SOCIAL SECURITY ACT AMENDMENTS OF 1983

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000200120006-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 45
• Document Creation Date: December 21, 2016
• Document Release Date: October 6, 2008
• Sequence Number: 6
• Publication Date: March 18, 1983
• Content Type: OPEN SOURCE

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March 18, 1983
CONGRESSIONAL RECORD -- SENATE S 3339
medicare reimbursement of hospitals, to
extend the Federal supplemental compensa-
tion program, and for other purposes.
The Senate resumed consideration
of the bill.
Mr. DOLE. Mr. President, as I un-
derstand it, the distinguished Senator
from Idaho is prepared to offer an
amendment. I am pleased to yield the
floor for that purpose.
Mr. SYMMS. I thank the distin-
guished chairman of, the Finance Com-
mittee.
AMZKD1aLIT NO. 525
(Purpose: To provide that no social security
cost-of-living adjustments be made in 1981
and 1984)
Mr. SYMMS. Mr. President, a parlia-
mentary inquiry. I believe the amend-
ment is pending; is that not correct?
The PRESIDING OFFICER. The
Senator is correct.
Mr.. SYMMS.- Have the yeas and
nays been ordered?
The PRESIDING OFFICER. No;
they have not.
Mr. SYMM& Mr. President, b ask
for the yeas and nays on my, amend-
ment.
The PRESIDING OFFICER. Is
there a sufficient. second? There ap-
pears to be a sufficient second.
The yeas and nays were ordered.
Mr. SYMMS. Mr. President, I bring
up this amendment that is pending at
the desk which would in effect freeze
the social security COLA that is sched-
uled in the bill for the upcoming year.
It would not tamper with the COLA's
for those people who are in'the need-
iest of positions-the 881 benetci-
aries. The need-lest in. our society
would be held harmless by this-amend-
ment.
I am not going to belabor the point
this morning, Mr. Pr~ because
yesterday during the on of my
amendment to move the effective date
of COLA stabilizer I spoke at great
length on the issue of the cost-of-
living adjustment.
Nevertheless, I want to make a'few
points about this amendment. I think
that the principal underlying reason
for Members to support this amend
ment is one of fairness and equity.
One of the great founders of this
country, Thomas Jefferson, spent his
political career making sure that ev-
eryone understood that when we did
pass laws that we tried to treat every-
body in our society fairly and equita=
bly.
Like Thomas Jefferson, I believe our
primary responsibility is to insure that
whatever legislation we pass is fair. If
we are going to request one group of
individuals to take a larger reduction
or have to wait longer to receive a
cost-of-living. increase in their salaries
or retirement income, then we should
ask everyone to do so.
As I mentioned, in the fiscal year
1984 budget the President has request-
ed that the COLA increases for civil-
ian and military wages and retirement
benefits be frozen this year. Last year
the civilian and military workers and
retirees received a lower cost-of-living
adjustment than those receiving social
security benefits. And the year before '
that we told the civil service and mili-
tary retirees that they had to wait 6
more months for their COLA adjust-
ments. Now we are in the process of
requesting. that everyone else except
social security recipients take a 1-year
delay in the COLA adjustment.
Mr. President, this is simply unfair.,
This amendment would simply make
an attempt to equalize the reductions
in the increases-it is not going to
reduce anybody's check, it is just going
to change when the increases come-
and we have asked of these good
people to take what other people In
our society are taking. Besides making
this legislation more equitable, the
amendment would help stabilize the
OASDI trust fund.
I have found that Americans are
willing to make sacrifices if they know
that everyone else is mating the same
sacrifice. We cannot continue this
process of favoring senior citizens re-
ceiving -social security benefits over
and above every other group that is
either getting a Government paycheck
or some kind of a Government pension
check.
I urge my colleagues to support the
amendment
amendment. It is an
which strikes right at the issue of
equity.
I would like to share with my col-
leagues a comment that was made to
me by the distinguished Senator from
Wyoniing. Senator 8tilasoal, -chairman
of the Veterans Affair Committee. He
told me last year that every veterans
group, including the Disabled Ameri-
can Veterans, said they Were willing to
take reductions in the-future COLA
increases if it, was fair and equitable
across the board, and applied to every-
onThe Commission, the Congress, and
the administration have decided to ask
for those reductions. We have not
giver. the some increases to civil serv-
ice retirees or to military retirees that
we have given to the social security re-
tirees.
This amendment would save the
OASDI trust fund about $50 billion to
$60 billion. I think if all Senators
would vote for this amendment, then
they could support the Armstrong
amendment which will be offered
later. Then we might actually have a
social security package that we could
pass without massively increasing the
payroll taxes that will be required of
us if we take this package as r'ecom,
mended by the Commission.
I yield back to the chairman of the
committee. I am prepared to to for the
yeas and nays: -.
Mr. DOLE. Have the yeas and nays
been ordered?
The PRESIDING OFFICER. Yes.
Mr. DOLE. Mr. President, I will take
just a minute. Mr. President, I do not
quarrel with the, intent or purpose of
the amendment. Again, we have craft-
ed this compromise which' may not be
perfect, and obviously is not perfect,
but I believe this amendment would go
beyond the bounds of the agreement.
Therefore. I hope the amendment will
not be accepted.
There is no doubt about it that the
Senator from Idaho has adopted a
very constructive approach and it
would have the result he has - indicat-
ed But as I look at it in the totality of
everything we have considered in the
Commission and the committee, it is
not an amendment that I could sup-
port.
The PRESIDING OFFICER. The
Senator from New York.
Mr. MOYNIHAAN. 'M[r. President, the
present legislation, the bill before us,
is not difficult to arisemble in all its
parts. The distinguished chairman has
said that it is the weakness of the indi-
vidual parts that comprises the
strength of the whole. I feel strongly
that this amendment while perfectly
well-intentioned and certainly moder-
ate in many regards, goes beyond our
ability to faithfully represent the con-
sensus that this proposal embsdies.
Therefore, I would urge my fellow
Senators not to accept' it. That In said
without rancor or any sense that this
is beyond the bounds of reason. It to
not. But I still Would not accept the
amendment.
Mr. SYMMS. I thank the distin-
guished Senators froth Kansas and
New York for their comments. I am
sorry they are not ably to support the
amendment
I would like to say one other thing
and then we can go to the vote.
The Senator from ~ifew York alluded
to the fact that It is a well-intended
amendment, a moderate amendment
in its 'approach N one' examines the
substance of the amendment. Howev-
er, due to the strength of the support
for the Commission's . proposal, there
is opposition to the amendment.
I would make one last appeal to my
colleagues.
I know that some of the members on
the Commission feel bound to stay
with what the Commission has pro-
posed Being a politician, I understand
that and appreciate it. I certainly re-
spect the Senator from New York and
the Senator from Kansas for their po-
sition. But I would just say that we are
trying very hard, Whether we be Re-
publicans or Democr*ts, to see this
economy of ours sirt'rhaking a come-
back. One of the reasons that we have
had such a difficult time in having an
economic recovery that will be sus-
tained and lasting are the high inter-
est rates. If any- Senators have been
noticing, the short-term rates have
been creeping up slightly and long-
term capital is almost nonexistent.
If the Congress, in its wisdom, could
make a decision to adjust the rate of
increases, of the benefit programs
across the. board in the Federal Gov-
ernment, actually paaa it and out it
into law. I think we would find a re-
sponse with respect to the long-term
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S 3340 CONGRESSIONAL RECORT) SENATE
Interest rates that would serve all of
our constituencies very well. Capital-
ism cannot survive without long-term
capital markets. Long-term capital
markets are not going to be revitalized
until the Congress controls our public
pension programs. Long-term capital
rates are necessary so that the young
married couples can afford to buy
homes, and so that the industrial com-
panies can expand plants and equip-
ment and modernize. A robust recov-
ery will not occur until long-term capi-
tal markets are restored and capital is
available to borrow over the long term
and at a reasonable rate of interest.
This amendment and the amend-
ments I offered yesterday will, in the
long run, be beneficial to all Ameri-
cans including the senior citizen com-
munity. Economic revival will make
life easier for all Americans, for all
families, and for all the people who
are receiving social security benefits,
who also have children and grandchil-
dren.
We all have a vested interest in
trying to see this thing put together
the best way possible. This Senator re-
duced the goals he had in his amend-
ment by 1 year, hoping that more Sen-
ators would recognize the moderation
that is in this amendment and recog-
nize that by this amendment being
added to this bill, we will send a signal
to the investors and borrowers in this
country to start doing business over
the long-term. If we can get long term
capital markets restored, we will see a
revitalization of the steel industry, the
automobile industry. the homebuild-
ing industry, and many other indus-
tries, which I think is what we want to
have happen in this country.
I urge my colleagues to support this
amendment. Even if we have to give
up part of it in the conference it will
be a step in the right direction, no
matter how small.
The PRESIDING OFFICER. Is
there further debate? If not, the ques-
tion is on agreeing to the amendment
of the Senator from Idaho. The yeas
and nays have been ordered and the
clerk will ball the roll.
The legislative clerk called the roll.
Mr. STEVENS. I announce that the
Senator from Indiana (Mr. QuAYLE) is
necessarily absent.
I also announce that the Senator
from Maryland (Mr. MATHIAS) is
absent due to an illness in the family.
Mr. BYRD. I announce that the
Senator from Arkansas (Mr. BuMP-
ERS), the Senator from California (Mr.
CRANSTON), the Senator from Colorado
(Mr. HART) and the Senator from
South Carolina (Mr. HoLLINCS) are
necessarily absent.
I further announce that the Senator
from Delaware (Mr. BIaEN) is absent
because of illness in the family.
The PRESIDING OFFICER (Mr.
PRESSLER). Are there any other Sena-
tors in the Chamber wishing to vote?
The result was announced-yeas 13.
nays 80, as follows:
[Rollcall Vote No. 32 Leg.]
YEAS-13
Armstrong
Helms
Nickles
Baker
Humphrey
Symms
East
Laxalt
Wallop
Goldwater
Mattingly
Hatch
McClure
NAYS-80
Abdnor
Glenn
Nunn
Andrews
Gorton
Packwood
Baucus
Grassley
Pell
Bentsen
Hatfield,
Percy
Bingaman
Hawkins
Premier
Boren
Hecht
Proxmire
Boschwits
Heflin
Pryor
Bradley
Heinz
Randolph
Burdick
Huddleston
Riegle
Byrd
Inouye
Roth
Chafee
Jackson
Rudman
Chiles
Jepseu
Sarbanes
Cochran
Johnston
Sasser
Cohen
Kassebaum
Simpson
D'Amato
Kasten
Specter
Danforth
Kennedy
Stafford
DeConcini
Lautenberg
Stennis
Denton
Leahy
Stevens
Dixon
Levin
Thurmond
Dodd
Long
Tower
Dole
Lugar
Tribie
Domeaid
Matsunaga
Tsongas
Durenberger
Meicher
Warner
Eagleton
Metzenbaum
Weicker
Exon
Mitchell
Wilson
Ford
Moynihan
Zorlnsky
clam
Murkowald
NOT VOTING-7
Eiden
Hart
Quayle
Bumpers
Hollings
Cranston
Mathias
So Mr. SYMMS' amendment (UP No.
525) was rejected.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was rejected.
Mr. MOYNIHAN I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
The PRESIDING OFFICER. The
Senator from Washington. ,
Mr. GORTON. Mr. President, I ask
unanimous consent that the Bradley
amendment to set aside in order that I
may call up an amendment.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
UP AKEMMZKT NO. 85
Mr. GORTON. Mr. President, I send
an amendment to the desk and ask for
its consideration.
The PRESIDING OFFICER. The
amendment will be stated.
The bill clerk read as follows:
The Senator from Washington (Mr.
Oorbon), for himself and Mr. Jackson, Mr.
Symms, Mr. McClure, Mr. Baucus, Mr.
Melcher, Mr. Stevens and Mr. Murkowski,
proposes an unprinted amendment num-
bered 85.
Mr. GORTON. Mr. President, I ask
unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
At the appropriate place insert:
Sac. . Professors of Clinical Medicine-
Section 3121 (s) (relating to concurrent em-
ployment by two or more employers) is
amended to read as follows:
(a) Concurrent Employment by Two or
More Employers
(1) IN GENERAL-For purposes of sections
3102, 3111, and 3121(aXl), if two or more re-
lated corporations concurrently employ the
March 18, 1988
same individual and compensate such indi-
vidual through a common paymaster which
is one of such corporations, each such cor-
poration shall be considered to have paid as
remuneration to such individual only the
amounts actually disbursed by it to such in-
dividual and shall not be considered to have
paid as remuneration to such individual
amounts actually disbursed to such individ-
ual by another of such corporations.
(2) UNIVERSITIES AND EXEMPT ORGANIZA-
TIONS.-For purposes of this subsection,
(A) the following entities shall be deemed
to be related corporations:
(I) a state university which employs
health care professionals as faculty mem-
bers at a medical school which is the offi-
cially designated medical school for more
than one state.
(ii) a faculty practice plan qualified as an
exempt organization under section 501(cX3)
which employs faculty members of such
medical school; and
(B) remuneration which
(i) is disbursed by such faculty practice
plan to an individual employee by both such
entities and
(ii) when added to remuneration actually
disbursed (prior to the application of this
paragraph) by such university, exceeds this
contribution and benefit base (as deter-
mined under section 230 of the Social Secu-
rity Act).
shall be deemed to have been actually dis-
bursed by such university as a common pay-
master and not to have been actually dis-
bursed by such faculty practice plan.
Mr. DOLE. Mr. President, may we
have order?
The PRESIDING OFFICER. The
Senate will be in order.
Mr. GORTON. Mr. President, this
amendment is necessary to avoid
having the regionalized medical school
for the States of Washington, Alaska,
Idaho, and Montana pay approximate-
ly $500,000 annually in unreimburs-
able FICA taxes. The reason for this
amendment stems from the unavaila-
bility of the so-called common paymas-
ter doctrine to the unique circum-
stances at the regionalized school-the
University of Washington School of
Medicine. Professors of clinical medi-
cine receive two paychecks-one from
the university, and one from the medi-
cal school practice plan-a 501(c)(3)
organization. Both organizations
would have to pay FICA taxes under
the provisions of S. 1. Because this
school uniquely functions as the State
medical school for four States, with di-
verse Federal research funding and ap-
propriations from four separate
States, the doctrine of related corpora-
tions using a common paymaster is not
available to avoid the double taxation
of the unreimbursable employer FICA
contribution.
In addition, Mr. President, a similar
situation exists at the University of
Colorado to that which affects us, and
this would also care for concerns of
the Senators from Colorado.
Mr. SYMMS. Mr. President, will the
Senator yield?
Mr. GORTON. I yield.
Mr. SYMMS. I thank the distin-
guished Senator from Washington for .
offering this amendment.
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S 3342 CONGRESSIONAL RECORD - SENATE
Under the social security option ac-
count, individuals paying social secu-
rity taxes could choose an alternative
means of providing for their retire-
ment. They would continue to pay
social security taxes but would forfeit
future social security benefits in
return for a current income tax deduc-
tion.
The concept would work as follows:
First, individuals who pay social se-
curity taxes could establish a special
retirement account and then deduct
annual contributions from their tax-
able income. The account would be
similar to the current IRA's and
Keogh's.
Second, tax deductions would be lim-
ited to 20 percent of the amount of
income subject to social security taxes.
Thus, the maximum individual deduc-
tion would be about $7,000-plus today.
Third, in return, individuals with
SSOA's would forfeit one-half percent
of their social security retirement
benefits for each $1,000 contributed to
the account. For a person who contrib-
uted the maximum amount to an
SSOA In any year, the maximum
annual rate of forfeiture would be 3Y
percent plus. At this forfeiture rate,
an SSOA would become attractive to
working Americans in a broad range of
age and income categories.
Fourth, upon retirement, individuals
with SSOA's could receive benefits
from their accounts, along with re-
duced social security benefits; if an in-
dividual had invested enough in an
SSOA, he or she would forfeit all
social security benefits.
Private industry analysis of this pro-
posal shows that by the year 2005, the
SSOA could reduce social security out-
flows by $10 billion to $25 billion an-
nually in 1981 dollars, providing
needed relief prior to the time when
the system will face its most severe fi-
nancial crisis.
In addition to relieving financial
pressure on social security, the SSOA
would stimulate long-term capital for-
mation to finance economic growth.
Again, private industry analysis indi-
cates that within 10 years, the SSOA
program would generate a capital pool
of $40 billion to $100 billion, in 1981
dollars. A significant percentage would
be new capital, rather than dollars
shifted from one form of savings to
another. The SSOA would create a
new long-term capital source that
would be stabilizing in today's econo-
my.
When the SSOA was compared with
other savings incentives including the
expansion of current IRA's, both con-
cepts would stimulate savings and cap-
ital formation but the SSOA has the
added advantage of benefiting the
social security system. After retire-
ment, each dollar lost to the Treasury
through SSOA tax deductions would
be more than offset by a $2.50 savings
in social security benefit payments.
Over the long term, establishment of
SSOA's would produce substantially
greater public benefits than the
simple expansion of IRA's or Keogh's.
The SSOA has other advantages as
well. Retirement income would be de-
termined by a prearranged personal
savings plan, not political decisions as
is the case with the social security
system. The contributor would influ-
ence the investment decisions. SSOA's
thus offer a degree of -personal con-
trol, predictability, and individual re-
sponsibility not possible with social se-
curity.
In addition, SSOA's would fill in
some the present gaps in our Nation's
retirement policy. Presently few tax
incentives exist for individuals to gen-
erate funds for their own, retirement.
Many employers provide pensions for
their workers, but not all workers re-
ceive pensions and changes in employ-
ment often curtail benefits. KEOGH
plans are available only to the self-em-
ployed individuals. IRA's have fairly
low caps on contributions.
The SSOA's would represent an im-
portant change in direction for Feder-
al programs. It would veer away from
ever-increasing Government entitle-
ments, with their uncontrollable de-
mands on the Federal budget. It would
help restore the long-term solvency of
the social security system and return
to its original purpose of providing re-
tirement floor. Individuals will gain
more responsibility for their own re-
tirement planning. Moreover, SSOA's
would link tax relief to spending re-
ductions and further solidify this
direct relationship as a cornerstone for
future fiscal policy.
The SSOA plan is not the total
answer to the problems confronting
the social security system and the
economy, but it makes a major contri-
bution toward a secure retirement for
an Americans.
For the most part, Americans have
treated the problem of security in're-
tirement as a distinct issue from the
overall health of the Nation's eeono-
my. Policymakers have addressed the
crises presented by the long-term well-
being of the social security program,
the gaps in the Nation's retirement
programs, the excessive tax burden,
and the lack of adequate capital in-
vestment as separate matters. But, as
the National Commission on Social Se-
curity has recently determined, our
Nation's retirement programs will be
healthy only if the American economy
as a whole is healthy. And, I would
venture to say that the capability of
this economy to recover lies in our
ability to solve the unfunded liability
problems facing our public pension
systems. Too often, for example, past
attempts to solve problems facing the
social security system have adversely
affected private retirement planning
or economic productivity. Therefore,
the challenge is find solutions that
achieve diverse public goals.
The foremost goal of the Nation's
retirement policy should be to provide
an economic climate in which all
Americans can plan for income secu-
March 18, 1983
rity in their postemployment years.
Yet within this broad goal, the specific
features of individual choice, long-
range planning, flexibility, and innova-
tion should be encouraged. Opportuni-
ties should be provided in both public
and private programs to encourage the
widest range of choice and greatest
amount of security. Finally, as San-
ford Ross recently pointed out, the
entire system of retirement plans-
social security, private pensions, and
individual savings-must be rationa-
lized so they work together.
Social security is an essential foun-
dation for the Nation's retirement
system. Long-term planning for the
social security system must address
the long-range funding problems and
the actuarial deficit that presently af-
flict the system. A second goal should
be to prevent any increase in the social
security tax burden, which, for more
than half of all American families,
now exceeds their income taxes.
Third, efforts should be made to miti-
gate the effect of present demographic
trends on the fiscal integrity of the
trust .fund, perhaps by encouraging
people to rely less on the system in
meeting their retirement needs.
Fourth, Government actions should
reinforce people's confidence that the
social security system is strong and
will provide a minimal floor of benefits
for their retirement. At the same time,
however, the public should understand
that social security is not a compre-
hensive retirement program and that
it must be supplemented by individual
retirement planning and saving.
Most importantly, security in retire-
ment requires policies that retard in-
flation, stimulate productivity, create
jobs, and foster growth. Because a sig-
nificant portion of the Nation's GNP
Is dedicated to retirement programs,
these resources should be used, where
possible, to stimulate rather than
retard economic productivity. Private
retirement programs are, and should
be, a major source of savings and capi-
tal formation. Moreover, because high
taxes retard economic growth and
thus indirectly burden retirement pro-
grams, tax relief is an essential ele-
ment of comprehensive Federal retire-
ment policy. Furthermore, to the
extent possible, retirement policy
should contribute to full employment,
high wages, and new jobs, because
these factors will widen the economic
base upon which retirement programs
must rest.
The social security option account
contributes to these public policy
goals. It allows individuals who pay
social security taxes to chose an alter-
native means of providing for their re-
tirement. They may establish a fund
to pay their future retirement benefits
by deducting from their Federal
income tax their annual contributions
to this fund. Deductions would be lim-
ited to 20 percent of their social secu-
rity wages-that is, the amount of
income subject to social security taxes.
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CONGRESSIONAL RECORD - SENATE March 18, 1983
Mr. SYMMS. Mr. President, I ask
unanimous consent that the reading of
the amendment be dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
At the end of Title I, insert the following
new section:
(a) The Secretary of the Treasury, or his
delegate, should conduct a study of the fea-
sibility of implementing "Social Security
Option Accounts." Such accounts would
have the following characteristics:
1. Individuals who pay social security
taxes could establish a special retirement
account and then deduct annual contribu-
tions from their taxable income. The ac-
count would be similar to the current IRA's
and KEOGH's.
2. Tax deductions would be limited to 20
percent of the amount of income subject to
social security taxes. Thus, the maximum
individual deduction would be about $7,000
plus today.
3. In return, individuals with SSOA's
would forfeit one-half percent of their social
security retirement benefits for each $1,000
contributed to the account. For a person
who contributed the maximum amount to
an SSOA in any year, the maximum annual
rate of forfeiture would be 3% percent plus.
At this forfeiture rate, an SSOA become at-
tractive to working Americans in a broad
range of age and income categories.
4. Upon retirement, individuals with
SSOA's could receive benefits from their ac-
counts. along with reduced social security
benefits: if an individual had invested
enough in an SSOA, he or she would forfeit
all social security benefits.
(b) The Secretary of the Treasury should
submit to the Congress a report on the re-
sults of the study conducted under section
(a) by June 30, 1984.
Mr. SY11 MS. Mr. President, the
amendment simply states that Treas-
ury do a study on the concept of the
amendment that I originally intended
to offer and report back to the Fi-
nance Committee by June 30, 1985. It
would be 18 months.
I yield back my time.
Mr. DOLE. Mr. President, I thank
the distinguished Senator from Idaho.
The proposal to allow employees to
establish a special retirement account
similar to an IRA (with tax deductible
contributions) in place of a portion of
their social security benefits is an in-
teresting concept and is worth study.
It would undoubtely have the poten-
tial for increasing the private pool of
capital and encourage individuals to
take more responsibility for their own
retirement.
Such a program could take some
pressure off the social security system
by encouraging those who can to save
for retirement rather than relying pri-
marily on social security.
However, this is a major change in
the role of social security and tax in-
centives to encourage retirement sav-
ings. It is appropriate to require a
thorough study of the proposal before
Congress is asked to enact it into law.
For instance, we need more informa-
tion on whether these accounts will be
attractive enough to gain wide accept-
ance as a partial substitute for social
security benefits, and we need to ana-
lyze the impact on general services.
As Senator Sys outlined, his
original proposal would allow employ-
ees to establish a special retirement
account similar to an IRA.
I think this has a lot of potential
and a lot of merit, and I do believe
that this approach now taken will give
us an opportunity to take a look at it
because it is a major change in the
role of social security and tax incen-
tive to encourage retirement savings.
It is appropriate to require a thorough
study of the proposal before Congress
is asked to enact it into law.
I can assure the Senator from Idaho
that we will do what we can to make
certain that it. is a study in the real
sense of the word and it can come back
to us within a year.
Mr. SYMMS. Within a year, a year
and a few months.
Mr. DOLE. So we might then have
full hearings and take another look at
it.
Mr. SYMMS. I thank the distin-
guished chairman and I thank the dis-
tinguished Senator for his indulgence
of the amendments that this Senator
has offered.
I note that although they have not
passed, I still think there is a great
deal of merit for study, and I think
that we will be back revisiting social
security within the next 2 or 3 years
and so most likely we will have the op-
portunity to offer a broader choice for
the American people and do some
things that would encourage more sav-
ings to help revitalize our needed capi-
tal market, and this would be one way
to do it.
It would not affect everyone, I must
admit, but it would be an option that
some people might take and they
would still be paying the social secu-
rity taxes but they would have the op-
portunity as I perceive that they
would help keep the contract or would
not hurt the system as far as the fidu-
ciary ability of the social security to
pay its way out of the contract that it
has with the American people but it
would give those people who were able
to do so an opportunity to have their
own retirement in exchange for social
security benefits.
I call for a vote.
The PRESIDING OFFICER. Is
there further debate? If not, the ques-
tion is on agreeing to the amendment
of the Senator from Idaho.
(Putting the question.)
The amendment (UP No. 87) was
agreed to.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. SYMMS. Mr. President, I move
to lay that motion on the table.
The motion to lay on the table was
agreed to.
Mr. METZENBAUM. Mr. President,
I ask unanimous consent that the
pending amendment be laid aside so
that I may present an amendment.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
UP AMZNDIfCNT NO. 88
(Purpose: Relating to interest on State
loans.)
Mr. METZENBAUM. Mr. President,
I send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The
amendment will be stated.
The bill clerk read as follows:
The Senator from Ohio (Mr. METZENBAUM)
proposes an unprinted amendment num-
bered 88.
Mr. METZENBAUM. Mr. President,
I ask unanimous consent that the
reading of the amendment be dis-
pensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered. w
The amendment is as follows:
On page 235, lines 12 through 14, strike
out "Interest shall accrue on such deferred
interest in the same manner as under para-
graph (3)(C)." and insert "No interest shall
accrue on such deferred interest.".
On page 236, line 7, strike out "30" and
insert "25".
On page 236, line 9, strike out "40" and
insert "35".
On page 237, line 9, strike out "30 percent,
40 percent, 50 percent," and insert "25 per-
cent, 35 percent, 50 percent".
On page 237, line 12, strike out the quota-
tion marks and the second period.
On page 237, between lines 12 and 13,
insert the following:
"(9) Any interest otherwise due from a
State during a calendar year after 1982 may
be deferred (and no interest shall accrue on
such deferred interest) for a grace period of
not to exceed 9 months if, for such calendar
year in which the interest was due, the
State had an average unemployment rate of
13.5 percent or greater.".
On page 237, between lines 14 and 15,
insert the following:
(c) Section 1202(b)(3)(C)(1) of the Social
Security Act is amended by striking the
matter that follows clause (II) and inserting
"No interest shall accrue on such deferred
interest.".
Mr. METZENBAUM. Mr. President,
this amendment has to do with the
solvency of the unemployment funds
in the States and the obligations of
the States to the Federal Government.
It is my understanding that the dis-
tinguished senior Senator from Illinois
has an interest in a part of this
amendment having to do with that
which might be called interest on in-
terest and by reason of that fact if the
manager of the bill feels it appropriate
that we lay this aside temporarily
without losing its position on the cal-
endar, I would have no objection to
doing so, provided that we can get
some understanding as to when the
Senator from Illinois would be joining
us.
Mr. DOLE. Mr. President, if the Sen-
ator will yield, I think in addition to
the two Senators from Illinois, we
have the distinguished senior Senator,
Senator PEacy, and Senator D1xoN--
Mr. METZENBAUM. That is cor-
rect.
Mr. DOLE (continuing). As well as
the two Senators from Michigan, and
the two Senators from the State of
Pennsylvania.
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S 3346 CONGRESSIONAL RECORD - SENATE March 18, 1989
lation and interference in the private
health care industry. Therefore I am
hopeful that in our consideration of
this issue today that we do not apply
it to all payors.
In reviewing the legislation, there
are several issues of special interest to
me. and my constituents in Utah. I
would like to briefly address them.
One subject is capital costs. For the
present time, both the Senate and the
House bills provide that capital costs
for hospitals are not subject to this
new prospective payment system. The
Senate specifically excludes reim-
bursement for capital costs under this
program until after October 1, 1986.
The House bill, on the other hand,
asks that the administration study the
issue and submit recommendations to
Congress by December 31, 1983. The
House bill goes on to state that it will
be the intent of Congress to make a
distinction between capital costs in-
curred before and after March 1, 1983,
and to indicate that projects "initiat-
ed" before that date will somehow be
treated differently in the future.
While I strongly prefer the Senate
version, it is worth emphasizing that
at a minimum hospitals should not be
penalized for obligations legally in-
curred prior to enactment of this law.
An example in my own State should
suffice to show the problem. The larg-
est hospital in the State of Utah is in
the midst of a much-needed major
project. The State-granted certificate
of need approval to this hospital for
its major remodeling and construction
project in November of 1980. While
the construction and remodeling have
proceeded at pace, the project will not
be completed until sometime after the
first quarter of 1985. The hospital in-
curred these substantial financial com-
mitments with the expectation that
capital costs would be paid on a rea-
sonable cost basis.
There are several items in the
Senate bill that I support and hope
that they are retained in the final
measure adopted by the Senate and
the House.
First, I strongly support the Senate
version on regionalization of DRG
rates. I believe it is important to have
a national rural/urban split in order to
take into account the varying needs of
hospitals serving different popula-
tions. However, too great a division re-
gionally would only serve to reinforce
the inefficiencies of some larger urban
centers and at the same time not pro-
vide enough support to rural areas.
I also support the option for States
to have their own program of prospec-
tive payment. I do not believe that the
Congress should mandate a program
of prospective payment for all-payers,
which is really just the formerly con-
sidered and defeated Carter cost con-
tainment proposal. However, if a State
has a good cost control program in
place, then we should not place this
Federal program on top of it. Of
course, as made clear in the Senate
bill, such State programs should not
be more costly. to the Federal Govern-
ment.
Finally, I strongly support two other
provisions of the Senate's version: The
development of a independent commis-
sion to insure the mechanisms of this
proposal; and a study to insure the
various components of reliability of
this prospective payment program.
I urge my colleagues to expeditious-
ly support this legislation which re-
flects the Federal Government's desire
to become a prudent purchaser of
health care.
I would like to conclude by asking
my distinguished colleague, Mr. Dols
to respond to one concern I have
about the viability of . one set of
DRG's. the basis of DRG's is a system
know as the MEDPAR files.
These files provide the Federal Gov-
ernment with historical medicare
charge data. And is the basis for deter-
mining the number of cases in the rel-
ative cost weighting of diagnozed re-
lated groups: 356 of the 467 DRG's
had a good sampling of charges from
which to calculate a relative index.
But according to information provided
me by the administration, there is lim-
ited data on 111 of the 467 DRG's. I
believe this situation needs to be cor-
rected in order to insure the statistical
viability of the DRG's used. As I un-
derstand, for various reasons, these
111 will be little used by medicare but
might be used by other payors. Since
these 111 weightings are not statisti-
cally sound, these classifications
should only be made available to other
payers with the specific addendum
that they are not statistically valid
and that further research should be
made prior to their use. Senate Dols
would you agree with me that these
problems should be duly noted when
these DRG's are published in the Fed-
eral Register and that it is consistent
with the legislation that this should
be done?
Mr. DOLE. I thank my distingushed
colleague, Mr. HATCn, for his com-
ments. With regard to your question: I
agree that these problems should be
duly noted in the Federal Register and
that to do so is consistent with this
legislation and appropriate.
Mr. HATCH. I thank the Senator.
Now I also understand there may be
proposed an amendment to require use
of the prospective payment plan as an
all-payers proposal. This must be vig-
orously opposed. The required use by
all payers of the Federal diagnosis-re-
lated groups classification, weighing
system and the specific payment rates
set by HHS is nothing less than a
design to discard the free-enterprise
system in favor of a program of na-
tional controls which would turn
health care in the United States into a
Federal public utility. The health-care
field is too diverse to impose these
rigid controls across the board. And let
me restate that if these controls are
imposed, we, as a Nation, may not ex-
perience the quality of health care
that we are currently provided.
It is one thing for the U.S. Govern-
ment to act as a prudent purchaser of
health care in a competitive market-
place with other purchasers of care. It
is quite another thing for health-care
providers to be required to accept as
payment in full from all private citi-
zens and third-party payers rates dic-
tated by a Federal Government
agency. This has the effect of replac-
ing the marketplace.
If this were not repugnant enough, I
understand this amendment I am op-
posing might preclude judicial review
of the Government's discretionary au-
thority to establish the DRG system
and payment methodology. Thus, it
would vest in the Government the
right to act arbitrarily and capricious-
ly without accountability. Rather than
functioning as the head of a Federal
administrative agency, the Secretary
of Health and Human Services would
be transformed into a Federal czar of
national health with unbridled au-
thority. Such a possibility threatens
the health care available to the Ameri-
can people and thwarts efforts to
make the health-care marketplace
more price competitive.
In addition, there is quite limited
practical experience with the DRG-
based payment system. Although a
DRG-based experiment has been con-
ducted in the State of New Jersey for
a few years, the results of this under-
taking are not final or conclusive. In
recommending a DRG-based system
for prospective medicare payments,
the Secretary of HHS refers to, what
she characterizes as preliminary re-
ports that the system worked in New
Jersey.
Even if a preliminary indication in
New Jersey is accurate, transposing
the DRG system from New Jersey to a
national level will necessitate numer-
ous adjustments and changes. The ad-
ministration of a program has to be
more fully developed; the propriety of
the proposed methodology for estab-
lishing the DRG payment on a nation-
al level for medicare patients still
needs to be analyzed; the adequacy of
the payment rates are in question, es-
pecially the 111 DRG's that the Feder-
al Government does not have ade-
quate, random sampling and now must
find alternative sources for charge in-
formation.
In summary, the impact of the medi-
care DRG system on hospitals nation-
wide is uncertain. Imposing a DRG
payment limit for all payers of health
care would compound these adjust-
ments and risks permanently crippling
our Nation's hospitals. For this reason,
I support the proposal from the
Senate Finance Committee requiring
the Secretary to report to Congress on
the appropriateness of the DRG
system. At this time I would like to
read Blue Cross-Blue Shield's letter in
opposition to any all-payer proposal.
They state:
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83348 CONGRESSIONAL RECORD - SENATE March 18, 1983
able under regulations in effect on March 1, than their overall share. When you TABLE 1.-DISTRIBUTION OF ESTIMATED MEDICARE
1986. For cog reporting periods beginning add in return on equity-the real story PAYMENTS FOR CAPITAL COSTS, BY HOSPITAL OWNERSHIP
an or after October 1, 1986, the Secretary is told. For-profit hospitals account for
shall not provide for any such return on 20 percent of medicare's capital pay- PerceM at aedcare Esdimet-
equi,ty capital for such hospitals.". capb peysbols ad Tsai Pew# Mr. E3Un EDY. Mr. President, the ments, more than twice their share of Parma overall medicare payments. Medicare Eadnd yea Of ot bill before us today marks a major capital m rdrAe meediiicrwe
change in the way the Government capit payments to for-profit hospi- Iaspitals cm retom S capita
pals are
pays for health care. As my colleagues $7,170 per bed m cant- W*' aFeyuur pane s
pared with $3,360 per r bed bed for for nonpro-
know, since medicare was enacted, it fits.
paid for health care like the Defense
Now, what effect do these payments
Department paid for weapons-on a
have
cost-plus basis. And the results were on medicare and on the health
pretty much the same. Costs kept care system generally? Well, they cer-
going up and up-but no matter how fairly do not go to help pay for care
much the costs went up-there was for the poor and the uninsured-like
always the plus-the profit. the 16 million Americans who have
With this bill, we are finally turning lost health insurance since the Reagan
recession began. Their own spokesman
away from this wasteful way of paying
has admitted
for health care. I regret that this step that private hospitals
is limited to medicare, since I believe skim well-to-do patients and leave the
that we can only control costs with an public hospitals to care for the 'poor
an-payers approach to prospective and the lower middle class. But it does
a
lead
payment. Nonetheless, it is a step in to a lot of unoccupied beds
the right direction. through acquisition and construction.
unfortunately, on our way to elimi- For-profit hospitals have a 65-percent
unf
occupancy rate compared
rating cost-plus in medicare, we have with the
forgotten to eliminate the plus. Al- American Hospital Association average
of 76 percent. And each unoccupied
though we provide for a fixed pay-
bed
ment per case, the bill still requires costs $112,000-a large share
the Government to throw in a sweet- borne by medicare.
ener for a small number of hospitals- And for-profit hospitals are more ex-
the profit. pensive for medicare-primarily be-
I simply cannot understand the cause of return on equity. According
reason for keeping in the profit- to a recent study, for-profit hospitals
known in the jargon as "return on cost medicare about 13 percent more
equity." The whole point of prospeo- than comparasble not-for-profit hospi-
tals.
tive payment is to pay a fixed price
. to result has been that return an
keep the hospitals difference bei,they the get equity has served to increase both cap-
and the fixed d payment. between ethat costs ital and operating costs for medicare.
are not to It does no good to adopt a prospective
profit? Under this bill, the a going to payment system if we exclude from it
the pay a second profit
profit on top o op of does not even profit. have And the most unjustified inflationary corn-
to be earned. It gets paid whether the ponent in the medicare system-
hospital is efficient or not, whether it return on equity.
delivers good care or not. It just gets Now, I know what the opponents of
paid. this amendment will say. They will
My amendment would address that say: "Return on equity is a difficult
issue. As prospective payment is issue. We need to study it before we
phased, a first by 25 percent, then 50 act. We do not know what the effect
percent, and then 75 percent, this will be." Well, prospective payment by
amendment would phase out that ad- diagnosis-related group is a difficult
ditional profit item, the return on issue. We do not know what the effect
equity, over a 3-year period. will be on public hospitals. But does
It is effectively the same concept the committee ask us to study first
that has been accepted by the House and then act. No. We are to act first,
of Representatives. I do think it is a ask questions later.
valuable and worthwhile saving. The We do not know what the effect will
estimate would be tht there would be be on urbaf?hospitals. Or rural hospi-
a $300 million per year saving when tals. Or, most important, quality and
this is completely implemented. adequacy of care for the elderly, the
Even under the current system, poor, and the sick. Does the committee
return on equity has produced unjust ask us to study first and act later on
results-rewarding the well off, and behalf of the elderly and the sick. No.
pushing up medicare costs. Return on But when it comes to hospital profits,
equity costs medicare about $300 mil- suddenly we are cautious. Suddenly we
lion per year-not for expanded bene- are unwilling to take the plunge. I say
fits for the elderly, or lower copay- that is wrong. I say it speaks of admin-
ments, or lower deductibles. No-in istration policies that are too willing
fact the administration wants to in- to sacrifice the neediest to save the
crease costs for the elderly. No-this greediest. And I say we stop now.
$300 million is for profit. I ask unanimous consent to have
According to CBO figures, for-profit printed in the Raeoiw several tables
hospitals account for only 9 percent of and articles.
medicare costs. Excluding return on There being no objection, the mat-
equity, they account for 11 percent of ters were ordered to be printed in the
medicare capital payments-higher RECORD, as follows:
Naipralq........ .- .............. 57 74 74 67 $2.1V
12 30
Aeepr~etary..........._.........
71 20 126
Government.._...._.._...... 31 17 15 13 470
Includes depredation, rent and interest ea ses.
? In millions d AeNare. Includes return on epxry.
Source: ?Slim nary COO ealmates tinned an Medicare cost rtyorls for ISIS
(From the Wall Street Journal, Mar. 11,
1983]
BIG HosPrrAL CHAINS CoNTINur HEALTHY
SHOWING EVEN AS LIMIT ON MEDICARE
COSTS APPEARS CERTAIN
(By Gary Putka)
Congressional efforts to curb Medicare
costs might be considered ill tidings for the
stocks of the nation's big hospital chains,
which derive 40% to 45% of their revenues
from the federal program.
Instead, a couple of the stocks have been
moving briskly upward recently. And yester-
day, the hospital-management companies
held their own in a downward market, even
though it was investors' first chance to react
to Wednesday night's passage in the House
of Representatives of a Social Security
measure containing Medicare curbs.
The reason for the stocks' surprising
strength appears to be that the bill didn't
come out quite as badly for hospitals as
some had feared. In fact, for hospitals that
are run for profit, some analysts see distinct
advantages in the way that the House would
change Medicare payments.
The Senate Finance Committee began
work on its version of the Social Security
measure late yesterday. And while there are
no assurances that the final version of any
bill would be exactly as the House passed it,
there's widespread feeling in Washington
that a similar measure will be enacted into
Taw.
Late yesterday, the Senate Finance Com-
mittee voted to include the Medicare provi-
sion in its version of the Social Security bill.
On Wall Street, some of the biggest hospi-
tal chains are already well on their way to
recovery from fears late last year that the
measure would be a bitter pill. Hospital
Corp. of America, the largest hospital opera-
tor, has risen about 12% in the past two
weeks. Humana is up about 10% over the
same span. Others, which haven't outper-
formed the market in recent weeks, reacted
well- yesterday to the news from Washing-
ton. They included American Medical Inter-
national, which gained % to 30%; Lifemark,
up 1 to 39%; and Universal Health Services.
up y to 42%. National Medical Enterprises,
another major player, ebbed 34 to 31%.
The bill passed by the House would set
fixed Medicare payments to hospitals for
467 categories of treatment. Under the cur-
rent system, hospitals receive reimburse-
ment for costs, plus a regulated return on
equity, currently about 7% to 8% on an
after-tax basis.
Before all aspects of the House's proposed
ieglslatign were clear, some had feared that
the new "prospective payments" plan would
mean that hospitals operated for profit
wouldn't make any profit when dispensing
services under Medicare, an aid program for
the elderly. What seems to have dawned on
investors lately is that the payments system
will enable hospitals to pocket the differ-
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CONGRESSIONAL RECORD - SENATE March 18, 1983
We have a strong concern, and we
have had a strong concern, about the
whole issue of how and what role we
play in financing the access of for-
profit, not-for-profit, and Government
hospitals to capital in this country. We
have come a long way from the old
Hill-Burton days, the tax-exempt days,
to some relatively unpredictable
future, and it is a time in which com-
pensations and sweeteners and things
such as that ought to get out of the
picture.
I think in this medicare reform we
are taking the first step in the direc-
tion of some discipline on the whole
decisionmaking process because, in
effect, we are addressing the hospital
income area, and rather than saying to
the hospitals, "Whatever you want to
charge for a day in the hospital or for
a particular procedure that is conduct-
ed in the hospital we are going to re-
imburse you for those costs," we are
saying, "we are only going to reim-
burse so much money for each of 467
various types of diagnosis."
So right off the bat, the hospital
corporations or the government units
that operates these hospitals knows
they can only make so much money on
the front end for treating patients in
the hospital. That is the first essential
discipline in this process.
The second is to to back behind that
and to look at the various ways, other
ways, that capital needs are met,
Funds can be raised through bank
loans, stock sales, bond issuances, the
We of assets, acceptances of gifts?
Government aid such as the Hill
Burton guarantees, tax-exempt bonds.
and the return on equity, a whole vari-
ety of ways, and that is why-and I
know the Senator from Massachusetts
supports this-we made the decision
that in 3 years we are going to blend
capital costs into the prospective pay-
ment system.
That is why we want return on
equity and all the other capital issues
examined over the next 18 months
v4th a report back to us by the first of
the year in 1985 about what we ought
to do about all of these issues as we
prepare for that fourth year in this
system in which we are no longer
going to have these distinctions in the
capital area.
So I say to the Senator from Massa-
chusetts that I expect that I and many
of us on the Finance Committee may
ultimately end up supporting a phase-
out of return on equity and other
methods by which the Government fi-
nances capital costs associated with
health care.
I would indicate, as the chairman
has indicated, that we have been given
the flexibility in conference to come to
the ends that I think all of us would
agree we need to come to.
Mr. BAKER. Mr. President, I thank
the distinguished floor manager, the-
Senator from Kansas (Mr. DOLE) for
yielding. I find myself in the not un-
common position of supporting the
chairman of the Finance Committee in
his opposition to the 'amendment of-
fered by the Senator from Massachu-
setts (Mr. KENNEDY).
This amendment, Mr. President, is
similar to the language added by the
House Ways and Means Committee.
Quite simply, it would phase out com-
pensation, under medicare, for return
on equity to proprietary hospitals.
The amendment does not, however,
address any of the other costs of capi-
tal, such as interest on debt. Thus,
passage of this amendment would
greatly distort the means of capital
formation toward incurring debt. I do
not believe that it is good public
policy, Mr. President, to effectively
eliminate equity as a source of capital
for hospital construction and modern-
ization.
Furthermore, both the House-passed
and Senate-reported bills contain a re-
quirement for the Department of
Health and Human Services to con-
duct a study on the role of compensa-
tion for all capital costs. I think that it
is only proper that any changes in the
present computations wait until that
study is completed. At that time, we
will be better able to evaluate the ap-
propriate compensation for all types
of debt through the medicare system.
Given these considerations, I would
urge the Senator from Massachusetts
to consider withdrawing his amend-
ment, which I understand he is in-
clined to do. I would also urge the
chairman of the Finance Committee
to hold the Senate position in confer-
ence. I believe that it is premature to
address the issue in this legislation.
Again, I thank the Senator from
Kansas (Mr. DOLE) for yielding.
Mr. KENNEDY. Mr. President, as I
had other discussions both with the
chairman of the Finance Committee
and the chairman of the subcommit-
tee, I know they are aware of this
issue.
This is an appropriate time to ad-
dress it. The fact remains, as we have
effectively phased out the whole plan-
ning process, we lee an ttuseasing
number of proprietary hospitals with
increasing capital expenditures. Once
that capital investment is actually
made. it remains then for the succeed-
ing generations to end up paying for
it. So this is an important time to act.
I do think it is an important matter in
terms of long-term savings. I welcome
both the interest and the attention
that the Senator from Minnesota and
the chairman of the committee have
given to it.
I hope that they would give addi-
tional attention in the conference with
the House of Representatives on this
issue. I am quite willing to see that
matter considered in the conference.
We will have an opportunity to review
it down the line, in any event. But I
certainly welcome the attitude and the
disposition of the chairman of the
committee and the chairman of the
subcommittee.
With those assurances, Mr. Presi-
dent, I ask unanimous consent to with-
draw the amendment.
The PRESIDING OFFICER. The
Senator has a right to withdraw his
amendment. The amendment is with-
drawn.
UP ADMENDDNNT NO. 91
Mr. KENNEDY. Mr. President, I
have another amendment that I send
to the desk and ask for its immediate
consideration.
The PRESIDING OFFICER. With-
out objection, the Bradley amendment
will continue to be set aside.
The clerk will report the amendment
offered by the Senator from Massa-
chusetts.
The assistant legislative clerk read
as follows:
The Senator from Massachusetts (Mr.
KENNEDY) proposes an unprinted amend-
ment numbered 91.
Mr. KENNEDY. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
On page 215, after line 16 insert the fol-
lowing new subsection:
"(k) Section 1903(sX3) of such Act is
amended by-
(1) striking out "on July 1, 1981, and" in
subparagraph (A),
(2) inserting "(I)" after "the Secretary" In
subparagraph (D), and
;, that from a personal
standpoint it may be a combination. I
suspect if we discuss our differences in
concept on the right vehicle, this Sen-
ator might be more susceptible to the
arguments being made by the Senator
from Massachusetts.
Mr. KENNEDY. Mr. President, I do
think that the reason for this proposal
is really quite compelling.
I am grateful for the openness of the
Senator from Minnesota, but I would
just as soon let the Senate have an op-
portunity to speak on this issue. I am
prepared to move to a vote.
Mr. President, I ask for the yeas and
nays on the amendment.
The PRESIDING OFFICER. Is
there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. Is
there further debate? If not, the ques-
tion is on agreeing to the amendment
of the Senator from Massachusetts.
The yeas and nays have been ordered
and the clerk will call the roll.
The assistant legislative clerk called
the roll.
Mr. STEVENS. I announce that the
Senator from Arizona (Mr. GOLD-
wATER) and the Senator from Indiana
(Mr. QUAYLE) are necessarily absent.
I also announce that the Senator
from Maryland (Mr. MATHIAS) is
absent due to an illness in the family.
Mr. BYRD. I announce that the
Senator from Arkansas (Mr. BUMP-
ERS), the Senator from California (Mr.
CRANSTON), the Senator from Colorado
(Mr. HART), and the Senator from
South Carolina (Mr. HOLLINGS) are
necessarily absent.
I also announce that the Senator
from Delaware (Mr. BIDEN) is absent
because of illness in the family.
The PRESIDING OFFICER (Mr.
HATFIELD). Are there any other Sena-
tors in the Chamber wishing to vote?
The result was announced-yeas 28,
nays 64, as follows:
(Rollcall Vote No. 33 Leg.]
YEAS-28
Bentsen
Huddleston
Mitchell
Bingaman
Inouye
Moynihan
Bradley
Jackson
Nunn
Burdick
Kennedy
Pell
Byrd
Lautenberg
Randolph
Chiles
Leahy
Riegle
Dodd
Levin
Sarbanes
Eagleton
Matsunaga
Tsongas
Ford
Melcher
Glenn
Metaenbaum
NAYS-64
Abdnor
Grassley
Pressler
Andrews
Hatch
Proxmire
Armstrong
Hatfield
Pryor
Baker
Hawkins
Roth
Baucus
Hecht
Rudman
Boren
Heflin
Sasser
Boschwitz
Heins
Simpson
Chafes
Helms
Specter
Cochran
Humphrey
Stafford
Cohen
Jepsen
Stennis
D'Amato
Johnston
Stevens
Danforth
Kassebaum
Symms
DeConcini
Kasten
Thurmond
Denton
Laxalt
Tower
Dixon
Long
Trible
Dole
Lugar
Wallop
Domenici
Mattingly
Warner
Durenberger
McClure
Weicker
East
Murkowski
Wilson
Exon
Nickles
Zorinsky
Garn
Packwood
Gorton
Percy
NOT VOTING-8
Biden
Goldwater
Mathias
Bumpers
Hart
Quayle
Cranston
Hollings
So Mr. KENNEnY's amendment (UP
No. 91) was rejected.
Mr. DURENBERGER. Mr. Presi-
dent, I move to reconsider the vote by
which the amendment was rejected.
Mr. BAKER. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
The PRESIDING OFFICER. The
question now recurs on the amend-
ment of the Senator from New Jersey.
Mr. DOLE. Mr. President, I ask
unanimous consent that it be tempo-
rarily laid aside.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
UP AMENDMENT NO. 92
(Purpose: To provide that benefits no longer
be paid to aliens not authorized by law to
live and work in the United States)
Mr. NICKLES. Mr. President, I have
an amendment which I send to the
desk and ask for its immediate consid-
eration.
The PRESIDING OFFICER. The
amendment will be stated.
The bill clerk read as follows:
The Senator from Oklahoma (Mr.
NIcxz.Es), for himself. Mr. MELCHER, Mr.
BoREN, Mr. EAST, Mrs. HAwxINS, Mr. BoscH-
WITZ, Mr. ABDNOR, Mr. ARMSTONG, Mr. GOLD-
WATER. Mr. BURDIcx, Mr. WARNER, Mr.
PRESSLER, Mr. MATTINGLY, Mr. GRASSLEY,
and Mr. HUa7mtEY, proposes an unprinted
amendment numbered 92.
Mr. NICKLES. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
At the appropriate place in the bill, insert
the following new section:
DISALLOWANCE OF BENEFITS NOT AUTHORIZED
TO WORK IN THE UNITED STATES
SEC. , Title II of the Social Security Act
is amended by adding at the end thereof the
following section:
"1234. Prohibition of benefits to illegal aliens
"Notwithstanding any other provisions of
this title-
"(a) An individual can only receive bene-
fits if, at the time such individual files his
or her claim for benefits, such individual
can show that he or she-
"(1) is a U.S. citizen, or
"(2) was once a U.S. citizen but had volun-
tarily relinquished such status, or
"(3) is an alien who been legally admitted
to work, or
"(4) was once an alien who was legally ad-
mitted to work but had voluntarily relin-
quished such status.
"(b) Subsection (a) applies only with re-
spect to individuals who first become eligi-
ble for benefits after December, 1983."
SUSPENSION OF BENEFITS TO ILLEGAL ALIENS
Sac. . (a) Section 202(n) of the Social Se-
curity Act is amended by adding at the end
thereof:
"(3) Notwithstanding any other provisions
of this title, no monthly benefit under this
section or section 223 of such Act shall be
paid:
"(A) to an individual for any months for
which the Attorney General notifies the
Secretary that such individual is subject
to-
,,(I) a final order of exclusion entered
under 8 USC 1228, or
"(ii) a final order of departure entered
under 8 USC 1252, or
"(iii) a voluntary departure in lieu of de-
portation under 8 USC 1254(e); and
"(B) on the basis of wages or self-employ-
ment income which were earned by an indi-
vidual during any period for which the At-
torney General furnishes information suffi-
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S 3354 CONGRESSIONAL RECORD - SENATE March 18, 1983
been paying his taxes for 30 years, be tell me when that GAO study was that we are going to hear from the
deprived of social security benefits? published? GAO. I just make that point. I do not
Mr. NICKLES. Let me make sure I Mr. NICKLES. I mention in my want to go beyond that.
understand. Did the Senator say that statement that that report is in the But the distinguished author of the
the person was working illegally in the process of being published. It is ex- immigration legislation that we adopt-
country for 30 years? pected to be released at the end of ed last year is in the Chamber, and the
Mr. METZENBAUM. No; it would March. Senator from Wyoming might wish to
not be illegal. The person had been Mr. BRADLEY. And the Senator comment.
working in the country for 30 years. I has obtained the information from the Do I understand that if the legisla-
do not think that during that period GAO" as to what is in the study prior tion granting amnesty were not to
he would have been violating any laws to its release? pass, then we would be denying social
for having worked, and he had been Mr. NICKLES. That is correct. security to a large number of persons
under social security rules. Nobody There is a draft report that has been who have worked and earned it? We
had raised any question with him. He circulated which I would be happy to have proposed amnesty, but if it some-
was just one of those persons who had give to the Senator. how just did not happen, as it did not
not seen fit to take out citizenship As a matter of fact, I ask unanimous happen last time, would they be
papers. Maybe he even served in the consent to have printed in the RECORD denied that?
war. What happens? He is now 65 the report with my comments. Mr. NICKLES. If a person applies
years of age. Do we say to him, "You The PRESIDING OFFICER. With- for social security, then they would
can't have your benefits because one out objection, it is so ordered. have to say, "Yes, I am a U.S. citizen,"
afternoon, on the floor of the U.S. (See BRADLEY. How many illegal or "I worked legally in the United
Senate, the Senate adopted an amend- Mr. States," one or the other.
ment, and you had no knowledge of it immigrants did the GAO study state Second, we would allow Immigration
and most other people did"? Suddenly, were now receiving social security to contact the Social Security Admin-
he or she is without social security benefits? istration when they find someone who
benefits. Mr. NICKLES. The report provides is working illegally in the country so
Mr. NICKLES. I think the question only rough estimates, based on a that they could stop payments to
can be answered. number of studies which have been them. Present law does this, when il-
The Immigration and Nationality done. Estimates range from 1 million legal aliens are deported.
Act provides that if a person is not a to 12 million, the most accepted range When Immigration notifies Social
U.S. citizen, then in order for an alien being g B3.5 to 6 one Senator used- Security and says "We are deporting
to work in the United States they ac- an individual, he has been working in
tually have to receive from the De- some number $2.4 billion. What is that the United States illegally," then
partment of Labor, a green card. If an related to? social security stops his benefits. That
alien has this card or other documents Mr. NICKLES. That was a figure is present law. However present law
stating his or her legal status in this which GAO arrived at by calculating also provides that if Immigration con-
country, then they would receive the the annual cost to the trust fund if 25 Social Security and says, "We
benefits. percent of the illegal aliens working in fotacts und this alien working illegally,"
However, if they were working in the this country were to receive social se- and that alien leaves the country vol-
United States, under the example of cum BRADLEY So, according to this untarily, then that illegal alien can
the spr from Ohio, for 30 years, GAO report, which will be published continue to receive benefits even
with Senator
a suspect o or r a false social security though he worked in the United
card and under false circumstances, and preliminary information the Sena- States illegally.
they would not receive benefits. tor has, if there are anywhere from 1 It is a large loophole through which
Mr. METZENBAUM. If they had million to 12 million illegal immigrants a large percentage of illegal aliens can
not received that green card, even if in the country and anywhere between receive or continue to receive benefits.
-their entry had been illegal, but it 25 percent of 3 million to 5 million of I might add, according to this GAO
re-
would not be possible under some cir- thosvingillegal
cumstances to get a green card making its, to the study, the volume of benefits received
social s uri grranbenef
it possible e for them to work. level of $2.4 billion, is that what the versus the dollars contributed by
" basically because
Mr. NICKLES. If they received the Senator is asserting? aliens in is dividual enormous, contributes for a because
green card, that is the Department of Mr. NICKLES. Yes, Senator. GAO tnein short person of time.
Labor saying it is legal for them to came up with estimates and said that Mr. short p rind That because of
work, then they would be qualified to if 10 percent become vested which is automatic raises in tystem.
receive benefits. Even if they had not probably a minimal number, about Mr. automatic raises es the h that m because
worked legally but worked illegally for $900 million in benefits would be going the r. alien N works only ; that long as e half as an
30 years and the amnesty provisions out annually, and if 25 percent were American beneficiary and then returns
were passed, they would receive bene- becoming vested, it could be as much to his home country, where additional
fits. as $2.4 billion.
Mr. BRADLEY. Mr. President, let Mr. MOYNIHAN. Mr. President, will dependents are added who collect me try to be specific with the general the Senator yield for a question? b baenneefiitts for a about long period received of in b time. The
. The
question I asked earlier. Mr. NICKLES. I am happy to yield. for $23 r every dco teivued into the
Let us assume someone has been in Mr. MOYNIHAN. Let me put two system. It dollar
quite o drain a the oothe
the United States working illegally, as questions if I may. a on
an illegal immigrant, for 3 years. The First, we have not seen this GAO security
Mr. MOYNIHAN. system.
stem. I wish to see the
Simpson-Mazzola bill is passed and pro- report which evidently says they GAO report.
vides amnesty for that category of cannot prove what they do not know,
worker. but they can maybe. But is the Sena- May I say to my friend from Oklaho-
Under the Senator's amendment, tor aware that the Inspector General ma that the distinguished Senator
would that worker be eligible for social of Social Security recently ran a from Wyoming is in the Chamber. I
speak to this matter
security benefits that were accrued random sample of 80,000 social secu- hope ohe can ur debate concludes.
during those 3 years that he or she rite checks and found 2 to be irregu-before was an illegal immigrant? lar? Out of 80,000, 2, which really Mr. - GORTON. Mr. President, will
Mr. NICKLES. The Senator is cor- would be a remarkable performance the Senator yield?
rect. They would receive those bene- for any large system. And I do not Mr. CHAFEE. Mr. president, will the
fits. know but just from what we know Senator yield?
Mr. BRADLEY. The Senator alluded from the Inspector General that does Mr. NICKLES. I am happy to yield
to a GAO study. Could the Senator not seem to jibe with what we hear to the Senator from Washington.
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CONGRESSIONAL RECORD - SENATE March 18, 1983
essary to have this amendment at-
tached to the social security bill in
order to have it passed. It could be de-
ferred, and we would have a chance to
review it and have hearings on it in
the Finance Committee, and then
come up, after careful consideration,
and take care of the problems that
were voiced on the floor.
But let me just say to the Senator
from Oklahoma this whole area is
fraught with difficulties.
I am amazed that the Commissioner
wrote the Senator this letter on
March 18, because the Commissioner
appeared before our committee on a
simpler matter; namely, the payment
of benefits to legal aliens. In this legis-
lation that is before us on the floor, it
provides that legal aliens who return
overseas, in other words do not remain
residents in the United States, can
only collect for benefits what they
have put into the fund plus interest.
In other words, they cannot even col-
lect the employer's contribution.
Mr. Svahn was present when we
were considering this and certainly did
not take a position in favor of it. He
voiced some concerns about the ad-
ministrative problems. But the admin-
istrative problems that are involved in
the Senator's amendment are far more
difficult.
It seems to me, If we should adopt
the Senator's amendment on the floor
today, which I hope we will not and I
hope the Senator will not press it, we
are going to cause, I think, consider-
able hardship and unfairness to a host
of people who are unable to prove cer-
tain facts going into the distant past.
It is a fact there has never been a
hearing in the Finance Committee or,
I believe, in the House Ways and
Means Committee-and I cannot tes-
tify to that-on this matter. As a
matter of fact, when this came up
before the Ways and Means Commit-
tee, it was deferred on the Insistence
or the urging of Mr. PicKIZ because
there had not been hearings on this
matter. So it is not in the House bill.
In the Senate bill it was brought up
and many of us felt-we are dealing
solely with legal aliens and the pay-
ment to them overseas-and many of
us felt that it was improper to proceed
without more consideration with the
difficulties involved.
Now the Senator is coming forward
on the floor of the Senate with this
amendment which, as has been point-
ed out with various arguments-and I
am anxious to hear what the Senator
from Wyoming, who has worked long
hours on this in connection with his
immigration measure, has to say. Here
out of the blue comes this measure. I
think we are going to do great hard-
ship to a host of potential benefici-
aries.
Let me also say this: Never before, as
I understand it, in the social security
system, have we provided that those
who pay in do not get their benefits.
But that may be right. Perhaps it is
correct. Perhaps in this group of il-
legal aliens, I cannot see that you
make any provisions for those who
come in illegally who subsequently
become legal. But set that aside,
maybe we want to take that step. But
I think it is a step we ought to only
take after careful consideration and
hearings on it.
It may well come out the way the
Senator wants or a slight variation,
but this is the type of amendment
that can be considered separate from
this bill and will certainly have a good
deal of attention and I believe support
normally from this body.
So I hope the Senator will not press
his amendment.
(Mr. DURENBERGER assumed the
chair.)
Mr. MITCHELL. Will the Senator
yield for a comment on the point just
made?
Mr. NICKLES. I will be happy to
yield the floor unless the Senator has
a question to me.
Mr. MITCHELL. I will put it in the
form of a question.
As the Senator from Rhode Island
indicated, the committee dealt with
the problem of noncitizens who are
not residents receiving social security
benefits. In this legislation now pend-
ing before the Senate is a provision
that limits the benefits paid to aliens
who are not residents of the United
States to the amount that they paid
into the system plus interest. It is, I
believe, applicable to aliens who were
in this country legally or illegally.
There is no distinction between them.
Therefore, that provision already in
the legislation appears to take care of
the principal concern expressed by the
Senator from Oklahoma of an illegal
alien who is discovered by the Immi-
gration Service and is ordered to leave
the country and subsequently leaves-
and the Senator has expressed a legiti-
mate concern-and then, going back to
the country of origin, receives benefits
the same as other social security
beneficiaries which generally results
in a return far greater than the
amount of taxes paid.
I ask the Senator. Since that con-
cern is already addressed in the legis-
lation, is there any other reason to
pursue this particular amendment? As
I understood it, that was the Senator's
principal concern in response to the
questions raised here today.
Mr. NICKLES. I appreciate the Sen-
ator's question. The Lugar amend-
ment, which passed and which I co-
sponsored, did curb the amount of
benefits. There has been a growth of
benefits in some cases for those who
were living abroad and receiving social
security. I supported provisions to
curb that growth. However, those were
persons who were legally working in
the United States.
Our amendment addresses those
who are working illegally in the
United States and who Immigration
has deported.
What we are trying to do is say that
if Immigration finds a person working
illegally, then they would lose their
benefits.
The other aspect of our bill, the
prospective part, I think is much
greater and more important. It insures
that this abuse does not happen in the
future. In other words, if a alien is
working illegally in the United States,
they probably would not even apply
for social security because they would
say, "Wait a minute, I am going to
have to show I was legally working in
the United States."
Mr. MITCHELL. I would say it is my
understanding-and I think it ought to
be checked-that the provisions in the
bill now do not distinguish between
aliens who work legally and those who
work illegally in this country, but
rather the only distinguishing factor is
whether or not the beneficiary is an
alien and no longer resides In this
country; that is, the distinction that
the Senator has suggested between
the provisions in the bill and his
amendment do not, according to my
understanding, in fact, exist In the
bill. I think that ought to be checked.
Obviously, if I am incorrect I will
stand corrected.
But I was involved in the committee
discussions, as was the Senator from
Iowa, who was present at the time,
and I do not recall any mention being
made of limiting the provision now in
the bill only to those aliens who had
been legally in the country. Rather,
the only distinguishing factors are
whether or not they are aliens and
whether or not they are no longer resi-
dents of this country.
If that is so, then it seems to me
that the principal reason for the
amendment of the Senator from Okla-
homa no longer exists if this other
provision remains in the bill.
Mr. NICKLES. Let me explain a
little bit further. There Is a reason for
this legislation to exist. Again, I com-
pliment the work that the Finance
Committee has done in adopting the
Lugar amendment-the existing lan-
guage that is in the bill that is before
us.
However, we would go a step further.
Our amendment would say right now
that when Immigration finds a person
who is working, illegally, they will
notify the Social Security Administra-
tion and say, "This person is working
illegally and should not be entitled to
receive benefits." We make that pros-
pective. It gives them plenty of time to
coordinate their computers. The
amendment tells Immigration to work
with Social Security. And, by January
1, 1985, the two agencies would be able
to coordinate their efforts on this
matter.
Let me go into this a little further.
Currently, an alien can receive a social
security card. They receive it for pur-
poses that they type on the card, not
for work purposes, but they can use it
for credit cards, et cetera. However,
Social Security has found that people
use this social security card, even
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CONGRESSIONAL RECORD - SENATE March 18, 1988
as it were. "No," said he, "we will not
have anything to do with that."
He prevailed upon the House confer-
ees to turn down the position of the
Senate in this regard. He could not
care less about counterfeit cards.
Now they come along with this
matter which I have to say, in my
view, represents a violation of the 14th
amendment's rights, even of illegal
aliens; it is confiscating property. I
know the Senate Finance Committee,
as the distinguished Senator from
Rhode Island said, would be happy to
have hearings on this. We would be
happy to have the GAO come forward
and tell us what they know, have
people comment on it, listen, think
about the constitutional issues, think
about the whole range of effects
which we do not now understand.
I now would like to cease in order to
hear the Senator from Wyoming, who,
I hope, will speak.
Mr. SIMPSON. Mr. President, I was
just thinking how opportune it might
be to offer an unprinted amendment
consisting of the Immigration Reform
and Control Act of 1983. This might
be a dandy time to do that. But I shall
not do that.
I am fascinated to hear this very se-
rious debate, and it should be. I have
heard phrases like "fraught with diffi-
culty," "What are we really doing,"
and "What will be the impact." The
good Senator from Michigan outlined
some serious questions. The Senator
from New York makes a fascinating
statement on the social security
system. There is much truth in there;
much truth in what the Senator from
Rhode Island says as well as the Sena-
tor from Montana, and particularly
the Senator from Oklahoma.
Mr. President, I remain absolutely
intrigued and fascinated by the
debate, because it is with a strange
sense of irony that I recall last year's
debate when we had the Supreme
Court decision on who should bear the
cost of training the children of illegal
aliens in the United States. The super-
visors of Los Angeles County came to
the subcommittee to share with us
that two-thirds of the children born in
their largest hospital are born to 11-
legal alien mothers; and the Los Ange-
les County supervisors are asking, who
will bear that cost?
And now, today, we are justifiably
concerned about the burden on our
social security system created by bene-
fit payments to undocumented work-
ers. There is so much stuff in this one
that I just say, welcome to the fray.
We already have laws that say if you
are deported, there will be no benefits;
but there is no way for the INS, with
its present personnel, to handle depor-
tation proceedings for the illegal
aliens they apprehand. They do do not
have the personnel to deal with the
numbers. The Chula Vista sector last
week had 5,000 apprehensions in a
single day-along 60-mile segment of
our Mexican border. That is double
any kind of activity like that ever
under the history of that sector. That
is the situation in the United States
right now.
All of these concerns so ably ad-
dressed by so many various persons
and philosophies just scratch the sur-
face of the problem created in this
country by a singular national failure.
The first duty of a sovereign nation is
to control its borders, and we do not.
The other irony is the only other
nation on the Earth that does not con-
trol its borders is the United States of
Mexico. The problem on their south-
ern border matches ours.
If we had had the courage to address
the problem of immigration reform in
Congress during the last 10 years, to
follow the only possible solution,
which is employer sanctions against
those who knowingly hire illegal, un-
documented workers, and to provide
some form of employment verification
which is not carried on the person but
only available at the time of new
hire-the only real issue is not how
much do they leave on the table, how
much do they take off, do they do
work that American workers will not
do-we would not have to address
these issues today. The issue is this:
When you have a fake green card and
with that fake green card you receive
a valid social security card, a valid
AFL-CIO card, a valid food stamp
card, a valid medicare card, a valid
driver's license and valid unemploy-
ment insurance coverage, you have
gimmicked the systems of the United
States and the systems were not built
for that kind of gimmickry. They are
not actuarially able to handle that
kind of gimmickry.
The Social Security Administration
testified one time that they are not
really concerned about how many fake
cards are out, because at the time
someone sought benefits, they would
have to show up as a live human being
in front of a live interviewer. I said,
"Well, that is one way to run a rail-
road. It is not exactly the way I would
do it."
But we have developed some inter-
esting things. These things and this
matter we grapple with here are the
wholly unpleasant situations that
result from illegal immigration. They
would not be facing us today, nor
would we have the national disgrace of
a furtive, fearful, exploited, illegal
subsociety of human beings number-
ing millions extant in these United
States right now if we faced up to the
root cause of the problem-loss of con-
trol of our borders.
Mr. President, we must adopt meas-
ures which are not nativist nor mean
nor racist but we must reform what
are absolutely absurd, cumbersome
and unworkable immigration laws.
I thought I would get up and make.
that little plug for the Immigration
Reform and Control Act of 1983 be-
cause we are going to sec that legisla-
tion soon. Markup is coming at the
end of this month. I call upon my col-
leagues to carefully examine the bill,
which would solve this situation
before us today.
There is never a good time for immi-
gration reform. That I can assure my
colleagues. But the discussion and
debate on amendments such as this
show the strains on our society, the to-
tally inappropriate results that will
take place if we continue apathetically
to do absolutely nothing and pretend
uncontrolled illegal immigration is
going to disappear. I trust congression-
al maturity might lead us toward some
solution, because the matter will be
before us and will be pressed upon us
again and again and it will never go
away.
Mr. GRASSLEY addressed the
Chair.
The PRESIDING OFFICER. The
Senator from Iowa.
Mr. GRASSLEY. Mr. President,
Members of the body, I think the
appeal by the Senator from Wyoming
to look at the bigger picture is well in
order. On the other hand, I am sup-
porting this amendment, and have in
fact cosponsored the Senator from
Oklahoma's amendment.
I do not know what the Senator
from Kansas will do when he wants to
dispose of the debate on this amend-
ment and the bill. I shall leave that to
him. But I think the effort by the Sen-
ator from Wyoming to look at the
bigger picture needs to be applied spe-
cifically to this amendment as well.
The amendment is not offered soley in
the vein that we want to save money
from the social security funds, that we
want to make it more sound, even
though it Will have that impact; ac-
cording to the GAO report.
The broader picture is this: There
are many law-abiding citizens of Amer-
ica, people who spend their whole lives
abiding by the laws in this country,
and they also have the oddity that
they expect other people to abide by
the law in this country. They see ef-
forts of people who are not law-abid-
ing citizens to dip into the till and to
threaten the financial soundness of a
system that they pay into, and they do
not like it.
I think their concern goes even
beyond that and points to something
that ought to concern us. That is the
necessity of reestablishing credibility
in the social security system. People
who are working today, paying into
the system, paying high taxes-every
one of them would ask us who are out
at the grassroots, is there going to be
any money there for them to draw
from?
It is the same way with those citi-
zens who are retired today, drawing
out of the system. They, too, wonder
abut the soundness of the system. It is
not as credible a system with them as
it was one, two, or three decades ago.
Having people who are illegally in
the country who have, legally or ille-
gally, been paying into the system is
not the point. The issue is that some
are illegally in this country drawing
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The concerns which prompted the legisla-
tion are still valid today-aliens can work in
the United States for a relatively short time
and then return to their native country and
retire and receive benefits for themselves
and their dependents.
The payment of social security benefits to
aliens not only represents a valid policy
question for the Congress, but also presents
a number of difficult and complex issues.
Some of these issues involve (1) the equity
of treating aliens differently than Ameri-
cans, (2) the international reaction by coun-
tries whose citizens will be adversely affect-
ed and the potential retaliatory action of
curtailing benefits to Americans under their
systems, and (3) the administrative question
of requiring alien workers to pay full FICA
taxes although they might receive benefits
for retirement or disability in a curtailed or
capped amount.
GAO also identified an inconsistency be-
tween the Social Security Act and the Immi-
gration and Nationality Act-aliens are al-
lowed to earn entitlement to social security
benefits while violating the Immigration
and Nationality Act. Although there are not
complete and accurate data on the impact
that this situation is having on social secu-
rity, GAO estimates that perhaps a billion
dollars a year could flow from the trust
funds to pay aliens on the basis of their il-
legal employment.
CHAPTER 3: ALIENS CAN EARN ENTITLEMENT TO
SOCIAL SECURITY BENEFITS WHILE VIOLATING
THE IMMIGRATION AND NATIONALITY ACT
The Immigration and Nationality Act pro-
vides for regulating admission of aliens to
the U.S. The Act retluires that before aliens
are permitted to enter the U.S. for perma-
nent employment, the Secretary of Labor
must certify to the Attorney General that
there are insufficient U.S. workers willing,
able, and qualified to perform the work at
the time and location it is to be performed
and that such employment of aliens will not
adversely affect wages and working condi-
tions of U.S. workers similarly employed.
The Social Security Act allows aliens to
earn social security insurance credits re-
gardless of their employment or resident
status in the U.S. Section 210(a) of the
Social Security Act defines employment for
the purpose of social security credits as any
service performed in the U.S. by an employ-
ee for an employer irrespective of the citi-
zenship of either. Consequently, aliens who
are admitted to the U.S. to attend school,
visit, or for other purposes, but not for per-
manent employment, can earn social secu-
rity credits by illegally working at a job cov-
ered by Social Security. Similarly, aliens
who enter the U.S. illegally can earn social
security credits as a result of employment
during the time of their illegal stay. The ac-
cumulation of social security credits by legal
and illegal aliens can lead to insured status
and entitle them to social security benefits
earned through unlawful employment.
This chapter discusses both legal and il-
legal aliens who might have earned social
security credits while violating the Immigra-
tion and Nationality Act, and the potential
cost of paying benefits to such aliens.
Aliens have illegally worked and earned
social security coverage
The number of aliens who have illegally
engaged in employment and earned social
security credits can not be precisely deter-
mined. Under the Social Security Act a
wage earner's citizenship does not affect his
eligibility to earn social security credits and,
for that reason, SSA has not maintained
data on the citizenship of all workers who
pay social security taxes. SSA has some in-
formation on legal aliens who have violated
their immigration status by engaging in em-
ployment, but it does not have such data on
aliens who have entered the U.S. illegally
and engaged in social security-covered em-
ployment during their illegal stay.
Legal Aliens Working Illegally in the United
States
According to SSA's statistics, about
289,000 legal aliens have engaged in employ-
ment covered by Social Security since 1974.
Until 1974, SSA made no distinction based
on citizenship when issuing a social security
card. Beginning in 1974, as was required by
the Social Security Amendments of 1972,
SSA began issuing social security cards to
legal aliens who requested them for "non-
work purposes." These purposes included
opening bank accounts, registering for
school, and obtaining a driver's permit.
When SSA issued social security cards for
such non-work purposes, it coded its enu-
meration records to indicate that these
SSN's were for non-work purposes.
In 1975, SSA discovered that social secu-
rity-covered earnings were being reported
under many of the SSN's that were issued
for non-work purposes. This was not a viola-
tion of the Social Security Act, but SSA did
gather statistical data on these incidents
and shared the information with the Immi-
gration and Naturalization Service (INS),
since these alien wage earners were appar-
ently violating their immigrant status. This
information flow was discontinued after the
enactment of the Tax Reform Act of 1976
because of questions regarding interagency
transmittal of taxpayer information. These
questions were resolved in 1982, and SSA
plans to transmit the information on aliens
who worked illegally since 1976 to INS and
will resume transmitting information to INS
on aliens who are illegally working in the
U.S.
Also, SSA has begun noting "for non-work
purposes" on the face of new social security
cards issued to legal aliens if they are not
permitted to work in the U.S.
Illegal Aliens Working Illegally in the
United States
The exact number of illegal aliens who
have entered and worked in the U.S. and
earned social security credits cannot be de-
termined. This occurs, in part, because il-
legal aliens conceal their illegal immigrant
status when they apply for social security
cards. When they are successful in obtain-
ing social security cards, those cards and
numbers cannot be distinguished from le-
gitimate ones. Therefore, little is known as
to the number of illegal aliens who have
earned social security credits under fraudu-
lently obtained social security cards, or
those who have worked and paid taxes
under someone else's SSN.
Various studies, including one by GAO,'
have developed estimates of the number of
illegal aliens in the U.S. The estimates
range from 1 to 12 million, but the most
widely accepted range is from 3.5 to 6 mil-
lion. One study showed that between 65 and
88 percent of a group of illegal aliens who
were interviewed had been employed while
residing in the U.S. and had paid social secu-
rity taxes on their earnings.2
Potential cost to social security due to
aliens engaging unlawfully in covered em-
ployment
Despite the statistical limitations of the
various illegal alien studies, one can develop
a rough estimate of the impact on the social
' Problems and Options in Estimating the Size of
the Illegal Alien Population: September 24, 1982
(IPE-82-9), p. it, 10-11.
f David North and Marion Houstoun (31). "The
Characteristics and Role of Illegal Aliens in the
U.S. Labor Market: An Exploratory Study," March
1976, p. 130, ,
March 18, 1989
security trust funds of payments to illegal
aliens. To illustrate such potential impact,
we used the lower range of the most widely
quoted illegal alien population estimate (3.5
million) and the lower estimate of those il-
legal aliens who had been employed while in
the U.S. and paid social security taxes (65
percent). We chose the lower range of the
estimates because of uncertainties as to the
statistical reliability 46f these estimates.
Using these data, we estimated that from
2.2 million' aliens had worked in social se-
curity covered employment and had re-
ceived some social security credits.
It is unknown how many of these wage
earners have earned sufficient quarters of
credits to be eligible for disability or retire-
ment benefits. There are no reliable data on
social security payments made to aliens as a
result of their unlawful employment. None-
theless, we developed three estimates to
show the potential annual costs to the trust
funds if 10, 15, and 25 percent of the illegal
alien workers had qualified for and were re-
ceiving benefits in 1981. We used the aver-
age alien family benefit rate ($4,160) for
aliens abroad in 1981 to complete the esti-
mates. Our estimates show the following
cost ranges:
$,9 billion (if .10 percent of the illegal
aliens had qualified for social security),
$1.4 billion (if 15 percent of the illegal
aliens had qualified for social security), and
$2.3 billion (if 25 percent of the illegal
aliens had qualified for social security).
Applying these same assumptions and the
10-percent estimate to the legal aliens who
have unlawfully worked in the U.S., adds
another $.1 billion cost to the trust funds.4
Therefore, legal and illegal aliens combined
could cost SSA about $1 billion per year as a
result of unlawful employment if only 10
percent of the aliens working illegally even-
tually receive benefits.
Should social security benefits accrue from
unlawful employment?
In 1954, a bill was introduced in the Con-
gress (HR 9366) which said, in part, that
earnings derived from covered employment
by individuals during periods when they
were unlawfull-y residing in the U.S. would
not be used in establishing eligibility for, or
the amount of, social security benefits. Fur-
thermore, the bill said these earnings would
be deleted from such individuals' earnings
record upon the Secretary's 6 receipt of noti-
fication from the Attorney General of an
alien's periods of unlawful residence in the
U.S.
These provisions were deleted from the
bill, however, by the Senate Finance Com-
mittee after it received the Secretary's com-
ments on the feasibility of its implementa-
tion. The Secretary endorsed the objective
of these provisions, but he opposed enact-
ment on the basis of the disproportionate
administrative burden it would impose on
the Department and SSA, compared to the
benefits that might be realized. He noted,
for example, that he would have received
900,000 notifications of unlawful employ-
ment in 1953 and earnings from such em-
ployment would have had to be deleted
from the aliens' Social Security earnings re-
cords-a task he thought too administrative-
ly burdensome to accomplish.
The subject of aliens who might earn enti-
tlement to social security benefits while
either unlawfully residing or unlawfully
2 3,500,000 x.65.
4 This is the product of 289,000 (legal alien work-
ers)x$4,160x.10.
'"the Secretary" refers to the Secretary of the
Department of Health, Education, and Welfare;
currently the Secretary of the Department of
Health and Human Services.
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CONGRESSIONAL RECORD - SENATE March 18, 1988
which involves in effect taking from
them their employer contributions,
which were certainly a property right
as far as I am concerned, but we did
anyway. There is much to be learned.
The Senator from Wyoming has
spoken eloquently and calmly about
the complexities. We will address
those complexities in hearings and in
orderly legislation which this body will
not fail to take up, I am sure. There-
fore, Mr. President, without prejudice
to the provisions of the amendment as
such but because we do not know
enough about the 'subject and must
learn much more, I move to table the
amendment Arid ask for the yeas and
nays.
The PRESIDING OFFICER. Is
there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk called the roll.
Mr. STEVENS. I announce that the
Senator from Indiana (Mr. QUAYLE) is
necessarily absent.
I also announce that the Senator
from Maryland (Mr. MATHIAS) is
absent due to an illness in the family.
Mr. BYRD. I announce that the
Senator from Arkansas (Mr. BUMP-
ERS), the Senator from California (Mr.
CRANSTON), the Senator from Colorado
(Mr. HART), the Senator from South
Carolina (Mr. HOI.LINGS), and the Sen-
ator from Georgia (Mr. NUNN) are nec-
essary absent.
I also announce that the Senator
from Delaware (Mr. BIDEN) is absent
because of illness in the family.
The PRESIDING OFFICER. Are
there any other Senators in the Cham-
ber who desire to vote?
The result was announced-yeas 34,
nays 58, as follows:
[Rollcall Vote No. 34 Leg.]
YEAS-34
Bentsen
Hecht
Mitchell
Bingaman '
Heinz
Moynihan
Bradley
Inouye
Pell
Chafes
Jackson
Proxmire
Danforth
Kassebaum
Sarbanes
Denton
Kennedy
Simpson
Dodd
Lautenberg
Specter
Dole
Laxalt
Stafford
Domenlci
Levin
Tower
Durenberger
Lugar
Tsongas
Eagleton
Matsunaga
Glenn
Metzenbaum
NAYS-58
Abdnor
Gorton
Percy
Andrews
Grassley
Pressler
Armstrong
Hatch
Pryor
Baker
Hatfield
Randolph
Baucus
Hawkins
Riegle
Boren
Heflin
Roth
Boschwitz
Helms
Rudman
Burdick
Huddleston
Sasser
Byrd
Humphrey
Stennis
Chiles
Jepsen
Stevens
Cochran
Johnston
Symms
Cohen
Kasten
Thurmond
D'Amato
Leahy
Trible
DeConcini
Long
Wallop
Dixon
Mattingly
Warner
East
McClure
Weicker
Exon
Melcher
Wilson
Ford
Murkowskl
Zorinsky
Garn
Nickles
Goldwater
Packwood
NOT VOTING-8
Biden Hart Nunn
Bumpers Hollings Quayle
Cranston Mathias
So the motion to lay on the table
Mr. NICKLES' amendment (UP No. 92)
was rejected.
Mr. DOLE. Mr. President, I wonder
if we might agree to accept this
amendment based on the tabling
motion. I have discussed it with the
proponents and opponents of the
amendment. There is no similar provi-
sion in the House-passed bill.
I can 'understand some of the con-
cerns that have been expressed. I
think even the author of the amend-
ment indicates that there is one area
that he is willing to address.
If we might do that, I think we could
take care of some of the concerns in
the conference.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Oklahoma.
The amendment (UP No. 92) was
agreed to.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. NICKLES. Mr. President, I
move to lay that motion on the table.
The motion to. lay on the table was
agreed to.
Mr. BYRD. Mr. President, I will take
a minute.
Given the importance of the legisla-
tion before us today, I would like to
take a moment to state for the record
the reason why my good friend and
colleague, Senator BIDEN, is not able
to be present for this session.
Senator BIDEN, as we all know, com-
mutes daily from his home in Wil-
mington to Washington. As his train
arrived this morning, he was greeted
by the news that one of his sons had
suffered a dislocated hip in a sports
accident at school and had been
rushed to the hospital, where he
needed to be put under general anes-
thetic to have the hip put back in
place.
As any good father or grandfather
would, Senator BIDEN immediately
took the next train back home and is
with his son now at the hospital.
I am happy to report that the Sena-
tor's son is doing well, and I know that
we all wish him a speedy recovery.
I yield the floor.
The PRESIDING OFFICER. The
question recurs on the motion of the
Senator from Rhode Island, amend-
ment No. 88.
Mr. DOLE. Mr. President, will the
Senator yield for 1 second?
Mr. METZENBAUM. I yield.
Mr. DOLE. The Senator from
Kansas understands first the Senator
from Ohio, Senator METZENBAUM, has
an amendment pending. That will be
modified by an amendment by Sena-
tors PERCY, DIXON, and LEVIN. When
that is completed-and I understand
the distinguished Senator from Okla-
homa will speak in opposition to the
amendment-we have an amendment
from the distinguished Senators from
Kentucky, Senators FORD and HUDD-
LESTON. That will be followed by a col-
loquy between myself and the Senator
from Kentucky, Senator FORD. That
will be followed by an amendment by
the distinguished minority leader, to
which I am not certain there is no ob-
jection, followed by an amendment of
the Senator from Kansas.
I think, depending on the length of
debate, if we can just stay on this area
we might take care of a lot of the un-
employment matters now.
UP AMENDMENT NO. 88, AS MODIFIED
Mr. METZENBAUM. Mr. President,
I have an amendment pending at the
desk and I now ask unanimous consent
that I be permitted to send a modifica-
tion of that amendment to the desk
with the understanding that the Sena-
tors from Illinois and the Senators
from Michigan may be permitted to
reinsert the language which will be de-
leted from my amendment by modifi-
cation, and without unanimous con-
sent being granted I am informed that
it would violate the rules of this body,
and it is for that reason that I ask
unanimous consent.
The PRESIDING OFFICER (Mr.
COCHRAN). Is there objection to the re-
quest? The Chair hears none, and it is
so ordered.
Mr. METZENBAUM. Mr. President,
I send an amendment to the desk on
behalf of myself, Senators RIEGLE, and
LEVIN.
The PRESIDING OFFICER. The
clerk will report the amendment, the
modification.
The assistant legislative clerk read
as follows:
The Senator from Ohio (Mr. METZENBAUM)
proposes a modification to his amendment
numbered UP 88.
Mr. METZENBAUM. Mr. President,
I ask unanimous consent that further
reading of the amendment be dis-
pensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment, as modified, is as
follows:
On page 236, line 7, strike out "30" and
insert "25".
On page 236, line 9, strike out "40" and
insert "35".
On page 237, line 9, strike out "30" per-
cent, 40 percent, 50 percent, and insert "25
percent, 35 percent, 50 percent".
On page 237, line 12, strike out the quota-
tion marks and the second period.
On page 247, between lines 12 and 13,
insert the following:
"(9) Any interest otherwise due from a
State during a calendar year after 1982 may
be deferred (and no interest shall wccure on
such deferred interest) for a grace period of
not to exceed 9 months if, for such calendar
year in which the interest was due, the
State had an average unemployment rate of
13.5 percent or greater.".
Mr. METZENBAUM. Mr. President,
the purpose of this amendment and
the modifications which are to be sug-
gested, which are to be offered, in a
second degree by the Senator from Il-
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problems which made them least able
to repay their debt in the foreseeable
future.
In the Omnibus Budget Reconcili-
ation Act of 1981, Congress enacted
legislation calling for 10 percent inter-
est payments on new net borrowing
which was intended to decrease bor-
rowing from the Federal Government.
In addtion, some relief was made avail-
able to States with high unemploy-
ment problems by allowing employers
to qualify, under certain conditions,
for a cap on the so-called penalty tax.
When the legislation reached the
Senate floor, I offered an amendment,
along with my colleague ALAN DixoN,
to enable the State of Illinois to quali-
fy for this relief, and the issue was ul-
timately resolved on the floor.
Since that time, economic conditions
in my State have deteriorated. The
1982 unemployment insurance defict
in Illinois was $800 million and, even if
the State had paid benefits at the
level of the national average, our
higher unemployment rates still would
have caused a deficit, estimated to be
about $545 million. This is in spite of a
substantial effort to redice the costs of
the State system by enactment of a
$500 million package in 1981 of in-
creased taxes and reduced benefits.
Additional efforts are underway in Illi-
nois right now to further tighten up
our system.
Governor Thompson, business,
labor, and State legislative leaders,
have been meeting over the past 4
weeks in Chicago and Springfield to
fashion a new package of higher taxes
and reduced benefits in order to limit
as much as possible additional borrow-
ing. I know our Governor met in Chi-
cago with Chairman DOLE on January
19, with other Governors in at-
tendance, as well.
The elimination of the compounding
of interest on Illinois' debt will save
the State an estimated $40 million
ever a 4-year period. The remaining 10
percent interest on the debt will still
place a heavy burden on the State-a
burden which is more than is really
needed to encourage it to fix its unem-
ployment system.
I hope the conference can look at
this point and consider reductions in
the level of interest payments.
However, this $40 million savings
represented by the pending amend-
ment is a first step in the right direc-
tion.
I urge my colleagues to support it.
Mr. DIXON. Mr. President, I wish to
thank my warm friend and distin-
guished senior, colleague for those fine
remarks. I am honored to cosponsor
with him this amendment which is sig-
nificantly important for our State.
Mr. President, I would like to take,
this opportunity to thank the distin-
guished chairman of the Finance Com-
mittee, Boa DoLE, for his attention to
the critical problems of my State of Il-
linois, as well as others, which have in-
curred a substantial debt to the Feder-
al Government for unemployment in-
surance.
As we all know, there are many rea-
sons for these debts, and the solution
to solvency is not a simple one.
I wish to say to my distinguished
friend from Louisiana, who has been
kind enough to listen to my concerns
in regard to this problem in my State
and many similarly situated States,
that through the leadership of our
Governor and the State legislature, in
cooperation with labor and business
leaders, we are working on the final
details of a package of $1.151 billion in
tax increases and $777.3 million in
benefit cuts to shore up this system.
Now, that is a pretty bitter pill to
swallow: It will be introduced as an
amendment to House bill 327, which is
currently before the Illinois State
Labor and Commerce Committee. This
is in addition to $500 million in re-
duced benefits and increased taxes in
1981.
This is a major change, Mr. Presi-
dent. But it is necessary in order to
show the Federal Government that
our State is making a substantial
effort to meet a very substantial prob-
lem. I do not want to leave the impres-
sion that Illinois has been irresponsi-
ble, for we have not. Our tax effort is
well above the national averse-27
percent above and 12th in the Nation
to be exact. But we are also third
among 10 large States in unemploy-
ment, with a 13.5 percent rate in Feb-
ruary. The length and depth of this
recession is something that was never
figured into our unemployment insur-
ance system. It is designed to have
some surplus in good times to carry
States through during the bad. But
the bad times have endured longer
than that system could support.
I believe that any assistance that the
Federal Government can offer to the
31 borrowing States should be, in
effect, a partnership of responsibility.
The States should show a goodfaith
effort at making change in their sys-
tems which will contribute to im-
proved solvency. Unemployment is a
national problem-it is not the sole re-
sponsibility of States and local areas.
Our economic difficulties affect each
State, and have an impact on the
world economy as well. Therefore, it is
right for the Federal Government to
be involved in aiding States to pay
back their debts.
We are not asking for forgiveness of
these debts. We are asking for a rea-
sonable way of allowing us to pay
them, a way which will not jeopardize
the overall recovery effort. If we tax
businesses to the point where they
lock their doors and lay "off more
people, rather than hiring those al-
ready out of work, unemployment will
increase and the overall solvency prob-
lem will be exacerbated. If we cut
benefits to the point where people
cannot meet even their most basic
needs, then the system is no longer
doing what it should.
The amendment proposed by Sena-
tor PExcY and myself,' as well as
others, would improve the package of
assistance being proposed by the Fi-
nance Committee. It would eliminate
the accrual of interest on the interest
payments being deferred under the
plan. This will mean a savings of that
interest on interest of $30 to $40 mil-
lion for Illinois, over the 3 years.
Again, I commend my friend from
Kansas for addressing this critical
problem, and for keeping further op-
tions open to improving this package. I
have never seen Senator DoLE duck an
issue of grave importance that has
been within the purview of his com-
mittee, and some of those issues have
been tough to address.
Mr. President, I also wish to thank
my colleague, my colleague and warm
friend from Louisiana, the ranking
member, RUSSELL LoNG; and my col-
league from Ohio, who has accommo-
dated us.
I earnestly hope that the Members
of this body will support us in this
effort to help those very tragically af-
fected major States of this Union
which have suffered under a terrible
burden of high unemployment for a
great many months.
Mr. HEINZ. Mr. President, I rise in
strong support of the amendment of
the Senator from Illinois, Senator
PEacY. I agree with him in every re-
spect in his excellent analysis of the
situation of States like Illinois, Penn-
sylvania, and others, that are bur-
dened heavily with the costs of this re-
cession, where people have been
forced out of work for longer periods
than we have experienced in our
recent memory.
His amendment will eliminate the
interest on the interest, the com-
pounding. Frankly, in my judgment, it
is a very small step we should take to
improve the Finance Committee pack-
age.
I particularly want to emphasize his
point that it would be extremely help-
ful to States like Pennsylvania, Illi-
nois, and other of the urban, industri-
al States that are having to set their
houses in order, if the interest that is
now 10 percent by statute could be
further reduced.
It is my understanding-and I would
like the attention of the chairman of
the Finance Committee if he would be
so kind to respond to some questions-
that in 1983 there would be a revenue
loss or additional borrowing to the
Federal Government, somewhere in
the neighborhood of between $230 mil-
lion and $320 million. Does the Sena-
tor from Kansas know if that is ap-
proximately correct, depending on the
number of States?
Mr. DOLE. I am advised that is ap-
proximately correct.
Mr. HEINZ. In 1984 there would be
a favorable impact on the Federal
Government in the way of reduced
borrowing of somewhere between $700
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S 3366 CONGRESSIONAL RECORD - SENATE March 18, 1983
I think this step alone-I hope in con- of them that they have been very per- have made rather Draconian changes
ference, we can look at the rate we ac- suasive and forceful in the arguments in their systems. They stand as exam-
tually do charge. Even with adoption that they have made. I am sure the ples to such States as Pennsylvania
of the amendments before us, Illinois people in their States appreciate the and Ohio. There can be some relief
will have $70 million in interest alone efforts which they have made here, on without abandoning the principle of
added to its debt owed the Federal the floor, in their behalf. tightening up the State programs.
Government next year. Compounding Mr. METZENBAUM. Mr. President, That is what we ' tried to do in the Fi-
of this interest would place excessive I think we are going to concur on this nance Committee proposal.
and unnecessary burdens on a State matter. I think there is pretty general I think we should encourage States
already under tremendous strain. agreement that it is a good amend- to continue to make changes as Illinois
Given these factors, I hope we would went. Do I understand the Senator is about to do. I understand that in a
not eliminate compounding for only 2 from Michigan (Mr. LEViN) wishes to few days, based on the agreements
years. be recognized to speak on this matter reached by the political leadership in
Mr. BOREN. Will the Senator yield? on which he is a cosponsor? that State, organized labor, manage-
Mr. PERCY. Yes. The PRESIDING OFFICER. The ment, and others, Illinois may enact
Mr. BOREN. There is not a provi- Senator from Michigan. some real reform.
sion like this in the House bill, is that Mr. LEVIN. Mr. President, let me I assure the Senator from Oklahoma
correct, at thisrtime? just thank my friend from Oklahoma that there is no effort here to abandon
Mr. DIXON. There is not. for his usual reasonable approach on what we believe are some of the most
Mr. BOREN. Therefore, in terms of this. As he knows, we spoke on this in important changes in the UI field in
the proposal we are talking about now, private and after this amendment is many years-the Omnibus Budget
there would be no possibility that the accepted and adopted, I shall be offer- Reconciliation Act of 1981 reforms.
figures would come out of the confer- ing an amendment which does the Mr. President, I have agreed to sup-
ence any less stringent; the least possi- same as the earlier act, avoiding com- port the amendment offered by the
ble stringent standards that would pounding the interest on the tougher Senators from Illinois and the Sena-
come out would be the standards in act, which we adopted a few months tors from Pennsylvania even though it
this amendment, is that correct? ago-just as the Percy-Dixon-Metz- represents a liberalization of the inter-
Mr. PERCY. Yes. I point out, Mr. enbaum-Heinz amendment would est requirements enacted as part of
President, that the compounding avoid compounding it on this act. the Omnibus Budget Reconciliation
figure we are talking about does not I just wanted the Senator to know Act of 1981. The Percy/Dixon/Heinz/
kick in until near the end of 1984. that I shall be offering that. I do Samendment removes the re-
Mr. BOREN. Mr. President, I appre- thank him very much for his position. Specter pecte quirement that interest be charged on
ciate the comments that my colleagues Mr. BOREN. I thank the Senator the interest deferred as a result of the
have made. I did come to the floor be- very much. I do understand his 5-year deferral which is provided
cause. I am concerned. As I say, we amendment is the same. For the rea- under this bill.
have made such progress in the Com- sons already stated, I shall not be doubt that this amend-
think on Finance on this subject, I lodging any objection to that amend- There meat will is no have a fiscal impact. The
think it is something we do not want ment. will forego the
to engage in a massive retreat from. At Mr. DOLE. Mr. President, I also Federal collection of interest Government on will orego deferred the
inter-
the same time, I do not think that we commend the distinguished Senator c sum which will never
should take the position that we are so from Oklahoma because, as he indicat- est The sum which should never
locked into what we have done in the ed, we have made some substantial be recouped. and this this is a
past that we shall not consider the progress in the Finance Committee. cate that However, is it what is my will view happen.
that the big
suffering that is going on in parts of We relied, I say for the record, large- nadditional
the ig
this country right now. ly on the expertise of the Senator borrowing States their pro-
been I know the people in my State have from Oklahoma in this field. We ap- grams taams to solvency. to may y bring need e also
ls pls
been fortunate. We are one of the two preciate his assistance in the commit- vencency. These f States also
the
most fortunate States in this category. tee and his constructive remarks on may payment ne need of additional
large sums before time b interest to
It is also partly because we have had the floor today. Treasury. and
the most massive changes in our un- Let me reassure the Senator from the Federal deral al aThe of S. 1 loan and
pro-
employment compensation laws. That Oklahoma and other Senators, be- interest relief provisions
and time
is part of it, too, at the States level. cause there are some States that are vide incentives State pro-
in have completely rewritten our law not borrowing, we cannot continue for States tee to reform their
n -
in the past decade. taxing nonborrowing States to take grams. tes additional onal trans in those States have economic been cosdi-
We do have a strong feeling that we care of those who are borrowing, even that the those payment of a large interest
are a part of this country and that we though some of the borrowing States
crippling to the
cannot stand by and have others suf- are among the hardest hit-Ohio, Ias- ability
reform effort could be itself.
fering in other parts of the country nois, Pennsylvania, Michigan-by the The Percy amendment, preventing
without its ultimately- reflecting on recession and high unemployment. -
in-
our own people. We do want to be When I met with some of the Gover- the accrual would of result interest a on mddpreferred benefit
helpful to those in other parts of the nors in Chicago earlier this year and terest, the big borrowing States. Interest
country. later here in Washington, the de- for
Mr. President, I shall just say I am mands they made were great. They will still be paid by the States on the
not going to lodge any objection. I wanted interest forgiveness; they original borrowing, however, they will
shall not ask for any rollcall. I shall wanted reduced interest rates; they be relieved of the burden of a con-
not oppose this amendment. I appreci- wanted no compounding on interest- stantly growing interest liability.
ate the sensitivity that my colleagues we have agreed on that-they wanted This is a major amendment provid-
have expressed to the need to keep the forgiveness of old loans, and they ing substantial relief. It represents a
system stringent so that we do not just wanted to apply mandatory payments concession on the part of all taxpayers
open the doors so widely that States to interest-bearing loans before repay- in nonborrowing States-the very
no longer have an incentive to take ing old loans. They had a laundry list point the Senator from Oklahoma
action. I hope that we can hold this at that would not stop. made.
this point now and that we shall not It seems to this Senator we can try I trust, as we have already had some
see further attempts in the future to to accommodate some of their con- indication, that my colleagues repre-
weaken the standard. cerns, because many States are in a senting the borrowing States will rec-
I appreciate the time of my col- real financial bind. However, many ognize this concession and that they
leagues, but I did think it wise that we States, particularly Michigan, Louisi- will make an effort to encourage their
have an airing of this. I can say to all ana, and the District of Columbia, States to accept this relief and go
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S 3368 CONGRESSIONAL RECORD - SENATE March 18, 1983
Kansas and the distinguished Senator necessary to offer some relief to States it faces, however, make its recovery ex-
from Oklahoma for their comments in who have experienced high unemploy- ceedingly difficult. The interest relief
support of these amendments which ment for a long period of time; 29 embodied in the Metzenbaum and
will provide significant relief for States are now borrowing from the Levin amendments will help speed the
States like Pennsylvania, Michigan, Il-
linois, and Ohio.
After listening to the debate on the
subject this afternoon, I should like to
briefly comment that there is more in-
volved in this issue than the reform of
unemployment compensation pro-
grams. The central problem arises be-
cause of the very, very high unemploy-
ment levels in States like Pennsylva-
nia, Ohio, Michigan, and Illinois. That
is the central issue for which we have
not yet found an answer.
Two months ago, when the unem-
ployment rate nationally declined
from 10.8 to 10.4 percent, the unem-
ployment rate of Pennsylvania in-
creased from 12.9 to 13.7 percent. We
truly face a national problem. The un-
employment rate in Pennsylvania
turns significantly on the serious situ-
ation in the American steel industry,
which is compounded by the problem
that the Government has taken inef-
fective stands against dumping by for-
eign importers. The International
Trade Commission shows that subsi-
dies of British steel were in the range
of $250 a ton, but compromises were
worked out on that issue largely in
recognition- of foreign relations be-
tween the United States and Great
Britain and the implications of the
North Atlantic Treaty Organization.
The impact of automobiles turned on
relations between. the United States
and Japan. This is truly a national
problem where some States as a result
of a great many factors have incurred
great disadvantages.
The central factor of this unemploy-
ment compensation problem is the un-
employment rate itself. So that when
the distinguished Senator from
Kansas relates to the comments about
the laundry list that the Governors of
a number of States have presented,
they are talking about some very seri-
ous long-range problems which may
have to be addressed on another day.
I thank my colleagues from States
which have not incurred this kind of
problem for their consideration, and I
think that the step taken on the ab-
sence of interest, on the compounding
pay the unemployment Claims. Over
225,000 Minnesotans are unemployed,
with over 125,000 in actual claim
status. The drain on the financial
system has been enormous.
Minnesota requested $43 million for
the month of March, and due to the
shortfall in the trust fund received
only $18 million. Hopefully we have
resolved this problem by passage of
the supplemental appropriations bill,
but Minnesota will still have ari out-
standing loan of $400 million by the
end of this month.
To put this in perspective-Minneso-
ta's tax collections for the UI program
are projected to be only $200 million
this year.
According to the State's department
of economic security, they are paying
10 percent interest on $208 million
this year, plus paying the three-tenths
of 1 percent penalty from last year.
This penalty adds another $25 million
to the bill.
The amendment now being offered
would partially relieve States like
mine, by eliminating the requirement
that States pay interest on the inter-
est charged them. This will save Min-
nesota several million dollars.
I also am strongly supportive of the
work the Finance Committee has done
to help out the States who are borrow-
ing. Their proposal to allow deferral of
payments to States who have made
honest efforts to resolve their finan-
cial difficulties is a welcome step. I ap-
preciate Senator DoLE's cooperation
and responsiveness on this issue.
I believe that the Finance Commit-
tee's efforts, along with this amend-
ment, will go a long way toward put-
ting State UI programs into the
black.?
Mr. RIEGLE. Mr. President, I rise as
a cosponsor of the amendments of-
fered by my colleagues from Michigan
and Ohio. These amendments consti-
tute modest but important relief for
high-debt States devastated by the re-
cession.
Nowhere have the disastrous effects
trial States.
The Metzenbaum amendment pro-
vides a 9-month grace period for inter-
est payments due on October 1 for
those States whose unadjusted em-
ployment rate for the prior 12 months
equals or exceeds 13.5 percent. This
provision will benefit those States
which continue to suffer exceedingly
high unemployment by granting them
more time to raise additional revenues.
While it does not forgive the interest
payments due, it provides needed
relief for high unemployment and
high debt States such as my own.
The Levin amendment permits a
waiver of all interest assessed on
amounts permitted to be deferred
under the Tax Equity and Fiscal Re-
sponsibility Act of 1982. This provision
simply mirrors the interest waiver
that other States will receive on
amounts they can defer as a result of a
provision in this bill. Estimates indi-
cate that this interest waiver will save
Michigan $11.3 million during 1984-86.
I urge my colleagues to join me in
support for these important amend-
ments.
The PRESIDING OFFICER. Is
there further debate on the amend-
ment of the Senator from Illinois?
Mr. METZENBAUM addressed the
Chair.
The PRESIDING OFFICER. The
Senator from Ohio.
Mr. METZENBAUM. As I originally
indicated, this amendment was a part
of the original amendment. It obvious-
ly has good support on the floor. We
appreciate the consideration given to
it by the Senator from Oklahoma. I
am prepared to accept the amend-
ment.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
The amendment (UP No. 93) was
agreed to.
UP AMENDMENT NO. 94 TO UP AMENDMENT NO.
88 AS MODIFIED
(Purpose: To provide that no interest shall
accrue on any deferred interest.)
Mr. LEVIN addressed the Chair.
The PRESIDING OFFICER. The
Senator from Michigan.
Mr. LEVIN. Mr. President, I send an
amendment to the desk and ask for its
immediate consideration.
The PRESIDING OFFICER. The
amendment will be stated.
Mr. FORD. Parliamentary inquiry,
Mr. President.
The PRESIDING OFFICER. This is
an amendment to the amendment of
factor, and the delay of interest is a of this recession been felt more keenly
significant step forward. However, we than in my State of Michigan. Michi-
cannot lose sight of the underlying gan has sufferd double-digit unem-
problems and the necessity for a na- ployment for 38 consecutive months.
tional approach to this problem which In order to pay unemployment bene-
has resulted in some States being hit fits to its jobless workers, Michigan
harder than others. The problem is -far has incurred a debt to the Federal
beyond the control of those individual Government that exceeds $2.3 billion.
States and to a significant extent is be- Michigan is forced to pay over
cause of national objectives on foreign $216,000 per day in interest charges
policy resulting in national policies alone. Estimates indicate that Michi-
which worked to the disadvantage of a gan will owe almost $275 million in in-
terest charges during 1983-86. Michi-
hi
Mi
gan,
c
few States like Illinois,
the Senator from Ohio.
Ohio, and Pennsylvania. gan is a proud State struggling to re-
Mr. President, I yield the floor. cover from the economic agony that it Mr. METZENBAUM. Correct.
? Mr. BOSCHWITZ. Mr. President, I has suffered. It has enacted major re- The PRESIDING OFFICER. The
rise to express my support for Senator forms in its unemployment insurance amendment will be stated.
PERCY's amendment. I am a cosponsor laws to accelerate the repayment of its The assistant legislative clerk read
of his amendment because I feel it is debt. The staggering interest charges as follows:
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S 3370
CONGRESSIONAL RECORD - SENATE March 18, 198.7
purposes of allowing States to partici- the approximately $8.2 million inter-
pate in the unemployment loan inter- est that is presently required.
est deferral program if a sufficient sol- Kentucky has made the sacrifices re-
l
vency effort is undertaken.
This will enable Kentucky, which on
April 1, 1982, approved tough legisla-
tion saving money in its unemploy-
ment compensation system, to qualify
for the loan deferral provisions in this
bill. Kentucky's April 1982 legislation
retroactively increased employer taxes
as of January 1, 1982, and prospective-
ly reduced benefits as of July 1, 1982.
The result of this legislation, accord-
ing to February figures from the U.S.
Department of Labor, is that Ken-
tucky employers now have the highest
average tax rate in the Nation as a
percent of taxable wages and the fifth
highest average tax rate as a percent
of all wages. -
The provision in the Finance Com-
mittee bill which allows States to
defer interest payments that are due
on October 1, 1983, is designed to
assist States that have made a major
effort to find savings in their unem-
ployment compensation system, but
that because of the continued reces-
sion still must borrow from the Feder-
al Government.
The Senate Finance Committee bill
would allow States to qualify only if
they made changes in their unemploy-
ment compensation system after Octo-
ber 1, 1982. Kentucky made changes in
1982 before the October 1 date. Those
changes were substantial and repre-
sented tremendous sacrifice from both
employers in the State of Kentucky
and unemployment Compensation
beneficiaries. Kentucky has taken re-
sponsible action to strengthen its un-
employment compensation system. It
remains frustrated by continuing high
unemployment that has unexpectedly
forced the State to borrow funds from
the Federal Government. Like other
borrowing States, Kentucky is having
a very difficult time paying the new
interest charges on those borrowed
funds.
Unlike other States, Kentucky has
the unique problem of not gaving
funds to make the full October 1, 1983
interest payment. This situation has
arisen because the Kentucky Legisla-
ture is the only legislature in the
Nation that does not meet in regular
session in 1983 during which funds can
y
quired by this legislation and it is on
fair that Kentucky also be allowed to
participate in the deferral. Beyond
that, however, Kentucky must partici-
pate in the deferral because it does not
have funds to make the October' 1,
1983 payment. I am pleased the distin-
guished chairman and ranking minor-
ity member of the Senate Finance
Committee have agreed to accept this
provision. They agree it is the fair
thing to do and I hope it will give Ken-
tucky, like other States, the chance to
get its unemployment compensation
system in order.
Mr. President, I understand that
this change is acceptable to the major-
ity and minority floor managers of the
bill.
I say to the distinguished Senator
from Kansas that it is my understand-
ing that our amendment to change the
date for acceptable law changes from
October 1, 1982, to March 31, 1982,
will have no impact on the base levels
from which changes in State law will
be measured. As a result, Kentucky
will qualify on the basis of action
taken by our general assembly last
year.
Mr. DOLE. The distinguished Sena-
tor from Kentucky is correct. The bill
provides that the base level is deter-
mined to be the level of benefit out-
lays and revenues which would have
been in effect if the changes in State
law had not taken effect. The Depart-
ment of Labor estimates that Ken-
tucky may be eligible for deferral as a
result of this date change.
Mr. METZENBAUM. Mr. President,
will the Senator yield?
Mr. DOLE. I yield.
Mr. METZENBAUM. I understand
that the changes made last year by
Ohio would be taken into considera-
tion as the result of this amendment.
Mr. DOLE. Yes; they would. Of
course, any changes used in the deter-
mination will have to remain in place
throughout calendar year 1984 to
achieve the deferral for calendar year
1983.
Mr. METZENBAUM. I thank the
Senator from Kansas. '
Mr. DOLE. Mr. President, the Sena-
tor from Kentucky has discussed this
be appropriated to make the October 1 amendment with me and I do support
interest payments. In 1982, when the it. The amendment simply provides for
Kentucky General Assembly was con- a change In the date after which a
sidering making changes in the unem- State must have taken action to in-
ployment system, it was on the basis crease solvency in its State UI pro-
that those savings would be sufficient gram. The committee bill requires that
to avoid the necessity of borrowing State action must have occurred after
from the Federal Government. As a October 1, 1982. The Ford amendment
result, no contingency plans were changes that date to March 31, 1982.
made to set aside funds for possible in- The committee position is that in
terest payments on October 1, 1983. A order to qualify for relief from the in-
contingency fund does not exist to terest and loan provisions enacted in
make loan payments on the October 1, the Omnibus Budget Reconciliation
1983 date, but that fund has only Act of 1981, the State should have en-
enough money to pay the 20 percent acted reforms in response to those pro-
that would be required if Kentucky is visions. Interest became effective on
made eligible for the loan deferral. It borrowing by States after April 1,
does not have enough money to pay 1982.
It does seems clear, therefore, that
the State of Kentucky did pass its leg-
islation in response to the congression-
al action. The Kentucky legislation
retroactively increased taxes on em-
ployers as of January 1, 1982, and de-
creased benefits as of July 1, 1982. As
a result of these changes, Kentucky
has the highest average tax in the
Nation as a percent of taxable wages
and the fifth highest average tax rates
as a percent of all wages.
This is clearly a substantial effort
toward reaching solvency. I support
this minor change.
Mr. FORD. Mr. President, I thank
the distinguished floor manager of the
bill for his support.
I am ready to vote.
The PRESIDING OFFICER. Is
there further debate?
Mr. LONG. Mr. President, I have no
objection to this amendment, and I am
prepared to vote for it.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
The amendment (UP No. 95) was
agreed to.
Mr. FORD. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. HEINZ. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
UP AMENDMENT NO. 96
(Purpose: To adjust the criteria and period
for using the "normalization" procedure.)
Mr. LONG. Mr. President, I send to
the desk a conforming amendment.
The PRESIDING OFFICER. With-
out objection, the amendment of the
Senator from New Jersey will continue
to be set aside.
The amendment of the Senator from
Louisiana will be stated.
The assistant legislative clerk read
as follows:
The Senator from Louisiana (Mr. LONG)
proposes an unprinted amendment num-
bered 96:
On page 100, line 20, strike out "12" and
insert in lieu thereof "20".
On page 103, line 5, strike out "1988" and
insert in lieu thereof "1990".
Mr. LONG. Mr. President, the bill
contains several provisions designed to
assure the fiscal soundness of social se-
curity funds over this decade. The
pending amendment would conform
one of those provisions to the others
by making it available when the assets
of the trust fund are below 20 percent
of the year's benefits, and would have
the effect of carrying out what the
intent of the committee was all the
time.
Mr. DOLE. The Senator is correct.
This is a conforming amendment.
When we passed the Long amend-
ment, we failed to conform that with
another amendment in the bill. I un-
derstand that is essentially what the
Long amendment would do.
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March 18, 1983 CONGRESSIONAL RECORD - SENATE
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment.
The amendment (UP No. 96) was
agreed to.
Mr. LONG. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. DOLE. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
UP ANKNDI[KNT NO. 97
(Purpose: To revise the test for deferral of
interest)
Mr. BYRD. Mr. President, the Com-
mittee on Finance recommends that
States be allowed to defer paying in-
terest on loans from the unemploy-
ment trust fund over a 5-year period
for interest accrued during fiscal years
1983, 1984, and 1985. Eighty percent of
the interest accrued could be deferred,
with one-quarter of the deferred inter-
est payable in each of the four suc-
ceeding years.
In order to qualify, States would
have to meet two standards: They
would be prohibited from taking any
action to reduce tax effort or trust
fund solvency, and they would be re-
quired to increase revenues and de-
crease benefits by certain amounts
after October 1982.
In general, this is a reasonable provi-
sion. However, I- do not believe it is
reasonable to require benefit decreases
or tax increases in a State that has al-
ready taken substantial, responsible
steps to reform its unemployment in-
surance program-which resulted in
placing it among the States with the
highest unemployment insurance tax
rates in the Nation-just because that
action was taken before October 1982.
My State of West Virginia falls into
this category. In April 1981, the legis-
lature enacted and the Governor
signed into law a major reform of the
unemployment. insurance system.
West Virginia now has the third high.
est tax rate relative to total wages in
the State in the Nation.
The amendment that I am going to
offer provides, simply, that if a State
has an average unemployment tax
rate equal to or greater than 2 percent
of the total of the wages covered by
the State unemployment insurance
tax, without a `ceiling on those wages,
it may qualify for the ability to defer
paying interest on loans In the same
manner as States that take action to
reform their programs after October
1982 in accord with the committee's
criteria.
I have discussed this amendment
with the chairman and the ranking
minority member of the.Flnance Com-
mittee, and I hope that they will be
willing to accept the amendment. It is
an amendment pointed toward fair-
ness which I hope everyone in this
Chamber will be able to support.
I urge its adoption. -
I send the amendment to the desk
and ask that it be stated by the clerk.
The PRESIDING OFFICER. With-
out objection, the amendment of the
Senator from New Jersey will continue
to be set aside.
The amendment will be stated.
The legislative clerk read as follows:
The Senator from West Virginia (Mr.
BIRD) proposes an unprinted amendment
numbered 97.
Mr. BYRD. Mr. President, I have al-
ready explained the amendment. I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment Is as follows:
On page 235, line 22, Insert "(I)" after
"(Ii)".
On page 236, line 4, strike out the period
and insert ": or".
On page 236, between lines 4 and 5. Insert
the following:
"(II) have had, for taxable year 1982, an
average unemployment tax rate which was
equal to or greater than 2.0 percent of the
total of the wages (as determined without
any limitation on amount) attributable to
such State subject to contribution under the
State unemployment compensation law
with respect to such taxable year." \ ?
Mr. BYRD. Mr. President, I hope
the distinguished manager will accept
the amendment.
Mr. DOLE. Mr. President, the
amendment offered by the distin-
guished minority leader adds an addi-
tional qualification requirement to the
Finance Committee proposal on inter-
est relief. The requirement would in-
clude a State tax effort currently in
place In about three States.
I have no quarrel with the amend-
ment. It is my hope that the States
which qualify by -reason of the Byrd
amendment will also take steps to
reform their unemployment compen.
sation benefits.
So I am prepared to accept the
amendment.
I understand the distinguished Sena-
tor from Louisiana has no objection to
the amendment.
Mr. LONG. Mr. President, I have no
objection.
The PRESIDING OFFICER. If
there Is no further debate, the ques-
tion is on agreeing to the amendment
of the Senator from West Virginia.
The amendment -(UP No. 97) was
agreed to.
Mr. BYRD. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. DOLE. I move to- lay that
motion on the table.
The motion to lay on the table was
agreed to.
Mr. BYRD. Mr. President, I thank
the distinguished manager of the bill,
Mr. Dorx and the distinguished rank-
ing minority member, Mr- Loxa.
UP Alm1Dl~T NO. 99
(Purpose: To conduct a study with respect
to establishing the Social Security Admin-
istration as an independent agency)
Mr. HEINZ. Mr. President, on behalf
of myself and Senator MOYNniAN I
S 3371
send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. With-
out objection, the amendment of the
Senator from New Jersey (Mr. BRAD-
ram) will continue to be set aside.
The amendment will be stated.
The legislative clerk read as follows:
The Senator from Pennsylvania (Mr.
Hsnrt),.for himself and W. MoYNIBAN. pro-
poses an unprinted amendment numbered
98.
Mr. HEINZ. Mr. President, I ask
unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment Is as follows:
At the end of part D of title I, add the fol-
lowing new section:
SOCIAL BRCQAITY Al AN nIDIPINDZNT AGINCY
Sac. 153. In keeping with the recommen-
dations of the National Commission on
Social Security Reform, ' a study shall be
conducted with respect to the establishment
of the Social Security Administration as an
Independent agency under a bipartisan
board appointed by the President., by and
with the advice and consent of the Senate.
The study shall be conducted by a Presiden-
tial Commission consisting of experts widely
recognised In the fields of government ad-
ministration. social insurance, and labor re-
lations. The study shall address, analyse,
and report to the Congress on: the
program(s) which should be Included within
the jurisdiction of the um agency. the legal
and other relationships of the Social Secu-
rity Administration with other organiza-
tions which would be required as a result of
establishing the Social Security Administra-
tion as an independent agency. and any
other details which may be necessary for
the development of appropriate legislation
to establish the Social Security Administra-
tion as an independent agency. The Com-
mission shall report the legislative details to
the Committee on Ways and Means of the
House of Representatives and the Commit-
tee on Finance of the Senate. not later than
April 1. 1984.
Mr. HEINZ. Mr. President, the
amendment I am offering for myself
and the distinguished Senator from
New York (Mr. Morxncar) would es-
tablish a special study to develop the
legislative details necessary to estab-
lish the Social Security Administra-
tion as an independent agency under a
bipartisan board. The study would be
conducted by a special Presidential
commission and would be completed
by April 1. 1984.
This amendment would take the
first step toward restoring the Social
Security Administration to the status
it enjoyed in the early days of the pro-
gram. It would implement a recom-
mendation of the first National Com-
mission on Social Security which re-
ported to Congress In 1981, and it
would follow up on a recommendation
of the recent National Commission on
Social Security Reform, on which both
Senator MOYNgmAN and, I serve, which
supported separate agency status In
principle and recommended a study.
Mr. President, establishing the
Social Security Administration as an
independent agency under a bipartisan
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So at this point I am only urging my
colleagues to join me in setting in':
motion the process of restoring as it
once was the Social Security Adminis-
tration to independent status.
Mr. DOLE. Mr. President, this
amendment by the distinguished Sena-
tor from Pennsylvania and the Sena-
tor from New York (Mr. MoYNnuN),
has been discussed and also has been
modified so that it now is a study.
I think the idea has a great deal of
merit.
The one concern we had with the
original amendment was that it
became self-executing if nothing were
done by a certain date. It now satisfies
the chairman and others that it is a
good amendment and we hope that it
might be accepted.
The PRESIDING OFFICER. Is
there further debate? If not, the ques-
tion is on agreeing to the amendment
of the Senator from Pennsylvania.
The amendment (UP No. 98) was
agreed to.
Mr. HEINZ. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.'
Mr. DOLE. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
UP AMENDMENT NO. 99
Mr. DOLE. Mr. President, I send an
unprinted amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. With-
out objection,, the amendment of the
Senator from New Jersey (Mr. BRAD-
LEY) will continue to be set aside.
The clerk will report the amendment
of the Senator from Kansas.
The legislative clerk read as follows:
The Senator from Kansas (Mr. Dots) pro-
poses an unprinted amendment numbered
99.
Mr. DOLE. Mr. President, I ask
unanimous consent that further read-
ing of the amendment be dispensed
with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The amendment is as follows:
Beginning on page 239, line 16, strike out
through page 240, line 11, and insert the fol-
lowing: -
PENALTY FOR FAILURE TO PAY INTEREST
Sac. 414. (a) Section 303(c) of the Social
Security Act is amended by. striking out "or"
at the end of paragraph (1). striking out the
period at the end of paragraph (2) and in-
serting 11; or", and adding at the end thereof
the following new paragraph:
"(3) that any interest required to be paid
on advances under title XII of this Act has
not been paid by the date on which such In-
terest is required to be paid or has been paid
directly or indirectly (by an equivalent re-
duction in State unemployment taxes or
otherwise) by such State from amounts In
such State's unemployment fund, until such
Interest Is properly paid.".
(b) Section 8304(a) of the Internal Reve-
nue Code of 1954 (relating to certification of
State unemployment compensation laws) Is
amended by redesignating paragraph (17) as
paragraph (18) and by inserting after para-
graph (16) the following new paragraph:
"(17) any interest required to be paid on
advances under title XII of the Social Secu-
rity Act shall be paid in a timely manner
and shall not be paid, directly or indirectly
(by an equivalent, reduction in State unem-
ployment taxes or otherwise) by such State
from amounts in such State's unemploy-
ment fund; and".
Mr. DOLE. Mr. President, this
amendment should have followed the
other amendments relating to unem-
ployment insurance. But the Senator
from Pennsylvania wanted to offer his
amendment, and the Senator from
Kansas deferred.
What my amendment does is to
strengthen the collection authority of
the Federal Government in regard to
overdue interest on unemployment
compensation loans.
First, the amendment spells out the
implicit fact that a State's failure to
pay its interest liabilities could result
in the loss of State certification.
This would mean that State employ-
ers would no longer be eligible for full
credit against the Federal unemploy-
ment tax. Such a proceeding has been
carried out fully only once. However,
it does provide an effective tool for en-
forcement and compliance, Questions
with the States.
Second, the amendment would with-
hold administrative funds from a
State which fails to meet the payment
schedule of its Interest liabilities. The
funding, which is all Federal, would be
withheld until the required payment is
made. -
The amendment provides for the
late payments which qualify under the
Metzenbaum amendment, but the pro-
vision I am proposing would become
effective for late. interest payments
beyond the grace period.
I urge my colleagues to approve this
amendment as it is simply good busi-
ness policy to require payments In a
timely fashion of debts. The Federal
Government hopefully will never have
to utilize this provision, but it should
be available if necessary.
I think this amendment has been
discussed with the minority manager
of the bill. It is a strengthening
amendment, and I hope there is no ob-
jection to it.
The PRESIDING OFFICER. Is
there objection to the amendment?
Mr. LONG. I do not object. It accom-
plishes the purpose it has in mind,
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Kansas.
The amendment (UP No. 99) was
agreed to.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. LONG. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
Mr. DOLE. Mr. President, I under-
stand the Senator from Kentucky (Mr.
HUDDLESTON) has an amendment
which we are in the process of review-
ing, and perhaps while he Is discussing
it we can take a look at it.
S 3373
UP AMENDMENT NO. 100
Mr. HUDDLESTON. Mr. President,
I thank the floor manager of the bill. I
send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. With-
out objection, the amendment of the
Senator from New Jersey will continue
to be set aside. The clerk will report
the amendment.
The legislative clerk read as follows:
The Senator from Kentucky (Mr. Hun-
DLSSToN), for himself and Senators DAN-
FORTH, RANDOLPH, FORD, and FELL, proposes
an unprinted amendment numbered 100.
Mr. HUDDLESTON. Mr. President,
I ask unanimous consent that further
reading of the amendment be dis-
pensed with.
The PRESIDING OFFICER. With-
out objection,, It is so ordered.
The amendment is as follows:
At the end of title I add the following new
section:
Sac. (aXi) Section 210 of the Social Se-
curity Act is amended by adding at the end
thereof the following new subsection:
'?EtsCrIVS CovenAOs FOR MmxSTERS AS
EMPLOYSRs
"(r) Services performed in the exercise of
his ministry by a duly ordained, commis-
sioned, or licensed minister of a church who
has made an election under section
812(vX1XA) of the Internal Revenue Code
of 1954 with respect to such service shall
constitute employment under this section
beginning with the first day of the calendar
quarter in which coverage becomes effective
with respect to such service under section
312(vX3) of such Code."
(2) Section 210(aXBXA) of such Act is
amended by striking out "except that" and
inserting In lieu thereof the following:
"except as provided in subsection (r), and
except that."
(3) The last sentence of section 211(c) of
such Act is amended by inserting "(I)" after
"unless", and by inserting before the period
at the end of the sentence the following "or
(ii) In the case of service performed by a
duly ordained, commissioned, or licensed
minister of, & church in the exercise of his
ministry as described in paragraph (4), the
service constitutes employment under sec-
tion 210(r)."
(bXl) Section 3121 of the Internal Reve-
nue Code of 1954 (definitions under Federal
Insurance Contributions Act) is amended by
adding at the end thereof the following new
subsection:
"(v) MINISTER.-
"(1) TREATMENT or SERVICE As EMPLOY-
MENT.-Service performed by a duly or-
dained, commissioned, or licensed minister
of a church in the exercise of his ministry,
shall constitute employment under this sec-
tion if-
"(A) he has elected to have such service
covered as employment under this section;
and
"(B) the church has elected to have such
service covered as employment under this
section.
"(2) ELECTION BY MINISTER AND CHURCH.-
"(A) Any minister who makes an election
under paragraph (1XA) shall file a certifi-
cate of such election in such forip and
manner, and with such official, as the Secre-
tary shall by regulations prescribe. Such
certificate shall specify the date on which
the minister wishes such election to become
effective for him, but in no case shall such
election become effective (1) prior to the
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March 18, 1983 CONGRESSIONAL RECORD - SENATE
tax in order to reduce their ministers'
social security tax burden.
More Is at stake in this question
than, mere dollars and cents. The root
question is more than a financial one.
Some ministers could never consider
themselves the "employees" of a
church. Likewise, some churches could
never agree that they are in an em-
ployer-employee relationship with
their ministers or priests.
It is for this reason, as I understand
it, that an employer-employee rela-
tionship has been avoided for purposes
of social security.
The beauty of this amendment is
that a clergyman or clergywoman and
his or her church, by a voluntary and
mutual agreement, could consider
themselves in that relationship of em-
ployer and employee. Under such an
agreement, the clergyman would pay
the employee share of the social secu-
rity tax, and the church the employer
share. Again, the amendment man-
dates no such change-it merely allows
such a change If both parties agree.
Happily, the amendment is revenue
neutral. It will not affect the social se-
curity trust funds.
I urge the adoption of the amend-
ment.
Mr. DOLE. Mr. President, the Hud-
dleston-Danforth amendment would
allow ministers to be treated as em-
ployees for FICA tax purposes if both
the minister and his church elected
such treatment.
There would be no adverse impact
on the trust funds and no adverse
impact on general revenues by the
adoption of this amendment since our
bill equalizes the SECA rate and the
combined employer-employee social
security tax rate.
My only concern would be whether
the affected ministers and churches
would agree that this is an appropriate
amendment. It is my understanding
that there is no problem so .long as the
provision is elective-which it is-and
that, in appropriate circumstances, a
national, -regional, or other governing
body has the. authority to make the
election on behalf of the local church.
These concerns have been addressed
by the amendment in a fair and equi-
table manner.
Therefore, the Senator from Kansas
believes the amendment should be so-
cepted, and I have no objection to the
amendment.
Mr. LONG. I have no objection.
Mr. HUDDLESTON. I move the
adoption of the amendment.
The PRESIDING OFFICER (Mr.
Txxazs). Is there further debate? If
not, the question is on agreeing to the
amendment of the Senator from Ken-
tucky.
The amendment (UP No. 100) was
agreed to.
Mr. DOLE. Mr. President, I move to
reconsider the vote by which the
amendment was agreed to.
Mr. LONG. I move to lay that
motion on the table.
The motion to lay on the table was
agreed to.
Mr. DOLE. Mr. President, as I un-
derstand it, we are waiting for the ar-
rival of the Senator from New Mexico
(Mr. Doisaxlcl).
We have disposed of 10 or 15 amend-
ments since noon, so we have made
good progress.
I do not believe there are that many
amendments left. We have an amend-
ment by the distinguished Senator
from New Jersey (Mr. BaAmtiy), the
Senator from Louisiana, and other
amendments relating to that one
topic. If there are other amendments.
I would say to Members who may be in
their offices that we would like to con-
tinue to dispose of amendments this
afternoon. I think that is the hope of
the majority leader, is that correct?
Mr. BAKER. That is correct.
Mr. President, will the Senator yield
to me?
Mr. DOLE. Yes.
Mr. BAKER. Mr. President, we
really need to do as much as we can
this afternoon. I congratulate the Sen-
ator from-Kansas, the chairman of the
committee, and others for moving
along as expeditiously as they have
been doing.
May I ask the manager of the bill
whether or not he thinks that we can
be usefully employed this afternoon
for another hour or so, so that Sena-
tors can be on notice?
Mr. DOLE. I would say probably an-
other hour, maybe an hour and a half.
Mr. BARER. I would like to get to
third reading if we can, and, if we
cannot, to do as much as is possible to
do in any event so'that we can finish
this bill on Monday.
Mr. DOLE. There may be one addi-
tional roileall vote today.
Mr. BAKER. I thank the chairman.
Mr. DOLE. Mr. President, I suggest
the absence of a quorum while we
await the arrival of the distinguished
chairman of the Budget Committee.
The PRESIDING OFFICER. The
clerk will call the roll.
The bill clerk proceeded to call the
roll.
Mr. DOLE. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, It is so ordered.
Mr. DOLE. Mr. President, the Sena-
tor from Kansas is advised that the
amendment we had hoped to take up
now probably cannot be disposed of or
even considered until sometime on
Monday. It concerns whether. or not
social security should be within the
budget process. That may take, I
would assume, at least an hour or an
hour and a half of debate. Hopefully it
would not take longer than that
amount of time.
Because of a conflict between four
or five principal players we cannot act
on that amendment this afternoon. I
hope that other Members in their of-
fices who may have amendments could
offer them. I know the distinguished
83375
Senator from Florida. Senator HAw-
xn s, has an amendment, as does the
Senator from New Jersey, Senator
Barwrsn. Both will require rollcall
votes.
If there are Senators who believe
they have noncontroversial amend-
ments, this would be a good time to
discuss them and determine if they are
noncontroversial. We would like to dis-
pose of additional amendments this
afternoon. It is our purpose to com-
plete action on this bill on Monday.
I suggest the absence of a quorum
while, hopefully. Members start
coming this way.
The PRESIDING OFFICER. The
clerk will call the roll.
The bill clerk proceeded to call the
roll.
Mr. HEINZ. Mr. President, I ask
unanimous consent that the order for
the quorum call IZe rescinded.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Rarovnro SOCIAL anus TY mom rss UEnFIED
EuDOer
Mr. HEINZ. Mr. President, it had
been my intention to offer my amend-
ment to remove social security from
the unified Federal budget this ? after-
noon, but Senator CmLRS, the ranking
member of the Budget Committee,
and Senator Doaiakxcx have travel ar-
rangements that, were I to offer the
amendment at this time, would pre-
vent them from fully engaging in
debate. What I shall do Instead is dis-
cuss the amendment this afternoon. I
shall send the amendment to the desk
not to be taken up and to be consid-
ered, but I shall simply have the
amendment printed and printed in the
Rsoosa at this point but not as if for
consideration.
The amendment is as follows:
At the end of title I, insert the following:
REMOVAL OF SOCIAL s ITT TRUST FUNDS
P R O M Tffi V SUDO3r
Sac. Part A of title BI of the Social Se-
curity Act is amended by adding at the end
thereof the following new section:
"REMOVAL OF SOCIAL SECURITY TRUST FUNDS
FROM TUR UNIFESD SUDOIT
"Sac. 1138. (aXl) For the fiscal years be-
ginning after September 30, 1984, and
ending before October 1. 1988, the President
shall, in accordance with the second sen-
tence of section 1104(c) of title 31, United
States Code, establish a separate functional
category for requests for new budget au-
thority and estimates of outlays for the
Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insur-
ance Trust Fund, the Federal Hospital In-
surance Trust Fund, and the Federal Sup-
plementary Medical Insurance Trust Fund,
and a separate category for estimates of rev-
enues for such Trust Funds and estimates of
revenues from taxes imposed under sections
1401, 3101, and 3111 of the Internal Reve-
nue Code of 1954. The categories estab-
lished by the President pursuant to the pre-.
ceding sentence shall be used in the prepa-
ration and submission of the budget under.
section 1105(a) of title 31, United States
Code, for each such fiscal Sear. The budget
submitted under such section for each such
fiscal year shall not classify requests for
new budget authority and estimates of out-
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March 18, 1983 CONGRESSIONAL RECORD - SENATE
the submission of the first unified
budget, there were two separate Fed-
eral budgets: a trust fund budget and
an administrative budget. Though
these budgets were presented sepa-
rately, they were combined in a single
table for use in assessing the overall
impact of all Federal spending pro-
grams on the economy. The amend-
ment I will offer on Monday would not
hinder in any way the ability of the
Congress to evaluate the economic ef-
fects of social security spending. What
it would do is separate the issue of
social security solvency from other
budget issues which are substantively
unrelated.
Mr. President, the time has come to
clarify for the American public that
social security is an independent and
separate program which must survive
on its own basis and not be continually
adjusted to respond to budget pres-
sures. I ask my colleagues to support
this method of dealing responsibly
with the issue when we address it on
Monday.
Mr.-President, I suggest the absence
of a quorum.
The PRESIDING OFFICER (Mr.
Anna=s). The clerk will call the roll.
The assistant legislative clerk pro-
ceeded to call the roll.
Mr. BAKER. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. ? BAKER. Mr. President, I have
just conferred with the distinguished
chairman of the Finance Committee,
Senator Doze, who is on the floor. He
indicates to me that there are one or
two, maybe three, other amendments
that can be disposed of this afternoon.
I hope so, because we need to do as
much as we can. It does not appear
that those amendments will require
rollcall votes.
In view of that, and in view of the
number of absentees on both sides of
the aisle which have developed by this
hour, I wish to announce that there
will be no more rollcall votes today.
We will continue on this bill, however,
and do as much of it as we can without
further record votes today.
I urge Senators who have amend-
ments and are willing to take them up
today to come to the floor and make
that known to the two managers.
Mr. President, so much has been
done today that I feel we all should
offer congratulations to the chairman
of the committee and the ranking mi-
nority member, who have done their
usual excellent job of moving this bill
along. I believe that we are now in
striking distance of finishing on
Monday.
I announce, Mr. President, that Sen-
ators should be prepared to stay late
on Monday and finish this bill, be-
cause it is essential, in my view, that
we get this bill to conference as soon
as possible.
The adjournment resolution that
will come to us from the House of
Representatives will provide for the
adjournment of the Senate over for
the Easter recess on Wednesday,
Thursday, or Friday.
I nged not belabor that point, except
to say that the sooner we get the
social security bill out of the way and
get to conference and get the jobs bill
out of the way, the sooner we will be
able to adjourn and perhaps improve
the schedule for the Easter recess by a
day or so.
UNANIMOUS-CONSENT AGREE-
MENT-ORDER FOR ADJOURN-
MENT UNTIL MONDAY
Mr. BAKER. Mr. President, I should
like to put a unanimous-consent re-
quest now, which I have submitted for
the consideration of the minority
leader, who is in the Chamber.
I ask unanimous consent that when
the Senate completes its business
today, it stand in adjournment until 12
noon on Monday next, March 21, pro-
vided that when the Senate convenes
at that time, the reading of the Jour-
nal be dispensed with; that no resolu-
tion or motion come over under the
rule; that no call of the calendar
occur; that the morning hour be
deemed to have expired; but provided
that there be a period for the transac-
tion of, routine morning business of
not to exceed 30 minutes, in which
Senators may speak for not more than
5 minutes each-again, after the expi-
ration of the time allocated to the two
leaders under the standing order.
Mr. BYRD. Mr. President, reserving
the right to object-and I will not
object-the majority leader has elimi-
nated the morning hour. As he well
understands, that eliminates the possi-
bility of making a nondebatable
motion that might otherwise be made,
and he put that in as an understand-
ing between the two of us.
Mr. LONG. Mr. PrZsident, reserving
the right to object, may I understand
what the distinguished leader plans?
It is his intention that the social secu-
rity bill will continue to be the pend-
ing business?
Mr. BAKER. It will. When we go out
today, it will be the pending business;
and when we return, after the time for
the transaction of routine morning
business, it will recur.
Mr. LONG. Can the Senator say how
long he thinks morning business will
take?
Mr. BAKER. Mr. President, I think
we will be on this bill again before 1
p.m.
The PRESIDING OFFICER. With-
out objection, the unanimous-consent
request of the majority leader is
agreed to.
Mr. BYRD. Mr. President, could the
majority leader indicate-maybe he is
not in a position to do so-that there
will be no votes before 2 p.m. on
Monday?
Mr. BAKER. Yes. Mr. President,
rather than request an order to that
effect, let me simply assure the minor-
S 3379
ity leader that I do not expect or an-
ticipate record votes except perhaps
procedural votes to instruct the Ser-
geant at Arms, and the like, prior to 2
p.m. on Monday.
Mr. President, I have just been
handed a note that there are two re-
quests for special orders on Monday
that I shall request shortly.
I will say to the distinguished Sena-
tor from Louisiana that will advance
the time perhaps when this bill will be
up on Monday by 30 minutes, so it
may be a little after 1 p.m. If this re-
quest is granted.
ORDER FOR THE RECOGNITION
OF SENATORS WARNER AND
THURMOND ON MONDAY
Mr. BAKER. Mr. President, I ask
unanimous consent that on Monday
next, after the recognition of the two
leaders under the standing order, Sen-
ators WAnxsa and Tsvas[oim be recog-
nized in that order for not more than
15 minutes each.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. BAKER. I yield.
ORDER OF PROCEDURE ON
MONDAY
Mr. BYRD. Mr. President, if I may
ask the majority leader a difficult
question and one which I doubt he
would wish to give me assurances on,
but would it be possible to get an un-
derstanding that there will be no votes
before 2:30 p.m. and none after 6 p.m.
on Monday.
Mr. BAKER. Mr. President, I really
cannot do that after 6 p.m. part be-
cause, I indicated earlier, and I .believe
the chairman of the committee and
the ranking 'minority member both
have expressed an enthusiasm for fin-
ishing this bill on Monday. It may be
after 6 p.m. before we do so. So I am
confident there will be no votes before
2:30 p.m., but I feel fairly certain there
will be votes after 6 p.m.
Mr. BYRD. Mr. President, I felt the
majority leader would, of necessity,
have to respond in that way.
I think that his indication that there
will be no votes before 2:30 p.m. is cer
tainly something that should be bene-
ficial to some of the Senators who in-
quired of me about that possibility.
I thank the Senator.
Mr. BYRD. I thank the Senator.
rSOCIAL SECURITY ACT
AMENDMENTS OF11983
The Senate resumed consideration
H.R. 1900.
Mr. SARBANES. Mr. President, will
the majority leader yield?
Mr. BAKER. I yield.
Mr. SARBANES. Is it the majority
leader's intention to try to finish the
bill on Monday?
Mr. BAKER. Yes, it is.
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March 18, 1989 CONGRESSIONAL RECORD - SENATE
the RaooRD, with the distinguished pensation under the social security
Senator from South Carolina, Senator "earnings test."
TnumoND, on this same subject. I have been advised that, as reported
This amendment is further clarifies- from the Finance Committee, the
tion, and, as the Senator from Texas social ? security bill apparently would
indicates, it is a conforming amend- have had the unintentional effect of
ment in many respects. causing thousands of retired recipients
amendment will conform, as closely as
possible, nonqualified deferred com-
pensation arrangement to the FICA
tax treatment, section 401(k) Plans as
agreed to by 'the Finance Committee.
It is fair to treat all deferred compere-
Sation equally for PICA purposes.
There may. be additional areas such
as ad hoc cost-of-living adjustments
which may have to be worked out in
conference, but this amendment goes
a long way toward equalizing the
FICA tax treatment of qualified and
nonqualified deferred compensation
arrangements and should be adopted.
I am willing to accept the amend-
ment as I understand the distin-
guished Senator from Louisiana is
willing to accept the amendment.
I am happy to yield to the Senator
from South Carolina.
Mr. THURMOND. Mr. President, I
wish to thank the able manager of the
bill.
We feel this is a sound amendment,
and I hope the Senate will accept it.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Texas.
The amendment (UP No. 101) was
agreed to.
Mr. BENTSEN. Mr. President, I
move to reconsider the vote by which
the amendment was agreed to.
Mr. DOLE. Mr. President, I move to
lay that motion on the table.
The motion to lay on the table was
agreed to.
Mr. DOLE. Mr. President, are there
other amendments that might be dis-
posed of without record votes?
Mr. BAKER. Mr. President, may I
inquire of the distinguished chairman
of the committee if there are other
amendments that appear available, to
us? If not, I intend to ask the Senate
to have a period for the transaction of
routine morning business.
Mr. DOLE. Mr. President, I know of
no other noncontroversial amend.
ments. There are some that may
become 'noncontroversial, but at this
point we are still in the negotiation
and discussion stage.
So I think that Is about all we can do
today.
Mr. BAKER. I thank the Senator.
Mr. President, it has been a good
day, and the chairman of the commit-
tee and the ranking minority member
should be commended for their good
work this day.
part of their social security benefits.
This would occur as a result of the
interaction between the revised defini-
tion of "wages"-which would include
certain types of deferred compensa-
tion-and the "earnings test", which
causes social security benefits to be re-
duced if - the retiree has earnings in
excess of the allowed amount. Since
another provision of the bill complete-
ly eliminates the retirement earnings
test by 1994, an objective which I
strongly support, I am sure that it is
not the intent of the committee to
bring under the earnings limitation a
large group of individuals-retired re-
cipients of deferred compensation-
who heretofore have not been subject
to it in respect to that deferred com-
pensation.
Mr. DOLE. The Senator's observa-
tions are well founded. This was
simply a drafting error which we will.
take care of -through a committee
technical amendment. The amend-
ment reflects the intent of the com-
mittee that the receipt of income by a
retired employee under a deferred
compensation plan will not be counted
as earned income for the purpose of
the earnings test.
Mr. THURMOND. I thank the dis-
tinguished chairman of the Finance
Committee for recognizing and taking
care of this problem.
? Mr. BURDICK. I say to-Abe chair-
man, I hope we can clarify a4oncern I
have about the diagnosis-related
groups, or DRO's. I am concerned that
the proposed system will not take into
consideration the costs at those insti-
tutions which have research costs as-
sociated with the care of their pa-
tients.
As you may know, the Senate Appro-
priations Committee, on which I serve,
has a long history of supporting com-
munity-based cancer- centers. In fact,
the Labor-HHS Appropriations Sub-
committee has included report lan-
guage in 2 of the last 3 years directing
the National Cancer Institute to con-
tinue this effort. In part because of
this interest, the Institute is establish-
ing closer links between local commu-
nity physicians and hospitals and the
larger cancer centers. Two examples of
this outreach are the regional cancer
research groups and the community
clinical oncology program. These kinds
of programs are allowing patients at
TRZATMZNT or Daum IMPLOYSE coxpmss- the local level to participate in and
TIOI u ssa T!S soc~-L sacvarry EAaxnfoa benefit from NCI research. In the
TasT upper midwest, we have a fine pro-
Mr. THURMOND. Mr. President, I gram developing in which community.
wish to have a brief _colloquy with the based physicians and hospitals are in-
distinguished floor manager of the volving their patients in cooperative
social security bill concerning the bill's research programs which benefit hot
treatment of deferred employee com- only the patients, but the larger body
S 3381
of medical knowledge. This research
does not involve excessive additional
costa, but it sometimes requires a
greater intensity of care, more careful
monitoring, additional testing or
slightly longer hospital stays.
I feel strongly that this kind of coop-
erative, community-based research
should continue so that citizens from
all parts of the country can share the
benefits of NCI research. I would hate
to see the prospective reimbursement
system limit this or reduce the oppor-
tunity for participation for medicare
patients. I would hope that the Secre-
tary will have the flexibility to recog-
nize the additional research-related
costa that may be involved in these
cases, and that she or he will have the
authority to make appropriate adjust-
ments for them.
Mr. DOLE. I fully understand your
concerns about' this and share your
belief in the Importance of communi-
ty-based research. We have no inten-
tion of discouraging, legitimate re-
search from taking place. Under the
terms of our bill, the Secretary will
have the authority to take the intensi-
ty of these cases into consideration in
making adjustments to the standard
DRG's.
Mr. BURDICK. I thank the Senator
for clarifying this matter..
? Mr. DsCONCINI. Mr. President, I
aft that judicial and administrative
review are not available for the initial
rates for each diagnosis'related group
(DRG) and the DRO classification
system itself.
I wish to clarify that, subject to the
present jurisdictional requirements for
review by the Provider Reimburse-
ment Review Board (PRRB), judicial
and administrative review are availa-
ble for matters relating to updating
the rates, including the composition of
the market basket, and the Secretary's
decisions on the advisory panel's rec-
ommendations.
Mr. DURENBEROER. That is cor-
rect. The exclusions from judicial and
administrative review are those items
necessary to maintain budget neutral-
ity during fiscal ye;-r 1984 and fiscal
year 1985. In addition, the establish-
ment of specific DRO's and their rela-
tive weights are not reviewable. Mat-
ters affecting aggregate expenditures
and the DRO rates in subsequent
years are reviewable.
Mr. DaCONCINI. Are subsequent
additions to or subtractions from the
initial list of DRG's reviewable?
Mr. DURENBERGER. I do not be-
lieve so.
Mr. DaCONCINI. Then the Secre-
tary could cut the number of DRO's in
half, or double the number, or do any-
thing else he wanted at his total dis-
cretion. He could also refuse to change
the relative weights of ' the DRO's,
even though it was absolutely proven
that a given DRO was under or over
weighted. This -is particularly signifi-
cant because, as I understand it, a rel-
atively small number of DRO's ac-
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