Providing for consideration of the bill (H.R. 1528) to amend the Internal Revenue Code of 1986 to protect taxpayers and ensure accountability of the Internal Revenue Service.

Mr. Speaker, the legislation before the Committee contains important improvements in taxpayer rights and IRS accountability. This bill is very similar to legislation approved by the House twice in 2002.

Practically all the taxpayer provisions in the bill are based on recommendations by the Joint Committee on Taxation, the Treasury Department, the IRS, the National Taxpayer Advocate, and on hearings held by the Ways and Means Subcommittee on Oversight during the past several years.

The provisions also are consistent with, and in some cases are a refinement of, the IRS Restructuring and Reform Act of 1998 that enacted important taxpayer protections and reforms of the IRS.

Just to mention some of the provisions in the bill before us today:

1. It encourages greater use of the more efficient electronic filing by taxpayers.

2. It authorizes more support for Low Income Taxpayer Clinics to help provide legal assistance to more low-income citizens involved in disputes with the IRS.

3. It ensures that taxpayers receive the confidentiality they deserve, by reforming the punishment for code of conduct violations by IRS employees, and providing for dismissal of IRS staff who browse tax records without authorization.

4. It adjusts the so-called ``ten deadly sins'' in other ways to give the Commissioner more discretion.

5. It reforms penalty and interest provisions by raising the safe harbor for failure to pay estimated taxes and allowing taxpayers to enter into installment agreements for less than the full amount of their tax liability, and it includes many other pro-taxpayer provisions.

The bill has a small revenue impact. The Joint Committee on Taxation estimates that it will raise $607 million over 5 years and lose $352 million over 10 years.

Our colleagues, Oversight Subcommittee Chairman Amo Houghton and ranking member Earl Pomeroy played key roles in constructing this legislation and we appreciate their efforts.

One new provision allows individuals greater access to the healthcare tax credit previously adopted as part of the Trade Act. Individuals would be permitted to waive certain requirements in TAA and thus receive coverage under state based healthcare plans. This is a short transition measure, effective for less than two years, and will increase the availability of qualified health insurance for individuals who would otherwise not have access to such coverage.

Another new provision would extend the joint House-Senate review of the Internal Revenue Service.

Let me provide some details on this provision, as it was not considered in the Ways and Means Committee. This legislation would reauthorization for 5 additional years, the annual joint review of the strategic plans and budget of the IRS. Unlike other federal agencies, the IRS is subject to oversight by six committees of Congress and the Joint Committee on Taxation. The National Commission on Restructuring the IRS, that I co-chaired, recognized that the IRS would be better managed if the committees that share primary jurisdiction over the IRS budget and IRS administration coordinated their efforts. The Joint Review grew out of a recommendation by the National Commission.

While the Joint Review has met the objective of coordinating Congressional oversight of the IRS, the original legislation imposed a burden on the Joint Committee on Taxation to report on every aspect of the IRS's budget and strategic plans on an annual basis, even when the Joint Review hearing has focused on a more narrow set of issues. The reauthorizing language that is included in this legislation therefore allows the JCT to confine its annual report to the issues addressed at the annual Joint Review hearing. It is anticipated that the topics to be addressed at the Joint Review will be decided well in advance of the annual hearing by the JCT Chairman, in consultation with the staff of the JCT and the six participating committees.

I believe it is important to continue the joint review, and this provision will increase the focus on key areas of the IRS that need attention by the relevant committees of Congress.

In summary, Mr. Speaker, this is a good bill. I urge my colleagues to support this legislation that promotes common sense solutions to some of the most frustrating and time-consuming aspects of our tax system.

Mr. Speaker, I rise in opposition to the substitute.

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

Mr. Speaker, I rise today in part to remind us as to where we are in this process. Yesterday we talked about the underlying legislation, which is a very good combination of taxpayer protections and health care protections for workers. I think it would be helpful to start by reviewing that, only because I think by adding this substitute, we would jeopardize so many of those good provisions.

Yesterday, we talked a little about the importance of moving quickly on those provisions. After all, these are the result of over 2 years of work by the Taxpayer Advocate, by the Internal Revenue Service, by the Treasury Department itself, and by the Committee on Ways and Means, based on oversight hearings, to basically strengthen and protect the rights of average, honest taxpayers.

Let me give you an example of some the things in the underlying legislation. It prohibits IRS employees from unauthorized browsing of tax returns. We do have a series of prohibitions in the Code. This is not one of them. It would now make browsing of your tax return or mine part of those prohibitions. This is very important, and, again, it is based on good testimony we have had from the IRS and some obvious problems that have resulted from unauthorized browsing.

It also simplifies tax filing in a number of ways. One I really like is it helps the mom-and-pop businesses of America. It says that now- married spouses would be allowed to file a sole proprietor return who are in business, which is a Schedule C, instead of a partnership return.

This is far simpler. It allows for spouses to account separately for their respective self-employment income from the business. It allows family businesses to take full advantage, therefore, of Social Security and Medicare, and, at the same time, greatly simplify tax filing.

Again, this comes out of hard work by people at the Joint Tax Committee, at the Treasury Department and elsewhere, to try to figure out ways to simplify our current system.

It also, very importantly, extends the filing deadline for E-filers to April 30. This one is not only added to, therefore making it more difficult to enact, but it is actually substituted, it is replaced, it is eliminated in the substitute.

Let me just talk about that for a second. It says if you are willing to be an E-filer, you have until April 30. Why is this so important? It is important because we need to add another incentive to encourage people to electronically file.

Electronic filing is in the interests of taxpayers, and it is in the interests of the IRS. This is something over the last 6 years as we have reviewed the IRS through a commission, and then through the legislative process, we had a total consensus on, that it is absolutely critical that we encourage electronic filing.

We have gone from 15 percent to about 41 percent, but the Congressionally set goal of 80 percent electronic filing is not going to make it unless we provide some new incentives. This is one well worth undertaking.

Why? Right now there is about a 22 percent error rate, Mr. Speaker, if you can believe it, when you file your tax return by paper. Twenty- two percent of the time there is an error. That is unacceptable to any of us. Eleven percent of that error, half of it, is caused by the IRS, largely transposing numbers, where they take a paper return and transpose the numbers from paper on to a computer.

That does not happen with electronic filing, obviously, because you are electronically filing straight into the computer.

Second, the other 11 percent, about half, is caused by the taxpayer.

Electronic filing, the error rate is far less than 1 percent. This obviously saves the IRS a lot of money and is very good for the tax system, because you are going to have fewer people who will be filing by paper and, therefore, fewer IRS employees are necessary and

great efficiencies are put in place at less than half the cost to the

Mr. Speaker, I yield such time as she may consume to the gentlewoman from Connecticut (Mrs. Johnson), the Chair of the Subcommittee on Health.

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

Mr. Speaker, I find the gentlewoman's comments a little puzzling listening because on the one hand, my colleagues are arguing it was wrong to put the important health care credit into the IRS reforms which are so important and so widely viewed as popular and the appropriate thing to do, and then the gentlewoman is saying but let us add something else to this mix, another 160 pages of controversial, and for a large part of them, untested, proposals. None of these substitute proposals to my knowledge have been reported out of the Senate Finance Committee. They have not even dealt with inversions, for instance. We have legislation sitting over there in the energy bill for weeks and so the gentlewoman says, well, we need to add child credit to this to get it done.

If you want the child credit issue to be resolved, and our side on the aisle, agree it ought to be resolved. In fact, we came up with a good balanced proposal to provide relief who do not have any income tax liability, have no federal income tax liability, to increase an existing 10 percent refundable credit for the child care that is going to the same families now. We said it ought to be taken to 15 percent immediately rather than waiting until 2005, when it is going to happen anyway.

We said, if you are going to make that permanent, the 15 percent on the refundable side, again, for people who do not have Federal income tax liability, and many of whom do not have payroll tax liability, then at the least, we ought to be sure that those people who do have Federal income tax liability have their $1,000 credit which we have now provided them until 2005, to continue as well, at least until 2010.

The President wanted to continue it until 2013. We said, as a balance, let us go ahead with the child credit for the refundable part and let us go ahead with making sure that those who do pay income taxes also get some benefit after 2005 as we would be doing for those who do not have income tax liabilities.

We think that is a fair and balanced proposal. That has just been sent over to the Senate and it is being worked out between the House and the Senate. Conferees are being named. We are trying to work through this process to try to get to a solution to resolve the child credit issue. And yet the gentlewoman says, this will make more sense to get it resolved to add it to these extremely controversial, as we will talk about in a moment, and untested proposals that have not even been reported out of the Senate Finance Committee, much less subject to hearings, and none have been reported out of the Committee on Ways and Means. I do not know how that helps us get on to child credit.

Let me talk about some of the other provisions the gentlewoman talked about.

The next provision was the inversion provision. Well, as the gentleman from Massachusetts, who spoke about inversion knows, we also passed an inversion provision on this floor and we included it in legislation that is sitting in the Senate, which provides specifically for a 2-year moratorium on inversions. We think that is the right way to go. There is some bipartisan support for that. The gentleman, instead is saying, let us go ahead and load up this bill with something more controversial that provides for a retroactive provision under inversion. So it would actually undue transaction which were entered into lawfully 30 or 40 years ago and you are now going back and penalizing.

We have dealt with the inversion issue. We have done it in a bipartisan way. It had some bipartisan support. And here we come up with this new idea again which would actually be retroactive on perfectly legal transactions. We do not think that is the right way to go. Instead, we think we ought to be having a moratorium in place and looking at the underlying causes as to why companies leave the United States. We are doing that very aggressively. Maybe too aggressively for some on both sides of the aisle. But in the fixed ETI bill, which deals with particularly the Europeans, but more generally our competitive position as Americans, it takes very aggressive action and it is going through the process of hearings now and will be before this Congress, I believe, in the next month, which says let us deal with the underlying causes. Why do companies leave? We do not want foreign corporations to come buy our companies.

I personally believe that would be the result of the inversion provision that is in this substitute. Rather, let us deal with these underlying causes. Let us make it better for companies to stay here, employ American workers, stay headquartered in this country.

Finally, there has been a lot of discussion about the refundable tax credit that is in the underlying bill and why that is not a good idea. Again, it deals with the very simple issue of 12,000 families cannot get health care unless we do this. We want to provide health care. Do a bridge program. We dealt with three concerns that were raised in the Committee on Ways and Means by the other side of the aisle. Those issues have been addressed. It is still not acceptable to some of my colleagues. I understand that.

But in terms of the legislation, the gentleman from Michigan earlier said that it allows people to go to the individual market and that is wrong. It does not. That is the point. It continues to require they go to the State options. That is what the Democrats in the Senate insisted on back in 2002. That is what we are sticking to. If that were not the case, if we were allowing people to go to the individual market, we would not have a problem here, would we?

The problem is that up to 21 States have not changed their State plans adequately to allow people who have been displaced because of trade to be able to access health care. So we are saying during a bridge while those State gets up to speed and make their programs compliant, we ought to allow them to have access to health care. The State options, again, was not something that we particularly felt was the best policy, but it was something that was insisted upon. Now let us make it work. That is all we are saying.

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

Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Illinois (Mr. Weller), my colleague on the Committee on Ways and Means.

(Mr. WELLER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 3 minutes to the gentleman from Florida (Mr. Foley), my colleague on the Committee on Ways and Means.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I think we have seen why this effort today is more politics than it is practical. We are now talking about Iraq. We have loaded this bill up with Iraq, and somehow that is going to get through the Senate. The reality is we have about 160 pages of new provisions here that have not been through the Committee on Ways and Means process, have not been reported out of the Senate Finance Committee; and they are, therefore, going to drag down all of the other good legislation in the underlying bill. We are talking about the substitute for good legislation.

The gentleman from Washington has talked about the child credit. Here is the reality. If we really want the child credit to get resolved, to be sure we were giving fair and balanced relief to families with kids, Members would not tack it onto this, raising every issue from inversions to Iraq. Members would instead want to make that a streamlined process, as we did here in the House recently where we said we ought to be able to provide people who do not have Federal income tax liability with a little help, more help than we are already giving them because all those families already get help, thanks to Republicans, because in 2001 we passed tax legislation that for the first time ever, unlike what the Democrats did for the previous 40-plus years when they controlled this place, we provided tax credits that were refundable to people who do not pay Federal income taxes.

The Democrats are saying now we ought to increase that refundability, which is scheduled to happen anyway in 2005, and instead what we ought to do, we ought not provide relief to people who do pay income taxes. That is absurd. We ought to do both. We are willing to increase it to 15 percent, but for the Democrats to say but if you pay income taxes, you do not get the $1,000 credit, that makes no sense at all. That is what they want to do.

Anyhow, that issue should not be on this bill because this bill has now become so complicated with this Democrat substitute that it would, if the Democrat substitute passed, not be able to make it through the Senate. The underlying legislation here is the result of years of work by people who are concerned about ordinary taxpayers and how to make our tax system work better. That is what it is. It is great legislation.

The provision the gentleman criticized earlier is from the bipartisan, bicameral joint tax committee. There are anti-abuse provisions in it. He misreads the provision or he thinks it is not good law because he thinks taxpayers ought to be saddled with more liability than they should be.

Let me talk about some of the great provisions that are in here that would not happen if this substitute goes through because we are not going to get this bill through if the substitute is part of it. We would not have an end to this first time penalty. Right now, even the most conscientious taxpayers who put a $1.40 stamp on their tax return envelope rather than $1.50, those people now end up having a penalty against them for minor errors, and we would not be able to fix that if the substitute goes through.

Second, there would be no relief on the estimated tax penalty. We would still have people who are charged interest and have to pay tax, additional interest and penalties just for how they quarterly file their taxes. There would be no simplified filing for family businesses. There would be no prohibition and increased penalties for unauthorized browsing. How could Members be against that? Do Members think the IRS employees ought to be able to browse?

And with regard to the so-called 10 deadly sins, we help the IRS and its employees to improve morale by reforming that and doing what the IRS commissioners strongly believe we ought to do, give them some flexibility.

Mr. Speaker, the bottom line is we ought not to take these good provisions down because of a health care credit. All it does is provide 12,000 families with the ability to access health care, that and the good IRS provisions ought to go. The substitute ought to be voted down. I urge my colleagues to vote no on the substitute and yes on the underlying bill.

Mr. Speaker, I offer an amendment in the nature of a substitute.

Yes, Mr. Speaker.

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

Mr. Speaker, the amendment that is at the desk on H.R. 1528 is a fairly comprehensive amendment to the bill which we discussed yesterday. The first thing is that my amendment would delete the controversial provisions contained in the underlying bill which would eliminate consumer protections that this Congress provided less than 1 year ago when it enacted the Trade Promotion Act. I think that there are many Members who voted for the fast track bill with the belief that this was in it and now less than a year later we are back taking it out.

I think that is an important part of this amendment.

The second thing is this amendment would provide the recently increased family credit for 12 million children and 6 million families. We passed it out of here and it has gone to an uncertain future in a conference committee. I read there is some debate among the Members of the conference committee about who is going to chair it. We could put this issue to rest with this amendment today.

The third part of the amendment is to stop the delay of tax benefits for our military and relief to families of the astronauts killed in the Columbia disaster. I think that this is one of those issues where we all agree, it has been sitting there and somehow it does not get done, and I think it is time for us to move on.

Fourth, the amendment will prohibit the Internal Revenue Service from implementing a pre-certification program for Earned Income Tax Credit recipients. I think this is a needed and important change in the IRS. It is the only place that we have such a thing where we make people send in their money reports before they even get the benefit, rather than letting them make application for it and then figuring out if there is some question.

Fifth, my amendment would also contain provisions addressing the abusive corporate tax shelters which we have talked about in the past.

Finally, this adds taxpayer protections designed to assist low and middle-class taxpayers in complying with the tax law.

It is a fairly comprehensive amendment, but I think it is a good one, and it does a number of things which we ought to do when we are passing this bill.

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

Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Levin).

(Mr. LEVIN asked and was given permission to revise and extend his remarks.)

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

The gentlewoman from Connecticut calls it a small adjustment. I would call it a gutting of the program. If you allow an insurance company to screen people out on the basis of preexisting conditions, which is what this amendment does, of course it will be simpler. They just look down your history. If you are over 50 years old, you will never get access to this. And the people who are losing their jobs here are not 20 years old. They are people who are in steel industries and other industries where the existence of a preexisting condition is very common.

So to say that the insurance company does not have to have that consumer protection, there is no guaranteed issue and they can use preexisting conditions is simply to give the insurance industry the ability to cherry pick the young and leave the others by the side of the road.

Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts (Mr. Neal).

Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Becerra).

Mr. Speaker, I yield 3 minutes to the gentlewoman from Connecticut (Ms. DeLauro).

Mr. Speaker, how much time remains on both sides?

Mr. Speaker, I yield 30 seconds to the gentlewoman from Connecticut (Ms. DeLauro).

Mr. Speaker, I yield 3 minutes to the gentlewoman from California (Ms. Solis).

(Ms. SOLIS asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. Levin).

(Mr. LEVIN asked and was given permission to revise and extend his remarks.)

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

Listening to the other side, Mr. Speaker, I do not quite know where to start. It is not very often that the public gets a clear view of the naked desire of the Republican Party to not do something while appearing to do it. These taxpayer provisions to protect taxpayers could have passed 12 months ago; but at that time, a year ago, they stuck in a poison pill amendment, and it died in the Senate.

Now, if they had only done it once, no one would have seen what was going on there. They passed the taxpayer bill, they put this amendment in, and they knew it would never come back; and that was the end of it. But they did not learn from that. They had the people fooled that they cared about taxpayers. But now they have come back a second time, and they do the same thing over again. They could have put a bill out here that everybody would have passed, that would have had 435 votes for it; but they had to put another poison pill in.

They know this is not going to get through the Senate because, first of all, it was part of the fast track bill and votes were obtained from people on both sides of the aisle around the belief that they were going to look after workers' rights in trade negotiations. One of the things that happens is people lose their health care benefits when they lose their job because of trade. So we took care of that. And now my Republican colleagues come in here, and what is really amazing is they believe in devolution; that everything should be put down to the States; and what they are basically saying is that we are rewarding the States that have not done anything.

Most States have acted under the bill and provided programs. They have followed all the rules. But we do have some laggards. Maybe my colleagues want to read that list again. Those laggards, those slothful ones, whatever they are, that do not care about their people, or whatever it is, they have not acted; and yet my colleagues are saying, okay, okay, we understand you really do care, so we are going to get rid of all the rules. What kind of incentive, what kind of message is that to send to the States? Hang back, do not do it, and we will change it to fit you; right?

Now, that is no message to send. And the real message here is, and I do not know anybody who wants to see this, this bill occurred because the Republicans would not allow them to use COBRA or Medicaid. When these negotiations were going on, we wanted to put these people into Medicaid, give them coverage there, or allow them to extend their COBRA. But my Republican colleagues said oh, no, no, no, no, we have a new plan. We believe that tax credits are the answer. So we will give them 65 percent of the premium tax credit, and they will be able to go out and buy. And lo and behold it did not work.

This is kind of the reverse of that movie called ``Field of Dreams'': If you build it, they will come. Well, the Republicans said if we build this tax credit around health insurance, they will come; and they have not come. So now they are saying, well, we are going to tweak it a little bit here and take away the consumer protections. And I think that is not fair. It makes it pretty hard to deal with the other side when one year they are saying they are going to do one thing, and in less than a year they are back here taking it out. What can we believe from them? Did my colleagues not think it was a good idea last time, so they just let it go through in order to get fast track, because they knew they could come back and repeal it? What was going on?

I think my Republican colleagues ought to ask themselves what kind of a message it sends from their side to us when they want us to work on a bipartisan basis. We do not work very often on a bipartisan basis; but when we do, on the fast track bill, the Republicans undercut it the next time they stand up. In my view, that is not the way this body should operate.

Now, what are some of the other things that are in here that we took out? We took out some things that the Republicans had in their taxpayer bill. We took out the ability to have tax-free interest on overpayments. If we look at the scoring of this bill, if we look at what the CBO said, they said they think a billion dollars is going to be paid in overpayments. Now, why would anybody overpay their taxes? Well, if this bill passes, they would get tax-free interest because the government has to pay interest on overpayments that are given back. It has always been taxable, but now it would not be. The CBO's estimate is that a billion dollars is going to be put into tax-free bonds, basically, in the IRS.

Now, my view is that is not necessary. And the other thing is, my colleagues talk about wanting to revise the Tax Code, yet they come out here with a bill that is going to complicate it some more. They are going to give some people 2 more weeks. For what?

For 2 years they are going to give people who file electronically two more weeks. I asked the staff, where did this come from? Who asked for this?

Mr. Speaker, no accountants that I know want two different dates. It turns out this is a provision that the last Treasury Secretary kind of thought was a great idea. Guys, he is gone. Let this idea go away. It is a bad idea. We do not need any more confusion in tax filing than we already have today.

Finally, this issue of children. I do not know why they continue to tar

themselves with their own brush. They say they care about kids, and then they pass a bill through here that does not give the benefit to the poorest of the kids, not the poorest, the ones just above the poorest. Their folks make between $15,000 and $28,000, and they say to them, you do not get this money, this child tax credit. But they are willing to give it to people making $80,000, $90,000 all of the way up to $150,000. I do not know why Republicans would want to have that image.

I stand over here and think, why would they be doing this? All I can think of is they thought it was an engine that would be able to drag some things through Congress which they could not get any other way. It makes no sense at all. If they really cared about these kids, they would pass this bill and with this amendment on it, and it would go into law immediately.

I know the other side does not like the provision about companies that run away, but we are over there rebuilding Iraq, and some of the very companies that left the country and have established another office someplace else, the Cayman Islands or Bermuda or wherever, have the gall to come back here and bid on contracts to rebuild Iraq. They are willing to pay no taxes in this country, and then take American taxpayer money and make profit off it in Iraq. It is unbelievable that the other side of the aisle would set up a system like that unless they had friends in the oil industry or concrete-laying or dam-building or airport-rebuilding. All those issues are in this bill, and I say we should adopt this amendment if we want to protect the taxpayers. This amendment in the nature of a substitute would get through the Senate.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, pursuant to House Resolution 282, I call up the bill (H.R. 1528) to amend the Internal Revenue Code of 1986 to protect taxpayers and ensure accountability of the Internal Revenue Service, and ask for its immediate consideration.

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

Mr. Speaker, I rise in support of the Taxpayer Protection and IRS Accountability Act. The title of this bill is a good summary for the fundamental principles contained in it. We are increasing protections for taxpayers from unfair actions by the IRS while at the same time we are making reforms in the IRS that will make the administration of our tax laws more accountable.

Let me mention just a few of the ways we increase protections for taxpayers. The bill increases the confidentiality of taxpayer communications when they seek the assistance of the Taxpayer Advocate. The bill restricts the IRS from auditing the tax returns of taxpayer representatives simply based on their having prepared the returns of other taxpayers.

And let me mention some of the ways we improve tax administration of the IRS.

The bill allows the IRS to enter into installment agreements; to let a taxpayer pay an unpaid amount over 2 or 3 years without imposing the requirement that they pay the full amount. The IRS already has the authority to settle tax debts for less than the full amount. But when it comes to installment payments, the law requires the agreement to cover 100 percent of the debt. So in some cases, instead of the taxpayer paying $9,000 of a $10,000 debt, let us say, giving the IRS $500 every month, the IRS gets nothing.

The bill improves the so-called ten deadly sins actions for which IRS employees can be fired, by removing some of the employee versus employee cases that have bogged down the system, but adding another standard, that of unauthorized browsing of taxpayer records to the list of offenses.

Let me conclude by stressing that the health care tax credit provisions in this bill are sound, prudent and necessary. They do not overturn or weaken the State plans already in effect in

eight States, nor do they have any impact on State consumer protections. The waiver only applies to the preexisting condition and guarantee issues. And the waiver will only be in place until the end of 2004.

We want workers who have suffered a loss of their job and their health insurance to be able to receive the tax credit for health insurance. If we pass this bill, an estimated 12,000 workers will be able to obtain health insurance. Those workers, without this bill, would not be able to get health insurance.

I support the bill, and I urge the House to support this bill.

Mr. Speaker, I would like to say that the gentleman from Maryland (Mr. Cardin) has been instrumental in putting together the provisions of this bill, along with my colleague on the Committee on Ways and Means, the gentleman from Ohio (Mr. Portman). So I want to thank both of those gentlemen for the good work they have done on this legislation.

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

Mr. Speaker, I yield such time as he may consume to the gentleman from New York (Mr. Houghton), the chairman of the Subcommittee on Oversight of the Committee on Ways and Means.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the last point that the gentleman from North Dakota made about if this provision were to pass, then it could reduce the pressure on the States to enter into agreements which would create qualified plans under the trade bill we passed last year is a legitimate point. It is the only legitimate point he or his colleagues on the Democratic side have made today, but that is a legitimate point. We concede that. That is why we listened to the gentleman from North Dakota and his complaints earlier while the committee was considering this and we reduced the window within which unemployed workers could take advantage of this waiver.

Under the provision, as it now stands in this bill, they would only have until the end of calendar year 2004 to waive their rights under the trade bill and take advantage of the tax credit to purchase insurance for themselves and their family. So I concede that that is a legitimate point. We do not want the States to stop their efforts to create plans that would qualify for the credit under the Trade Act. We do not think the States will. In fact, of the speakers that were offered by the other side of the aisle today, Maryland, the first speaker, the State of Maryland, already has a qualified plan in place, so this provision in the bill today will not affect unemployed workers in Maryland at all; North Dakota has a provision in place, so it will not affect unemployed workers in North Dakota. Texas is very close to having a provision ready, we are told. The only State that is behind in this process is the State of Washington.

So we know that basically two-thirds of the States already either have a plan in place or are negotiating to get plans in place. The Treasury Department thinks, after researching this, that only about 20 States or so would not have plans in place by this August. So this provision in this bill would not affect all of those States that have plans in place by this August, probably not until September or October because this bill will not make it through the process before this fall.

But let us think about those States which for whatever reason, their legislatures do not meet this year, their insurance commissioner is not as adept as the gentleman from North Dakota was in getting these things done, for whatever reason, what about the unemployed workers in those States who want to use their credit to get insurance for their families and they do not have access to COBRA? They are left out in the cold.

I would say to my good friends on the other side, do you not care about these people and their families? Do you not want them to use the generous tax credit that we provided to get health insurance for their families? If you do not pass the provision that is in this bill, they cannot get insurance and utilize the credit to get it. Period. You will leave them with nothing. You will leave them bare. They will not have insurance. That is the fact. That is what we are trying to correct. We are trying to make sure that all those unemployed workers who want to use the credit to cover their families can do so. And so we have said to the States that have not yet complied with the requirements of the Trade Act, we are going to give you one more year to do that.

And in the meantime, any of your unemployed workers who want to use the tax credit can avail themselves of that by waiving the requirements of the Trade Act. It is not compulsory, it is voluntary, we are not going to twist anybody's arm to make them waive the requirements of the Trade Act. We are going to tell them if you want to waive that, you may. And if that enables you to use the tax credit to cover yourselves and your families, by golly, that is a good thing. And CBO estimates that 12,000 workers and their families will take advantage of this provision and will get coverage and who, if this bill does not pass, would not be able to get coverage.

I think, Mr. Speaker, what we have heard today from the other side is a lot of obfuscation. The truth is they never wanted the health tax credit to be used for anything other than COBRA. That is the truth. It was we Republicans who insisted that we think about unemployed workers who did not happen to come from a big company or from a company with employment coverage that would qualify under COBRA. We said, what about the people who work for small businesses? What about the people who did not have any coverage, they had to get individual coverage? Should we not have some compassion for those unemployed workers as well, not just unionized workers? We battled and fought and scraped and finally won, got a compromise so that those workers could get some advantage from the tax credit.

But the Democrats said, okay, we'll agree to the compromise, but we're going to have to have a provision that goes even further than the Republican-passed legislation, the Health Insurance Portability and Accountability Act, HIPAA.

That was a Republican bill. Up until that time, there were no guarantees for workers changing jobs. Health insurance was not portable at all. Everybody was going to be subject to those conditions that the gentleman from North Dakota talked about, preexisting conditions, no guaranteed issue, until Republicans passed the bill in 1996, I believe, called HIPAA, which said that if you had 18 months prior coverage in the health insurance system, then you do not have to worry about getting covered again. Insurance companies offering health insurance must guarantee you issue of that plan. And you are not subject to any preexisting conditions clauses in those insurance plans.

We did that. We passed that. We are the ones who put those guarantees in law. And so last year, we agreed for this small set of workers who lost their jobs because of trade actions or were covered under the Pension Benefit Guaranty Corporation that in that small set of workers, we would reduce that 18-month requirement to 3 months, so that if they only had 3 months prior coverage, they would not have to go through all the underwriting and so forth that workers used to have to go through before HIPAA. And we agreed to that. But now we find that we have large numbers of workers who are not able to avail themselves of the credit because States have not yet put into place plans that comply with that 3-month prior coverage requirement.

So in the meantime, while those States are getting those plans up and running, we say, let those individuals who want to waive that requirement, they may have had 18 months prior coverage and, therefore, they would still have those guarantees that the gentleman from North Dakota spoke about, why not let them voluntarily waive their requirements under the Trade Act, get the insurance for themselves and their families and then when all the States have these policies in place, the 3-month requirement will be there in those plans. I simply do not understand why the other side would object so strenuously to letting 12,000 families get health insurance who otherwise would not be able to get it if this provision does not pass.

I urge the House to have compassion for these workers as well as workers with COBRA coverage and pass this bill today.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield such to time as he may consume to the gentleman from Maryland (Mr. Cardin).

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

Mr. Speaker, I would say in response to the gentleman from New York, what a privilege I feel it is to serve as a ranking member on the subcommittee chaired by the gentleman from New York (Mr. Houghton). He is an example of the leading effort in the Congress to forge bipartisan consensus and address in commonsense ways problems affecting the American people. That is precisely what the bill before us did, the bill that the gentleman from New York (Mr. Houghton) and I agreed to cosponsor until the week before it was to come to the Committee on Ways and Means, at which time we learned of an extraordinarily offensive provision added into the bill. This provision significantly changes and undermines essential consumer protections that exist for displaced workers as a result of trade agreements that are looking for health insurance.

Mr. Speaker, I yield 5 minutes to the gentleman from Washington (Mr. McDermott) to elaborate on this feature of the bill and other points relative to the issue before us.

(Mr. McDERMOTT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 3 minutes to the gentleman from Maine (Mr. Michaud).

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

(Mr. POMEROY asked and was given permission to revise and extend his remarks, and include extraneous material.)

Mr. Speaker, I appreciate the gentleman's outstanding work on behalf of the displaced workers in the State of Maine and throughout the country.

Let me try to put in perspective what this is all about. Let me note back in my days as the State insurance commissioner of North Dakota, I spent a lot of time working on issues, fundamental consumer protections for people buying health insurance. We believe it is critical when we have workers displaced because of trade agreements, they ought to have some assistance with the expenses they incur while looking for other careers and other ways to earn their livelihood.

As a result, we got trade adjustment assistance in that last bill, and it provided for very meaningful assistance, support in purchasing the premium as well as very strong consumer protections in the purchase of that coverage. These protections include guaranteed issues; if you are sick or have some medical condition, it does not matter. You have the right to get that coverage, no preexisting condition exclusion. What that means is, say you want to get coverage but I have some disability maybe that occurred at work. They cannot exclude all medical conditions arising from that disability; they have to cover that, too. And then premiums have to be equitable with other premiums; benefits have to be comparable with other benefits.

What the majority bill would do is allow a period where some of the most important consumer protections do not have to be offered, those providing for guaranteed issue, absolute right to get the coverage, those protecting against

having something excluded; those are also eliminated in this provision.

We have been upset by this provision; and when I say ``we,'' I speak about a swath in the caucus that voted for the fast track trade authority and did so in part because of the protections of trade adjustment assistance.

Mr. Speaker, I include for the Record a Dear Colleague written by the gentlewoman from California (Mrs. Tauscher) and signed by 15 Democrats who voted for the trade bill, all referencing the fact that this trade adjustment protection for displaced workers was an important part of them coming to agree that we ought to pass this trade bill.

Pro-trade House Democrats Fight to Keep Worker Assistance in Trade Bill

Today, 15 House Democrats who voted for the Trade Promotion

Authority bill last year sent a strong letter to Ways and

Means Chairman Bill Thomas expressing their concern about his

efforts to rewrite guarantees for healthcare benefits for

displaced workers that were agreed to as part of the

comprehensive trade bill passed last year.

The effort to keep Trade Adjustment Assistance as part of

future trade agreements is being led by Reps. Ellen Tauscher

(D-Calif.), Adam Smith (D-Wash.) and Cal Dooley (D-Calif.).

Mr. Speaker, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

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

I am going to close debate on my side of the aisle, and I would do so with the following comments. My friend and Ways and Means colleague, the gentleman from Louisiana, raises on the question of health coverage for displaced workers the important issue of whether or not coverage is actually available for these workers or might there be because of these preexisting conditions circumstances where no coverage is available and by insisting on these protections we are actually depriving these workers of the availability to get health coverage.

I am pleased to respond to that concern by saying that negotiations at the State level are coming along very successfully, and so far 13 States have been successful at getting insurance companies to enter into an agreement to provide the coverage to these displaced workers under the consumer protections in the bill. Thirteen States. What concerns us about raising this issue at this time is that we think it sends a very bad signal from Congress to the States and the insurance companies in negotiations with them, that they might not have to comply with these consumer protections.

As an old insurance commissioner, I know darn well you give an insurance company the chance of not offering coverage to everybody, but, rather, cherry-picking, picking only the ones they want to cover as opposed to the mandate that they cover everybody, well, they are going to want to cherry-pick. Of course they are going to want to do that. If you give insurance companies the opportunity to say, well, we'll cover you except for the disability that you have or the preexisting health condition that you have, of course insurance companies are going to want to restrict their coverage from those medical features that are so troublesome to the displaced workers. We think that passing this bill with this provision in it is going to bring negotiations at the State level potentially to a standstill because the insurance companies are going to hold out for a sweeter deal, and what a sweet deal it would be.

We are going to have a situation where the insurance companies, under the majority proposal, would be able to exclude who they want to. Of the individuals they underwrite, they will be able to exclude the medical conditions that they want to and they are still going to get the Federal Government paying 65 percent of the premium. Let us face it, it is not often you put forward Federal tax dollars to pay private insurance premiums. We have chosen to do so at this time because these are workers that lost their jobs because of trade agreements entered by this country. That is certified by the Department of Labor.

We think under those circumstances, having lost their job through no fault of their own, because of trade agreements entered and ratified here in Congress, that those workers need some help while they get their lives back on track, get a new livelihood in place, and that help certainly includes health insurance coverage to protect them and their families. We are even going to help pay for it. Under these circumstances, let us not let the insurance companies run roughshod by excluding who they want, by excluding the medical conditions that they want. We have got to hold for the whole package, give these workers the absolute right to get the coverage they need and the absolute right to get coverage for all of their medical conditions, not just those the insurance company is going to want to pick.

Work is coming along well at the State level. Again, 13 States concluding these agreements, others still in negotiation now. Now is not the time to take the pressure off. Now is not the time to give the insurance companies a pass. Now is not the time to walk away from the health care needs of our displaced workers. Hold the consumer protections, reject the majority bill, we will take this taxpayer protection right, remove the poison pill, bring it back here, as it should have been in the first place, and get on with reforming the Tax Code in the responsible ways but not in the ways that, because of the poison pill, hurt our displaced workers.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I want to talk about the health provision. It is unfortunate that the Republican majority insists on inserting this provision in this bill. The TAA provisions were carefully crafted. Many relied on them for their vote. And now the majority is taking a step away from them.

In the legislation there were protections for beneficiaries, four of them, if

they could not get COBRA, a requirement that States develop these plans with these four protections.

Now, essentially what they are saying is that provision can be changed and individuals can buy insurance individually without those protections. This is going to undermine the negotiations that are continuing now for the completion of State plans. The younger, more healthy people will buy this insurance without the protections. It will reduce the incentive of insurance companies to work this out with States.

But then it was said yesterday that State legislatures do not meet every year, that some only meet every 2 years, so that is an inhibition on working this out. It does not take State legislative action to work out these plans. As has been true in a number of States, it can be done without action by the State legislature.

This a voluntary plan, and what is going to happen if this amendment is allowed, and I do not think it could pass the Senate, is that there will be selection by the younger and more healthy, leaving the insurance availability to older workers that will be too expensive, or there will be no availability whatsoever.

So this is a change that matters. This is another example of an erosion of a safety net that was worked out carefully between the two parties.

Now, look, the gentleman from North Dakota (Mr. Pomeroy) said to people on your side, we will sit down and talk about finding a resolution to this, and a few of us suggested we would join. The answer was, well, we will only talk to the gentleman from North Dakota (Mr. Pomeroy). We will not let your staff in any meeting. I know that directly. And then there was no discussion with the gentleman from North Dakota (Mr. Pomeroy).

So essentially, what you did was to go into some room and make a decision that you were going to change a TAA provision for people who were laid off. This is trade adjustment assistance for people who are unemployed because of the impact of trade.

So if you really cared enough, you would sit down and work this out. Instead, you inserted it in a bill that has IRS provisions, and the gentleman from Ohio (Mr. Portman) talks about how laudable they are. Well, they are laudable provisions, so why put an anchor around them, and why pull back from something that you yourselves negotiated with people on this side to provide health protection for people laid off through no fault of their own?

So this is enough of a flaw, in my judgment, for people to vote against this bill. This is turning your back on what you agreed to, without even being willing to sit down and try to work it out with the minority. This is turning your backs on thousands of people who need health coverage, and I urge that we take the steps to take this out of the bill and not wait for the Senate to do it. Support the substitute that has been offered by the gentleman from New York (Mr. Rangel) and now being managed by the gentleman from Washington (Mr. McDermott).

Mr. Speaker, the gentleman from Illinois has repeated a claim that was made earlier by the gentlewoman from Connecticut, and it simply is wrong. Under the legislation that was passed here, the States are mandated to provide this coverage. Most of the States are providing it or are negotiating agreements with insurance carriers. There are only a small number of States with a much smaller number of employees who are constituents or residents who have not done this yet. They can provide this insurance, for example, by modifying their risk pools rules. It does not take legislation. It does not take an act by the Governor and by the State legislature. They can take this action.

Now, look, we offered to sit down with the majority and work this out. For example, there could have been an alternative that if any State did not live up to the mandate, there could be insurance through the Federal plan. That was just one idea. But the majority refused to sit down with us to work this out. And what this is is backtracking. What this is is a foot in the door away from State plans, in addition to other plans that could be bought through COBRA and to allow individuals to buy individual insurance without the protections that are guaranteed in the legislation.

So what is going to happen is there will be cherrypicking and a lot of employees are going to be left with only more expensive insurance to buy. That is the basic principle here. The basic principle. There is a State mandate. The States are fully capable of carrying them out, and the majority is using the fact that a few States or some States have not yet acted to essentially create this vacuum. That is what the majority is utilizing to change the kind of insurance that is going to be purchased by a number of the more healthy people covered by TAA, leaving everybody else in a worse situation.

So, look, there is a State mandate here. The States can carry this out. And if you think not, and we offered to get a quick study of this, sit down with us and try to figure out an answer to a problem that I think does not really exist. You do not like these approaches that are based on State plans, on governmental plans. You prefer individual insurance where people can be cherrypicked by insurance companies. That is not the policy embedded in the TAA that was passed here. We should not turn our backs on what was passed here just a few months ago.