Drug and Tax Bills Force Congress To Extend Session Another Week

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Washington--The 100th Congress planned to remain in session into this week in an attempt to complete action on an omnibus anti-drug bill that is likely to contain new education programs and could also carry a controversial provision barring drug offenders from receiving student aid.

Other education-related bills also were fighting for life in the waning hours of the 1988 Congressional session. Chief among them was a massive bill that could provide tax relief for teachers, administrators, private schools, and parents seeking to save money for college tuition.

The Senate took up its version of the drug bill, HR 5210, on Oct. 13.

Senator Phil Gramm, Republican of Texas, proposed an amendment denying student aid and other federal benefits to convicted drug offenders that was being debated late last week. The provision was contained in the House-passed bill, but left out of the Senate bill as introduced.

An amendment effectively requiring states to conduct random drug tests on applicants for driver's licenses also could be offered.

The Senate bill contains more education initiatives than the House bill. They include a sharp increase in the spending ceiling for the Drug-Free Schools and Communities Act, increased penalties for drug offenses involving children and schools, and creation of a National Commission on Drug-Free Schools.

If the Senate gives final approval to the bill, a conference committee would still have to resolve differences between the Senate and House versions. But, as the extended session indicates, lawmakers in both parties were eager to pass drug legislation.

Tax Breaks for Educators

A conference committee was considering the tax bill late last week, and education lobbyists said they hoped it would emerge in time to be enacted.

"Essentially, we're satisfied," said Bruce Hunter, executive director of the American Association of School Administrators. "We like what they've done for school people."

He said the remaining differences facing conferees did not include the provisions applying to educators, but the amounts of tax reductions and increases in other areas. The Senate bill would reduce federal revenues by $2.7 billion, while the House bill would cost $7.5 billion.

Both House and Senate versions would provide a one-year delay in the implementation of a provision of the 1986 tax-reform law. Designed to prevent discrimination in benefits between high- and low-paid employees, the provision would affect many educational administrators and a wide range of employees in other fields.

Both measures also would prevent the Internal Revenue Service from taxing such "non-elective" deferred compensation as unused sick leave and vacation time.

In addition, the bill eliminated a quirky provision of the 1986 law that had the effect of requiring retired teachers in Pennsylvania, Washington, and Hawaii to pay taxes twice on their pension funds.

College Savings

The Senate measure, which was adopted last week, contains a provison allowing for tax exemptions on the interest earned on U.S. Savings Bonds if the proceeds are being used to finance college tuition.

Currently, taxes on the bonds are deferred until they are redeemed.

Under an amendment by Senator Edward M. Kennedy, Democrat of Massachusetts, families with annual incomes of less than $60,000 would qualify for a full tax exemption on the entire amount of interest.

Those in higher-income brackets would receive lesser tax breaks. Families with incomes greater than $80,000 would not get exemptions.

The Senate also adopted an amendment by Senator Strom Thurmond, Republican of South Carolina, that would exempt non-church-operated religious schools from state unemployment taxes. Current law exempts church-owned religious schools from the tax.

The House version, which was adopted in August, would also restore a provision allowing employees to receive $1,500 a year in employer-paid education programs without paying a tax. However, the House excluded education programs leading to a graduate degree.

The 1986 tax-reform law prohibited any exemptions for employer-paid education programs.

Other legislation awaiting final approval includes measures to help schools remedy lead contamination in their drinking water, reauthorize the National Science Foundation, and make technical corrections in the 1986 Education for All Handicapped Children amendments.

Vol. 08, Issue 07

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