[Pages H2838-H2853]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PROVIDING FOR DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA PLANS
AND FLEXIBLE SPENDING ARRANGEMENTS

Mr. McCRERY. Mr. Speaker, pursuant to House Resolution 638, I call up
the bill (H.R. 4279) to amend the Internal Revenue Code of 1986 to
provide for the disposition of unused health benefits in cafeteria
plans and flexible spending arrangements, and ask for its immediate
consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Bonilla). Pursuant to House Resolution
638, the bill is considered read for amendment.
The text of H.R. 4279 is as follows:

H.R. 4279

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA
PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.

(a) In General.--Section 125 of the Internal Revenue Code
of 1986 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and
(j), respectively, and by inserting after subsection (g) the
following:
``(h) Contributions of Certain Unused Health Benefits.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan solely because qualified benefits under such plan
include a health flexible spending arrangement under which
not more than $500 of unused health benefits may be--
``(A) carried forward to the succeeding plan year of such
health flexible spending arrangement, or
``(B) to the extent permitted by section 106(d),
contributed by the employer to a health savings account (as
defined in section 223(d)) maintained for the benefit of the
employee.
``(2) Health flexible spending arrangement.--For purposes
of this subsection, the term `health flexible spending
arrangement' means a flexible spending arrangement (as
defined in section 106(c)) that is a qualified benefit and
only permits reimbursement for expenses for medical care (as
defined in section 213(d)(1), without regard to subparagraphs
(C) and (D) thereof).
``(3) Unused health benefits.--For purposes of this
subsection, with respect to an employee, the term `unused
health benefits' means the excess of--
``(A) the maximum amount of reimbursement allowable to the
employee for a plan year under a health flexible spending
arrangement, over
``(B) the actual amount of reimbursement for such year
under such arrangement.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to taxable years beginning after December 31,
2003.

The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall
be in order to consider the amendment printed in part A of House Report
108-484, if offered by the gentleman from New York (Mr. Rangel) or his
designee, which shall be considered read, and shall be debatable for 1
hour, equally divided and controlled by the proponent and an opponent.
The gentleman from Louisiana (Mr. McCrery) and the gentleman from
California (Mr. Stark) each will control 30 minutes of debate on the
bill.
The Chair recognizes the gentleman from Louisiana (Mr. McCrery).
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 4279, a bill that would update flexible
spending arrangements, known as FSAs, to allow up to $500 of unused
health benefits to be carried forward to next year's FSA or transferred
to a health savings account. Flexible spending arrangements allow
employees to set aside money in an employer-established benefit plan
that can be used on a tax-free basis to meet their out-of-pocket health
care expenses during the year. However, under current law, any money
remaining in the FSA at the end of the year must be returned to the
employer.
Nearly 37 million private sector employees have access to an FSA.
However, only 18 percent of eligible employees take advantage of the
pretax health care spending provided by flexible spending arrangements.
Many employees cite the fear of forfeiting unused funds as the primary
reason why they elect not to participate in an FSA. Those employees who
do participate in an FSA often underfund their account rather than risk
losing the funds at the end of the year.
Let me expound on that for just a minute because what happens in most
flexible spending arrangements is that the employee chooses to take
part of his monthly income, set it aside into one of these flexible
spending arrangements, and that income that he removes from his
paycheck is basically tax-free income, and that is a good thing. The
employee likes that. However, it is still his income. And if he is
afraid that he will lose some of that income at the end of the year
because he has not used it for the specified purpose in the account,
then of course that employee is going to be very reluctant to set aside
that money.
This use-it-or-lose-it rule does more, though, than discourage
widespread participation. It can also lead to perverse incentives such
as encouraging people to spend money on health care products and
services that they do not necessarily need. In other words, at the end
of the year, if there is money left in the account, the employee's
incentive is to go out and get an extra pair of sunglasses or whatever
it is and spend that money, and that in turn drives up demand, drives
up the price of health care for everybody.
H.R. 4279 provides greater flexibility and consumer choice. The bill
would allow up to $500 of unused funds at the end of the year to be
carried forward in that flexible spending arrangement for use in the
next year, or that employee could begin a new HSA, a health savings
account, and put up to $500 into that health savings account.
I believe this bill will encourage greater participation in flexible
spending arrangements and, to a lesser extent, participation in health
savings account benefit plans because people will not be afraid of
losing their hard-earned money. The Joint Committee on Taxation
estimates that approximately 76 percent of current FSA participants
will take advantage of the rollover option each year.
Through this legislation, we can expand access to health care for
millions of Americans by making it easier for them to save for their
health care costs. This bill would also reduce end-of-the-year excess
spending and overuse of health care services, allowing FSA participants
to benefit from the prudent use of their health care resources.
Mr. Speaker, I should point out that a nearly identical FSA rollover
option was approved by the Committee on Ways and Means as part of H.R.
2351 on June 19, 2003. The provision passed this House last year as
part of the Medicare Modernization Act.
Reducing health costs and increasing access to health care are worthy
goals that every Member of Congress should support. H.R. 4279 takes an
important step in that direction; so I encourage my colleagues to
support this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
I stand here in just abject wonder at having 2 hours and 10 minutes
to debate this bill over which there is very little controversy, a few
dollars here and there; and I was going to ask the gentleman from
Louisiana if he might accept a unanimous consent request that we cut
the time in half, spend the first hour on this bill and spend the
second hour debating whether or not Rumsfeld ordered the torture of
prisoners in Iraq, and then we might have some more fun at least in the
2 hours we have got.

[[Page H2839]]

Does the gentleman agree?
Mr. McCRERY. I object, Mr. Speaker.
Mr. STARK. Mr. Speaker, it is kind of sad that this bill was not
worked out in committee because the differences, which I will describe
shortly, are simple and there could have been a compromise, it appears
to me, and certainly we have a substitute which will come up and we, I
think, have to discuss both.
Let us start out by suggesting that I would like to agree with the
distinguished gentleman from Louisiana that it is probably a good idea
to not encourage people to spend foolishly, to buy two extra pair of
eyeglasses or go out for an extra shot of Botox or something at the end
of the year just to use up the money in their flexible spending
account.
The problem, and where we would disagree, is that the gentleman's
bill is not paid for, and this does push us further into debt; and our
bill and the differences, and we have some, is paid for. If the
gentleman wanted to say let us compromise right now and pay for half of
it, we could get this done in 15 minutes. I am easy. But that is
basically our difference. The Republican bill creates more of a
deficit, and it does discourage people from spending foolishly at the
end of the year and it costs, what, 8 billion bucks over 10.
Therein is the major difference. I would like to discuss one minor
difference which is complex and which our substitute drops. The
gentleman from Louisiana, the Republican bill, allows members of a
flexible spending account to transfer money into a health savings
account. The only problem with that is that, insofar as the regulations
appear now, one cannot have a flexible spending account and a health
savings account at the same time, so that to transfer the money from
the flexible spending account into the health savings account, they
have to drop their flexible spending account, and then the next year
they would not have 500 bucks to transfer.
I mean, it is a way to encourage, or perhaps force, people into
dropping a flexible spending account and move into a health savings
account. I am not sure that was his intention, but that is the reality.
And there is almost no one who would qualify to transfer money, the
$500, say, from the flexible spending account into a health savings
account. As a matter of fact, it is scored at 20 million bucks over 10
years; so if it is $20 at maybe 1 million people who would use it, and
if our purpose is to encourage health savings accounts, I would suggest
to the gentleman that that is a separate debate and perhaps not really
pertinent to the question of whether we should allow people this
carryover and repeal the use-it-or-lose-it provision. Had we had a
chance to mark this up in committee and work it out in some detail, I
think we could have worked out a system, perhaps brought two bills to
the floor.
The bill, I know, and I hate to be critical, but I know it is
introduced as a centerpiece of the week for the uninsured, and I am
afraid that this bill does nothing for the uninsured. We cannot have a
flexible spending account and not have access to insurance. So we
really are not dealing with the uninsured here. People who have
flexible spending accounts, as a matter of fact, probably have very
generous and good health insurance coverage. So it is somewhat
disingenuous, and that is the harshest thing I can think of, to suggest
that this is going to have any effect or impact in Cover the Uninsured
Week.
So if I could summarize just for a moment, there is a part of the
bill which would help people and prevent them from frivolous spending
from their flexible spending accounts. We concur in that, and our
substitute includes that. Our major difference is, and we could have a
vote, is it worth increasing the deficit by $8.5 billion. We have some
simple ways to pay for that. For instance, not letting corporations
reincorporate offshore and avoid Federal income tax on their corporate
income, a theory that has some bipartisan support.
There are some egregious loopholes that were dreamed up mostly by the
Enron Corporation, which we also closed. I do not think anybody would
suggest that those loopholes ought to continue. So in a minimal way, we
changed the Tax Code to make this, and it is a principle, we ought to
pay for things that we are providing, and that is it. We would leave
the health savings account portion out. We would allow people to
transfer the $500 and carry it forward so they would not have a use-it-
or-lose-it, and we would pay for it. Other than that I do not know what
we could find to disagree about for the next 2 hours, but in my
inimitable way I will be just as disagreeable as the gentleman from
Louisiana would like me to be.
Mr. Speaker, I reserve the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank the gentleman for his complimentary remarks
about expanding, making more versatile the flexible spending
arrangements. And I would not disagree with him on his comments about
HSAs to the extent that I would agree that this legislation is not
designed to encourage HSAs. That is not the intent of this legislation,
at least not my intent as the author. My intent is, though, to make it
convenient for employees who just may be in a firm that decides to
create HSAs, give them kind of a head start on funding their HSA. I
agree with the gentleman there will not be many instances of that in
the near future; but in those few instances that there may be and an
employee has $500 left over in his account, I see no reason why he
should not be able to take advantage of using that money, transferring
it to the employer's new choice of health insurance for his employees,
an HSA.
Mr. STARK. Mr. Speaker, will the gentleman yield?
Mr. McCRERY. I yield to the gentleman from California.
Mr. STARK. Mr. Speaker, if I were to stipulate to the gentleman from
Louisiana that we keep the HSA portion, would the gentleman agree to
pay for it or some of it here, and we will have a compromise right now?
Mr. McCRERY. Mr. Speaker, I believe we will state our objections to
the substitute during the appropriate debate time on the substitute. So
I would regretfully reject the gentleman's kind offer at this time.
Mr. STARK. Mr. Speaker, I thank the gentleman.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Royce).
Mr. ROYCE. Mr. Speaker, I thank the gentleman for yielding me this
time.
I have been trying for some years now to push this concept, a bill
that I introduced a number of years ago. With the knowledge that we
have got, I do not know, maybe 37 million Americans who do have access
to these flexible spending accounts, and I think many of us here
probably know someone who does, maybe a spouse, if he or she is
employed in the private sector, but the problem is that over half of
these individuals do not utilize their access to FSAs because of this
use-it-or-lose-it provision that we are trying to eliminate through
this measure here today. And as we know, currently, the employer and
the employee can set aside money before taxes into this flexible
spending account and then that money can be used just like cash to pay
for out-of-pocket medical expenses and insurance copayments and
doctors' visits and even child care. The downside is that if they do
not spend their money at the end of the year, they lose it, and it goes
back to their employer.
I originally introduced this bill as a consequence of a conversation
I had 4 years ago with my wife, who came home with yet another pair of
glasses, and Marie said she purchased them not because she needed them
necessarily. She liked them, but she said she did not want to lose the
money in her FSA and her employer said that if she does not spend it,
this money will revert back to the company.

{time} 1330

So the rules governing FSAs force workers who have put in money to
match the money put in by their employer to scurry around at the end of
the year and wastefully spend their health care dollars, just so they
do not have to forfeit it.
I do not know how many of you have seen the TV ads that run each
December talking up medical procedures, reminding people to spend their
unused FSA dollars. Now, that is a wasteful procedure. What is worse
here is over half of the employees who are eligible do not sign up in
the first place because they do not want to lose their

[[Page H2840]]

money. So this use-it-or-lose-it is the worst type of economic
incentive. It discourages savings and, instead, encourages frivolous,
needless spending.
So this initiative that I have introduced and has been picked up by
the committee will allow workers to roll over up to $500 of their own
money back into their FSA at the end of the year, or, as mentioned, put
it into a recently created Health Savings Account. I think it is a
commonsense solution that will give peace of mind and let employees
save for future expenses.
I encourage the Senate to take immediate action on this important
legislation. We have pushed this for some years. We need to get it
through the process, because FSAs are a commonsense, free market
approach that allows people to take more control over their health care
dollars. The use-it-or-lose-it provision must go.
Mr. STARK. Mr. Speaker, I am pleased to yield 6 minutes to the
distinguished gentleman from California (Mr. Becerra).
Mr. BECERRA. Mr. Speaker, I thank my colleague and friend from
California for yielding me time.
Mr. Speaker, let us make sure that we do not confuse our colleagues
or anyone who might be watching this on what we are talking about.
First, flexible spending accounts, most people who have insurance,
health insurance through an employer, are eligible to, pretax, ahead of
time, declare how much they think they are going to spend out of pocket
that will not be reimbursed by their employer's health plan. That way,
you are using money that has not yet been taxed to pay for some of
these services, a copayment that you may have for a service that you
receive, or vision or dental benefits that are not covered completely
under your health care plan where you pay out of pocket.
Those out-of-pocket costs, if you have a flexible spending account
and you bank money in that account at the beginning, you can then use
that money, you can bring down the account, and use that money, pre-
tax, to pay for your out-of-pocket costs for your health services that
are not covered by your employer's health care plan. A great idea,
pretax dollars to pay for health care services. That is fine.
Then the notion under the current law, that if you have money in that
account and you do not spend it down through your out-of-pocket
expenditures to reimburse yourself for those out-of-pocket
expenditures, by the end of the year anything left over you lose. So
you have to calculate how much you think you are going to end up
spending out of pocket beyond what your employer's health care plan
would provide, and then hope you spend it all.
Some folks find themselves in a position where they still have money
left over in this flexible spending account at the end of the year, and
they lose that. That is a calculated risk.
This proposal to try to allow some flexibility in that use-it-or-
lose-it rule says you could carry over a certain sum, I think it is
about $500, into the next year. So let us say you used up all but $200
in your flexible spending account; rather than lose it at the end of
this year, you would get to carry that over into next year's flexible
spending account. So then you would be able to go ahead and budget
based on what you think your needs will be next year.
A great idea. What is the problem? There are two.
First, you got to ask the question, why complicate such a simple,
straightforward, and sensible idea to allow us to carry forward a
portion of that flexible spending account money to the next year and to
modify that use-it-or-lose-it rule? Why then complicate it by saying,
by the way, which are going to let you send it over to what are called
HSAs, these health savings accounts which are principally accounts
which help wealthy folks or healthy folks when it comes to getting
access to health care, because these HSAs give you money you can use
later on to buy these catastrophic care plans for health care, which,
for the most part, the only folks who can afford to do that, whether
healthwise afford or monetarily afford, are people who are very wealthy
or very healthy, because they do not have to worry about trying to find
a health care plan, because they figure they are 25 years old, they are
not going to die, or they have so much money they can pay for whatever
services they need, or they have enough health care through other types
of plans or insurance.
HSAs do not help the bulk of Americans. So why complicate this issue
on a practical idea on giving us some flexibility on the spending
accounts, the flexible spending accounts.
The second problem, there are 8.4 billion reasons in the second
problem. $8.4 billion is the cost this bill. The reason those $8.4
billion are 8.4 billion reasons there is a problem with this is we are
$400 billion-plus in deficit this year for the Federal budget.
So it is something different if you are talking about a Federal
budget that is balanced and saying we are going to spend $8.4 billion
more, because this bill does not tell us how we are going to pay for
it.
So this is not a case where we are saying, well, the budget is
balanced at the Federal level. We are taking care of all of our
expenses. We are taking care of the needs of the soldiers in Iraq,
which, by the way, the President just told us he needs another $25
billion as a down payment. That is not saying that is going to cover
the cost. That is a down payment.
We are being told in the education committees they are cutting the
amounts of money we are spending for our kids in schools.
We are told the that the President's budget proposes cuts in veterans
services, for people who have served in our Armed Forces and are now
veterans.
We are told in health care, believe it or not, the proposal in the
House is to cut Medicaid spending for aged, blind, and disabled
individuals in this country more than $2 billion.
So were we talking about a balanced Federal budget, a proposal that
costs $8.4 billion and does not tell us how it is going to pay for
itself, you may want to think about whether we should do that or not.
But when you are $400 billion in debt, the largest Federal deficit we
have ever seen in the history of this country, to talk about not paying
for this is crazy. Especially when it comes to education, veterans
services, other health care programs, this Congress is requiring that
there be a pay-for for any proposal that costs money.
One more time: If I want to increase health care services to aged
individuals, poor seniors in this country, I have to find a way to pay
for that proposal before it can get through this House. If I want to
increase spending for our schools and all the children that go to our
schools today, I have to find something to pay for that proposal before
it can get through this House. But this proposal, as sensible as it
might sound, does not need that. Especially when you add the part about
sending money off to these HSAs, to these health savings accounts,
which help wealthy and healthy individuals, it makes very little sense.
So a good idea, complicated by bad ideas within it, makes it very
tough. That has sort of marked this whole session of Congress, and I
hope we find a way to be more sensible about moving forward with ideas.
The Democratic substitute addresses this, and I hope that we can vote
for the Democratic substitute.
Mr. McCRERY. Mr. Speaker, I yield 4 minutes to the gentleman from
Minnesota (Mr. Ramstad), a distinguished member of the Committee on
Ways and Means.
Mr. RAMSTAD. Mr. Speaker, I thank the chairman for yielding me time,
and I rise as a strong supporter and cosponsor of this important
legislation.
Mr. Speaker, it only makes common sense to allow workers to carry
forward unspent funds in their flexible spending accounts to the
following year or to allow workers to roll the funds into a new health
savings account.
This change is really long overdue. Flexible spending accounts are an
important vehicle to help workers and their families save pretax
dollars for medical expenses. Because of the tax savings, families can
actually save up to 30 percent of the cost of out-of-pocket health care
expenses by setting aside a portion of their income in a flexible
spending account.
American families, families back home in Minnesota, know only too
well that out-of-pocket expenses for health care have been rising at an
astonishing rate. In fact, the cost for the average worker and their
family has spiked over 100 percent since 1998, with no end in sight.

[[Page H2841]]

In spite of the skyrocketing health care costs and the significant
tax savings associated with the FSAs, relatively few workers choose to
take advantage of this vehicle to save for health care costs. The
reason for that is simple: This stupid, arcane, absurd use-it-or-lose-
it rule. This rule, this use-it-or-lose-it rule, makes absolutely no
sense at all.
As absurd as it is, Mr. Speaker, workers are required to forfeit all
unspent funds remaining in their FSA accounts at the end of the plan
year. This use-it-or-lose-it rule is totally counterproductive, and it
is a huge gamble to families, especially low- and middle-income
families who can least afford to guess wrong and lose the unspent
funds.
So what is happening is rather than facing that loss, many families
with these FSAs rush to spend money at the end of the year, as my
colleague previously expressed, often on high-cost medical items. How
can we tolerate such a bizarre rule that actually discourages prudent
spending on health care? It is time to end the use-it-or-lose-it rule.
Mr. Speaker, Ceridian Corporation, which is the leading administrator
of FSAs for employers and is based in my district in Bloomington,
Minnesota, estimates that while some 25 million, listen to this, 25
million American workers and their families are eligible to participate
in health care FSAs, fewer than 20 percent actually choose to
participate. It is obvious why. People do not want to take this gamble,
and they are not impressed; in fact, they are discouraged by the use-
it-or-lose-it rule.
This bill, which I applaud the gentleman from Louisiana (Chairman
McCrery) for bringing to the floor today, is very similar to
legislation I introduced over 3 years ago, and thanks to the leadership
of the gentleman from Louisiana (Mr. McCrery), it is finally here
today.
So it is high time, Mr. Speaker, that we address this important,
unfinished business. It is time to help millions of workers and their
families better afford rising medical costs. It is also time to prevent
the wasteful end-of-year spending the use-it-or-lose-it rule now
promotes.
I urge my colleagues to support this sensible and balanced reform. We
have got to pass this legislation here today, and encourage the other
body to follow suit.
Again, I thank the gentleman from Louisiana (Chairman McCrery).
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to inquire of the gentleman from Louisiana,
it is my understanding that you could use a flexible savings account
to, for example, pay for abortion if your employer's health care plan
did not provide that benefit. Is that not true?
Mr. McCRERY. Mr. Speaker, will the gentleman yield?
Mr. STARK. I yield to the gentleman from Louisiana.
Mr. McCRERY. Mr. Speaker, a flexible spending account, health
flexible spending accounts can be used for any health care expenses
incurred by the employee.
Mr. STARK. Mr. Speaker, reclaiming my time, there is nothing in this
bill that would prohibit a woman from using the benefits of the
flexible savings account for an abortion; is that correct?
Mr. McCRERY. Yes, sir.
Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman for
yielding me time and for a very thoughtful substitute. But I might
associate myself with his earlier remarks.
There are such important issues of the moment that are confronting us
today, the abuse of prisoners in Iraq, the tragic loss of life of Mr.
Berg, and the need to be able to provide for safe passage and safe
conditions of our United States military.
I almost feel somewhat shortchanged by discussing this legislation,
as important as it is, because I think there is necessary leadership
that is needed on crucial issues facing America, the peace and security
of Iraq and the peace and security of our military.
But even though this bill has good intentions, let me argue that this
bill is only an added burden on America's financial pocketbook. It
costs $8 billion. It is unpaid for with the bill on the floor.
The substitute is paid for, but when we add what I have heard in many
of our metaphors, we add insult to injury by costing $21 million extra.
We, frankly, have veterans who are not able to get in veterans
hospitals, and this bill, which serves really no purpose, it will
actually undermine the health insurance benefits received by millions
of Americans. It is confusing and complex. It makes a mess of a system
that needs to be fine-tuned, not destroyed.

{time} 1345

The majority of Americans already receive health care through
employers, though 44 million are uninsured. That is what I would like
to be doing here, is finding a way to provide insurance for the
uninsured. I would like to be able to find a guaranteed prescription
drug benefit for seniors and not have them use something that is
confusing.
This one will offer a tax break, another tax break when we are
needing monies to ensure the peace in Iraq, monies to keep veterans
hospitals open, monies to get a guaranteed prescription drug benefit.
It sounds good. This coverage has a deductible of over $1,000, and it
sounds good; but think about it. The bill will serve to encourage
businesses to cut your health insurance programs or raise deductibles
for their employees. Low- to moderate-income employees and those who
are uninsured pay all kinds of taxes, payroll taxes, sales taxes,
property taxes. However, they tend not to pay enough income taxes to
take advantage of this new Republican give-to-the-rich scheme or get-
what-you-can, or give-to-those-who-already-have.
Mr. Speaker, I would simply ask that we support the substitute, a
paid-for program, and we do not give an extra gift of $21 million that
is unpaid for. Maybe after we do this, we can get to the floor of the
House and find out how we can provide peace and security in Iraq, how
we can stop the abuse that is going on, bring our soldiers not in
harm's way, but away from harm's way, provide for seniors and those who
are uninsured. I believe that is the right way to go.
Because, Mr. Speaker, let me say this. In my very district, there is
a veterans hospital where I have to meet veterans every day who are
asking why they are denied services at the hospital. And just as a note
that we should bring to the attention of our colleagues, it is because
we have a means test for allowing you to go to the veterans hospital
and get your medical needs taken care of. If you make a certain amount,
the door is closed.
My belief is, this Congress's obligation to veterans and those who
enter the United States military is that we should continue our
promise, and that is the promise that services will always be there.
How can we do so if this legislation not only costs money and not be
paid for, but adds an extra $21 million for the health savings account?
It would be far preferable to support the substitute which clearly pays
for it, does not extend it to a health savings account, provides for
creativity and flexibility, which I support, but focuses our attention
on paying for those needs that are necessary to take care of those who
cannot take care of themselves.
Mr. Speaker, I ask my colleagues to oppose H.R. 4279 and vote for the
substitute.
It used to be that the most challenging part of my job here was
finding meaningful ways of improving quality of life for the people in
my district. Now it seems the most challenging part is trying to figure
out how the Republican leadership will next try to deny those same
people the lives they and their families deserve. Today's bill is one
of the more creative approaches I have seen by the Republicans to
advance their goals of giving their rich political donors big tax cuts,
and denying the poor and middle classes healthcare and the services
they need.
This bill serves no one that really needs it, and will actually
undermine the health insurance benefits received by millions of
Americans now. It is confusing and complex, and makes a mess of a
system that needs to be fine-tuned, not destroyed. The majority of
Americans now receive health insurance through employers. This bill
will offer a tax break to people who do not have health insurance
coverage, and those whose coverage

[[Page H2842]]

has a deductible of over $1,000. It sounds good, until you think about
it. This bill will serve to encourage businesses to cut their health
insurance programs, or raise deductibles on their employees. Low- to
moderate-income employees and those who are uninsured pay all kinds of
taxes: payroll taxes, sales taxes, property taxes. However, they tend
to not pay enough income taxes to take advantage of this new
Republican-give-to-the-rich scheme. So the exact people who are now
being left out of our healthcare system, and who need relief, are being
left out of this bill.
The underlying goal of this bill is to dismantle the employer-based
health insurance system that the chairman of the Ways and Means
Committee hates. He has stated that he does not like employer-based
health insurance because it shields people from the cost of healthcare
and thus enables people to use health care too much. I don't see that
Americans have made themselves too healthy. I want to increase access
to care not decrease it, so I will vote against this bill.
Not only is this a bad bill, it is an expensive one. It will cost $71
billion over the next 10 years--all money borrowed from our children
and granchildren. In the later years of the budget window, this bill
will cost in excess of $10 billion per year, and will accelerate just
at the time when the baby boom generation retires, denying resources to
meet our commitments to the Social Security and Medicare systems.
Again, it seems this bill was crafted to specifically target and
destroy the elements of our healthcare system that people know and
trust--Medicare and employer-sponsored coverage--and use the savings to
give to CEOs, the healthy, and the wealthy. It is not surprising to
find that due to the structure of this bill, the same people whose
children were denied the benefits of a child tax credit will also not
receive any benefits from this bill.
Of course they will be allowed to help pay the interest on the
booming debt that it adds to.
I will oppose this bill and encourage my colleagues to do the same.
Mr. McCRERY. Mr. Speaker, I would inform the gentleman from
California that I now have two speakers that request time on my side,
in addition to my closing. So I just wanted to let him know.
Mr. STARK. Mr. Speaker, if the gentleman will yield, I will then
reserve my time and precede his closing and try and warm up the
audience for what I know will be eloquent remarks.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Pennsylvania (Ms. Hart).
Ms. HART. Mr. Speaker, I rise in support of the flexible spending
arrangements. I am often baffled in this House when I have the
opportunity to listen to the debate. We are talking about policy that
will be far-reaching. Flexible spending accounts, flexible
arrangements, medical savings accounts, health savings accounts are all
plans that give flexibility and discretion to employers and employees.
They give power, economic power, to employers and employees.
This is a much larger issue than how much this may cost this year
because, ultimately, it will save the government money. Ultimately, it
will save individuals money. And, ultimately, it will save employers
money which, in the long run, will mean that more people will be likely
to access health care through their employer. That will, by the way,
save the government some money.
One of the first things I heard about as a candidate for Congress was
from one of the employers in one of the communities I represent. And he
said to me, I want you to pay close attention to the law around medical
savings accounts, flexible spending arrangements, the kinds of things
that are supposed to be flexible for benefits for employees to give
them economic power, but are not, because there are too many limits on
them.
Today's bill removes one of those limits, or at least significantly
reduces it, and that is this perverse incentive to quickly spend any of
the unused money in the flexible spending arrangement, the use-it-or-
lose-it rule. We change that today; and we say to the employee, if you
do not need to use that health care right now, you do not need to. You
do not need to waste the money. You can roll that over to next year;
and if something happens next year that you need it, you can use it.
And if you do not need it next year, you can roll it over. Does that
not just make sense? Should we not in Congress be the ones who are
providing the flexibility and the options to the employee, not putting
crazy limits on them?
This is a great bill, and we should go even farther than this and
allow employers and employees to work together to provide more options
for them to provide health care for their families, not fewer. Fewer
limits, more options and, ultimately, more opportunity for employers to
provide health care. Ultimately, it will provide opportunity for us to
put downward pressure on the costs of health care, also downward
pressure on the costs of health insurance, because there will be more
competition, more flexibility, more opportunity, and more coverage.
More coverage is ultimately what we want, and this bill will help us
get there.
Mr. Speaker, I commend the gentleman from Louisiana (Chairman
McCrery); I commend the members of the Committee on Ways and Means for
moving this forward. Because that employer back home, he is not by
himself. He wants to continue to provide good and flexible health
benefits for his employees. They are like family to him. Most of the
employers in my district are small employers. They want to provide
health care. It has become so expensive in what people traditionally
thought of, they cannot afford it. With flexible arrangements they can,
and they can continue to provide it into the future.
Mr. STARK. Mr. Speaker, I reserve the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Iowa (Mr. King).
Mr. KING of Iowa. Mr. Speaker, I thank the gentleman for yielding me
this time. I appreciate the opportunity to say a few words about this
issue of H.R. 4279.
I am a former employer. I started a business in 1975; and I met
payroll for 28 years, 1,400-and-some consecutive weeks. I was one of
the first employers in my industry to provide health insurance for my
employees. It was a difficult thing to do because of all of the Federal
constraints that made it difficult for a small business to compete with
large business. This is rooted back in World War II when there were
wage and price controls, and employers that tried to find a way to
offer additional benefits or wages to their employees were able to
deduct health insurance benefits for them as an expense and then offer
that as a quasi-raise or in the form of a benefit, an increase in
compensation for their employees.
The legacy of that remains today in Federal law. We have legislation
that continually makes it difficult to have the flexibility necessary
for businesses to work with their employees so that they can have a
legitimate health care plan. We have had to find ways around Federal
regulation to do that. H.R. 4279 helps us so that we do not have to
jump around that one or find another way to get things done.
I remember a Congressman coming into my district in the early 1980s
making a pitch for a national health care act. And I remember in that
room of about 80 people, in the end I was the only one of the employers
in the room that provided health insurance for my employees, and I
remember fighting off that effort of going for a national health care
because we need more individual responsibility so that we have more
individual decisions made, in the vision of Adam Smith and the
invisible hand.
We have today evolved into a health care system that has more and
more HMOs, fewer and fewer entities making decisions about more and
more people, to the point where the patients now have gotten the
mindset more of sheep of submitting themselves to the process rather
than making decisions on their health insurance and on their health
care. H.R. 4279, again, short-circuits some of that, gives us a little
more freedom and puts flexibility into the process.
I remember when the previous President was elected in 1992 and the
First Lady came out with a plan that many of us have described as the
Hillary Care Plan. I have that flow chart on my wall in my office in
Iowa that scares me half to death as an employer looking at a national
health care act versus individual flexibility. We have two choices
here, and the people that are against this bill are the ones that are
preserving what they can of the opportunity to build a Federal health
care Canadian-style plan.
Mr. Speaker, H.R. 4279 helps us get more decisions in the hands of
more

[[Page H2843]]

people so that they make their individual decisions in an efficient
fashion, the way that the gentlewoman from Pennsylvania (Ms. Hart)
described. It gets rid of that perverse incentive of spending the money
at the end of the year because you cannot roll those dollars over.
So I applaud the authors of this bill, the people who worked so hard
on it. I appreciate the opportunity to speak in favor of H.R. 4279.
Mr. STARK. Mr. Speaker, I yield 6 minutes to the gentleman from
Washington (Mr. McDERMOTT), as we are blessed with his late arrival.
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, it is always good to come out here and
talk about an important issue. We have had a wartime President who has
wanted to talk about war: I am a wartime President, I am doing this, I
am doing that. I wish we had a domestic President who would
occasionally think about what needs to be done on the domestic scene.
This particular little bill is what they are going to hold out for
their evidence that they care about domestic health problems in this
country.
Now, I do not know; it would be laughable if it was not so sad that
this is the only bill that they can come up with. I know my good
friend, the gentleman from Louisiana, knows, he and I share the desire
for everyone to be covered in this country, and the only thing that
separates us is how to do it. And for this to be offered as one of the
ways that we are going to make it easier is simply, well, they will
have to say they have passed something. I think it is called the
flexible savings and health savings account rollover. That will be a
title that will certainly sound like they did something.
The idea of health savings accounts goes against the basic issue here
in how we ought to be dealing with health care. We do not have any
problem in thinking that we should do fire departments collectively. We
do not call them socialistic or whatever. They do not look to Canada
for how to run a fire department. We started that in 1754, and police
departments and roads and schools, all of those issues we deal with
together. But in health care we say, hey, baby, you are on your own.
You and you and you and you and you, you are on your own.
Now, if you have a job that takes care of you, oh, well, you are
lucky; you have the plastic, you are in good shape in the lottery. I
have a piece of plastic in my pocket. Everybody has one in their pocket
or in their purse, and that plastic keeps you in the game. But God
forbid that you do not have a piece of plastic.
Now, the answer for those 40 million people in this country who do
not have plastic is, well, why do you not have a health savings
account? Yes, that is a good idea. You can take your money, and you can
put it in that health savings account and buy yourself a $10,000
deductible program and everything that comes up you can use the money
out of the health savings account to pay for it, and it will work
wonderfully.
The problem with this whole thing is the idea that people have
$4,500, or whatever the number is, to put into their health savings
account is nonsense, and it puts people on their own.
The idea of putting people on their own works very well for some
people in this society, people who are rich. I mean, golly, if you are
the head of Enron, you have a few extra dollars, you can just throw it
into a health savings account; and if you happen to have a little
problem that takes your life in some direction that costs a lot of
money, well, you can take it out of your pocket. But all of those
employees that were working for Enron that suddenly got dumped out in
the street because crooks were running the business, they do not have
anything. They could have their health savings account. Maybe it would
cover, maybe it would not, but where are they going after that? Enron
is not coming back, so after the first year, okay, where are you going
to go?

{time} 1400

How do you cover yourself in a situation when you are out there
alone? The individual market in this country is a mess. No one can
afford it because they can look at each one of you and say, well, you
look to me like you have the possibility of X, Y and Z and we are going
to charge you $1,000 a month.
The average person has trouble taking that kind of insurance. So
having this savings account, I put that $4,500 in I did not have, I put
that in there and then I get sick.
I had a friend who went in the hospital with a heart attack. He was
in the hospital 2 days, and the hospital bill alone was $10,000. So it
could happen to anybody. Any Member of the Congress, anybody on the
street can end up in the hospital and spend that deductible just like
that. Where do they have the money to pay for it? I do not know how
they are going to get some of it out of this health savings account.
Now, this bill is predicated on the idea that they will never get
sick and that at the end of the year they are going to have some money
left. The idea is at the end of the year you have not been sick so you
have got this money laying in your account so you can roll it over into
the next year. Well, that is a nice idea. It would probably help maybe
15, 20 people in this country, maybe even 1,000, but it does absolutely
nothing for 40 million people out there with no health insurance, and
this is why this is a joke.
We will pass it, of course. Nobody is going to vote against it. Well,
I do not know, some might, but the fact is that it is not dealing with
the problem that faces us, and if our war President would pay a little
more attention to the domestic and not cut taxes everywhere in sight,
we would have some money.
Part of the problem is what is happening at the State now, because
even Medicaid is going away, lots of States do not even put senior
citizens into their Medicaid program. Only 34 States have a Medicaid
spend-down for seniors.
This country is in a mess, and this bill does not do anything.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
I want to commend the last speaker, the gentleman from Washington,
for his efforts year after year in trying to solve the problems in our
health care system. I disagree with him occasionally on how we should
do that, but I think he is well-intentioned and certainly deserves
credit for his efforts.
However, his comments about the Enron employees, I cannot help but
stand up and point out to him that had those employees had HSAs,
instead of Enron providing first-dollar coverage insurance, they would
still have insurance today. They would have their HSAs because they are
fully portable and an employee can take an HSA from job to job. If he
loses his job, he can use what is in his HSA to pay premiums on a new
health insurance policy. So I just wanted to point out to the gentleman
that those employees would have been a lot better off if they had HSAs
rather than the Enron-provided health insurance.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume. I
thank the gentleman for his comments and I would close just briefly.
I believe that the Enron employee would not have insurance. He would
have some money in that health savings account, but when Enron folded
up, the insurance went along with Enron. He could go into the private
market and try and buy something.
I would just like to repeat, if I may, that this really does nothing
to cover the uninsured. So, if this is Cover the Uninsured Week, we are
burning up a couple of valuable hours that we could be discussing how
to cover the uninsured with this bill.
The principal disagreement that we had with the bill is that it is
not paid for, and we will offer, subsequently to closing this debate, a
substitute where we pay for it in very patriotic and simple ways. It is
not a lot of money but it is a principle that we Democrats have long
adhered to, and that is, that we ought to pay for the wonderful things
that are available to us in this country and not put the burden on our
children and grandchildren.
So, having said that, and without fear of contradiction that I
probably have more children and grandchildren than the combined
audience here, I can qualify, if the Speaker will allow me,

[[Page H2844]]

as an expert in that area. And maybe I am a little touchy about it, but
will conclude our debate on this and I appreciate the gentleman from
Louisiana. Next time I hope we can resolve these differences in our
committee and come to the floor, as we did in the good old days, with a
unified approach to Medicare and health insurance problems.
Mr. Speaker, I yield back the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
The bill before us today is a very simple bill. It will provide
employees, whose employers give them the opportunity to participate in
flexible spending arrangements, more flexibility to utilize those
arrangements and, indeed, encourage employees to do just that, and if
they have money left in their account at the end of the year, under the
bill, up to $500 can be rolled over into their next year's flexible
spending arrangements or rolled into a new health savings account,
thereby avoiding the discouraging factor in the law today of use it or
lose it.
Right now, today, if there is money left over at the end of the year,
the money goes back to the employer. That is why employees do not want
to participate because they do not want to lose part of their income,
and that is understandable. It is kind of silly that Federal law would
dictate that.
We are trying to correct that today. It is very simple. I urge the
Members to vote in favor of this good bill today.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Quinn). All time for debate on the bill
has expired.

Amendment In The Nature Of A Substitute Offered By Mr. Stark

Mr. STARK. Mr. Speaker, I offer an amendment in the nature of a
substitute.
The SPEAKER pro tempore. Is the gentleman the designee of the
gentleman from New York (Mr. Rangel)?
Mr. STARK. I am.
The SPEAKER pro tempore. The Clerk will designate the amendment in
the nature of a substitute.
The text of the amendment in the nature of a substitute is as
follows:
Part A amendment in the nature of a substitute printed in House
Report No. 108-484 offered by Mr. Stark:

Strike all after the enacting clause and insert the
following:

TITLE I--DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA PLANS AND
FLEXIBLE SPENDING ARRANGEMENTS

SEC. 101. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA
PLANS AND FLEXIBLE SPENDING ARRANGEMENTS.

(a) In General.--Section 125 of the Internal Revenue Code
of 1986 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and
(j), respectively, and by inserting after subsection (g) the
following:
``(h) Contributions of Certain Unused Health Benefits.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan solely because qualified benefits under such plan
include a health flexible spending arrangement under which
not more than $500 of unused health benefits may be carried
forward to the succeeding plan year of such health flexible
spending arrangement.
``(2) Health flexible spending arrangement.--For purposes
of this subsection, the term `health flexible spending
arrangement' means a flexible spending arrangement (as
defined in section 106(c)) that is a qualified benefit and
only permits reimbursement for expenses for medical care (as
defined in section 213(d)(1), without regard to subparagraphs
(C) and (D) thereof).
``(3) Unused health benefits.--For purposes of this
subsection, with respect to an employee, the term `unused
health benefits' means the excess of--
``(A) the maximum amount of reimbursement allowable to the
employee for a plan year under a health flexible spending
arrangement, over
``(B) the actual amount of reimbursement for such year
under such arrangement.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to taxable years beginning after December 31,
2003.

TITLE II--ENRON-RELATED TAX SHELTER PROVISIONS

SEC. 201. LIMITATION ON TRANSFER OR IMPORTATION OF BUILT-IN
LOSSES.

(a) In General.--Section 362 of the Internal Revenue Code
of 1986 (relating to basis to corporations) is amended by
adding at the end the following new subsection:
``(e) Limitations on Built-In Losses.--
``(1) Limitation on importation of built-in losses.--
``(A) In general.--If in any transaction described in
subsection (a) or (b) there would (but for this subsection)
be an importation of a net built-in loss, the basis of each
property described in subparagraph (B) which is acquired in
such transaction shall (notwithstanding subsections (a) and
(b)) be its fair market value immediately after such
transaction.
``(B) Property described.--For purposes of subparagraph
(A), property is described in this subparagraph if--
``(i) gain or loss with respect to such property is not
subject to tax under this subtitle in the hands of the
transferor immediately before the transfer, and
``(ii) gain or loss with respect to such property is
subject to such tax in the hands of the transferee
immediately after such transfer.

In any case in which the transferor is a partnership, the
preceding sentence shall be applied by treating each partner
in such partnership as holding such partner's proportionate
share of the property of such partnership.
``(C) Importation of net built-in loss.--For purposes of
subparagraph (A), there is an importation of a net built-in
loss in a transaction if the transferee's aggregate adjusted
bases of property described in subparagraph (B) which is
transferred in such transaction would (but for this
paragraph) exceed the fair market value of such property
immediately after such transaction.
``(2) Limitation on transfer of built-in losses in section
351 transactions.--
``(A) In general.--If--
``(i) property is transferred by a transferor in any
transaction which is described in subsection (a) and which is
not described in paragraph (1) of this subsection, and
``(ii) the transferee's aggregate adjusted bases of such
property so transferred would (but for this paragraph) exceed
the fair market value of such property immediately after such
transaction,

then, notwithstanding subsection (a), the transferee's
aggregate adjusted bases of the property so transferred shall
not exceed the fair market value of such property immediately
after such transaction.
``(B) Allocation of basis reduction.--The aggregate
reduction in basis by reason of subparagraph (A) shall be
allocated among the property so transferred in proportion to
their respective built-in losses immediately before the
transaction.
``(C) Exception for transfers within affiliated group.--
Subparagraph (A) shall not apply to any transaction if the
transferor owns stock in the transferee meeting the
requirements of section 1504(a)(2). In the case of property
to which subparagraph (A) does not apply by reason of the
preceding sentence, the transferor's basis in the stock
received for such property shall not exceed its fair market
value immediately after the transfer.''.
(b) Comparable Treatment Where Liquidation.--Paragraph (1)
of section 334(b) of such Code (relating to liquidation of
subsidiary) is amended to read as follows:
``(1) In general.--If property is received by a corporate
distributee in a distribution in a complete liquidation to
which section 332 applies (or in a transfer described in
section 337(b)(1)), the basis of such property in the hands
of such distributee shall be the same as it would be in the
hands of the transferor; except that the basis of such
property in the hands of such distributee shall be the fair
market value of the property at the time of the
distribution--
``(A) in any case in which gain or loss is recognized by
the liquidating corporation with respect to such property, or
``(B) in any case in which the liquidating corporation is a
foreign corporation, the corporate distributee is a domestic
corporation, and the corporate distributee's aggregate
adjusted bases of property described in section 362(e)(1)(B)
which is distributed in such liquidation would (but for this
subparagraph) exceed the fair market value of such property
immediately after such liquidation.''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to transactions after the date of the enactment of this
Act.
(2) Liquidations.--The amendment made by subsection (b)
shall apply to liquidations after the date of the enactment
of this Act.

SEC. 202. NO REDUCTION OF BASIS UNDER SECTION 734 IN STOCK
HELD BY PARTNERSHIP IN CORPORATE PARTNER.

(a) In General.--Section 755 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(c) No Allocation of Basis Decrease to Stock of Corporate
Partner.--In making an allocation under subsection (a) of any
decrease in the adjusted basis of partnership property under
section 734(b)--
``(1) no allocation may be made to stock in a corporation
(or any person which is related (within the meaning of
section 267(b) or 707(b)(1)) to such corporation) which is a
partner in the partnership, and
``(2) any amount not allocable to stock by reason of
paragraph (1) shall be allocated under subsection (a) to
other partnership property in such manner as the Secretary
may prescribe.

Gain shall be recognized to the partnership to the extent
that the amount required to be allocated under paragraph (2)
to other partnership property exceeds the aggregate adjusted
basis of such other property immediately before the
allocation required by paragraph (2).''.

[[Page H2845]]

(b) Effective Date.--The amendment made by this section
shall apply to distributions after the date of the enactment
of this Act.

SEC. 203. EXPANDED DISALLOWANCE OF DEDUCTION FOR INTEREST ON
CONVERTIBLE DEBT.

(a) In General.--Paragraph (2) of section 163(l) of the
Internal Revenue Code of 1986 is amended by inserting ``or
equity held by the issuer (or any related party) in any other
person'' after ``or a related party''.
(b) Capitalization Allowed With Respect to Equity of
Persons Other Than Issuer and Related Parties.--Section
163(l) of such Code is amended by redesignating paragraphs
(4) and (5) as paragraphs (5) and (6) and by inserting after
paragraph (3) the following new paragraph:
``(4) Capitalization allowed with respect to equity of
persons other than issuer and related parties.--If the
disqualified debt instrument of a corporation is payable in
equity held by the issuer (or any related party) in any other
person (other than a related party), the basis of such equity
shall be increased by the amount not allowed as a deduction
by reason of paragraph (1) with respect to the instrument.''.
(c) Exception for Certain Instruments Issued by Dealers in
Securities.--Section 163(l) of such Code, as amended by
subsection (b), is amended by redesignating paragraphs (5)
and (6) as paragraphs (6) and (7) and by inserting after
paragraph (4) the following new paragraph:
``(5) Exception for certain instruments issued by dealers
in securities.--For purposes of this subsection, the term
`disqualified debt instrument' does not include indebtedness
issued by a dealer in securities (or a related party) which
is payable in, or by reference to, equity (other than equity
of the issuer or a related party) held by such dealer in its
capacity as a dealer in securities. For purposes of this
paragraph, the term `dealer in securities' has the meaning
given such term by section 475.''.
(d) Conforming Amendments.--Paragraph (3) of section 163(l)
of such Code is amended--
(1) by striking ``or a related party'' in the material
preceding subparagraph (A) and inserting ``or any other
person'', and
(2) by striking ``or interest'' each place it appears.
(e) Effective Date.--The amendments made by this section
shall apply to debt instruments issued after the date of the
enactment of this Act.

SEC. 204. EXPANDED AUTHORITY TO DISALLOW TAX BENEFITS UNDER
SECTION 269.

(a) In General.--Subsection (a) of section 269 of the
Internal Revenue Code of 1986 (relating to acquisitions made
to evade or avoid income tax) is amended to read as follows:
``(a) In General.--If--
``(1)(A) any person or persons acquire, directly or
indirectly, control of a corporation, or
``(B) any corporation acquires, directly or indirectly,
property of another corporation and the basis of such
property, in the hands of the acquiring corporation, is
determined by reference to the basis in the hands of the
transferor corporation, and
``(2) the principal purpose for which such acquisition was
made is evasion or avoidance of Federal income tax,

then the Secretary may disallow such deduction, credit, or
other allowance. For purposes of paragraph (1)(A), control
means the ownership of stock possessing at least 50 percent
of the total combined voting power of all classes of stock
entitled to vote or at least 50 percent of the total value of
all shares of all classes of stock of the corporation.''.
(b) Effective Date.--The amendment made by this section
shall apply to stock and property acquired after the date of
the enactment of this Act.

SEC. 205. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND
PASSIVE FOREIGN INVESTMENT COMPANY RULES.

(a) Limitation on Exception From PFIC Rules for United
States Shareholders of Controlled Foreign Corporations.--
Paragraph (2) of section 1297(e) of the Internal Revenue Code
of 1986 (relating to passive foreign investment company) is
amended by adding at the end the following flush sentence:

``Such term shall not include any period if the earning of
subpart F income by such corporation during such period would
result in only a remote likelihood of an inclusion in gross
income under section 951(a)(1)(A)(i).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of controlled foreign
corporations beginning after the date of the enactment of
this Act, and to taxable years of United States shareholders
with or within which such taxable years of controlled foreign
corporations end.

TITLE III--PREVENTION OF CORPORATE EXPATRIATION TO AVOID UNITED STATES
INCOME TAX

SEC. 301. PREVENTION OF CORPORATE EXPATRIATION TO AVOID
UNITED STATES INCOME TAX.

(a) In General.--Paragraph (4) of section 7701(a) of the
Internal Revenue Code of 1986 (defining domestic) is amended
to read as follows:
``(4) Domestic.--
``(A) In general.--Except as provided in subparagraph (B),
the term `domestic' when applied to a corporation or
partnership means created or organized in the United States
or under the law of the United States or of any State unless,
in the case of a partnership, the Secretary provides
otherwise by regulations.
``(B) Certain corporations treated as domestic.--
``(i) In general.--The acquiring corporation in a corporate
expatriation transaction shall be treated as a domestic
corporation.
``(ii) Corporate expatriation transaction.--For purposes of
this subparagraph, the term `corporate expatriation
transaction' means any transaction if--

``(I) a nominally foreign corporation (referred to in this
subparagraph as the `acquiring corporation') acquires, as a
result of such transaction, directly or indirectly
substantially all of the properties held directly or
indirectly by a domestic corporation, and
``(II) immediately after the transaction, more than 80
percent of the stock (by vote or value) of the acquiring
corporation is held by former shareholders of the domestic
corporation by reason of holding stock in the domestic
corporation.

``(iii) Lower stock ownership requirement in certain
cases.--Subclause (II) of clause (ii) shall be applied by
substituting `50 percent' for `80 percent' with respect to
any nominally foreign corporation if--

``(I) such corporation does not have substantial business
activities (when compared to the total business activities of
the expanded affiliated group) in the foreign country in
which or under the law of which the corporation is created or
organized, and
``(II) the stock of the corporation is publicly traded and
the principal market for the public trading of such stock is
in the United States.

``(iv) Partnership transactions.--The term `corporate
expatriation transaction' includes any transaction if--

``(I) a nominally foreign corporation (referred to in this
subparagraph as the `acquiring corporation') acquires, as a
result of such transaction, directly or indirectly properties
constituting a trade or business of a domestic partnership,
``(II) immediately after the transaction, more than 80
percent of the stock (by vote or value) of the acquiring
corporation is held by former partners of the domestic
partnership or related foreign partnerships (determined
without regard to stock of the acquiring corporation which is
sold in a public offering related to the transaction), and
``(III) the acquiring corporation meets the requirements of
subclauses (I) and (II) of clause (iii).

``(v) Special rules.--For purposes of this subparagraph--

``(I) a series of related transactions shall be treated as
1 transaction, and
``(II) stock held by members of the expanded affiliated
group which includes the acquiring corporation shall not be
taken into account in determining ownership.

``(vi) Other definitions.--For purposes of this
subparagraph--

``(I) Nominally foreign corporation.--The term `nominally
foreign corporation' means any corporation which would (but
for this subparagraph) be treated as a foreign corporation.
``(II) Expanded affiliated group.--The term `expanded
affiliated group' means an affiliated group (as defined in
section 1504(a) without regard to section 1504(b)).
``(III) Related foreign partnership.--A foreign partnership
is related to a domestic partnership if they are under common
control (within the meaning of section 482), or they shared
the same trademark or tradename.''

(b) Effective Dates.--The amendment made by this section
shall apply to taxable years beginning after the date of
enactment of this Act.

The SPEAKER pro tempore. Pursuant to House Resolution 638, the
gentleman from California (Mr. Stark) and a Member opposed each will
control 30 minutes.
The Chair recognizes the gentleman from California (Mr. Stark).
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
Our Democratic substitute addresses a real issue of concern with
respect to flexible spending accounts in the use-it-or-lose-it rule.
We agree with the author of this legislation that it is unwise to
create an incentive for people to spend foolishly or frivolously for a
benefit that they might lose, and we have the Washington Business Group
and 50 major corporate members are clear on the issue. They want the
changes and they want the money carried over into FSAs. The position is
shared by their employees. There is some question, and nobody really
has raised it previously, as to putting this money into health savings
accounts, but because that is such a minor issue it could be
overlooked.
The real question here is whether we should pay for this. And it will
be expensive. It is $8 billion. That is money that could be used in
many programs, education programs, environmental programs, health
programs, and it is a principle to which we are dedicated, and that is
that we would like to expand health care in this country, but we have
never offered a plan that we

[[Page H2846]]

will not pay for. And I find it sometimes difficult when my opponents
across the aisle will not even give us a plan that costs nothing.
My Republican friends are opposed to expanding COBRA benefits. They
are very expensive for people, but some 40 million people have used
them since we wrote that bill on a bipartisan basis to expand COBRA
benefits until a person gets another job or until they mature into
Medicare. Costs zip, nothing, nada. It costs the employer nothing. Why
do we object to expanding COBRA benefits? Just because it is a
government plan and obviously people on the other side of the aisle do
not like the government helping people unless they are very rich, of
course.
So here we have just another example of not a bad piece of
legislation. It could use some improvement, but it is a freebie and
will predominantly benefit people in good jobs, with good health
insurance and expand another tax loophole.
It is a modest one, but it is a principle. Left unchecked, we would
soon have almost no tax revenue in this country at all, a position
which the Club For Growth would applaud, but I am sure that those of us
who are on the Federal salary or those people who are defending us now
in Iraq would object to.
So I hope that we could reverse this disastrous rush to the bottom of
debt and begin to be responsible in how we legislate by paying for
these provisions. We will hear more later from my colleagues on the
really very useful ways that it will help our economy if, in fact, we
did pay for this bill under the provisions of our Democratic
substitute.
Mr. Speaker, I reserve the balance of my time.
Mr. McCRERY. Mr. Speaker, I rise to claim the time in opposition, and
I yield myself such time as I may consume.
Before I get into the specifics of objections to the ``pay fors'' on
the Democratic substitute, I would point out to the gentleman from
California that it was under the leadership of this committee and on a
bipartisan basis 2 years ago to, in fact, expand COBRA in the Trade
Adjustment Assistance Act whereby we, the government, now will pay up
to I believe 65 percent of the premium for someone's COBRA benefits
when they are unemployed due to trade adjustments. So, in fact, I agree
with the gentleman that we should indeed encourage people to continue
their health insurance when they become unemployed, and we have
endeavored to do that with taxpayer dollars.
With respect to the bill at hand and the substitute offered by the
gentleman from California, it is true that most of the cost of the bill
is paid for; not all the cost of the bill, but most of the cost of the
bill is paid for by the minority's substitute, but the manner they
choose to pay for this health care benefit I think is quite
objectionable.
About half, in fact, maybe a little over half, of the revenue that
would be produced by the Democratic substitute is produced by a
retroactive application of a change in the law which would affect
companies that made a determination which was legal 30 or 40 years ago.
And I do not know of anyone who thinks that that is a fair result, to
impose suddenly a penalty on a company that in good faith operated
under a law 30 or 40 years ago and have been operating that way ever
since. So I would hope that this body would not suddenly choose to use
a punitive, retroactive change in the law to penalize companies
operating in good faith for decades under the United States Tax Code.
So that is the most objectionable part of their ``pay for.'' The
other parts simply amount to a tax increase on business in this
country. Those changes, in fact, could result, and it has been
estimated by Treasury and testified to by Treasury officials, that
these changes in the Democratic substitute would actually encourage
foreign takeover of United States companies, and I do not think that is
the result we want in this body for the American people or for American
companies.
So, Mr. Speaker, while I may have some sympathy for the minority's
desire to pay for legislation, I think the manner they have chosen to
pay for this particular bill is ill-advised, and I would hope that this
House would reject the substitute and pass the underlying bill.
Mr. Speaker, I reserve the balance of my time.

{time} 1415

Mr. STARK. Mr. Speaker, I yield myself such time as I may consume,
before I recognize the distinguished gentleman from Massachusetts, to
remind my good friend from Louisiana that the tax provisions in our
substitute were recommended by the bipartisan, bicameral Joint
Committee on Taxation; and these provisions have already passed on a
bipartisan basis in the other body.
Mr. Speaker, I yield 4 minutes to the distinguished gentleman from
Massachusetts (Mr. Neal) 2 minutes for economic logic and 2 minutes for
righteous indignation, for a total of 4 minutes.
(Mr. NEAL of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from
California (Mr. Stark) for yielding me this time.
One of the problems here in having a dialogue is that sometimes the
facts do not square with the dialogue. Now, the gentleman from
Louisiana (Mr. McCrery) is one of the better people in this House; a
good Member of the Congress and a very nice guy to work with. But where
is the sympathy for those companies that stayed here? What about those
companies that pay their taxes every day? What about those who did not
attempt to escape in the dark of night to Bermuda for the purpose of
avoiding American corporate taxes? Where is the sympathy for them?
Their competitors can go offshore with a phony post office box for
$27,000 a year, and then they avoid any share of the burden that the
rest of the American taxpayers face for financing small things like
Social Security and Medicare and paying for this war in Iraq and
Afghanistan.
I would like to put this issue in front of those 134,000 troops in
Iraq for a vote and see where we go on that issue. We hear about these
companies that have been gone for 30 or 40 years. Let us get something
straight, Tyco has been gone since 1997, Ma and Pa Tyco, that avoid
paying $400 million a year in corporate taxes. Tell that to the parents
of those men and women and wives and husbands of those men and women in
Iraq and Afghanistan.
We make it sound as though these companies are under great duress
when they avoid paying corporate taxes. I would ask this for the
listening audience today as well. What do you think the IRS would do to
you on Monday if you got up and said as an individual that you were
going to Bermuda for the purpose of denying American citizenship, but
only for the real purpose of avoiding your share of taxes in America?
That is what we are asking today.
This is a decent proposal that is before us. All we are saying on our
side is let us discuss how you pay for it. That is the important
reminder for all of us.
The Rangel substitute with flexible spending accounts is not only a
popular employee benefit because it allows pretax dollars to be used
for dependent care expenses or medical expenditures not covered by
insurance, but in fact, except for the staff of this Republican-run
House, most of the employees of the Federal Government have had the
opportunity to indeed utilize FSAs.
But today we could be debating whether FSAs might even be more
flexible, allowing employees to roll over unused funds from one year to
the next. But the leadership has decided that once again we are going
to come to the aid of their favorite constituency, the healthy and the
wealthy. We never have time in this institution to take up anything
that might be of benefit to middle-income taxpayers, to the working
poor of this country every day who do not have any health benefits; but
we find plenty of time for the purpose of cutting taxes for the
wealthiest Americans.
And let me just go back to this subject again, and I hope people are
paying attention in this sense: we are now fighting two wars, and the
answer of this Congress to two wars: three tax cuts. We are going to
come in with a $25 billion request now because we all know what the
real cost of that incursion into Iraq is going to be, not only in terms
of human life but, just as importantly, in terms of the financial

[[Page H2847]]

burden it will be to the American people. So we roll it out in small
increments.
We should begin to pay for some of these initiatives that come
through this House. By the way, that used to be the historic position
the Republican Party adopted. Today, it is borrow and spend.
The Rangel substitute would allow workers to roll over their FSA
money from one year to the next without any budget impact that is
negative. But because this benefit costs money, the Rangel substitute
would pay for it by closing down a loophole.
All I ask is this, Mr. Speaker. If the position that I have adopted
on these companies that go to Bermuda is so bad, why is it that almost
2\1/2\ years later the majority will not give me an up-or-down vote in
this institution? Put this in front of the body here. Square it with
those men and women in Iraq. Close down this Bermuda loophole, and let
everybody pay what they are supposed to pay.
Mr. Speaker, I rise today in support of the Rangel substitute.
Flexible Spending Accounts have proven to be a popular employee
benefit, allowing pre-tax collars to be used for dependent care
expenses or medical expenditures not covered by insurance. In fact,
except for the staff of this Republican-run House, most of the
employees of the federal government have had the opportunity to utilize
FSA's. Today, we could have been debating whether FSA's should be even
more flexible--allowing employees to roll-over unused funds from one
year to the next. However, the leadership has decided to instead to
once again prop-up its favorite tax shelter for healthy workers.
The Rangel substitute would allow workers to roll over FSA money from
one year to the next and would do so without any negative budget
impact.
Because this tax benefit costs money, the Rangel substitute would pay
for this worker benefit by closing the loophole allowing former
American companies to move their headquarters offshore for tax
avoidance.
Corporate expatriation accounts for $5 billion in lost taxpayer
revenue over the next decade. Today, we debate a substitute that shows
us exactly what we could be doing with that money: providing greater
employee benefits. Why should the workers of America be supporting
corporate tax dodgers? Consider that in 1997, Tyco renounced its
corporate citizenship and changed its mailing address to Bermuda to
avoid paying nearly $400 million a year in U.S. taxes.
While many in the House have expressed outrage since this loophole
was first exposed two years ago, the Leadership has done nothing but
cement the loophole with legislation protecting Tyco and those that
have already left.
Since I first filed the bipartisan Corporate Patriot Enforcement Act
to end this tax subsidy, these corporate expatriates have enjoyed
almost one billion dollars in U.S. federal government contracts
annually, 70 percent of which are defense or homeland security related.
Our colleagues in the Senate have passed as recently as yesterday
legislation to close this loophole affecting those that are considering
the island tax havens and those that are already exploiting this
loophole. But in this Congress, we wait.
For those that profess to care about the exploding budget deficit,
for those that claim to hear Chairman Greenspan's warning about the
harm this historical budget deficit is doing to our economy, you must
at some point decide that bills that pile on more federal debt are
wrong. I urge my colleagues to support the fiscally responsible Rangel
substitute, which makes the corporate tax cheats and those that forsake
America in a time of war pay for improving benefits for American
workers.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Pennsylvania (Mr. English), a member of the Committee on
Ways and Means.
Mr. ENGLISH. Mr. Speaker, it has been fascinating to appear several
times on the floor during recent weeks to hear the debate on tax bills
that seem to lurch in the direction of Iraq and wander all over the
public policy landscape. I would like to bring the debate today back to
the core issue of the bill that is before us and whether the substitute
is actually an improvement on it, and I would argue that it is not.
Mr. Speaker, the underlying bill that we have before us today would
provide increased medical security, not as my friend, the gentleman
from Massachusetts, has suggested, for the wealthiest Americans, but
for many American workers. When flexible spending accounts are offered
by an employer, their tax-preferred nature offers a powerful incentive
for workers to contribute to and grow these accounts. Unfortunately,
current law perversely influences these incentives by pushing workers
who have built up an FSA to spend the money in the account if they have
not used it by the end of the year.
This use-it-or-lose-it policy defeats the positive benefits of an
FSA, which is why many eligible workers have chosen not to open FSAs.
When workers use the hard-earned dollars they have contributed
themselves or earned from their employers, they will ask more
questions, further inform themselves, and become better consumers, for
example, of health care products. If they lose these dollars at the end
of the year by simply not having the necessity for them instead of
becoming better health care consumers, they become, in a sense, over-
users of health care.
Through allocating $500 of unused FSA funds to be carried forward or
rolled over into a health savings account, FSAs and HSAs can thrive and
become the practical vehicles they were intended to be for working
families who want to manage their own health care.
It is important to point out that the substitute, unlike the
underlying bill, does not allow the unused funds to be transferred to
the new HSAs. This is an essential component of the legislation because
it encourages the HSAs, which embody similar pro-consumer and pro-
worker principles as the FSAs.
Employers are just beginning to offer HSAs, so now is not the time to
discourage a health savings account, but to promote it. Let us not take
a step backwards by passing the substitute. It is bad policy, it is
poorly thought through, and I think that we ought to be looking at how
we can provide workers with more opportunities to have these kinds of
accounts, not fewer.
These are not the wealthiest people in America. These are people who
want the opportunity to manage their own health care, to manage their
own resources; and we are giving them an opportunity to accumulate more
of those resources in this bill.
Mr. STARK. Mr. Speaker, I yield 5 minutes to the gentleman from Texas
(Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, I visited with a group of small business
people from Texas this morning who came to discuss, among other things,
their concerns about being able to provide health coverage for
themselves and for their employees. Their stories were very similar to
ones I have heard while visiting with small retailers in Phaw and in
Mission, Texas, and in talking with musicians in Austin, Texas--that we
have a growing crisis in this country in trying to ensure that working
Americans can get the health protection and the health insurance access
that they need.
As I talked with them, one of the concerns that I raised was this
need versus another one that is also the tragic result of the
misleadership of this administration and this Republican Congress. They
are driving our country into an economic ditch with the largest deficit
in the history of America last year, to be surpassed this year, and to
be exceeded in the future under a broken economic scheme.
In fact, the deficits are rising at such a rate that our Republican
colleagues are continually coming to ask for an increase in the debt
ceiling. They will have to do it again in the very near future. I think
they probably need to keep an extension ladder in this House so that
they can continue raising the ceiling upward, up to what will become
$10 trillion or $11 trillion. That is trillion with a ``T'' that they
will be raising the debt ceiling to as a result of their misguided
economic policies and their willingness to give tax break after tax
break to those at the top of the economic ladder without paying for it.
They get it for free.
Today, we have another example of that. We have an example of an
unwillingness to consider the cost and the burden on future generations
of Americans and the adverse effect on our economy of continuing to
incur more and more debt, as has been true in the past, by adding more
and more tax breaks.
So we have come forward with a substitute and said that if you are
going to make these changes--even though this is probably not the most
efficient way to deliver health care and there are much preferable
approaches--but if you are going to do this, at least pay

[[Page H2848]]

for it. Do not add more and more to the national debt.
And we have done it in very reasonable ways. One is to deal with
something that Republicans in this House would like to forget about as
just ancient history: the scandal called Enron, the scandal that led to
so much trouble for our economy and to a reduction in the public's
confidence in our economic marketplace.
Enron manipulated our tax laws. In fact, as The Washington Post
reported last year, Enron was turning its tax department into a profit
center. Its senior executives, along with leading accounting, banking,
and legal advisers were seeking to manipulate tax laws through complex
concealed transactions. These were transactions that involved things
like synthetic leases. These were transactions that, as one of their
people reported, were so intentionally complicated it would take a year
or more to construct a single deal.
Well, we have adopted in this substitute very modest proposals,
recommended by the Joint Committee on Taxation and approved
overwhelmingly in the United States Senate, to do something about those
Enron tax abuses. What has the House of Representatives done in the two
years since these abuses were disclosed? Absolutely nothing. The Senate
was willing to look at the tax returns of Enron to see how these
manipulations occurred, but the House Committee on Ways and Means was
afraid to look under that rock because it knew the scandal it would
find. They have been unwilling to address this problem.
The same is true of the unpatriotic corporations that retreat to
Bermuda or Barbados, who basically say that they do not want to pay
their fair share of our homeland security and defense. Oh, yes, they
are proud of our flag when they want our fighting men and women
defending their position. They are so proud of our flag when they are
being defended by our Armed Forces. They are so proud of our flag when
they want to do business with the United States Government.
Some of these same unpatriotic corporations come and ask for hundreds
of millions of tax dollars in government contracts. In fact, one
contracts with the Internal Revenue Service. Another one contracts with
the Department of Homeland Security. On the one hand they will not pay
their fair share of taxes, but they sure want all the tax money they
can get in contracts with the government.
We have a proposal to pay for health care through reforms to prevent
another Enron scandal and through reforms that simply ask for a level
playing field. Those corporations that want the protection of the
American flag ought to be willing to pay their fair share.
The Committee on Ways and Means and the Republican leadership in the
House will never make these needed changes unless they are forced to do
it through proposals just like this. They feel so comfortable with the
Enron philosophy that a tax department is a profit center that they
will continue to defend these abuses.
I ask your support for the substitute.

{time} 1430

Mr. STARK. 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. LEVIN. Mr. Speaker, there was a story in yesterday's Detroit
News, Michigan's uninsureds swells by 100,000 last year to 1.2 million
people. I do not see how this bill will reduce that amount at all. This
is supposed to be the week where we pay attention to the uninsured, but
this bill really does not do that. It really turns away from them. I
think we very much need to keep that in mind. That is the first point.
Secondly, it allows the transfer to savings accounts which really can
become a dodge to escape taxation altogether. Even though it is a small
amount of this, it is a serious mistake. We do not need more tax
shelters in our Tax Code. We should not be feeding any moneys
whatsoever into those shelters. This is what this bill in part does.
My third point, the gentleman from Louisiana (Mr. McCrery) works very
hard on tax issues and knows the Tax Code well. I think this is a good
pay-for. I think it is really irresponsible to bring another bill forth
to this floor and not pay one dime. It is going to add $8 billion plus
to our deficit.
And the last aspect of this is the following: If they do not like
this pay-for, come up with their own, but do not come here without
anything to say as to how it will be paid for except by our children
and our grandchildren. I support the substitute.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the gentleman from
Wisconsin (Mr. Ryan), a distinguished member of the Committee on Ways
and Means.
Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for
yielding me this time and for bringing attention to this issue.
I want to make three points. Number one, we are hearing all of this
hue and cry against allowing people to roll their flexible spending
accounts $500 a year over into the next year. There is a reason why it
is important to allow a person to roll their money over from one year
to the next: We are not getting the kind of consumer activity and
consumer reforms we want in health care when we deny an employee the
ability to keep the money in their account from one year to the next.
What ends up happening with the flexible spending account is when there
is a balance at the end of the year, the employee goes and buys a
couple pairs of eyeglasses, gets their teeth cleaned a couple of times,
more money is spent and it props up health care inflation.
What this reform does, it lets the employee know this is their money.
More importantly, what this bill does and what the Rangel substitute
denies is the ability to roll over $500 from their flexible spending
account into a health savings account. They say this health savings
account is a new tax shelter.
Mr. Speaker, what a health savings account does is it lets people
spend money on health care tax free. We can deduct the cost of health
insurance on corporate tax rates when corporations pay for health care
for their employees; why cannot employees and individuals deduct the
cost of their health care expenditures on their income taxes? That is
what HSAs do.
Take a look at what health savings accounts have already produced,
only having been in law since January 1; 37 percent of all health
savings accounts sold went to people who previously were uninsured; 18
percent of those people had preexisting conditions, people who had
sicker risk profiles. And 47 years old was the median age of a person
who bought health savings accounts.
So to the critics that said only wealthy, only young, only insured
people would be buying HSAs, all of that is being proven untrue with
the results that are taking place today in the marketplace. But more
importantly is the fact that the Mercer Study just did a survey and
they noted that 73 percent of all firms in America who offer their
employees health insurance are considering giving an additional option
of health insurance through a health savings account by 2006. By
denying your employees the ability to take the money that is in their
flexible spending account, which is controlled by the employer, and put
it in their own account, which goes to the employee, is simply saying
you are not going to let the employers give this money to the employee
and be part of the employee's property.
It is very important that we allow the employees to keep this money
and use this money for their own health insurance and to do so tax free
so we end the bias in the Tax Code right now that is against giving
people the ability to spend money on health care on a tax-free basis.
This is how we get the employee and the consumer back into the business
of buying health care.
I urge rejection of the Rangel substitute and adoption of the base
bill.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to suggest to the gentleman from Wisconsin
(Mr. Ryan) that we do not on this side have any objection to the
rollover. We think it is a good idea, and all we would suggest is that
we have to pay for it. That is the only difference.
Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?
Mr. STARK. I yield to the gentleman from Wisconsin.

[[Page H2849]]

Mr. RYAN of Wisconsin. Is the gentleman opposed to rolling over the
FSA money into an HSA?
Mr. STARK. Actually, I am opposed to it in general, but I offer to
the gentleman from Louisiana (Mr. McCrery) that we would accept that if
he would pay for half of the bill. That is compromise.
Mr. RYAN of Wisconsin. The vote we are faced with, the Rangel
substitute, is denying people the ability to keep this money. It denies
people the ability to put their FSA money into an HSA.
Mr. STARK. It only denies the HSA, which they think is going to be a
small number. There is still time to negotiate.
Mr. Speaker, I yield 4 minutes to the gentlewoman from Connecticut
(Ms. DeLauro).
Ms. DeLAURO. Mr. Speaker, I rise in support of the Rangel substitute.
Like the underlying bill, the substitute permits up to $500 of unused
benefits in the employee's health flexible spending arrangement to be
carried forward to the employee's FSA account for the next plan year.
However, this substitute does not permit unused benefits to be
contributed to an employee's health savings account, which in fact we
know to be a tax shelter for the healthy and for the wealthy.
This substitute is paid for, which is the principal reason why we
have this substitute and why we are opposed to the underlying
amendment, not by driving us deeper into debt. How do we pay for it? We
eliminate the tax benefits that corporations receive when they
reincorporate overseas for the express purposes of avoiding U.S. income
taxes. They do not want to pay taxes to the United States of America.
These so-called corporate expatriates, they enjoy all of the benefits
of corporate citizenship in America. They look like U.S. companies,
their stock is principally traded in the United States, and their
physical assets are protected by our Armed Forces. They just refuse to
pay for the benefits as every other American citizen or other companies
do.
Countless companies engage in this practice: PriceWaterhouse Coopers
Consulting, Accenture, Tyco, Foster Wheeler, the list goes on and on.
These companies go to Bermuda, Barbados, the Cayman Islands. These are
great vacation spots, particularly for companies who want to live tax
free.
Many of us have worked for years to end this practice only to be
turned back again and again by the Republican leadership which has time
and again given their approval to corporations who continue to avoid
living up to their obligations as citizens. Two years ago, this House
voted overwhelmingly, 318 to 110, to pass an amendment that I offered
to the Homeland Security Act that would have prohibited corporate
expatriates from receiving Federal contracts from the Department of
Homeland Security. The other body followed suit; unanimously, I may
add. Even the President spoke out in favor of ending this practice. But
in the dark of night, this Republican leadership gutted the amendment,
a bipartisan amendment, defying the will of the President and both
Chambers of the Congress. Now that contracting ban is, for all intents
and purposes, meaningless.
What happens is we have a company that goes offshore, pays no taxes,
takes jobs and technology with them, and then what they want to do is
to be considered for millions and billions of dollars in taxpayer
dollars from the Department of Energy, the Department of Defense, the
Department of Homeland Security; that is what is happening, but they
pay no taxes in the United States of America.
With this substitute we say, no more. At a time when we have brave
men and women putting their lives on the line across the world, we will
put patriotism before profit. And some of those companies that we are
talking about are reaping the benefits today in Iraq while our young
men and women are dying in Iraq. At a time when we have seen the
greatest fiscal reversal in this country, a $5.6 trillion surplus has
become a $3 trillion deficit, we are saying with this amendment that we
have a moral obligation to pay our bills and not pass them on to our
children and our children's children.
Mr. Speaker, I support this substitute. It is the right thing to do.
It is the responsible thing to do. Support the Rangel substitute.
Mr. McCRERY. Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to close the debate on our side for our
substitute. My belief is these two tax provisions, modest as they are,
regardless of the underlying bill, are good tax policy and ought to be
considered if for no other reason than that they correct some serious
inequities in our Tax Code which have been described by previous
speakers.
We are very close to a compromise with our friends on the other side
of the aisle. Our substitute would eliminate the health savings account
issue. But as I said, it is possible to reinstate that in conference,
and if the gentleman would like to support our substitute, we could do
the patriotic thing, we could provide good tax policy, we could pay for
a very good idea, and we could walk out, arm in arm, saying we have
helped a few people, we have paid for it, and we have brought
patriotism and corporate responsibility to some of our recalcitrant
corporate friends who are not doing their share.
I would urge that this substitute does no harm to the underlying
philosophy of the bill of the gentleman from Louisiana (Mr. McCrery).
It does add to the coffers of our Nation when it is so desperately
needed. This money is contributed by those corporations whose actions
are I believe indefensible, and particularly at this time of grave
national emergency.
I would not want to suggest that anybody who votes against our
substitute is unpatriotic, but I would suggest that it certainly is
helpful for our troops and the American economy to support the Rangel
substitute.
Mr. Speaker, I yield back the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, while I would relish the opportunity to walk out of the
Chamber arm in arm with the gentleman from California (Mr. Stark) in
complete agreement on a compromise on this legislation, I am afraid
that the ill-advised tax changes contained in the gentleman's
substitute would likely result in increased takeover of American
corporations by foreign companies, so I will not be able to do that;
but perhaps another day.
This substitute admits that the underlying policy in the bill under
consideration is appropriate, that is allowing employees to roll over
up to $500 at the end of the year into next year's flexible spending
arrangement. They do object to rolling money over into a health savings
account, but the other part of the substitute which makes dramatic
changes in tax policy in this country I think are indeed ill-advised,
and I would urge this House to reject that.
I just want to go over a couple of things that have been mentioned by
previous speakers, one of whom said we are now experiencing the largest
deficit in the history of the country. Of course, he is speaking in
nominal terms, not in real terms. In fact, the appropriate measurement
of a deficit is against the national income; what percent of our
national income is the deficit. And the deficit we are running now is
not even close to the largest deficit in history measured in those
terms.

{time} 1445

He also said the economy is in the ditch, or something like that. No,
the economy was in the ditch in 2000, but we have succeeded in dragging
the economy out of the ditch thanks to the three tax cuts that another
gentleman mentioned earlier. We now have a very vibrant, growing
economy. We now see jobs being created at a remarkable clip for the
last 2 months, so I would disagree with the gentleman's
characterization of the economy being in the ditch. In fact, it is very
much alive, and we hope it will continue that way.
The subject of American companies moving offshore is indeed a
delicate one and one that we would like to address. In fact, we do
address that unfortunate phenomenon in a bill that passed the Committee
on Ways and Means back in 2002 and a different version was just passed
yesterday by the Senate, and we will have another opportunity to
address it here in the House. Since we introduced that bill

[[Page H2850]]

and passed it through the Committee on Ways and Means in 2002, there
has not been a single company that has gone offshore. So the remedy
that we prescribed for this deplorable action by some American
companies we believe to be the correct remedy, the good tax policy
remedy, and it is already working even though we have not even passed
it. We just passed it through the Committee on Ways and Means. I would
urge this House to reject the ill-advised course of action in the
substitute and instead look forward to voting on a much more
progressive treatment of that problem which will not encourage foreign
takeover of American companies.
Mr. Speaker, while again I commend the minority on supporting the
major provision of the underlying bill, I am afraid we must ask for a
rejection of their substitute.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Quinn). All time for debate has expired.
Pursuant to House Resolution 638, the previous question is ordered on
the bill and on the amendment in the nature of a substitute offered by
the gentleman from California (Mr. Stark).
The question is on the amendment in the nature of a substitute
offered by the gentleman from California (Mr. Stark).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.

Recorded Vote

Mr. STARK. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 197,
noes 230, not voting 6, as follows:

[Roll No. 161]

AYES--197

Abercrombie
Ackerman
Alexander
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Bell
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Carson (IN)
Case
Chandler
Clay
Clyburn
Conyers
Costello
Cramer
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Doggett
Dooley (CA)
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Grijalva
Gutierrez
Harman
Hastings (FL)
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
Marshall
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Moore
Moran (VA)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pomeroy
Price (NC)
Rahall
Rangel
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn

NOES--230

Aderholt
Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carson (OK)
Carter
Castle
Chabot
Chocola
Coble
Cole
Collins
Cooper
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Kanjorski
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Manzullo
Matheson
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Mollohan
Moran (KS)
Murphy
Murtha
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Upton
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)

NOT VOTING--6

DeMint
Kolbe
Regula
Reyes
Simmons
Tauzin

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mr. Quinn) (during the vote). Members are
advised there are 2 minutes remaining.

{time} 1515

Messrs. WELLER, CARSON of Oklahoma, FEENEY, KINGSTON, and LUCAS of
Kentucky changed their vote from ``aye'' to ``no.''
Messrs. TANNER, PASTOR, and LARSON of Connecticut changed their vote
from ``no'' to ``aye.''
So the amendment in the nature of substitute was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.

Motion to Recommit Offered by Mr. Stark

Mr. STARK. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore (Mr. Quinn). Is the gentleman opposed to the
bill?
Mr. STARK. I am, Mr. Speaker, in its present form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:

Mr. Stark moves to recommit the bill H.R. 4279 to the
Committee on Ways and Means with instructions to report the
same back to the House forthwith with the following
amendment:
At the end of the bill, add the following new section:

SEC. 2. SOCIAL SECURITY AND MEDICARE TRUST FUNDS HELD
HARMLESS.

Nothing in this Act shall be construed as affecting the
amount of transfers to any trust fund established by title II
or XVIII of the Social Security Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Stark) is recognized for 5 minutes in support of his
motion to recommit.
Mr. STARK. Mr. Speaker, during the past several hours we have had a
good debate on this bill, and I think we have agreed to some of the
basic principles that the flexible savings accounts should allow a
reduction of the use-it-or-lose-it rule. We had attempted to offer a
compromise to get our Republican colleagues to just pay for half of the
bill, which was turned down. And the bill has, indeed, many supporters.
But what we have seen during the course of this current
administration is indirectly a complete raid on the Social Security and
Medicare Trust

[[Page H2851]]

Funds. Basically, the Republicans have spent all of the surplus in
Social Security and Medicare, and that, in my opinion, is indefensible.
Whether we agree about flexible savings accounts or medical savings
accounts is not the issue. This bill directly, specifically, transfers
out of the trust funds $3.4 billion. The Republicans are raiding the
Social Security and Medicare Trust Funds.
Now, that may not sound like a lot to my colleagues across the aisle,
but to the people who depend on Social Security and Medicare, the idea
that they are stealing money out of the Medicare and Social Security
Trust Funds blatantly, I think they will find offensive.
This reduction in receipts should not be permitted to occur. It will
not harm this bill. The bill will go forward exactly as the
distinguished gentleman from Louisiana has outlined it and has
prevailed. The only difference is our motion to recommit asks us all to
stand up and take the pledge to protect Social Security and Medicare
and its trust funds for all of those who depend on their benefits in
this country.
This bill takes care of well-employed, well-insured individuals. This
does not help any uninsured people at all. It gives an additional
benefit to people with first-class medical insurance. Why then should
we spoil an otherwise decent bill by taking the first step to destroy
Medicare and Social Security for people who are unable to get health
insurance? That is wrong.
We have all committed to protect Social Security and Medicare. You
cannot oppose this motion to recommit and say you are protecting it.
You are stealing almost $3.5 billion over the next 10 years out of
these trust funds.
To support our motion to recommit would merely say find it someplace
else; take it out of general revenues, take it out of trade, take it
out of anything, but do not take it out of the hard-earned benefits
that our senior citizens are entitled to. This could be the first step
toward destroying the financial viability of Medicare and Social
Security.
If you vote for our motion to recommit, you are standing up and
suggesting that you will protect the trust funds that underlie Social
Security and Medicare. If you vote against it, you are saying, ``We
don't care. Take the seniors' money. What the heck. We can spend it. We
have spent everybody else's money. We have spent our grandkids'
money.''
I ask you, out of compassion, those of us who are seniors might not
be able to get a job anyplace else if I am not reelected. My Social
Security, please do not steal it. Do not make my little children go out
and get an extra paper route to take care of me in my dotage. We need
this. Our parents need it. We must protect our children.
So, to repeat, the bill will go through exactly as the Republicans
have crafted it; but if you vote for our motion to recommit, you get
the added benefit of saying to every senior in your district, I stood
up and protected your Social Security and Medicare benefits by
protecting the trust funds to which this money would go.
Mr. Speaker, I urge support for the motion to recommit.
Mr. THOMAS. Mr. Speaker, I rise in opposition to the motion to
recommit.
The SPEAKER pro tempore. The gentleman from California is recognized
for 5 minutes.
Mr. THOMAS. Mr. Speaker, I hope you all enjoyed that ride through
very dark woods. Now let me explain what is really going on.
Return with me to 1945. We were in the middle of a war and a decision
was made which affects us profoundly today. There was a choice of
increasing wages or there was an idea that we can snooker workers not
to ask for more wages if we create a procedure in which employers offer
fringe benefits for which they will get a tax break.
Today, a dollar in wages competes against a dollar in fringe
benefits. A dollar in wages is taxed 100 percent. A dollar in fringe
benefits does not affect the worker or the employer. We created a
system that puts a premium on going for fringe benefits over wages.
The argument the gentleman from California just made is based on that
concept. He has a letter from Joint Tax that says if you create this
fringe benefit, flexible spending accounts, in which up to $500 of the
employee's tax deferred structure is allowed to roll over in the
employee-controlled structure as an incentive to keep down the fringe
benefit costs, there is a possibility that these will be successful.
What happens if they are successful? The dollar in wages is not paid,
the dollar in fringe benefits is paid, and the payroll tax, which
otherwise would have gone into the Social Security Trust Fund from the
wages foregone, is what he is talking about; not enough to modify the
trust fund one iota over the year in terms of true impact on the Social
Security Trust Fund.
It happens with every decision we make in here in choosing either
wages or fringe benefits. This is worse than a red herring. What it
does is commit you to say that any change that would save dollars in
the larger picture, for example incorporating individuals' own
decision-making in health care where they actually have an investment,
rather than having $5,000 worth of fringe benefits in which they are
taking care of themselves, do not get any benefit out of it, and at the
end of the year they go get eyeglass frames because they are trying to
get money back out of the fringe benefits; the system we have
constructed today, that if in fact this is successful and you save
total money because somebody decides they want to make a prudent
decision and a couple of hundred dollars roll over into the flexible
savings account, Joint Tax has said that couple of hundred dollars that
is in the flexible spending account may have been paid out in wages,
which means you then lose the payroll taxes in terms of the difference
between the two.
The overall cost to the economy, the society, and the taxpayers is
less. It is a minor accounting procedure which you can not even see.
And that is the black wood he took you through to buy the concept that
anytime you want to make an improvement in the overall structure of
society, taxes and Social Security, you have taken the pledge not to
have anything happen.
Do not take this pledge. Understand what they are trying to do to
you. Reject this gimmick and simply say, look at the larger overall
society benefit, and do not put on the green eyeshade and do not let
them tell you that somehow this is going to impact the Social Security
Trust Fund. In the long run, people helping make their own decisions
saves money, it does not cost money.
Vote no on the motion to recommit.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.

Recorded Vote

Mr. STARK. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clauses 8 and 9 of rule XX, this
15-minute vote on the motion to recommit will be followed by 5-minute
votes, if ordered, on passage of H.R. 4279 and adoption of H. Con. Res.
352.
The vote was taken by electronic device, and there were--ayes 202,
noes 224, not voting 7, as follows:

[Roll No. 162]

AYES--202

[[Page H2852]]

Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Lynch
Majette
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watson
Watt
Waxman
Weiner
Wexler
Wu
Wynn

NOES--224

Akin
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carter
Castle
Chabot
Chocola
Coble
Cole
Collins
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Dreier
Duncan
Dunn
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Upton
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)

NOT VOTING--7

Aderholt
DeMint
Owens
Reyes
Scott (GA)
Tauzin
Woolsey

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mr. Quinn) (during the vote). Members are
advised there are 2 minutes remaining in this vote.

{time} 1547

So the motion to recommit was rejected.
The result of the vote was announced as above recorded.

{time} 1545

The SPEAKER pro tempore (Mr. Latham). The question is on passage of
the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. McCRERY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 273,
nays 152, not voting 8, as follows:

[Roll No. 163]

YEAS--273

Akin
Alexander
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Beauprez
Bereuter
Berkley
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boucher
Boyd
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardoza
Carson (OK)
Carter
Case
Castle
Chabot
Chandler
Chocola
Coble
Cole
Collins
Cooper
Costello
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis (AL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeFazio
DeLay
Deutsch
Diaz-Balart, L.
Diaz-Balart, M.
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Emerson
English
Everett
Feeney
Ferguson
Flake
Foley
Forbes
Fossella
Franks (AZ)
Frelinghuysen
Frost
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (WI)
Greenwood
Gutknecht
Hall
Harman
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hinojosa
Hobson
Hoekstra
Holden
Honda
Hooley (OR)
Hostettler
Houghton
Hulshof
Hunter
Hyde
Inslee
Isakson
Issa
Istook
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lowey
Lucas (KY)
Lucas (OK)
Majette
Maloney
Manzullo
Matheson
McCarthy (NY)
McCotter
McCrery
McHugh
McInnis
McKeon
Meeks (NY)
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Mollohan
Moore
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Putnam
Quinn
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ruppersberger
Ryan (WI)
Ryun (KS)
Saxton
Schrock
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Snyder
Souder
Stearns
Strickland
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Turner (OH)
Udall (CO)
Upton
Visclosky
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Wynn
Young (AK)
Young (FL)

NAYS--152

Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Ballance
Becerra
Bell
Berman
Berry
Bishop (NY)
Blumenauer
Boswell
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Carson (IN)
Clay
Clyburn
Conyers
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Gephardt
Green (TX)
Grijalva
Gutierrez
Hastings (FL)
Hill
Hinchey
Hoeffel
Holt
Hoyer
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick
Kind
Kleczka
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lofgren
Lynch
Markey
Marshall
Matsui
McCarthy (MO)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Price (NC)
Rahall
Rangel
Rodriguez
Ross
Rothman
Roybal-Allard
Rush
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Sandlin
Schakowsky
Schiff
Scott (VA)
Serrano
Sherman
Skelton
Smith (WA)
Solis
Spratt
Stark
Stenholm
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (NM)

[[Page H2853]]

Van Hollen
Velazquez
Waters
Watson
Watt
Waxman
Weiner
Woolsey

NOT VOTING--8

Aderholt
DeMint
Obey
Radanovich
Reyes
Scott (GA)
Tauzin
Wexler

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (during the vote). Members are advised there
are 2 minutes remaining in this vote.

{time} 1555

So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

____________________