gentleman from Arizona (Chairman KOLBE) will work with the colleagues in the Senate to attempt to adequately fund the IRS restructuring and reform effort.

Again, I would say to the gentleman from Vermont (Mr. SANDERS), my friend, this amendment before us, I think, is probably unnecessary, but my bigger concern is whether the IRS has the resources to be able to follow the very requirements that we put in place through the IRS Restructuring and Reform Act.

7:32 PM EDT

Steny Hoyer, D-MD 5th

Mr. HOYER. Mr. Chairman, I thank the gentleman for yielding to me.

Mr. Chairman, I want to say to all colleagues in the House, I do not think there is anybody in the House who has spent more time on making sure that the Internal Revenue Service is an effective agency efficiently collecting the revenues that are due to the government that can be used for the benefit of the American public and to do so in a manner that is consistent with the best interests of the taxpayer and his focus on giving it the proper resources to do the job we expect of it I think has

been untiring and unwavering, and I congratulate him for his efforts.

7:33 PM EDT

Gil Gutknecht, R-MN 1st

Mr. GUTKNECHT. Mr. Chairman, I thank the gentleman for yielding me the time.

I must say to my friend from Ohio (Mr. PORTMAN), this is not about more computers. It is not about more people. It is about the IRS doing its job. I have here the dictionary definition of vested, and it says, law, settled, fixed or absolute, being without contingency, as in a vested right.

What this is about, ladies and gentlemen, is forcing the IRS to finally offer us a ruling on whether or not the conversion of some of these pensions violate the age discrimination laws that we already have on the books. That does not require a new computer. That does not require more staff. It simply requires that they do what we expect them to do, and that is interpret the law the way I think most of us would say.

I would say to all of my friends on either side of the aisle, could we imagine what would happen if we started tinkering with Federal employees with their vested pension rights? I might to say to some of my friends in the military, what would happen here in this very Chamber if we began to tinker with the vested rights for some of our people who serve us in the Armed Services. But that is happening right now in violation, in my opinion, of age discrimination laws, and this IRS and this administration

has refused to do anything about it.

This is a simple amendment. It is supported by the AARP, and, frankly, it will be supported by millions of Americans. I hope my colleagues will join me in supporting this amendment.

7:33 PM EDT

Gil Gutknecht, R-MN 1st

Mr. GUTKNECHT. Mr. Chairman, I thank the gentleman for yielding me the time.

I must say to my friend from Ohio (Mr. PORTMAN), this is not about more computers. It is not about more people. It is about the IRS doing its job. I have here the dictionary definition of vested, and it says, law, settled, fixed or absolute, being without contingency, as in a vested right.

What this is about, ladies and gentlemen, is forcing the IRS to finally offer us a ruling on whether or not the conversion of some of these pensions violate the age discrimination laws that we already have on the books. That does not require a new computer. That does not require more staff. It simply requires that they do what we expect them to do, and that is interpret the law the way I think most of us would say.

I would say to all of my friends on either side of the aisle, could we imagine what would happen if we started tinkering with Federal employees with their vested pension rights? I might to say to some of my friends in the military, what would happen here in this very Chamber if we began to tinker with the vested rights for some of our people who serve us in the Armed Services. But that is happening right now in violation, in my opinion, of age discrimination laws, and this IRS and this administration

has refused to do anything about it.

This is a simple amendment. It is supported by the AARP, and, frankly, it will be supported by millions of Americans. I hope my colleagues will join me in supporting this amendment.

7:34 PM EDT

Dennis Kucinich, D-OH 10th

Mr. KUCINICH. Mr. Chairman, I support the amendment, cash balance pension conversion completely reverses the incentive older workers now have. Under cash balance pensions, workers have hypothetical retirement accounts that grow by earning interest.

The longer a worker stays with the company the larger effect of this compound interest; therefore, an older worker with only 10 years left before retirement does not have as much time as a younger worker with 25 years before retirement in which to earn interest. So this older worker will retire with a smaller retirement than a younger worker will when he retires. That just is not fair.

This amendment would compel compliance with the laws saving many American workers from losing the pensions they work for and halting the illegal and unethical conversion of workers pension to cash balance plans.

7:34 PM EDT

Dennis Kucinich, D-OH 10th

Mr. KUCINICH. Mr. Chairman, I support the amendment, cash balance pension conversion completely reverses the incentive older workers now have. Under cash balance pensions, workers have hypothetical retirement accounts that grow by earning interest.

The longer a worker stays with the company the larger effect of this compound interest; therefore, an older worker with only 10 years left before retirement does not have as much time as a younger worker with 25 years before retirement in which to earn interest. So this older worker will retire with a smaller retirement than a younger worker will when he retires. That just is not fair.

This amendment would compel compliance with the laws saving many American workers from losing the pensions they work for and halting the illegal and unethical conversion of workers pension to cash balance plans.

7:35 PM EDT

Maurice Hinchey, D-NY 26th

Mr. HINCHEY. Mr. Chairman, this amendment is necessary. It is necessary, particularly in light of some of the omissions in the pension bill that passed the House yesterday. Among those omissions was the failure to deal with the increasing propensity of many major corporations across America to move from defined benefit pension plans to cash balance pension plans, and thereby, as a result of that move, reducing pension benefits for the more senior employees in the organization.

So this amendment is absolutely necessary. It draws attention to that omission, and, in fact, it draws attention of the IRS to the fact that its responsibilities with regard to pensions has to be observed, particularly, those responsibilities with regard to protecting older employees in their retirement.

This amendment is necessary. It should be passed.

7:35 PM EDT

Maurice Hinchey, D-NY 26th

Mr. HINCHEY. Mr. Chairman, this amendment is necessary. It is necessary, particularly in light of some of the omissions in the pension bill that passed the House yesterday. Among those omissions was the failure to deal with the increasing propensity of many major corporations across America to move from defined benefit pension plans to cash balance pension plans, and thereby, as a result of that move, reducing pension benefits for the more senior employees in the organization.

So this amendment is absolutely necessary. It draws attention to that omission, and, in fact, it draws attention of the IRS to the fact that its responsibilities with regard to pensions has to be observed, particularly, those responsibilities with regard to protecting older employees in their retirement.

This amendment is necessary. It should be passed.

7:36 PM EDT

Tom Barrett, D-WI 5th

Mr. BARRETT of Wisconsin. Mr. Chairman, I want to applaud my colleague from Vermont (Mr. SANDERS) for this excellent amendment.

This is an amendment that is necessary. The issue here is cash balance pensions, and what we have heard from many corporations is that they are doing this to help younger workers being more mobile. We do not need to do this to help the younger workers. We are hearing that it is being done to make it easier for people to understand what their balances are. We do not [Page: H6692]

need to do it. What we do need is, we do need the IRS to make it clear that you cannot

convert a pension plan and rip off workers, and that is why it is important that this amendment be added. It is important that the age discrimination laws in this country be followed by the IRS as well.

7:36 PM EDT

Tom Barrett, D-WI 5th

Mr. BARRETT of Wisconsin. Mr. Chairman, I want to applaud my colleague from Vermont (Mr. SANDERS) for this excellent amendment.

This is an amendment that is necessary. The issue here is cash balance pensions, and what we have heard from many corporations is that they are doing this to help younger workers being more mobile. We do not need to do this to help the younger workers. We are hearing that it is being done to make it easier for people to understand what their balances are. We do not [Page: H6692]

need to do it. What we do need is, we do need the IRS to make it clear that you cannot

convert a pension plan and rip off workers, and that is why it is important that this amendment be added. It is important that the age discrimination laws in this country be followed by the IRS as well.

7:36 PM EDT

Tom Barrett, D-WI 5th

Mr. BARRETT of Wisconsin. Mr. Chairman, I want to applaud my colleague from Vermont (Mr. SANDERS) for this excellent amendment.

This is an amendment that is necessary. The issue here is cash balance pensions, and what we have heard from many corporations is that they are doing this to help younger workers being more mobile. We do not need to do this to help the younger workers. We are hearing that it is being done to make it easier for people to understand what their balances are. We do not [Page: H6692]

need to do it. What we do need is, we do need the IRS to make it clear that you cannot

convert a pension plan and rip off workers, and that is why it is important that this amendment be added. It is important that the age discrimination laws in this country be followed by the IRS as well.