Military Death Gratuity Improvement Act of 2003

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1307) to amend the Internal Revenue Code of 1986 to provide a special rule for members of the uniformed services in determining the exclusion of gain from the sale of a principal residence and to restore the tax exempt status of death gratuity payments to members of the uniformed services, and for other purposes.

Mr. Speaker, I yield myself such time as I may consume.

This particular provision is called the Armed Forces Tax Fairness Act of 2003, and a couple of examples, I think, will make it quite obvious as to why it is the tax fairness part of the title that we should focus on. As we now know for some years now, you have been able to exclude the capital gain on a home if you lived in that home as your principal residence for 24 months out of a 5-year period. Of course, we all know that the military as to where they live is subject to the exigencies of the world and the need for military personnel to be dispersed sometimes literally around the world. I think it is entirely appropriate to examine this kind of a piece of legislation in the context of where we are vis-a-vis the President's decision to perhaps move militarily against Iraq.

So what this says is that if, in fact, you are not able to meet that 24-months-out-of-5-year period for exclusion from the capital gains, and the reason you are not able to is because you have been transferred away from home on official extended duty during that 5-year period, you would be exempt from that regulation.

There follow a series of other changes in the Tax Code that very much are representative of that kind of approach in treating the military differently because the military does not have the ability at times, the individuals in the military, to control decisions that affect them directly.

That is the purpose of the bill. It is as it was originally introduced. For purposes of determining the above-the-line deduction for overnight travel expenses for military reservists, this bill, as some people know, passed the House twice in the last Congress, and in negotiating with the Senate, the agreement at that time was that the exemption should be up to $1,500 for reservists who serve more than 100 miles away from home. That was an agreement that had been negotiated between the House and the Senate, and this particular bill includes that agreement so that we could reach quick settlement in a conference between the House and the Senate.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, it is my pleasure to yield such time as he may consume to the gentleman from North Carolina (Mr. Jones), who has a measure included in this bill, which was a separate bill, which is a significant piece of legislation.

Mr. Speaker, I yield as much time as he may consume to the gentleman from New York (Mr. Houghton), a member of the Committee on Ways and Means.

Mr. Speaker, I yield myself such time as I may consume.

I agree with the gentleman from Missouri that the House and the Senate have indeed acted, but not in concert and let the Record note that the House acted in July and again in October. That perhaps was not enough lead time for the Senate; so we are moving in March, and we believe that may be sufficient lead time for the Senate to be able to act.

Mr. Speaker, I yield such time as he may consume to the gentleman from Florida (Mr. Foley), a member of the Committee on Ways and Means.

Mr. Speaker, I came to the floor today because let me first explain the posters on my left and right are the faces of young men and women who have died fighting for freedom in Iraq and Afghanistan, and also, Mr. Speaker, I hold up a photograph of a young man from Connecticut whose name is Tyler Jordan, 6 years old. He has the American flag folded under his arm, and he is looking at the casket of his father who died for freedom. Gunny Sergeant Phillip Jordan from Connecticut died for freedom.

Mr. Speaker, the reason I am on the floor today is that last year I introduced a bill that would repeal the tax on the death gratuity. The American military family receives when a loved one dies a small amount of money. It is $6,000, and there is a tax on $3,000 of the $6,000. And last year we passed in a larger bill a repeal, and it was sent to the other body and they did nothing with it. This year again the House has passed the same language which was in H.R. 693, the Military Death Gratuity Tax Repeal, the bill I put in. It was put into a larger bill that went to the Senate, and they still have taken no action. Let me tell the Members what that means.

From September 11, 2001, to December 31, 2001, over 292 military were killed and their families paid a tax on the gift of their son or loved one fighting for freedom. That is absolutely horrible in my opinion, Mr. Speaker. And in the year 2002, 1,007 families had to pay a tax on the death of a loved one. Again, Mr. Speaker, I want to say that we, the House, have done our part and we have sent to the other body legislation to repeal this tax. It is unacceptable that any family in this country who has a loved one who has died for freedom would get a bill tax due from Uncle Sam. And, Mr. Speaker, I am calling on the House leadership to bring up H.R. 693, bring it to the floor as a stand-alone bill, let us pass it and send it over to the other body, because if we will do that, Mr. Speaker, I will go on every radio show I can get on, every TV show I can get on, and ask that we not leave this October/November without passing this bill to eliminate the tax on the death gratuity. $6,000 is not enough. We need to raise that, but there is one thing we can do, take off the tax.

Again I hold up the photograph of this young man, Tyler Jordan, who gave his father to this country, and why in the world should his family, in the year 2004, get a tax due bill from Uncle Sam? Is not giving the life of a loved one fighting for freedom enough?

So, again, Mr. Speaker, I ask the House leadership, both Republican and Democrat, to join me and bring to the floor H.R. 693. Let us repeal this death tax and send it over to the other body, and let us put pressure on them to get it to the President so that the other Phillip Jordans throughout this country will not have a mother or father saying I owe Uncle Sam tax on the gift of my loved one.

Mr. Speaker, with that, I want to close by asking God to please bless our men and women in uniform. I ask God to please bless the families of our men and women in uniform, and I ask God in His loving way to hold in his arms those who have lost ones fighting for freedom, and I ask God to bless the American people, the House and Senate that we will do what is right. I ask God to give strength and wisdom to the President of the United States. And I ask God three times, please, God; please, God; please, God, continue to bless America.

Mr. Speaker, this is a very important issue that I bring to the floor. As you can see behind me, these are the faces of just a few of the men and women who have died for this country, both in Afghanistan and Iraq. I bring this to the floor because last year I introduced a bill to repeal the tax on the death gratuity.

The death gratuity, Mr. Speaker, is a ``thank you,'' if you will, not enough, but it is a check that is given to the families of those who have given loved ones in uniform that have died for this country. I want to say to the leadership on both sides that last year you did, and I thank both sides, put the language from that bill into a larger bill to bring tax relief to our men and women in uniform, but the other body did not pass the bill.

This year, I put the bill back in as H.R. 693, to repeal the tax on the death gratuity. It was put into a larger bill known as the Military Tax Fairness Act, supported by both sides, sent to the other body, known as the Senate, and they still have not moved that bill. So I am coming to the floor as much as possible to ask the leadership on the House side, both Republican and Democrat, to please bring up as a stand-alone bill, H.R. 693.

Mr. Speaker, I wanted to show you another photograph. This is a young fellow whose father was killed in Iraq. His name is Tyler Jordan. His father was a Gunnery Sergeant killed while fighting for freedom in Iraq. Mr. Speaker, I bring this to the floor because this next year, his mother will receive a tax bill from Uncle Sam.

Mr. Speaker, how much does a family have to give? It gives a loved one, who has died for freedom, to protect the American people. Why can we not, as a Congress, send to the President, before we leave in November, a bill to say that we are going to repeal the tax on the death gratuity?

Mr. Speaker, I hope that the leadership on the House side, both Republican and Democrat, will join me in bringing this bill to the floor as a stand-alone bill, and let us send it to the other body and ask them to please look into their own hearts and pass that legislation and send it to the President. No family that has given a loved one, and in many cases a child, a father, a husband, should be asked next year by Uncle Sam to pay a tax on that gift.

So, with that, Mr. Speaker, I am going to close, as I do all over my district, the Third District of North Carolina, the home of Camp Lejeune Marine Base, Cherry Point Marine Corps Air Station and Seymour Johnson Air Force Base.

Mr. Speaker, I ask God to please bless the men and women in uniform; I ask God to please bless the families of the men and women in uniform; I ask God to please hold the families who have lost loved ones in His loving arms. I ask God to please bless the House and Senate, that we will do what is right in the eyes of the Lord; and I ask God to please bless the President of the United States, that will he have courage and wisdom to what is right for this Nation, today and tomorrow.

Mr. Speaker, I close three times by asking God, God please, God please, God please continue to bless America.

Mr. Speaker, Members can see beside me and behind me are photographs of men and women who have died in Operation Freedom; and the reason I come to the floor with these photographs, I do not want us as Members of Congress to ever forget, not that we ever would, the high cost of freedom, because someone has given a life to ensure that the American people as well as the people of Iraq can have the freedom that we in America are guaranteed by our Constitution.

The reason I wanted to come to the floor is because many of my colleagues, as well as people throughout this country, do not realize that each and every family that has a loved one killed in the military receives what is called a death gratuity. It is a small amount of money, I do not think it is enough, but it is a check for $6,000. What makes it even worse than the amount is a tax on part of the $6,000.

In the 107th Congress, I introduced legislation to eliminate the tax, and let me say that the House did its job in a bipartisan way and passed the legislation, sent it over to the other body and they failed to act on that legislation. Because of that, Mr. Speaker, families throughout this country, actually 292 military families, had to pay a tax on the death gratuity they received on the death of a loved one serving this Nation and possibly fighting for freedom.

Mr. Speaker, if the other body does not pass this legislation that we have sent over there again this year, meaning 2003, very possibly in 2004 there could be as many as 200 to 300 families in this country that will receive from Uncle Sam a notice that they owe tax on the death gratuity. I think this is unacceptable. I think it is deplorable that any family that would give a loved one to serve this Nation who has given their life to protect freedom would next year receive a tax notice from Uncle Sam.

Mr. Speaker, I think that is unacceptable. I think the other body needs to do its job and pass legislation to ensure that in the year 2004 the families who lose loved ones serving this Nation will not have to pay a tax on a $6,000 death gratuity. I think we as Congress must ensure that the families who have lost those loved ones will not be asked by Uncle Sam to pay a tax on the small amount of $6,000 for that loved one who has given their life. I close by encouraging the other body to do its job and not leave this fall and not have passed this legislation.

Mr. Speaker, I close as I always do in my district, I ask God to please bless our men and women in uniform, I ask God to please bless their families, I ask God to please bless the families who have lost loved ones, I ask God to please bless the House and Senate that we will do what is right in the eyes of God, I ask God to please bless the President of the United States that he will do what is right in the eyes of God, and I ask three times, God please, God please, God please continue to bless America.

Mr. Speaker, I appreciate the ranking member recognizing me on this very important bill, the Armed Forces Tax Fairness Act of 2003. So I rise in support of this bill which is much-needed tax relief for our men and women in uniform. And although there was some delay, I am glad that the majority has agreed to remove the extraneous amendments and bring a clean bill to the floor, and we thank them for that. A bill to provide tax relief for brave men and women is not the appropriate vehicle for extraneous amendments.

I hope that this bill will now be able to move forward expeditiously so that our servicemen and women, particularly those in the Guard and Reserve, will be able to receive meaningful and proper tax relief.

Since the end of the Persian Gulf conflict in 1991, our reliance on the Reserve components has steadily increased. In 1993, for example, Reservists and National Guardsmen provided 5.7 million man-days' worth of support to our military. In the wake of the attacks on September 11, 2001, Reservists provided more than 41 million man-days of support to meet military requirements, primarily because of operations Noble Eagle, which of course is protecting the United States, and Enduring Freedom, which was liberating Afghanistan. The demands on our Reservists to participate in military operational missions have more than doubled in recent years.

The global war on terrorism has also increased burden on the Reserves and National Guard. Following the terrorist attacks on September 11, some 85,500 Reserve and National Guardsmen personnel were mobilized for active duty. Thousands were sent to guard our Nation's airports. This provided security for bridges and power plants and water treatment facilities and other important infrastructures that are vital to the American economy. Today, more than 50,000 Reservists still remain mobilized for the global war on terrorism, and almost 20,000 Reservists, and I will say there again, almost 20,000 Reservists face a second year of involuntary active duty.

The last several months have seen the number of mobilized Reservists soar to over 120,000 to meet potential demands for our conflict in Iraq, and these numbers continue to rise daily. Allowing travel expense deductions for Reservists is the least we can do for these brave men and women.

Last year the House and the Senate passed similar tax measures to support the troops. In the waning days of the Congress, the measure was tied up by extraneous provisions, which ultimately led to its demise before adjournment. On the eve of our Nation going to war, and that is what we are going to do, I urge my colleagues to support this measure so that we can move forward in ultimately adopting a bill that will provide significant tax relief for those who wear the uniform of the United States of America.

Mr. Speaker, as Members know, I represent the Third District of North Carolina, which is the home of Camp Lejeune and Cherry Point and Seymour Johnson Air Force Base. A bill that I introduced, H.R. 693, the Military Death Gratuity Improvement Act, I want to thank the chairman and the ranking member for including that bill, or the language from that bill, into this major bill that I think is of great benefit to our men and women in uniform.

I would like to give very briefly the history of this provision because the death gratuity was reaffirmed as a tax free benefit when the Congress amended the Tax Code in 1986; and about a year ago I happened to be driving back to the Congress, and I was listening to a talk show and they were talking about how the fact that our men and women in uniform who received the death gratuity, should they die while serving this Nation, that the families are taxed; and to the chairman and ranking member, this just really bothered my heart, to be honest about it.

So I called my staff and I asked John Weaver if he would look into this, and I thought there must have been some mistake along the way. And actually there was and when the mistake took place was in 1991 when the Congress actually increased the death gratuity from $3,000 to $6,000; and what happened was the Committee on Armed Services did not send the bill to the Committee on Ways and Means, so therefore there was a tax on the second $3,000. And Mr. Speaker and Members of the Congress, as our wonderful men and women in uniform are ready to go to war and to die for this country, I think this is an excellent bill not just because of this provision but because of the other provisions in this major bill that will help our men and women in uniform. So by the passage of this bill today, we are taking the tax off the death gratuity when the government says to the families of those who have lost loved ones that they are receiving this small amount, but yet important amount, of $6,000, that they will not get a bill from the IRS at the end of the year.

So with that I want to thank the chairman and ranking member for including the language from H.R. 693, the Military Death Gratuity Improvement Act, in this bill to help our men and women in uniform. This is just a small portion of the bill, but I thank them very much.

Let me say in closing, Mr. Speaker, to the chairman and the ranking member that the men and women in my district, and again it is Camp Lejeune, Cherry Point, Seymour Johnson Air Force base, are very appreciative of how we have worked together to bring this bill forward to help our men and women in uniform. So with that I thank the chairman for yielding me this time and God bless America.

Mr. Speaker, I yield myself such time as I may consume.

I rise in support of this suspension bill and congratulate the chairman of the committee for taking the bulbs and baubles and whistles off the Christmas tree that they stacked on this bill initially. I am disappointed that we were not able to do more for our reservists, but I am pleased that we are doing more than they had originally thought on the other side of the aisle. And I am glad to see that we are bringing a clean bill to the floor and that is not bogged down with fish tackle boxes and foreign bettors on horse races.

I do hope during these very sober hours and days that the majority will think more and more about how we can be of assistance to those brave men and women who have volunteered or who are in the Reserve to see what we can do to not only give them political support, but legislatively to give them real support for the dedication that they continuously show not only in defense of this great country, but now in following the mandates of the President.

I would like to say that during time of war, we have become historically accustomed to the fact that we share sacrifices. Soon our chairman will be presenting to us an obscene tax bill that is anything but sacrifice, but would reward the wealthy. I do hope that as the House has caused the committee's leadership to change its mind and try to do things fairly, that we will see a change in attitude as this country is on the brink of war where shared sacrifice means exactly what the President said it would mean, and that is that we all be prepared to give support.

I support the Armed Forces tax fairness bill. I do hope we will see more bills of this kind in the future.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Cardin), an outstanding member of the Committee on Ways and Means.

Mr. Speaker, I yield 4 minutes to the gentleman from Missouri (Mr. Skelton), the ranking member of the Committee on Armed Services on the Democratic side.

Mr. Speaker, I yield 3 minutes to the gentleman from New York (Mr. McNulty), an outstanding member of the Committee on Ways and Means.

Mr. Speaker, I thank the gentleman from California (Mr. Thomas) for bringing this very important bill, H.R. 1307, to the floor, the Armed Forces Tax Fairness Act. I am pleased to have played a part in the Committee on Ways and Means and delighted it is here on the floor today.

Our forces will soon be engaging the enemy. We pray for their safety and also for a quick and decisive victory. We have about a quarter of a million of our soldiers, sailors, airmen and Marines poised for combat in the Middle East. In addition, thousands upon thousands of our military personnel are patrolling our skies, protecting key domestic sites, and fighting the war on terror both here at home and abroad. Our military families, active duty, the Reserves, and the National Guard are feeling increased pressure from frequent and longer deployments. This legislation brings tax relief and fairness to those who are protecting our freedoms.

I would like to focus quickly, if I may, on the Reserve component. One of the most important provisions of this bill would provide a $1,500 above-the-line deduction for their nonreimbursable overnight travel expenses. Let me underscore these travel expenses are not just for casual jaunts. These are for them to do their training required of them by this government so that they will be ready in fact to provide the backup needed for our active duty troops. Many give up time from their families, certainly leaving their loved ones, to be ready to combat the evil that may occur in this country or in fact abroad.

For too long our Reservists have incurred significant out-of-pocket costs associated with traveling to and from their Reserve stations. Our men and women in uniform should not be financially punished for serving their country, and thankfully this legislation fixes that problem. Our men and women in uniform deserve nothing less, and again I reiterate our prayers today go out to all families and particularly those who are in harm's way as they lead freedom in Iraq and certainly lead us away from terror in the United States.