June 08,2000

Roth Acts To Protect Dover AFB

Announces that Finance Committee Will Take Up Campaign Disclosure Issue

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today announced he would vote against an amendment that would jeopardize the Department of Defense Authorization bill, which contains many measures beneficial to Delaware and local service personnel.

The amendment would require disclosure of Section 527 organizations, which are groups claiming tax exempt status under Section 527 of the Internal Revenue Code. As a revenue provision originating in the Senate, the amendment, if approved, would kill the Department of Defense Authorization bill. That legislation:

• authorizes a 3.7% pay raise for military personnel

• makes extensive improvements in military heath care to ensure active duty personnel and their families, and military retirees and their families receive quality care (many provisions taken from legislation cosponsored by Sen. Roth)

• authorizes over $187 million for much needed repairs C-5 Galaxy, including the second-year Research and Development into C-5 Re-engining

• contains an amendment sponsored by Senators Roth and Biden requiring a requiring a report by the Secretary of the Air Force on C-5 spare part deficiencies

• authorizes $7.02 million a new Army National Guard Readiness Center in Smyrna

Roth, who supports increased disclosure in the political process, agreed that section 527 needs to be amended and announced that he intends to take up the issue in the Senate Finance Committee later this summer, separately from the DoD Authorization bill.

Roth's statement from the Senate floor follows:

"I rise today to make two announcements about the proposed amendment. The first announcement is that the Department of Defense Authorization bill is not the proper vehicle for the issue raised by raised by this amendment. The second announcement is that there will be a proper vehicle for the issue.

"Let's explore my first point, that is, whether this defense bill is an appropriate vehicle for this amendment. This amendment increases the amount of disclosure that certain tax exempt organizations that are organized under Section 527 of the Internal Revenue Code have to make if they are not subject to the disclosure requirements under the Federal Election Campaign Act.

"To do this, this amendment will subject these tax exempt organizations to tax on the contributions they receive if they do not follow disclosure requirements similar to the disclosure requirements set out in the Federal Election Campaign Act.

"While the objective of the amendment is increased campaign finance disclosure, the amendment is framed in the context of a tax code change, which is a revenue measure. Under the Constitution, all revenue measures must originate in the House of Representatives. If the revenue measure did not originate in the House, then any member could subject the bill to a "blue slip," thereby voiding the entire bill, not just the part of the bill that is a revenue measure.

"Make no mistake, regardless of its merits, this amendment will kill this bill. If adopted, this amendment would mean that the Senate would be originating a piece of tax legislation. This is in direct violation of the Constitution. Rest assured, the House will not accept it and will refuse the bill when we seek to send it to them. Hence, the adoption of this amendment will kill this Defense bill just as assuredly as if we voted it down.

"We must not lose sight of the fact that there is no higher priority than our nation's defense. This bill provides much-needed funds for it. It gives a deserved pay raise to our armed forces -- allowing them to enlist and retain the all-volunteer force that stands on perpetual watch over our nation. It provides for spare parts that will keep our Armed Services in service.

"Now, I'd like to move to my second point, provision of the proper vehicle.

"The House has passed a tax bill that deals with taxpayer rights and disclosure of information for tax-exempt organizations. That bill, known as the "Taxpayer Bill of Rights 2000," is in the Finance Committee.

"The taxpayer rights legislation will be the vehicle for proposals to curtail corporate tax shelters, which both the Majority and the Minority staffs of the Finance Committee have been working to draft. The taxpayer rights legislation will be the appropriate vehicles for this amendment. I support increased disclosure. Section 527 needs to be amended. It is my intention to move such legislation later this year."