by the House Ways and Means Committee are sufficiently generous to accommodate the vast majority of employees covered by Sears employee-retirement plans and similar plans which might have been endangered by the limitation proposed in the pension bill previously passed by the Senate.

The Reuss amendment would unwisely strike this forward step, these important improvements provided by the House Ways and Means Committee. It would preserve existing inequities in the law. It unfairly discriminates against the burdened middle class taxpayer, selfemployed farmers and small businessmen whose continued vigor and independence are vital to the American system and way of life. I respectfully call upon everyone in this Chamber to join in decisively rejecting this unwise amendment.

The CHAIRMAN. The question is on the amendments, offered by the gentleman from Wisconsin (Mr. Reuss).

The amendments were rejected.

AMENDMENT OFFERED BY MR. CONABLE

Mr. CONABLE. Mr. Chairman, I offer an amendment.
The Clerk read as follows:

Amendment offered by Mr. Conable: Page 280, after the period in line 21, insert :

Section 404 (e) is amended by adding at the end thereof the following new paragraph:

"(5) Cost-of-living adjustment.-The Secretary or his delegate shall adjust annually the $7,500 amount in paragraph (1), in paragraph (2) (A), in section 401(e), and in section 1379(b)(1) (B) for increases in the cost of living in accordance with regulations prescribed by the Secretary or his delegate. Such regulations shall provide for adjustment procedures which are similar to the procedures used to adjust primary insurance amounts under section 215 (i) (2) (A) of the Social Security Act. For purposes of this paragraph, the base period taken into account shall be the calendar quarter beginning October 1, 1973."

Mr. CONABLE. Mr. Chairman, I shall not take 5 minutes to speak in support of this amendment. It is obvious what this amendment does. It takes the $7,500 maximum provided by the bill on the Keoghtype plan and makes it subject to adjustment for cost of living. We have a similar cost-of-living evaluator elsewhere in the bill.

For instance, with respect to the $75,000 maximum defined benefit limitation, included in the provision relating to corporation pensions, we provide for a cost-of-living adjustment which would permit an upward movement of this already generous figure.

There are many people who are unhappy that we have imposed such a liberal corporate limitation, but we have, and it seems to me entirely appropriate if we are going to do it with respect to corporate pensions, we should also do it with respect to the Keogh-type plan.

The Keogh-type plan has not been changed for 12 years. It may be some time before it is changed again. We should take into account at this time the probability that an upward adjustment would be in keeping with the equities granted to those who serve under corporate pension plans.

Mr. SCHNEEBELI. Will the gentleman yield?

Mr. CONABLE. I yield to the gentleman.

Mr. SCHNEEBELI. Mr. Chairman, I support the gentleman from New York in his amendment regarding the cost-of-living bonus for Keogh

plans, because in two or three other areas of this legislation a cost-ofliving amendment has been incorporated. I think the gentleman is entirely right, and I ask my colleagues to support his amendment. Mr. CONABLE. I thank my colleague.

I think one important thing to keep in mind with respect to the Keogh-type plans is that if we have a permissible maximum figure compensating for the complications a Keogh plan imposes on self-employed people, they will have the incentive to go into this type of plan instead of into IRA and in the process they will, of course, have to cover their own employees.

The purposes of this bill generally is to extend the benefits of tax deferral for retirement purposes and to extend the coverage to more people than are presently covered under our piecemeal voluntary retirement systems.

Mr. BURLESON of Texas. Will the gentleman yield?

Mr. CONABLE. I yield to the gentleman.

Mr. BURLESON of Texas. I wish to associate myself with the proposal of the gentleman from New York. It seems to me this is the pattern followed in the retirement plan for Federal employees, including Members of Congress. The cost-of-living provision in the Federal retirement program provides for increases commensurate with increases in the cost-of-living, whenever there has been at least 3-percent increase in the Consumer Price Index.

This is a modest approach in view of the current trends and the anticipated situation in the future.

Mr. Chairman, I think the proposal offered by the gentleman from New York (Mr. Conable) is a wise proposal, is just, and is equitable under this system.

Mr. CONABLE. Mr. Chairman, I thank the gentleman from Texas. Mr. ARCHER. Mr. Chairman, will the gentleman yield?

Mr. CONABLE. I yield to the gentleman from Texas.

Mr. ARCHER. Mr. Chairman, I would like to compliment the gentleman from New York on offering his amendment. I think it is a very responsible amendment, and I for one would like to associate myself with the amendment.

Mr. CONABLE. Mr. Chairman, I urge support of the amendment that I have offered.

Mr. ULLMAN. Mr. Chairman, I rise in opposition to the amendment offered by the gentleman from New York (Mr. Conable) and I move to strike the requisite number of words.

Mr. Chairman, the committee worked its will on this matter in a very careful way. We considered all aspects of the problem. In this instance we are increasing the maximum self-employed contribution from $2.500 to $7.500. The provisions where we did put the cost-of-living feature in were those restricting the corporate outer limits. It seems to me that this threefold increase is enough for now. If further increases are needed in the future Congress can consider the provisions again at some subsequent date. It also seems to me that it would be wise for the House not to extend the cost-of-living factor any further because if we do, then we ought to extend it to the $1,500 provision. So let us leave it in the responsible way in which the committee brought it to the floor, and pass it, and consider this matter further at another time if this becomes necessary.

Mr. REUSS. Mr. Chairman, I move to strike the requisite number of words, and I rise in opposition to the amendment offered by the gentleman from New York (Mr. Conable).

Mr. Chairman, I will not take the full 5 minutes, but it is odd here to hear four or five members of the tax-writing Committee on Ways and Means trying to devise new ways to give away the revenues. If we adopt this amendment on top of the $7,500 preference which is in there for those Keogh bill beneficiaries who make $50,000 a year, we would be adding in this year of 8-percent inflation, another 4-percent preference, for a total of $11,500.

Nobody talks about a cost-of-living break for the average hardpressed American worker earning $11,000, $12,000, $14,000 or $15,000 a year, who is being belabored by ever-increasing payroll taxes imposed upon him under a closed rule from the Committee on Ways and Means. Mr. Chairman, I hope that this amendment will be overwhelmingly voted down.

The CHAIRMAN. The question is on the amendment offered by the gentleman from New York (Mr. Conable).

The question was taken; and the Chairman announced that the aves appeared to have it.

RECORDED VOTE

Mr. ANNUNZIO. Mr. Chairman, I demand a recorded vote.

A recorded vote was ordered.

The vote was taken by electronic device, and there were-ayes 183, noes 206, answered "present" 1, not voting 41, as follows:

So the amendment was rejected.

The result of the vote was announced as above recorded.

AMENDMENT OFFERED BY MR. LONG OF LOUISIANA

Mr. LONG of Louisiana. Mr. Chairman, I offer an amendment.
The Clerk reads as follows:

Amendment offered by Mr. Long of Louisiana : Pages 280, 281, and 288, strike out "$7,500" and insert "$6,000".