Friday, 15 May 1987 Washington, DC
THE "GENERAL EXPLANATION OF THE TAX REFORM ACT OF 1987,"
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.
. 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.
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.