Friday, 15 May 1987 Washington, DC

1. THE "GENERAL EXPLANATION OF THE TAX REFORM ACT OF 1987,"
the government's 1379-page "blue book" interpreting the simplified income tax, finally became available last Friday. The new tax policies will have a significant negative effect on fellowship recipients (WN 22 Aug 86). Under the new law, only that portion of a scholarship or fellowship used for tuition and fees, or for course-related expenses such as books, can be excluded; living expenses, such as room and board, cannot. The Act expressly includes in gross income any payment for teaching, research or other services required as a condition of receiving the grant. To prevent circumvention, the rule also applies to tuition reduction and fair-market value of other fringe benefits. The sole exception is employee educational benefits at the undergraduate level. Congress has vowed "hands off the tax code" for the next few years.

2 . AN ATTEMPT TO FIX THE McCARRAN-WALTER ACT
by an amendment to the FY 88 State Department Authorization Bill emerged essentially intact from the Foreign Relations Committee. A vestige of the McCarthy era, McCarran-Walter denies admission to foreign visitors with past or present Communist affiliations unless they apply for an exception. The US is alone in having a political test for visitors. Few scientists have actually been barred, but many refuse to submit to the process. The amendment specifically preserves the authority to deny admission to terrorists. The Bill will go to the floor of the Senate in a couple of weeks.

3. THE AUTHORIZATION FOR SDI WAS REDUCED TO $3.1B BY THE HOUSE
on Tuesday, which is not only well below the President's $5.8B request, but also below the current level of $3.5B. The House was clearly thinking in terms of a bargaining position with the Senate, which is considering a Committee recommendation of $4.5B (WN 1 May 87). The debate included frequent references to the APS report on Directed Energy Weapons (WN 24 Apr 87) and the Council statement on SDI (WN 1 May 87). A "Dear Colleague" letter to the House membership enclosing the APS Council statement was circulated by Reps. Bennett (D-FL), Olin (D-VA), Ridge (R-PA) and McClosky (D-IN). This was countered by a letter from Rep. Hyde (R-IL), who attached an article from the National Review based on the work of Dr. Gregory Canavan, of Los Alamos, who challenged some of the findings of the APS Report. In all, fourteen SDI-related amendments were considered, seven passed. Among them:

DEPLOYMENT OF ANY ELEMENT OF AN ABM SYSTEM WAS PROHIBITED by the Hertel amendment, unless specifically authorized.

THE TRANSFER OF SDI TECHNOLOGY TO THE SOVIET UNION WAS PROHIBITED by the Downey Amendment. Reagan has, in the past, proposed sharing defensive technology with the Soviets.



Bob Park can be reached via email at whatsnew@bobpark.org
THE UNIVERSITY OF MARYLAND
Opinions are the author's and are not necessarily shared by the University, but they should be.