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Senator Mike Enzi (ME): One of the main things I've been working on, of course, is taxes. As the only accountant in the United States Senate they've come to trust me and rely on me a little bit for some of the opinions on some of the legislation and that's a nice little niche for me to have. It's helping me to have some credibility in all of the things that I'm working on back here. Of course we are working on a number of different tax issues. One that we'll emphasize this week is the one for medical savings accounts. It's a new way of having portability for people with their health insurance accounts. There have been some test proposals that have been put through some broadening of the health insurance taxation that has allowed people who own their own businesses to begin medical savings accounts but it placed a limitation of 750,000 of the medical savings accounts nationally. One of the things we are trying to do is enlarge the medical savings accounts so that anybody who wants to can take advantage of them and increase both their portability and the kind of coverage that they've got tax free. A medical savings account works like an individual retirement account where you can either take your own money and put it into the account and then allow that to be tax deductible on your tax form so that you don't have to pay any tax on it. Or in the case of medical savings accounts the business that you work for could take the normal insurance money that they normally pay for insurance, give it to you and you could pick your own policy. Plus you can add to it from your own money tax free. That way if the business you are working at doesn't allow for dental or glasses you could make additional contributions to that account, tax free, have dental and glasses covered as well as to have more range of being able to pick your own insurance and having portability for your insurance. The portability is the important part of that. If a person changes jobs they can take the insurance policy they have already got to the new job and institute it through the same mechanism of medical savings accounts provided the new employer allows that same kind of a contribution. We are working to get more portable health insurance and also to allow you to pick the kinds of things that you want to have covered under the insurance. I've cosponsored a bill that is in the process of doing that. Just one more of the tax initiatives that we are working on back here. With that I'll open it to questions on anything.

Tony Monterastelli (TM): What other tax initiatives are you working on?

ME: We've been working to allow for capital gains tax changes. I think we've got that worked out to where every single person in the United States if they get into a capital gains transaction, which means if you purchase something and you own it for more than a year and then you sell it and you make money on it, would be able to get a tax break. The way that that tax break would work is that you would only have to pay income tax on that gain of revenue that would amount to half of what your normal tax would be. So if you are in a 20 percent tax bracket on that investment that you made you would only have to pay 10 percent taxes instead of the normal 20 percent taxes. We are also working on changing the estate taxes, trying to move the cap on the amount that is excluded from federal estate taxes to a higher level with an eventual elimination all in the same bill so that over a period of time we would be eliminating estate taxes. That's part of the negotiation that is going on right now with the balanced budget proposal. The Budget Committee is meeting with the President and there are people on the Budget Committee from both the Republicans and the Democrats. They are negotiating a budget package for this year. The budget package is the constraints that the Appropriation Committee has to work within when it's passed. They are working on getting the tax cuts that we've outlined included in that budget proposal because there are some costs to them. Another one we are looking at is eliminating some of the restrictions on individual retirement accounts, recognizing that there are some difficulties for future generations with Social Security taxes. We are trying to make an alternate proposal so that they can build up retirement funds so that they will have adequate retirement at the point they retire and it will be within their range of what they consider to be adequate. We've had some restrictions on that in the past where a spouse wasn't able to enter into them unless she made all of the money herself. Now they recognize that a family is a team and so if one individual is making the money and the other is handling the other family responsibilities that money can be divided. They can both have an individual retirement account, an IRA. And we are taking some of the restrictions off of how much can be put in. For a long time it was limited to $2,000 a year and went to $2,500 a year. Now it's been raised to $4,000 a year. We are trying to get some of those caps off so that we can determine what they think will be adequate retirement and put in that kind of an adequate retirement. We are also talking about a $500 per child tax credit that people could have. So again they would be able to retain a little bit more of their own money to spend the way they see fit because we really feel that individuals know better how to spend their money than the federal government does. It's a philosophical approach that we think is real important. That could be a pretty good chunk of money. Included in that though is some debate on whether the money ought to go for every child that is under the age of 13 or whether it ought to go to the parents during the teenage years which are the more expensive years. So that one is far from being determined and there is a lot of discussion and controversy on it yet. But it is one that we are working on as a primary policy. Those are just a few of them that we are working on. Alternative minimum tax elimination is another one. That's a double bookkeeping system. In fact it costs small businesses about $2 billion a year just to do the paperwork on it and it raises less than one billion a year nationwide. It is a very expansive tax for collecting. We are looking at eliminating that huge cost.

Ray Hageman (RH): Once the budget deal is figured out and it's agreed upon what's your prediction as far as what it will look like? Whose philosophy will win? Is it going to have a Republican stamp on it or is it going to have the President's stamp on it?

ME: Back here the President gets more air time than anybody so of course it will have the President's stamp on it (laughter). That's one of the things we've been working at very diligently in any of the budget deals. Anything the President says is quotable more than we would expect of what Senators and Representatives say is quotable. But it doesn't carry the same power and weight when it weighs in with individuals across the United States. That's why, unlike two years ago when they hurried through a bunch of developments and put pressure on the President to do things which in many cases he vetoed, this time we are telling the President what sorts of things we like and negotiating with him to see what things he will buy into. We can walk down the road arm in arm saying these are the things the American people want, not things the Democrats want, not things the Republicans want, not things the President wants. These are the things the American people want. We are trying to get everybody to buy into the American people concept because that is really what we are back here for. If we can do that we'll come up with a balanced budget that includes a lot of the things that the American people want. Not all of the things that the American people want because we simply can't afford all of the things the American people want. Fortunately there seems to be a trend in the United States where the American people want us to balance the budget, to quit spending their money on their behalf and their kids behalf. We are building up this incredible debt for future generations and that's one that our kids have to pay off. We've got to worry about that.

RH : On the liberal side of things you have Tom Daschle saying that he doesn't want any more reductions in the cost of increase for entitlement programs. Then you have a group of Republican Senators last week who signed a bill saying they did not want to see any more spending increases. Who amongst the groups there are going to have to I guess pitch a little in order to get a budget agreement passed?

ME: Everybody in the process has to give a little bit on something. But what we are really talking about in balancing the budget is some limitations on the additions that we put into the budget. A lot of the balancing can be done by not adding additional things on that cost. When we are doing the budget negotiations now of course there are two areas they are talking about quite a bit. One of them is determining which set of revenue figures we'll be taking. Both the Democrats and the Republicans in Congress have been asking for the Congressional Budget Office figures to be used because they are little bit more conservative. The President would like to use the OMB numbers. They are less conservative so it is easier to balance using those numbers. But the strides that we've made in balancing the budget over the last four years that have resulted in a continual downturn of the deficit, there is still a deficit every year but its been less of a deficit each year, have been as a result of using the Congressional Budget Office figures. Then when money does come in the OMB figures are fairly accurate. When the money comes in at the higher level than we based our spending on at the lower anticipated revenue that's what actually has created the decrease in the amount of revenue we are spending. It hasn't been constraint by Congress. It's been a constraint using the revenue figures. So that's where a lot of the debate is, which figures to use.

TM: In addition to the tax proposals you just mentioned, what are the prospects that we can see a broader overhaul of the revenue code?

ME: It's pretty preliminary on that yet. When I held the Small Business Committee hearing, I got to chair one in Casper, it was the first time in nine years there had been a hearing held in Casper. (He was pleased as a freshman to get to be the one to Chair that hearing.) We had some absolutely great testimony from people in business, from state agencies, from some of the professionals across the state and from some of the trade organizations. One of the groups that testified there was the State Society of CPA's and I was fascinated with their approach. They are concerned about the tax code at the present time. They would like to see it drastically simplified because they are in some terrible liability situations. Money Magazine does this every year. If you take a tax picture and you give it to a number of different accountants, they will come up with a different tax bill for each of them. If you call the Internal Revenue Service on consecutive days and ask the same question, you will get different interpretations from different people. The tax code right now is very hard to understand so they would like it simplified. Everybody that I know would like the code simplified. They said the only problem they have had with simplification has been that every time Congress has talked about simplification what they have done is made it more difficult and discreetly raised taxes. That's one thing I definitely do not want to do. I have asked the CPA's both in Wyoming and back here in Washington to help come up with a simplification plan. Of course they could not start on that until after April 15 because they rely on the tax season to produce about 60 to 70 percent of their income. That becomes a very busy time. I was pleased that they would take the time to testify before the Committee during that time. But we'll be getting some help from them and I'm interested in any suggestions from any of the people from Wyoming. Everybody has to work with taxes to some degree so everybody has some ideas on it and there is a lot that can be done. I picked up a book back here that I knew of from a tax course I had taken at one time. It's about 1,800 pages, includes all of the Code, all of the regulations and the tax tables that are currently used. Now there is another 8,000 pages of regulations that are not used that are part of our present tax code. I've also been working real hard to get a copy of the tax code from the Internal Revenue Service. The first response I got from them was I don't think you are entitled to that. I assured them that I was, but I can tell you at this point I still do not have a copy of the federal tax code from the IRS. We push that with them on a weekly basis. Part of that is to keep them informed that there is an accountant back here now and that we are going to be looking over their shoulder.

RH: Senator, what's the latest status on the re-authorization of the Endangered Species Act? The Game and Fish here in Wyoming just wrapped up their state meetings with talking about their plan to manage wolves in Yellowstone and there is a sense among some of them that whatever final plan comes up from the state could be in a sense micro-managed by the federal government in order to get the wolf de-listed. There was a concern we might be still having to go with a federal plan so to speak in order to get the wolf de-listed so that the state could manage the animal. What's your thoughts on all of that?

ME: As to the status of it, it probably isn't going to be taken up in Committee until after Memorial Day. I've seen the things that are on Committee lists prior to that time. It's one of the more difficult issues to take up because there is a pretty wide divergence of philosophy on endangered species. I know that my philosophy on it is that if we are going to put a lot of extra costs on private individuals because the endangered species happens to be on their property then there needs to be some kind of a national compensation as well. It is a national priority for us to save those animals and I do think that is important, however, once they are saved there needs to be a way to delist them as well. The grizzly bear is creating a lot of problems now where it has been forced to expand well beyond the Yellowstone boundaries but there is no provision for any kind of control there because they don't have any provision for de-listing them at the moment. Perhaps the wolf would be de-listed if it were actually taken into consideration because while it is endangered in some particular areas because it doesn't exist there, Central Park in New York is one of those places where it no longer exists, that doesn't mean that it is necessarily an endangered species. We were able to trap those animals up in Canada and bring them down to Yellowstone. So you might say they are not endangered in Canada. There have to be a lot of things worked out in that legislation, but we will get to it probably not until after we've reached a budget decision though. That appears to be what the plan is at the moment.

RH : Senator, I see that the government wants to stop paying too much in rent for low income housing it has been subsidizing. And the housing secretary says there are some places where contracts that were written 20 years ago have forced the government to pay rent that is twice the market rate in some areas. Is this something that has to be again taken up after the budget? There is a potential savings they are claiming of $1.4 billion over five years if they renegotiate the contracts.

ME: No, I think that is something we'll be taking up much sooner than that. I'm on the Banking and Urban Housing Committee (Banking, Housing and Urban Affairs) and that's kind of an interesting combination to me how the two get in there. I've been forcing some rural housing issues in there at the same time. In the urban housing areas, 20 years ago we contracted for low cost housing and there are a couple of problems with it. You mentioned one of them. The other problem is that when these are coming due we have already paid off that housing one time. Now we are having to enter into contracts to buy it again. So I am hoping that they do more lease purchase contracts on this next round because we are going to be doing as high as $19 billion worth of recontracting. I think it is $3 billion then $6 billion then $19 billion over the next three years on contracting on this housing again. And that's all housing that we entered into contracts with before. I guess we thought that at the end of that time all of the housing problems in the nation would be solved. Of course they are not. They are a growing problem. So we will be reviewing those contracts to make sure we can get as favorable a position in them as possible now and have people in low cost housing. Again, one of the things I am pushing for though is the option for them to buy their own home. I think that people have a lot more pride and a lot more participation in their community when they own their own homes. That's part of the American dream that I'm going to be pushing for.

RH: Senator, do you have time for one more? I wanted to ask you about the anti-trust legislation that is going through regarding the Cowboy football team. You are going to have some Judiciary hearings on all that. Maybe if you can in the next couple minutes just tell me what you hope to get out of that. At least an explanation from the coalition as to why they are going with this plan.

ME: We are actually planning on getting them to accept non-coalition people up to a higher level than just in the top five in the nation. The reason we are working that issue so hard is because it has a financial impact on the University of Wyoming. It also has an impact on the players, of course. We are interested in that. We want the players to be able to have the chance to perform and show their skills and talents and to get the publicity for the University of Wyoming on a national level or any of the other WAC schools. But the financial picture is even greater on that. For instance, BYU last year got cheated out of one of the major bowls. They were in that top five in the nation that we have now gotten them to agree to. We don't think that's far enough down the list. But BYU last year got $750,000 for their bowl appearance. If they would have been in a major bowl they would have gotten $8 million. The $8 million gets divided among the WAC teams. So, its the difference between getting $50,000 for each school in the WAC or $500,000 for each school in the WAC. I think that's worth pursuing. That's a lot of money in Wyoming and in the other WAC schools and we are going to pursue that real hard.

RH: What kind of interest are you getting from other lawmakers?

ME: We're not getting opposition from the other lawmakers, which tells me that they agree that that's probably gotten a little too tight. It's an anti-trust issue. They are controlling the market on that and we need to make sure they are not in restraint of trade, that they are not keeping all of the schools from having an equal chance at the money and for the chance for their kids to perform.

RH: When are you are going to have some decisions from the Justice Department and the FTC that what they are doing if it is legal or illegal?

ME: We haven't gotten a good read yet on how long that's going to take. We are going ahead and having the hearings on May 22.

RH: When you question them are you going to wear your brown and gold?

ME: (laughter) Probably a brown and gold tie but they have some pretty strict dress codes for us back here if we are going to participate.