October 9, 1978
Page 34788
Mr. HELMS. I thank my friend.
Mr. President, already today this position has been established because the gasoline tax deduction is in the present law. I believe there was a ruling this morning, and I consider it to be a correct one, that maintaining the present law cannot be considered a revenue loss under the Budget Act.
I ask for the yeas and nays on the amendment, Mr. President.
The PRESIDING OFFICER (Mr. STEVENSON). Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. PROXMIRE. Mr. President, the Senator from North Carolina anticipated what I was going to do. I do make the point of order that this is a violation of 311 of the Budget Act. It would knock $400 million of revenue out of the bill and as a result it would put us $400 million over the budget resolution.
I make that point of order and I ask for a ruling.
The PRESIDING OFFICER. The Chair sustains the point of order.
Mr. HELMS. I did not understand the Chair.
The PRESIDING OFFICER. The Chair sustains the point of order.
Mr. HELMS. I appeal the ruling of the Chair and I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
Mr. RIEGLE. I do not know that the request of the Senator was heard. I wonder if it can be stated again.
Mr. HELMS. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HELMS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HELMS. Mr. President, I appeal the ruling of the Chair and I ask for the yeas and nays.
Mr. STEVENS. Will the Senator withhold that?
The PRESIDING OFFICER. Is there a sufficient second?
Mr. STEVENS. Mr. President, I ask the Senator to withhold his appeal for just a moment. I feel very strongly about this and I would like take time out of my hour under cloture to explain my position.
As one who has supported the Budget Act in both general and specific terms, I have difficulty with the assumption that where the report of the committee recommends a repeal of the existing law which, if sustained by the Senate, would—
The PRESIDING OFFICER. An appeal is not debatable. Does the Senator from North Carolina withhold his appeal?
Mr. HELMS. I did withhold, Mr. President. I am sorry the Chair did not hear.
Mr. STEVENS. Where the committee recommends a repeal of existing law, the net effect of which would be to increase revenues, the committee then draws the conclusion that based on its recommendation to repeal existing law, a further decrease in revenues in terms of a tax cut cannot be justified nor ruled in order.
Based upon that presumption, the bill is presented to us as a balanced proposition under the Budget Act. Having voted to sustain the budget position, I understand their proposition, but I do not believe the ruling of the Chair is proper when it deals with existing law. The net effect of this ruling would be that, if there are some people in this body who feel that existing tax incentives or special exclusions should be changed, all they have to do is tie it to a tax cut and come bring it before the Senate. It is not even subject to a vote, but is subject to a point or order on an amendment denying the committee the right to change existing law. I do not see how we should be prevented from voting up or down on the committee's recommendation to change existing law by virtue of a point or order.
That is the net result of what is happening. The committee's recommendation is to change the existing law with regard to deductions for State gasoline taxes. I think we ought to have a right to vote on that recommendation and not be prevented from challenging the committee provision and deleting from the committee provision the repeal of existing law on the deductibility of State gasoline taxes.
Mr. HELMS. The Senator is absolutely correct.
Mr. STEVENS. The point of order prevents us from challenging the committee's recommendations to change existing law. That is not fair. It is not a proper interpretation of the Budget Act. With due respect to the Budget Committee chairman, .I hope he will agree with me that the time to handle budgetary impacts is when the bill comes to final consideration here on the Senate floor. What will need to be changed to prevent the point of order from being valid, is the total amount of tax reductions.
If the amendment of the Senator from North Carolina carries, there would be $400 million less to cut in taxes because we have denied the committee's recommendation to change existing law. We are being denied a chance to vote on the specific issue of whether or not we want gasoline taxes to be deductible on a non-business, individual basis. For those people who itemize their tax returns, this is a personal deduction for State taxes. If we follow this procedure, I think a dangerous precedent will be set. The next thing we know, the committee would recommend that individuals could not deduct State income taxes based on the fact that a reduction in Federal taxes has been provided. Each time, we would be denied the right to vote on these specific issues.
I urge the Chair to look at this again. I do not believe that the Budget Act can deny a specific vote on a repeal of existing law based on the Chair's ruling sustaining the point of order of the Budget Committee. I may not have articulated my position as well as I could, but I am disturbed about this because there are too many provisions in the tax code that could be eliminated this way. Sustaining this point of order would go even farther than the Glenn amendment in eliminating nonbusiness deductions for individuals.
I thank the Senator from North Carolina for his courtesy.
Mr. MUSKIE. Mr. President, will the Senator withhold further?
Mr. HELMS. Yes.
Mr. MUSKIE. The Senator from Alaska seems to argue that I am somehow denying Senators' rights. My only role is to uphold the Budget Act. The budget provides for $21.9 billion in tax reductions. That is the gross figure. It is the Finance Committee's prerogative to make up that figure by a combination of proposals to change the revenue code, some of which will pick up revenues and some of which will lose revenues.
The Budget Committee does not second guess the Finance Committee directly on particular provisions.
Mr. STEVENS. Will the Senator allow me to apologize? He took umbrage. I want to apologize. I did not mean to imply that the Senate Budget Committee had second guessed the Finance Committee. I do imply, however, that a majority of the Finance Committee, in a substitute reported by the Finance Committee, could wipe out the depletion allowance, or any other single incentive in the Tax Code, as long as it was coupled with a sufficient reduction in taxes. All it would take would be a majority of the Finance Committee to get us in this posture. The Senate is faced with a vote to sustain the ruling of the Chair that the Finance Committee's recommendation to repeal existing law is correct.
It is not a proper ruling. I do not imply in any way that the Budget Committee's chairman has brought this about.
Mr. MUSKIE. I have to try, at least, to supply the Senate with the information which will enable the Senate to properly enforce the Budget Act.
In this case, the provision in the pending bill would increase revenues and offset some of the very attractive revenue reductions that are contained in the bill. The bill is, of necessity, a tradeoff between revenue increases and revenue reductions. What the budget resolution states is that the net reduction cannot exceed $21.9 billion.
The bill that the Finance Committee reported to the Senate was $1.4 billion below that ceiling. In other words, the Finance Committee brought to the Senate a bill that would have permitted the Helms amendment, if the Senate chose, without violating the ceilings. The Finance Committee left the Senate with $1.4 billion under the revenue floor of the second budget resolution for fiscal year 1979.
But the Senate has used up that $1.4 billion.
Mr. STEVENS. Will the Senator yield?
Mr. MUSKIE. Let me finish.
But the Senate has used up that $1.4 billion by using wedge-type amendments that have produced a $10 billion additional reduction on an annual basis.
We have done that as a Senate — the Finance Committee did not do it — the Budget Committee did not do it but the Senate has done it. In other words, in order to get $10 billion in annual reductions into this bill, we have slipped effective dates; we have played with the calendar; and we have gotten a total additional cut for fiscal 1979 of $1.4 billion. But on an annual basis, thereafter, the revenue loss will be $10 billion.
Surely, we have the right to raise a point of order based on the $21.9 billion revenue reduction that the budget permits to raise the point of order.
With enactment of this amendment, we would add $400 million to the deficit in the budget.
Mr. LONG. Will the Senator yield at that point?
Mr. MUSKIE. Yes.
Mr. LONG. The Senator's argument is clearly correct. The Senate Finance Committee brought in a bill where the Helmsamendment could have been passed and we could have still cut taxes another $1 billion.
But the Senate used all that tax cut up. The Senator from Maine did not vote to use it up. The Senator from Louisiana did not vote to use it up. But those who voted for the Kennedy amendment, the Packwood amendment, and the various other goodies here, voted to use it all up.
Now, if we now adopt the Helms amendment, the committee amendment — I ask the Senator from Maine to hear this — if we now adopt the Helms amendment, which is subject to a point of order, once that is in effect, then the whole committee amendment will be subject to a point of order and the whole thing will go down the drain.
So we will have wasted completely the time that we spent working on this bill, because the whole committee amendment will be subject to a point of order.
Mr. MUSKIE. May I make one other point? Senator HELMS' amendment, which would cut $400 million in fiscal 1979, would cut $1.2 billion in fiscal 1980. So that we would add that $1.2 billion to the $10 billion we have already put in this bill as additional out year revenue losses.
Now, if the Senate wants to support the Helms amendment on that basis, the Budget Act leaves that prerogative to the Senate, do not let me disabuse anyone on that score. But these are the facts of which every Senator should be aware.
Mr. HELMS. If the Senator will yield, on the Senator's figures of 1 year's time, I think that should be a matter of great concern to the voting public. Gasoline prices increase that much, gasoline taxes increase that much; where does the Senator get his figures?
Mr. MUSKIE;. These are from the Joint Taxation Committee.
Mr. HELMS. He says it will cost $400 million this year and—
Mr. MUSKIE. Losses this year. Now the Senator is talking about fiscal year.
Mr. HELMS. Yes.
Mr. MUSKIE. Fiscal.
Mr. HELMS. Yes.
Mr. MUSKIE. The loss this year would be $471 million, and for fiscal year 1980, it is $1.2 billion.
The basic point is the $475 million for fiscal year 1979.
Several Senators addressed the Chair.
Mr. STEVENS. Will the Senator now yield for my question?
The PRESIDING OFFICER (Mr. STONE). The Senators will kindly suspend. The Senate will be in order now.
Mr. STEVENS. Will the Senator now—
The PRESIDING OFFICER. If the Senator will suspend, the Senate will be in order.
The Senator may proceed.
Mr. STEVENS. I wish to direct a question to the Senator from Maine.
Let us assume, and I do not imply any bad faith to my good friend from Louisiana, everybody knows my great respect for him, but assume we have a majority of the Finance Committee who wants to do away with the personal exemption, or any one of the existing provisions in the law, and they tie along with it an idea we can reduce taxes significantly if it were approved.
We have here a bill, a committee substitute, and it is supposed to be subject to amendment. But someone else ties on just a little bit of an amendment, that is another reduction in taxes, that makes any further amendment, any further change, financially, in that bill subject to a point of order.
Say that we find ourselves in the position that we cannot have a vote on the recommendation of a majority of the Finance Committee to change existing law because of what might happen under the budget resolution.
Mr. MUSKIE. If a committee — if the tax committee — were that irresponsible, the Budget Act does not prevent the Senate from overturning that result.
Mr. STEVENS. Just have that situation right here.
Mr. MUSKIE. If the Senator can lay out such a case, any time
Mr. STEVENS. Just happened right now. This amendment would change existing law in a committee substitute. Existing law permits this deduction, this is a tax
Mr. MUSKIE. Wait a minute. The Senator is putting a different question to me than he had a moment ago.
Mr. STEVENS. I am saying, how do we get to do it under the Senator's position?
Mr. MUSKIE. The Senate addresses—
Mr. STEVENS. All we have to do is come out with a bill that is absolutely balanced, completely, the tax reductions and the revenue increases are balanced, totally balanced. The first time anyone wants to make a change In that bill, he is subject to a point of order which would change the budget resolution.
That is exactly what has happened here. We had the tax increase to the tax reduction first, and we have had no chance at all to challenge the assumptions in the change of the existing law as far as the revenue
Mr. MUSKIE. That is not true.
Mr. STEVENS. It is. That is what the Chair just ruled.
Mr. MUSKIE. What the Senator is telling me is that I, as chairman of the Budget Committee, am telling the Senate it cannot vote for the Helms amendment. But I am telling the Senator that the fact—
Mr. STEVENS. Cannot vote on it, period. It is subject to a point of order. We will vote on overruling the Chair's sustaining the point of order that violates the budget resolution.
Mr. MUSKIE. So the Senator does not want the restraint of a point of order, he is saying—
Mr. STEVENS. I am saying—
Mr. MUSKIE. If I may continue—
Mr. STEVENS. The Senator would not accept my postulate. I will state it again.
If the chairman had brought out a bill perfectly balanced under the budget resolution, changes in income and changes in taxes, as far as the Federal Government is concerned, and those changes were postulated, on changes in existing benefits under the tax laws, we would get more revenue because we took away — I said the individual deduction, exclusion from tax, and, therefore, could reduce them generally across the board, and that was, under the budget waiver, completely balanced.
Now, if someone wanted to challenge that and say, "No, we do not accept the proposition that existing law, as far as these individual deductions are concerned, should be changed," we would be in exactly the same position, subject to the point of order.
Mr. MUSKIE. No. I heard the Senator's postulate three times. Now, may I answer it?
Mr. STEVENS. Yes.
Mr. MUSKIE. I understand the postulate. The Senator is postulating the possibility of a perfectly horrendous tax matter, which wipes out long established preferences, like the personal exemption, or like interest on home mortgages. If a committee were that irresponsible, if it ran that far against the grain of the Senate and the grain of the country, somebody would raise that issue on the Senate floor.
A Senator is going to make that case then, and the point of order is going to be made by whomever is chairman of the Budget Committee at that point. The Senate will then consider those changes in the law that should be retained, and the Senate will do what is right.
The purpose of this point of order is not to handcuff the Senate. The Budget Act says that when the point of order is raised — this is a different point of order from the one raised by Senator LONG earlier this week — it is raised for the purpose of alerting the Senate to the fact that the floors and ceilings set in the budget resolution would be breached by this proposal.
All I am saying to the Senator is that this proposal would breach the revenue floor. But the Senator does not even wantme to raise the question and provide the information.
Mr. SARBANES. Mr. President, will the Senator yield for a question?
Mr. MUSKIE. I yield.
Mr. SARBANES. If the Helms amendment, in addition to seeking to restore the deduction — which would cost the $400 million, or whatever the figure is — had also carried with it some proposal to raise revenues, since you are now at the ceiling or close to the ceiling, under the budget resolution, and to that extent it would have been balanced within itself, would it have been subject to a point of order? Would the Senator make a point of order?
Mr. MUSKIE. I would not make a point of order.
Mr. SARBANES. There are two ways to deal with the question. One is by the point of order being made. If the Senate wants to overrule the point of order, it can do that on a vote and take the consequences of adding another $400 million to the cost of this bill.
Second, if the Senator from North Carolina wanted to preclude the point of order from even being offered, he could have come in to restore these deductions,which he considers important, and at the same time have found the revenue through some other combination to balance it.
The budget process is supposed to induce that kind of responsible fiscal action on the part of the Senate.
The whole purpose of the budget process on spending and taxing is to get away from the idea that either you can come in here and just add spending through appropriations, without regard to what it adds up to, or, in this instance, add on the loss of tax revenues, without any regard to what it adds up to.
Therefore, the discipline which the process seeks to impose is at work here. The discipline does not run so far that we cannot even overrule it by majority vote. There are ways to deal with this problem, one of which, if the Senator from North Carolina chose, would not have brought a point of order, and the second is that we can overrule the point of order.
Mr. LONG. Mr. President, let me make this point; also.
Let us assume that as of right now, the bill before us has been passed and has gone to the President to be signed. So all the budget authority has been used.
Then let us take the case of the Senator from Alaska. If the Finance Committee still could bring in a bill with a tax cut of $5 billion, we would have to bring in $5 billion of a tax increase. At that point, if anybody struck out any part of the $5 billion tax increase, our bill would be subject to a point of order. We would have to violate the budget processto handle it. You can recommit the bill to the Finance Committee with instructions.
Suppose half of our tax increases were knocked out. You could recommit the bill to the committee with instructions to take that out and to reduce the tax cut, since you had lost half your revenues, and you would still be within the budget.
However, the Finance Committee did not prevent the Helms amendment. The Senate has prevented the Helms amendment when it voted for the other tax cuts, which I opposed and the chairman of the Budget Committee opposed; but the Senate did not see it our way. So it all has been used up.
On the issue of this particular item, Senators should understand that on the energy bill, the House conferees were insisting on this item anyway — the repeal of the deduction for gasoline taxes — on the energy bill. So it is likely to come back in a conference report, anyway. Even if we knock this out on the tax bill, the probability is that it will come back in a conference report between the Senate and the House, because the House Ways and Means Committee has passed it twice and probably will insist on it.
The Senate is not denied these alternatives and does not have to violate the budget process in order to have whatever recourse the Senate wants. In other words, it can vote the whole bill down; it can recommit the bill with instructions. The Senate has other alternatives available to it, if it wants to do them, and does not have to violate the budget process.
Mr. STEVENS. Mr. President, a parliamentary inquiry.
The PRESIDING OFFICER. The Senator will state it.
Mr. STEVENS. The Senator from Delaware has suggested that an amendment could be submitted to raise revenues to offset the amendment of the Senator from North Carolina should it be adopted. Would it be in order, under the cloture procedure, to file such an amendment at this time?
The PRESIDING OFFICER. It would take unanimous consent.
Mr. STEVENS. Mr. President, a second parliamentary inquiry.
Under the Budget Act, there is a provision that says that any provision in title 3 or 4 may be waived or suspended in the Senate by a majority vote of Members voting, a quorum being present, or by unanimous consent of the Senate. Is it in order at this time to file such a waiver for the amendment of the Senator from North Carolina?
The PRESIDING OFFICER. The Senator could move at this time, under section 904 of the Budget Act, to waive section 311 of the Budget Act.
Mr. STEVENS. It would take a majority vote to do that?
The PRESIDING OFFICER. That is correct.
Mr. STEVENS. And the effect of that would be to permit a vote up or down on the amendment of the Senator from North Carolina, if it were done?
The PRESIDING OFFICER. That is correct.
Mr. STEVENS. I am learning a little bit myself about this.
I would not like to see the Senate get into the position in which we were unable to get a vote on a recommendation of a committee, with due respect to the Senator's Finance Committee, on an issue of this type, where we would be in such a position that we would be forced to accept recommendations of change in existing law without having the right to challenge those assumptions of the committee, as to what is right in terms of changing existing law, because of the budgetary impact of the cut.
Again, this is perhaps a small item, but it does affect a lot of people who deduct State incomes taxes today. I, for one, want a chance to vote on that. I do not want to see it happen. If that means we reduce the income tax cut a little later on, fine.
I always have taken the position that we should assess the Budget Committee's position as to whether we are in balance after we see what happens to the basic recommendations to change existing law. It seems to me we should find out whether we agree with the Finance Committee as to what portion of existing law should be changed, before we make up our minds as to how much we should cut taxes. I do not think we can make up our minds as to how much we should cut taxes until we know what we are going to do with the basic recommendations about changing existing law which would bring about increased revenues, which means decreasing the tax incentives and increasing the taxes to some taxpayers.
I hope the Senator from North Carolina understands that he has the right to file and ask for a waiver and would seek the waiver, so that we will have a chance to vote on the committee's recommendation of deduction of State gas taxes.
Mr. ROBERT C. BYRD. The motion would come too late, in view of the fact that the Chair already has ruled and sustained the point of order.
The PRESIDING OFFICER. The Senator is correct.
Mr. HATCH. Mr. President, I am pleased to be a cosponsor of this amendment along with my very able colleagues, Mr. HELMS and Mr. REIGLE. I rise with them in opposing the deletion of the itemized deduction for State and local nonbusiness gasoline and motor fuel taxes. I do so for the following reasons:
First. It will have an adverse effect on a large portion of middle-income tax-payers.
Second. It will help undermine the incentive for taxpayers to make use of itemized deductions.
Third. It will not bring about a substantial gain in energy savings.
Present law allows individuals who itemize to deduct State and local excise taxes imposed on gasoline, diesel, and other motor fuels if the fuels are not used for business purposes. If the Senate agrees to repeal this deduction, the middle-income taxpayers will suffer the most from the added tax burden. As a time when the Government is promising tax relief,. it is using a "backdoor approach" to impose another new tax on a large segment of American society.
According to the U.S. Treasury Department figures, over 70 percent of the revenue that will be raised from the repeal of this deduction will come from taxpayers making less than $30,000 a year. In 1983 alone, the elimination of this deduction will, according to the Treasury, take an additional $2.2 billion from the pockets of the American taxpayer who must also face spiraling fuel prices. Can the Senate justify such an increase during a period when taxpayers are saying "no" to more taxes?
Mr. President, the repeal of this deduction is part of a much larger scenario of tax reform, a scenario that represents a changing attitude within the Treasury with regard to tax legislation. Administration's decision to end the gasoline tax deduction is a disguised attack on the class of itemized deductions. By eliminating a deduction every year, the value of itemized deductions to all taxpayers is gradually eroded.
Contrary to popular belief, those who benefit most from itemizing are not just a few "fat cats." According to the Treasury Department's own figures, taxpayers with an income under $25,000 accounted for over 65 percent of the itemized returns in 1975. These are middle-income people who work hard for their take-home pay.
It is my opinion that Congress should view itemized deductions as a class when making revisions in tax law. As each deduction is eliminated, fewer taxpayers are provided the incentive to itemize. I suggest that Congress avoid the piecemeal approach and consider the total effect that is created by the repeal of itemized deductions. We should not allow the Treasury to sneak tax reform past in piecemeal.
Unfortunately, tax reformers have tricked both Houses of Congress into dealing with deductions by following an item-to-item approach. When it comes time to change the Tax Code, all attention is focused on the merits of one narrow issue. This year it happens to be the gasoline tax. Will the itemized deduction for State income taxes be next? Followed by elimination of the itemized deduction for interest on home mortgages?
Mr. President, if we continue to chop down trees one by one, the forest will soon be gone. Do we want that? I believe we need more information before we go any further. We need to look at the broader picture. American taxpayers deserve that much.
In its report on the tax bill, the Finance Committee mentions its concern about conservation of energy and the reduction of oil imports. In my opinion, however, the repeal of the gasoline deduction will not assist our Nation to achieve its energy goals. Instead, it will create an unfair tax burden for many taxpayers in western and rural States. People who live in these areas must drive greater distances. Should we penalize them when they must drive their family automobiles to seek medical care or travel into town to purchase groceries or farm supplies? And what about commuters? Will the elimination of the gasoline deduction suddenly force them to flee to mass transit? I think not. We promise our constituents a tax cut and then turn right around and pull out a meaningful deduction. We disguise our actions by claiming that it will somehow help cure our energy crisis.
If this measure is designed to save fuel, how can the committee allow business to maintain its fuel deductions? Or will business be next?
Mr. President, this matter was passed by the committee as a sop to the administration during its final hours of markup. I believe it deserves more discussion than it received at that time. I hope that my colleagues will understand the seriousness of this issue and support this amendment to the tax bill.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Michigan is recognized.
Mr. RIEGLE. Mr. President, I thank the Chair for recognizing me.
I ask, from the parliamentary point of view, whether we are free to use our 1 hour to discuss this issue, pending a decision by the Senator from North Carolina to move for a vote on this.
The PRESIDING OFFICER. The Senator is correct.
Mr. RIEGLE. I will make a point or two about the merits of this issue, because that has been lost along the way. I have not heard a syllable of argument as to why this deduction, which we have had for many years, should be done away with. I am not aware of any lengthy committee record — there may be one, but it has not come to my attention — in which a strong case has been made to do away with this deduction suddenly. Frankly, I know of no reason to do that.
If somebody is paying the tax to a State authority, I wonder whether we want to put ourselves in the position of applying a Federal tax on income that already has disappeared, because it has been taxed away by the State authority. It seems to me that we should allow a deduction in that case.
The Senate voted on this issue in 1974,and we voted to retain this deduction. We voted on it in 1976 and voted to retain this deduction. We voted on it in 1977 and voted to retain this deduction. I have not heard any argument as to why, suddenly, in 1978, we should go the other way.
I think the Senator from Alaska makes a very good point. I am not sure we want to say that the rule is a blanket, rule and locks everything into the same treatment. That is a point that should be raised.
But when we are talking about eliminating an aspect of current law and we are denied an up-and-down vote on that, that to me is very troubling. There happens to be in this particular tax provision such an item. And Senators know there is no fairness as to where an amendment comes up in the order of consideration. We have had other amendments come along that have increased the loss of revenue substantially, increased the tax cut and, in effect, the amount of money not coming into the Government, and I voted for some of those amendments.
But I must say that they were not matched with corresponding revenue-producing items. They were not considered on that basis. So for someone to suggest on this particular item, which deals with an existing deduction, that we should be in a position to have to match that with a revenue- producing item would impose a different test than anyone else had had to meet up until this time.
I hope we can get a clear up-and-down vote on this.
If the Senate wants to do away with the gasoline tax deduction, if there are reasons to do that, and frankly I see none, then let us vote to do it. But let us not have it done by a committee and then deny the full Senate the opportunity to participate. That runs against every decision we have made in the past on this issue.
Mr. DOLE and Mr. LONG addressed the Chair.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. LONG. Mr. President, one should keep in mind that almost 70 percent of the people do take the standard deduction, so it is only the 30 percent who itemize who get the benefit of this.
If this deduction is repealed, it makes for simplification, on the one hand, because it is one thing less to worry about itemizing on your tax return and it also tends to make people use the simple form rather than the long form, but, in addition to that, it means that we can have — I wish the Senator from Michigan to hear this — it means that we can have a bigger reduction in the rates of all individuals, and the Senator voted for that, because we have to have revenue to pay for the reduction.
Otherwise, we just cannot have as much tax cut as the Senate voted for.
The Senator can decide what he wants to do about the matter. But the point of it all is that if we do not have the revenue, we cannot vote as much tax cut as we have in the bill, including the rate cuts.
Mr. DOLE and Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. The Senator from Maine.
Mr. MUSKIE. Mr. President, just a couple of brief comments.
No. 1, section 904 was not intended to serve as a casual routine sidestepping of the Budget Act.
For the life of me, I cannot see why, when there is a provision of the Budget Act itself which permits the Senator from Alaska and the Senator from North Carolina to get a vote on the issue which they have raised, we should suspend the Budget Act or seek to suspend it in order to do the same thing. But let me put a parliamentary inquiry.
The PRESIDING OFFICER. The Senator will state it.
Mr. MUSKIE. Mr. President, if the Senate should vote to suspend the Budget Act what would be the status of the point of order which has been raised on the Helms amendment?
The PRESIDING OFFICER. Section 904 could not timely be invoked at this point, because the Chair had already ruled on the point of order; therefore, the Senator's only recourse would be to appeal the ruling of the Chair.
Mr. STEVENS. Mr. President, I have discussed this with the Senator from Wisconsin, who raised the point of order, and in order that the procedure for waiver might work. would it be possible now to set aside the proceedings which led to the sustaining of the point of order in order that the Senator from North Carolina might use the waiver proceedings; in other words, is it possible for me now to ask unanimous consent that the point of order of the Chair's ruling be set aside?
The PRESIDING OFFICER. The Senator could ask unanimous consent to invoke section 904 and that would have the effect the Senator seeks if he got unanimous consent.
Mr. MUSKIE. I would object, I say to the Senator.
Mr. STEVENS. I am trying to preserve the Budget Act.
Mr. MUSKIE. I just do not understand, when there is a procedure in the Budget Act, which was created for the purpose of letting Senators put the kind of question the Senator wants to put, when there is a procedure available deliberately written into the Budget Act, why the Senator wants to crucify the Budget Act and waive it to get it done his way. All the Senator has to do is pursue the appeal that the Senator from North Carolina said he would pursue. If the Senate accepts the Senator's argument, the argument of the Senator from North Carolina and the argument of the Senator from Michigan, a majority of the Senate can put in place the policy the Senator wishes. Why in heaven's name does the Senator not use that procedure? That is what it was created for. That is why it is there. Now if what the Senator is trying to do is to write the Budget Act in such a way that the chairman of the Budget Committee cannot perform that unpleasant duty of presenting unpleasant facts, then the thing the Senate ought to do is get a new chairman of the Budget Committee. But if what the Senator wants to do is a vote on his question, then pursue his appeal. That is why it was provided in the Budget Act and the Senator can get his answer.
Mr. STEVENS. I might say some of us are not that knowledgeable. Mr. President, about the rulings of the Budget Committee and the impact of what we have done. I have already said I learned a lot here. I did not know we were foreclosed from any further challenge of any recommendation to change existing law in this substitute, and there are many, unless we had the foresight to ask for a waiver under the Budget Act before a point of order was made. Now it seems to me—
Mr. MUSKIE. There is no provision for such a ruling.
Mr. STEVENS. I am trying to assist the chairman of the Budget Committee and at the same time to assist the Senator from North Carolina to get a vote on the merits of whether we want to do away with the existing law deduction of State income taxes on gasoline. That seems to me to be a very worthwhile argument to get a vote on that rather than have the ruling of the Chair be the issue.
The Budget Committee chairman wants us to have the role of constantly upsetting the ruling of the Chair. I do not want to have to vote to upset the ruling of the Chair in order to test a recommendation that has come from the Finance Committee to change existing law which is the basis of the committee's assumptions of the change of the revenues of the United States in order to determine whether we have gone too far in reducing taxes.
Again I just want to state this clearly. I understand the chairman is prepared to object to a unanimous consent request which would take us back to the position where the Senator from North Carolina could get a vote on the waiver, not on his amendment, but whether the budget should be waived in order to get that provision of the Finance Committee's substitute bill, which would change existing law and take away this deduction. Is that the Chair's position? Am I wrong?
Mr. MUSKIE. Mr. President, I really do not think that the Senator from Alaska understands my position at all.
But, Mr. President, before I proceed, how much time do I have remaining out of my hour? I do not want to use it all on this issue. I suspect there are going to be other amendments that are going to require that I speak to.
The PRESIDING OFFICER. The Senator has 45 minutes remaining.
Mr. MUSKIE. I will just say though to the Senator from Alaska, there are provisions of the Budget Act to which the Budget Committee can recommend or refuse to recommend waivers. Waivers can be sought by individual Senators and by committees. Section 402 is such a section. Section 303 is such a section.
But section 904 is nothing more nor less than a statement of what was an obvious fact, if it did not exist, namely, that is, that the Senate as a whole can set aside the Budget Act if it wished to at any time. There is no waiver procedure for us to set aside the Budget Act as a whole, none whatsoever. I cannot give you a waiver under the Budget Act. The Budget Committee cannot give you a waiver under the Budget Act. Only the Senate as a whole can set aside the Budget Act, just as by unanimous consent it can set aside the Senate rules, including rule XXII.
I mean the Senator expresses so much concern about changing a law by this method, but has no compunction about setting aside the whole Budget Act.
Mr. STEVENS. It is too late.
Is the Senator going to object? It is too late to do that.
Mr. MUSKIE. I object to a unanimous consent that would set aside the Budget Act, yes. That is my job.
Mr. RIEGLE. Mr. President, will the Senator from Alaska yield on my time?
Mr. STEVENS. I would be happy to yield on the Senator's time because I have used up my time, and then I am going to do something else.
Mr. RIEGLE. Mr. President, will the Senator from Alaska yield the floor?
Mr. STEVENS. I yield.
Mr. RIEGLE. I thank the Senator for yielding, because I do not think this amendment—
The PRESIDING OFFICER. The Senator from Alaska has not had the floor. The Senator from Maine has the floor, and the Senator from Louisiana has the recognition of the Chair for the moment.
Mr. LONG. Mr. President, I would hope that we could work out a way — I would like the Senator from North Carolina to listen — I would hope we could work out away that the Senator from North Carolina's amendment can be considered. At this moment I just do not know how we can do it. I do not know how to accommodate all the people with all their problems with the Budget Act. But I do not want to embarrass the Chair by overruling the Chair when the Chair is doing his duty as is required by the rules of the Senate.
I do not want to embarrass the chairman of the Budget Committee for doing his duty. I do not want to embarrass anybody, but I would hope we could just leave this matter in abeyance for awhile; if we cannot pass a bill here tonight, that by the time we come in tomorrow morning, we can figure out a way that the Senator can offer his amendment. It may take unanimous consent or it may not, but I would hope that by the time we come back tomorrow, we can figure out a way in which to accommodate all men of good will — and they are men of good will at this moment — so we can try to work out some way. I do not know at the moment how to do it.
I ask unanimous consent that when the Senator from North Carolina desires to do so, he can bring the matter back up and the parliamentary situation will be just exactly the way it is now.
Mr. DOLE. Mr. President, reserving the right to object
The PRESIDING OFFICER. The Senator from Kansas.
Mr. DOLE. I thank the Chair.
I do not plan to object, but I want the RECORD to show that this matter was raised by the Senator from Kansas in the Finance Committee. We took action at the very last moment to make up some revenue balances, and it was only done for that reason.
I notified my chairman that Senator HELMS had a real interest in this. So it does not come as any surprise. But I can understand what we have. We have here in effect a selective sunset about to take place or maybe a total eclipse. I think it is good to see my chairman of the Finance Committee arguing for sunset legislation because the sun is about to set on gasoline tax deductions, the very thing I understood this morning my chairman opposed, and that he opposed on Saturday, but today it is all right for the sun to set on gasoline tax deductions that affect middle class Americans.
If we want to do this and impose and increase the taxes on incomes from $5,000 to $10,000, it increases their taxes $26 million next year; $10,000 to $15,000, an increase in their taxes of $90 million next year; $15,000 to $20,000, will increase their taxes $151 million next year; $20,000 to $30,000, increase their taxes $328 million next year. We can do that. We can do that by having the sun set on this legislation. Perhaps that is what we want. If we want selective sunset this is a good way to start it.
I also point out that 32 percent of all taxpayers use these deductions. The Senator from Michigan pointed out that we voted on this as recently as last year, and I think the margin was almost what, 2 or 3 to 1, against removing that tax deduction.
It does seem to me, as the Senator from Alaska has pointed out, that if we do it on this particular situation we can do it by removing personal exemptions or any other thing. So if we are for sunset legislation, then I guess we vote against the Helms amendment.
Mr. STEVENS. Mr. President, will the Senator yield for a question? This is just for a question, now. The Senator is a member of the committee. Can he tell the Senate are there any other changes in existing law similar to this in order to pick up revenue, existing provisions of the tax law that give specific deductions to individuals, such as this gasoline tax deduction, are there others in here?
I have got to tell you that until this rhubarb started, I did not know that this was in here again.
Mr. DOLE. I am not certain, but I am certain of the — I might say to the Senator from Alaska that the Senator from Kansas has an amendment to add revenue. If that were done it might offset it, because I would change the earned income tax credits, so it would be an exclusion toward the poor and not toward those with $10,000 and $11,000 of income. That might offset any loss we might have from the amendment of the Senator from North Carolina. But I do not know of any other provision.
Mr. STEVENS. I am told the alternative tax on capital gains on individuals has been repealed by this. That would have or could have a substantial impact on individual income taxes.
Mr. DOLE. That is right.
Mr. STEVENS. On an individual basis.
Mr. DOLE. A revenue loss.
Mr. STEVENS. If this point of order is sustained on this one, as I understand it we will have no chance at all to consider that one either because the committee's assumptions must now be taken en bloc. They are subject to a point of order. If any one of us wants to challenge the committee's assumptions of where to "pick up revenue"—
Mr. DOLE. That is more of the selective sunset.
Mr. STEVENS. I do not have the floor.
Mr. RIEGLE. Mr. President, will the Senator from Kansas yield?
Mr. DOLE. I yield.
Mr. RIEGLE. I would say to the Senator from Kansas that the vote last year on this item by the Senate was 65 to 12. We went on record to preserve this particular tax deduction.
I do not know how, stemming from that vote and the previous votes of the same sort, the Finance Committee would take and turn this thing right upside down and come back with a recommendation to eliminate this deduction and, in effect, to increase taxes by so doing.
Let me just point out something else that has not been taken into account in this discussion yet. The increased tax burden to taxpayers that will result if we eliminate this gas tax deduction will actually be greater than the revenue increase to the Federal Treasury. That is because there are 33 States and the District of Columbia that model their income tax returns after the Federal return with respect to the gas tax deduction.
Thus taxpayers in those States would lose both the Federal and State deduction, and in some cases a local deduction as well.
I am just going to list what States those are because they ought to be included in the debate here, too, especially if this is going to be done without any kind of extensive hearing record or testimony to really see what the impact of this is going to be. It includes the States: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Ohio — I should say Iowa — Kansas, Kentucky, Louisiana, Maine; Maryland, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, RhodeIsland, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wisconsin.
If anybody is interested in knowing how much revenue this is going to pull out of these States — because it is going to damage the economies of these States,since it is taking money away from people, and it is, in effect, a tax increase — I would be happy to show him or her what it is going to mean State by State as well as in terms of average taxpayers.
But the thing that is so distressing is this being done without any kind of attention or care to this issue. It troubles me very much that this particular amendment coming up, by the luck of the draw, late in the amendment process is, in effect, ruled out of order where other amendments that propose new tax benefits were in order just because they happen to come first.
Perhaps what we need to do is to revise the procedure. If we are going to have 20 or 30 or 40 or 50 amendments of this sort, they ought perhaps to be put into a hat so that we could draw them out in random order to decide who gets the chance to offer an amendment before there is a point of order that lies. Or perhaps amendments pertaining to a provision of existing law should have priority.
But I think the distinction the Senator from Alaska has made is an important one. We are not dealing with additions here of new tax deductions. We are dealing with the question of attempting to do away with what has been a long-standing tax deduction.
That is different. That crosses a line. Just as the Senator says, I am troubled. I am troubled to see us in a situation where we cannot even have an up or down vote on an issue. In effect we are acceding to the Finance Committee the power to take items out of the tax code that have been there for many years, and as to which the Senate, as recently as last year, by a margin of 5 to 1 said it favored this deduction.
If someone wants to argue about procedure, it seems to me this proposal is a pretty good example of what we are right in the middle of now.
Mr. DOLE. Mr. President, reserving the right to object, let me say to the Senator from Michigan that I totally agree. We have been pointing out how we want to help the middle income tax-payer. We are certainly not going to do it if this is our approach.
Having said that, I withdraw my reservation.
Mr. HELMS. Mr. President, reserving the right to object, I have no objection whatsoever to the suggestion by the chairman, provided that it be in order for me, at an appropriate time, to modify my amendment according to whatever we may be able to work out.
Mr. METZENBAUM. Mr. President, the modification of an amendment is not permissible under cloture, and, since I do not want my friend from North Carolina to be taken by surprise, I wish to state in advance that if such a procedure were undertaken I would object.
Mr. LONG. Mr. President, I simply suggested that we bring the matter back up, and that the parliamentary situation be exactly as it is now, and by that time I had hoped we could work the thing out.