[Congressional Record Volume 140, Number 28 (Tuesday, March 15, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTION

      By Mr. WELLSTONE (for himself, Mr. Hatfield, Mr. Jeffords, and 
        Mr. Metzenbaum):
  S. 1928. A bill to require the availability of adequate waste 
emplacement capacity for the future licensing of construction and 
operations of nuclear utilization facilities, and for other purposes; 
to the Committee on Environment and Public Works.


                  second generation nuclear waste act

  Mr. WELLSTONE. Mr. President, today I rise to address a subject that 
has received too little attention here. I am talking about nuclear 
waste. Since the Senate's last major action on this issue, 7 years have 
passed, extremely little progress has been made, and more questions 
have been raised than resolved.
  Today, I propose a two-pronged approach to dealing with this problem. 
The first part deals with our current nuclear waste crisis, and to help 
resolve that issue I am sending a letter to the President with 12 
Senators signatures asking him to convene an independent review 
commission on nuclear waste programs and policies. The second part 
tries to keep us from ending up embroiled in another nuclear waste 
crisis, and to that end I will introduce and send to the desk in a few 
minutes, with three other cosponsors, the ``Second Generation Nuclear 
Waste Act.''
  The nuclear waste issue is coming to a boil throughout our country. 
We all know about--and hear every day about--the Department of Energy's 
difficulties in figuring out what to do with our high-level nuclear 
wastes. The New York Times Magazine of two Sundays ago, which I have 
right here, is telling it like it is. This problem will not go away, 
and burying it beneath a mountain in Nevada will not make it go away.
  This is a fine piece written by Kai Erikson. ``Nuclear waste buried 
now in haste will still be deadly in 12001 A.D.'' I recommend this 
article to my colleagues.
  Another high-level nuclear waste issue is the question of an interim 
storage facility--a monitored retrievable storage facility MRS. The 
congressional view of that program was made all too clear when we 
essentially killed Federal funding for it last year.
  But there are many, many other facets to the nuclear waste crisis 
besides high-level waste. There is also so-called low-level waste, 
which was addressed in legislation in 1982, but States have failed to 
open any new low-level dump sites. Part of the problem there is that 
what we are calling low-level often is about as dangerous as the high-
level.
  We also have military facilities run by the Department of Energy that 
have been making headlines for years for their high contamination 
levels. To clean up these sites, DOE has just come to Congress to ask 
for $6.3 billion--one-third of DOE's budget request for fiscal year 
1995. The variety of nuclear waste problems at military facilities is 
mind-boggling, including transuranic waste, both high- and low-level 
waste, and liquid wastes.
  And that is just the problems that we have here now. How about the 
nuclear wastes that we import rather than allow them to be reprocessed 
abroad? Right now they seem to be ending up, at least temporarily, at 
the Savannah River site in South Carolina. Where will future imported 
wastes go? And how about wastes from future nuclear powerplants here in 
the United States? Do we even have a plan about how we are going to 
deal with these problems? How about a fallback plan in case Yucca 
Mountain proves to be an unacceptable site for deep geologic disposal?
  Congress often does not act unless it absolutely has to. A crisis is 
sometimes necessary to move us into action. Well, that crisis--a 
national crisis--has arrived. Pieces of the crisis are manifesting 
themselves around the country--in Ward Valley, CA, Hanford, WA, and 
both the waste isolation pilot plant and the Mescalero Apache 
Reservation in New Mexico.
  My own State of Minnesota now finds itself at the forefront of this 
complex issue. The legislature is currently trying to make a critical 
and difficult decision, whether to allow dry-cask storage of high-level 
nuclear waste on the site of the Prairie Island nuclear plant. People 
are confused by the advertisements and varying claims the different 
sides make about the permanency and safety of such a waste dump, and 
about alternatives to nuclear power electricity generation. And the 
Federal Government is not helping the State of Minnesota, or any of our 
States, make a decision. Just 2 weeks ago today, the director of DOE's 
Office of Civilian Radioactive Waste Management told the Senate Energy 
and Natural Resources Committee that if Minnesota allows dry-casks at 
Prairie Island, he cannot guarantee that the waste will ever leave. I 
asked him: 20 years, 60 years, 80 years--how long will it be there? And 
Minnesotans are all too aware that if Yucca Mountain fails to meet the 
need as a permanent repository, there is no Federal policy for what to 
do then.
  Today I want to take a step toward breaking the current gridlock. 
There have been many calls for independent reviews of DOE's Nuclear 
Waste Program in the past, but today, along with 11 other Senators, I 
want to go much further. It is obvious from the litany of nuclear waste 
problems I have mentioned that this issue is significantly bigger than 
the finances and management of the Yucca Mountain project. We need to 
step back and see where we are and to decide whether, given our 
investment in our current course, we ought to do anything differently.
  We need an independent, comprehensive review of our nuclear waste 
policies and programs. We need a credible, public commission to take 
stock of where we are and to make recommendations about where we ought 
to be headed. If such a commission finds that we are doing everything 
right, then the program is served by giving it that seal of public 
approval that it so desperately needs. If the commission finds problems 
and makes recommendations for change, then those recommendations and 
findings will help inform the public as it takes part in this debate.
  In this letter, which I am sending to the President today, Senators 
Jeffords, Boxer, Leahy, Metzenbaum, Feinstein, Reid, Kennedy, Kohl, 
Bryan, Feingold, and John Kerry join me in asking the administration to 
set up such a commission. There has never been such a comprehensive, 
public review of our nuclear waste policies and programs, and at least 
this one dozen Senators think that such a review is long overdue. 
Representative Wyden and many of our House colleagues have also sent a 
similar letter.
  I ask unanimous consent that our letter to the President be printed 
in the Record at this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  U.S. Senate,

                                   Washington, DC, March 15, 1994.
     The President,
     The White House,
     Washington, DC.
       Dear President Clinton: The problem of nuclear waste 
     management has been a burden on our national energy and 
     environmental policies for decades. We urge you to appoint a 
     Presidential Commission to perform an independent review of 
     our nation's needs, policies, and programs with respect to 
     this persistent and troubling subject.
       The nuclear waste issue is coming to a boil throughout our 
     country. Nuclear power plants are running out of existing 
     storage capacity for spent fuel rods, states are repeatedly 
     failing in their efforts to site ``low-level'' waste dumps, 
     public opposition grows against the siting of a Monitored 
     Retrievable Storage (MRS) facility for spent nuclear fuel, 
     and the clean-up of the Department of Energy's (DOE) 
     facilities is posing a monumental task in dealing with a wide 
     range of nuclear wastes, including transuranic, spent fuel, 
     ``high-level'' and liquid wastes. In addition, nuclear 
     utilities around the country believe that in 1998, DOE will 
     be obligated to take title to the spent nuclear fuel 
     currently stored at nuclear power plants around the nation. 
     Each of these aspects of the nuclear waste problem brings 
     additional costs to ratepayers and taxpayers.
       Meanwhile, the only site being considered as a possible 
     location for a permanent spent fuel repository is Yucca 
     Mountain, Nevada. As the nuclear waste problem grows, the 
     pressure will continue to build to elevate Yucca Mountain 
     from potential site to construction site. Nevertheless, the 
     project is currently behind schedule and fraught with 
     technical and political uncertainties.
       Nuclear waste in this country has historically been 
     addressed not based on its hazardous nature or length of 
     life, but by other, non-scientific delineations, such as the 
     source of waste. Thus, our nuclear waste programs deal with 
     waste issues in a piecemeal fashion, not in the integrated 
     and presumably safer and more cost-effective manner that 
     would be preferable.
       This difficulty in addressing our nuclear waste dilemma is 
     cast against a background of continued waste generation. In 
     fact, Congress regularly appropriates money to fund research 
     and development for a second generation of commercial 
     reactors. Somehow, there is a disconnect in our policies 
     regarding the generation and disposal of nuclear waste.
       An independent review by a Presidential Commission would 
     clearly be appropriate and useful in discovering and 
     rectifying that disconnect. There has never been a 
     comprehensive, public review of our nuclear waste programs 
     across the wide range of technical, managerial, and policy 
     issues that make this problem so complex. The review we 
     envision would consider all nuclear wastes, including ``high-
     level'' wastes, transuranic wastes, and ``low-level'' wastes.
       We feel that such a review would enjoy greater credibility 
     if it were conducted by a truly independent body operating in 
     full public view. Accordingly, we urge the creation of a 
     Presidential Commission that would:
       1. Be independent from DOE;
       2. Include members of communities affected by nuclear 
     waste, representatives of tribal and state governments, 
     facility workers, and representatives from concerned 
     environmental, consumer, and taxpayer organizations;
       3. Make information readily available to the public;
       4. Engage in an extensive public hearing process including 
     consideration of and response to all public comments;
       5. Open all meetings to the public; and
       6. Issue a comprehensive report including evaluations of 
     current programs and recommendations for change.
       Your decision to step back and take a broad, comprehensive 
     look at our nation's health care system speaks volumes about 
     your willingness and ability to address very complex and 
     important problems created during previous administrations. 
     We look forward to hearing from you with respect to our 
     recommendations and appreciate your consideration of this 
     issue of national concern.
           Sincerely,
         Paul Wellstone, Barbara Boxer, James M. Jeffords, Patrick 
           J. Leahy, Howard M. Metzenbaum, John F. Kerry, Edward 
           Kennedy, Richard Bryan, Dianne Feinstein, Harry Reid, 
           Herb Kohl, Russell D. Feingold.

  Mr. WELLSTONE. Now let us look to the future. If this Commission 
comes back with recommendations that lead to the resolution of the 
current waste crisis, how do we avoid falling into another one?
  Today on behalf of Senators Hatfield, Jeffords, Metzenbaum, and 
myself, I introduce a bill that should have been the first law Congress 
passed upon entering the atomic age. It is nothing short of common 
sense.
  The bill I introduce today simply requires that we build no more 
nuclear powerplants until we have someplace to permanently store the 
waste they will generate. That's all there is to this piece of 
legislation.
  There is nothing radical about this idea. It is not a partisan idea--
just look at the list of cosponsors: Two Democrats and two Republicans. 
All this bill does is put the nuclear cart back behind the horse, where 
it belongs.
  It is true that no utility has yet stepped forward to site a new 
nuclear powerplant, and that is exactly why now is the time to pass 
this law. Once utilities make a huge investment in siting, licensing, 
and building new plants, the pressure upon Congress to provide a waste-
disposal option for them becomes immense. Unfortunately, if Congress 
acts under such pressure, it might not come up with the best 
resolution. Let's ensure that for future plants, we deal with the waste 
issue in a deliberate way, free from pressure applied by utilities with 
vested interests.
  I want to make this point crystal clear: This bill would not impact 
any existing plants. It would apply only to plants that would be 
licensed after the date of enactment. It would, therefore, not apply to 
renewal of existing licenses.
  Here is the current commercial high-level nuclear waste situation in 
a nutshell: We have DOE, by congressional mandate, putting all of its 
eggs in the Yucca Mountain basket. Even when Yucca Mountain in on-
line--if ever--it will be able to hold only the waste that has been and 
will be generated by our current generation of reactors.
  Where will the waste from a new generation of reactors be disposed 
of? This bill requires that we answer this question before that second 
generation is born.
  There is a common belief that no utility is likely to step forward 
with plans to build another nuclear powerplant anytime soon. 
While there may be some truth in this, do my colleagues know that two 
standardized advanced reactor designs will finish Nuclear Regulation 
Commission staff review within only a few months?
  Do my colleagues know that after that there is only a 1\1/2\-year 
period before the designs are certified and ready to be built?
  Do my colleagues know that DOE is offering to pay up to $58 million 
toward siting and licensing expenses and up to $100 million toward 
design work for second-generation reactors?
  This bill does not judge the ``deep geologic repository'' approach 
that the DOE is currently pursuing. Nor does it make any mention of the 
monitored retrievable storage facility that the nuclear waste 
negotiator is working to site.
  It only says that we ought to always have enough permanent storage 
capacity to take care of the waste that will be generated by any new 
nuclear power plant. It is not enough to have a plan for adequate 
storage. It is not enough to have begun construction on a storage 
facility. It is not enough to have finished building but not yet 
licensed a storage facility. The permanent storage facility must be 
sited, built, and licensed for operation before any new plant can be 
licensed under this piece of legislation.
  Mr. President, it is written that way because of the huge difference 
between the planning and building of a nuclear waste facility, on the 
one hand, and its actually accepting waste on the other. With a 
politically charged issue like nuclear waste, it is wise to make 
absolutely certain that there is water in the pool before jumping in, 
rather than just turning on the spigot, taking a deep breath, and 
diving.
  I will circulate a ``Dear Colleague'' letter with this bill attached 
asking for other Senators to become cosponsors. I urge Senators to do 
so. I think this piece of legislation, which I will send to the desk, 
is long overdue and I believe it represents just plain, good common 
sense.
  Mr. President, let me just conclude by saying that I really do 
believe that Kai Erikson did a real service for the country in the 
piece he wrote Sunday 2 weeks ago.
  For all too long, the nuclear waste problem has been sort of put in 
parentheses or put into brackets or swept under the rug. I commend 
Secretary O'Leary and the Department of Energy for trying to deal with 
this very difficult issue. But I have to say, Mr. President, one more 
time, that Yucca Mountain is not a certainty. There have been years of 
delay. The people in Nevada have raised important questions, and my 
State of Minnesota and many other States are going to be faced with an 
absolutely impossible position unless we have some kind of independent 
public commission that studies this issue, that has credibility and can 
build the political and public support in this country for the kind of 
decisions we have to make. I sent the bill to the desk on second-
generation nuclear waste because I believe that it is absolutely 
unconscionable for us to even think about building any more nuclear 
power plants until we know for certain what we are going to do with the 
waste.
  That is the two-pronged approach I take today on the floor of the 
Senate. I hope we will get a positive response from the letter I and 11 
Senate colleagues have sent to the President. I will ask other Senators 
to cosponsor the bill I introduced on second-generation nuclear 
facilities, and I hope that we will begin to address this question 
because I think it has the potential to be an absolutely huge disaster 
for this Nation. We just cannot hide from it any longer. We have to get 
serious about what we are going to do with this nuclear waste. I 
believe that now is the time.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1928

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Second Generation Nuclear 
     Waste Act''.

     SEC. 2. PERMIT AND LICENSING REQUIREMENTS.

       Section 185 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2235) is amended by adding at the end the following new 
     subsection:
       ``(c)(1) Notwithstanding any other law, no construction 
     permit or combined construction and operating license shall 
     be issued for a utilization facility used for the generation 
     of electricity for commercial sale until such time as--
       ``(A) there is a facility licensed by the Federal 
     Government for the permanent emplacement of spent nuclear 
     fuel and high-level radioactive waste from the utilization 
     facility; and
       ``(B) there is an adequate volume of capacity within the 
     emplacement facility to accept all of the spent nuclear fuel 
     and high-level radioactive waste that will be generated by 
     the utilization facility during the reasonably foreseeable 
     operational lifetime of the utilization facility.
       ``(2) At not time shall the total volume of spent fuel and 
     high-level radioactive waste generated, or reasonably 
     expected to be generated, by all utilization facilities used 
     for the generation of electricity for commercial sale 
     receiving construction permits or combined licenses after the 
     date of enactment of this subsection, exceed the total volume 
     of capacity available in facilities licensed by the Federal 
     Government for the permanent emplacement of spent nuclear 
     fuel and high-level radioactive waste.''.
                                 ______

      By Mr. KERRY (for himself and Mr. Kennedy):
  S. 1929. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation with appropriate endorsement for 
employment in the coastwise trade for each of the vessels Shamrock V 
and Endeavor; to the Committee on Commerce, Science, and 
Transportation.


                            jones act waiver

  Mr. KERRY. Mr. President, I am pleased to join my colleague, the 
distinguished senior Senator from Massachusetts, in introducing a bill 
to allow the vessels Shamrock V and Endeavor to be employed in 
coastwise trade of the United States. These boats have a small 
passenger capacity, normally 8 to 12 passengers on overnight trips and 
up to 30 passengers on day trips, and their owners intend to operate a 
charter business based out of Boston Harbor. The purpose of this bill 
is to waive those sections of the Jones Act which prohibit foreign-made 
vessels from operating in coastwise trade. The waiver is necessary 
because, under the law, a vessel is considered built in the United 
States if all major components of its hull and superstructure are 
fabricated in the United States, and the vessel is assembled entirely 
in the United States. Both of these boats were originally foreign built 
in the 1930's, but since the mid-1980's they have been owned and 
operated by American citizens, repaired in American shipyards, and 
maintained with American products. The owners bought the boats due to 
their historical significance. These vessels are the only two remaining 
boats of a class of enormous sailing yachts built in the 1930's to 
compete for the America's Cup and, as such, are a very significant part 
of American maritime and yachting history. To better showcase these 
historic vessels the owners now want to start a charter boat operation 
based out of Boston offering voyages of various durations to various 
destinations.
  After reviewing the facts in the cases of both the Shamrock V and the 
Endeavor, I find that these waivers do not compromise our national 
readiness in times of national emergency, which is the fundamental 
purpose of the Jones Act requirement. While I generally support the 
provisions of the Jones Act, I believe the specific facts of this case 
warrant a waiver to permit both the Shamrock V and the Endeavor to 
engage in coastwise trade. I hope and trust the Senate will agree and 
will speedily approve the bill being introduced today. Mr. President, I 
ask unanimous consent that the full text of my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1929

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     notwithstanding section 27 of the Merchant Marine Act, 1920 
     (46 U.S.C. App. 883), the Act of June 19, 1886 (46 U.S.C. 
     App. 289), and section 12106 of title 46, United States Code, 
     the Secretary of Transportation may issue a certificate of 
     documentation with appropriate endorsement for employment in 
     the coastwise trade for each of--
       (1) the vessel Shamrock V (United States official number 
     900936); and
       (2) the vessel Endeavor (United States official number 
     947869).
                                 ______

      By Mr. LEAHY (for himself and Mr. Conrad):
  S. 1930. A bill to amend the Consolidated Farm and Rural Development 
Act to improve the administration of claims and obligations of the 
Farmers Home Administration, and for other purposes; to the Committee 
on Agriculture, Nutrition, and Forestry.


          Farmers Home Administration Improvement Act of 1994

  Mr. LEAHY. Mr. President, the Washington Post ran a front page story 
recently about millions of dollars in delinquent debts owed by several 
wealthy farm loan borrowers to the Department of Agriculture's Farmers 
Home Administration.
  Delinquencies on large loans made by Farmers Home more than a decade 
ago are unpaid not because of the debtors' inability to pay--many of 
them are millionaires--but because they apparently feel no obligation 
to repay the loans made to them in good faith by the taxpayers.
  It is time to clean up the mess.
  The farmers who milked FmHA instead of cows will be forced to part 
with their profits and pay back the American taxpayers.
  Payback time has come.
  These poorly underwritten loans should not have been made in the 
first place. The problem at hand now is doing everything that is 
possible and lawful to collect from the well-heeled deadbeats who 
unjustly give real farmers a bad name, and who by avoiding their 
legitimate debts insult the thousands of small, limited resource 
farmers who play fair and pay regularly.
  It is time to stop communicating, negotiating, threatening, 
deliberating--it is time to send the private bar after the public 
scofflaws.
  It can be done. A threat will not do it. A real good lawsuit will.
  I cannot explain why somebody who has the means to repay a loan does 
not. It is unconscionable. I do not know how the people identified in 
the Washington Post story can live with themselves. This is an insult 
to the thousands of farmers who wait for years for modest FmHA loans.
  American taxpayers should not have to live with the delinquent debts 
of millionaires who thought they took our loans for a song--the time 
has come to pay the piper.
  I do not cast blame on Justice Department attorneys for not fully 
prosecuting these cases. They are excellent attorneys who have many 
demands placed on them and simply do not have time nor resources. They 
are up against some high-powered legal gunslingers, paid for by the 
same sophisticated scofflaws who claim they cannot afford to pay back 
the Federal farm loans.
  In addition to the horror stories we read about in the Post, there 
are currently pending over 4,000 foreclosures on bad debts from loans 
made by Farmers Home.
  Over $4.2 billion is involved in these delinquent debts. We need to 
act vigorously to recoup as much of the taxpayers' money as possible.
  The Farmers Home Administration is often the only credit source 
available to beginning or limited resource farmers to obtain operating 
loans for their farms.
  In times of disaster Farmers Home provides essential financial 
assistance to farmers, the majority of whom have small, modest 
operations.
  The millionaires in the Post story are exceptions to the typical 
borrower who is a bona fide farmer. Unlike bona fide farmers, these 
wealthy deadbeats are abusing the corrective legislation to ensure that 
such abuses do not occur again.
  It is clearly time to toughen the law and accelerate efforts to clear 
up this huge backload of delinquent debt.
  The bill I am introducing today would allow Agriculture Secretary 
Espy, who has requested this legislation, to hire private attorneys to 
work at collecting on this debt.
  This would result in recouping up to one third of the $4.2 billion 
the taxpayers loaned out. Using private attorneys would not cost any 
additional public money; part of the debt collected could be used to 
reimburse the private attorneys.
  I am sick and tired of reading about part-time farmers living in 
$800,000 houses, developing golf courses, and running big nonfarm 
businesses when they owe Farmers Home millions of dollars. I am sick 
and tired of frivolous, time consuming legal defenses that have no 
merit.
  The FmHA was created to assist farmers who are nothing like the 
``farmers'' in the Post story. They live along rocky hillsides, not 
oceanside vistas. They drive tractors--often very old ones--and do not 
collect vintage airplanes. They do not have expensive lawyers on 
retainer, but hire them only when absolutely necessary. And they milk 
Holstein and Jersey cows--not Federal farm credit programs.
  In the interest of these real farmers and all American taxpayers, we 
need to act decisively now to serve and protect the taxpayer by 
protecting the integrity of the Farmers Home Administration.
                                 ______

      By Mr. LUGAR (for himself and Mr. Coats):
  S. 1931. A bill to provide duty-free privileges to participants in, 
and other individuals associated with, the 1994 World Rowing 
Championships; to the Committee on Finance.


                       world rowing championships

  Mr. LUGAR. Mr. President, this September over 1,000 athletes from 
more than 40 countries will travel to Indianapolis to compete in the 
World Rowing Championships. This year marks the first time that this 
championship has been held in the United States, and I am naturally 
quite pleased that the men and women who compete in the championships' 
23 events will honor my State's capital with their presence.
  Indianapolis is the home of USRowing, the national governing body for 
this sport. The Eagle Creek Reservoir in Indianapolis is the only 
internationally sanctioned rowing course in the United States. Hoosiers 
are looking forward to hosting this premier sporting event, which will 
take place September 11-18.
  Equipment for the championship events ranges from 10-inch-wide, 30-
foot, single-person sculls to eight-person shells as long as 62 feet. 
Because of the equipment's length and delicacy, it poses shipping 
challenges and will enter the United States separately from the 
competing athletes.
  Partly for this reason, in order to ease the Customs clearance 
process for the athletes, the World Rowing Championships has requested 
a Customs waiver, providing duty-free entry privileges for participants 
and other individuals associated with the 1994 championships. Such a 
waiver will greatly simplify athletes' entry and streamline the 
transportation process for their equipment. Such waivers have often 
been granted for sporting events such as this, where sporting equipment 
is in the United States only on a temporary basis. I rise today to 
introduce legislation granting the waiver for participants in the 1994 
World Rowing Championships.
  Congressman Jacobs has introduced a similar measure in the House of 
Representatives, and I am honored to introduce this legislation in 
support of a prestigious championship event which is, for the first 
time, coming to America. I hope my colleagues will support this bill.
                                 ______

      By Mr. LIEBERMAN:
  S. 1932. A bill to establish demonstration projects to expand 
innovations in State administration of the Aid to Families With 
Dependent Children Program under title IV of the Social Security Act, 
and for other purposes; to the Committee on Finance.


              welfare reform through state innovation act

  Mr. LIEBERMAN. Mr. President, today I am introducing the Welfare 
Reform Through State Innovation Act of 1994. The welfare system is in 
crisis. The United States has one of the most expensive welfare systems 
in the world. But last year 20 percent of America's children were 
poor--a higher percentage than any other industrialized country.
  There is a consensus that we need to do something different from what 
we have done for the past 25 years to move poor children out of poverty 
and despair. The primary welfare program--aid to families with 
dependent children [AFDC]--is viewed by those participating in it and 
those paying for it as a failure. And there is some consensus about the 
objectives of reform--Americans agree that welfare should strengthen, 
not weaken, the benefits of work and family. But little consensus 
exists on how best to achieve our goals, and the welfare reform debate 
is increasingly polarized.
  As a legislator and law enforcer, I have worked on welfare issues for 
nearly 25 years. Over the past year, I have tried to pull together the 
best welfare reform idea. In the process, I have talked to those 
studying the system, those working in the system, and those dependent 
on the system. I am particularly appreciative of the counsel of Audrey 
Rowe, Connecticut's commissioner of social services. Most of all, I 
have benefited from my discussions with people who have been on 
welfare, and who have been willing to talk candidly with me about their 
experiences and their ideas.
  The bill I am introducing today is designed to move the debate 
forward and respond to the concerns of all who are justifiably 
disappointed with welfare as we know it. It is designed to supplement 
the administration's pending legislation that will make wholesale 
national changes in the welfare system. My bill embraces certain 
national reforms about which there is broad agreement, and gives States 
the responsibility and the opportunity to test innovative solutions to 
this complicated crisis. Making the States central players in our 
reform strategy is good policy and enlisting their involvement will 
help us pass a welfare reform bill this year.
  The focus of a reformed welfare system must be to move people back 
into the work force. The administration is preparing welfare reform 
legislation that will, among other things, impose a national 2-year 
limit on welfare benefits, followed by a requirement to work in private 
sector, or if necessary, public service jobs. I commend and support 
this effort.
  My bill will work in concert with the President's proposal to ensure 
we achieve meaningful reform. It provides the flexibility, resources, 
and guidance States need to implement innovative solutions not ready 
for application at the national level. It makes States full partners in 
our efforts to put people back to work, strengthen families, reduce 
teenage pregnancies, and reinvent the welfare bureaucracy.
  I believe States must take center stage in order for us to fully meet 
the objectives of reform. Let me review those objectives.
  First, we need to change the many perverse incentives in the current 
system that discourage work and weaken families. Today's welfare system 
demands little of people on welfare. It impedes, rather than empowers, 
those who seek to help themselves. It provides direct rewards for 
behaviors--including teenage childbearing--that contribute to the cycle 
of poverty. In multiple ways, it undermines our fundamental American 
values of work, family, and responsibility.
  Let me give you some specific examples. Under current AFDC rules:
  If an AFDC mother goes back to work, her income increases only 
minimally--often not enough to cover child care--and she loses her 
Medicaid benefits. She is likely to be economically worse off if she 
returns to the work force; so she stays on welfare;
  If she or her children save money for education, the family becomes 
ineligible for welfare because they have too much money in the bank. 
Their inability to save without losing AFDC helps trap her children in 
the cycle of poverty;
  Getting married reduces or eliminates a mother's benefits; and
  If a mother identifies the father of her child and works with 
authorities to secure child support payments, she receives only a 
limited portion of the benefit, $50 per month. She therefore has 
limited incentives to seek child support. The result is that few 
children of poor mothers see any portion of their father's earnings.
  There are reasons for each of these rules. They seek to target 
benefits toward our most needy citizens. But the lines they draw to 
keep the undeserving out inadvertently discourage those in the system 
from leaving it. For welfare mothers, it is more often than not a 
rational economic decision to stay single and stay on welfare. That 
result is absurd. Welfare reform must reverse these incentives.
  Second, welfare reform must also seek to address some of the causes 
of poverty that bring people onto the system in the first place. The 
recent growth in the number of people on welfare is alarming. Between 
1979 and 1989, about 7 million children were in the AFDC Program at any 
given time. But between 1989 and 1993, the number of children receiving 
AFDC increased by about 30 percent to 9.3 million children. Today 14 
million people--5 million families--receive AFDC assistance.
  And the numbers alone don't tell the worst part of the story. An 
increasing percentage of those entering the system are never-married 
mothers at greatest risk of long-term welfare dependency. Between 1983 
and 1992, families headed by unwed mothers accounted for about four-
fifths of the growth in people on welfare, and at least 40 percent of 
never-married mothers receiving AFDC remain in the system for 10 years 
or more.
  Never-married teen parents are particularly likely to fall into long-
term welfare dependency. More than one-half of welfare spending goes to 
women who first gave birth as teens. As William Raspberry noted in a 
recent Washington Post column aptly entitled ``Out of Wedlock, Out of 
Luck,'' children born to parents who had their first child out-of-
wedlock before they finished high school and reached the age of 20 are 
almost guaranteed a life of poverty. In other words, they and their 
parents are almost guaranteed a life on welfare. Citing William A. 
Galston's analyses, Raspberry notes that a startling 79 percent of 
children in this category lived in poverty in 1992. In contrast, only 8 
percent of children whose parents had achieved all three milestones--
marriage, graduation, and the 20th birthday--before having their first 
child were living in poverty.
  These numbers make it clear that we must make preventing teenage 
pregnancy a central part of our welfare reform strategy. If we do not, 
more and more children and their unwed teenage mothers will be 
condemned to lives of poverty and hopelessness.
  Reducing teenage, out-of-wedlock childbearing will not be easy. As 
Senator Daniel Patrick Moynihan points out, the illegitimacy rate in 
1970 was about 10 percent. Since that time it has continued its steady, 
linear rise and has now reached an alarming 30 percent.
  The potential effect of welfare itself on illegitimacy has taken 
center stage in the welfare reform debate. David Ellwood, economist and 
Department of Health and Human Services official, has found little 
evidence that welfare contributes to the increase in illegitimacy. In 
his book, ``Poor Support,'' he points to several other concurrent 
social changes that are likely contributors to the increase--the 
growing percentage of women in the work force, the drop in earnings and 
rise in unemployment among young men, and changes in attitudes toward 
marriage.
  Others interpret the data differently. Most notably, Charles Murray 
believes that welfare is the primary cause of the increase in 
illegitimate births. In a catalytic Wall Street Journal article 
published October 29, 1993, Murray argues that welfare has reduced the 
economic penalty associated with out-of-wedlock childbearing and, in 
turn, has reduced the social stigma associated with it. He concludes 
that the removal of both of these disincentives has led to more out-of-
wedlock births. Based on this conclusion, Murray recommends the 
dramatic step of ending welfare altogether. Murray recognizes that his 
approach may put this generation of children at risk and advocates, 
among other things, Government investment in new facilities to care for 
these children.
  The stigma of illegitimacy was not just an accident of social 
history; it was a societal attempt to protect children. The stigma is 
largely gone. Raspberry's article cites polling results indicating that 
70 percent of Americans aged 18 to 34 believe that people having 
children out of wedlock do not deserve any moral reproach. But the 
decision to bear a child has profound moral and practical content. We 
must infuse our children with a clear understanding of the consequences 
of teenage childbearing.
  Few would argue that a national campaign to discourage unmarried 
teenagers from having children is not a good thing to do. The question 
for those of us working on welfare reform is this: Can we supplement 
that campaign with changes in welfare policy that also discourage out-
of-wedlock births?
  Some might say no, believing that there is little correlation between 
welfare and out-of-wedlock births. The empirical evidence is generally 
viewed as inconclusive. Some controlled studies have demonstrated a 
positive association between welfare payments and out-of-wedlock 
births, and my own conversations with teenage mothers bear this out.
  However, imposing nationwide changes in welfare payments to reduce 
teenage parenthood is not yet appropriate, given the lack of conclusive 
evidence, and the impact of those changes on the people on welfare. But 
it is important to test these ideas at the State level, in a way that 
poses little risk, yet possesses the potential for very positive 
results. Our goal for this aspect of welfare reform should be to reduce 
the number of children born into poverty, while providing greater 
assistance and opportunities for children who are born poor.
  We must pursue several paths to reform:
  Improving the economic outlook for young men and women by enhancing 
their education and job opportunities. That increases their hope for 
success and therefore the ``opportunity costs'' associated with early 
childbearing;
  Requiring young people on welfare to stay in school and/or work, and 
to live at home, to reduce the advantages of welfare; and
  Strengthening child support enforcement, and holding parents of young 
men financially accountable for their sons' children, to increase the 
teenagers' disincentives to father children.
  As we try to discourage out-of-wedlock births, we must not forget the 
children who are born, despite the disincentives. That involves a 
redirection of welfare support from the parents of poor children to the 
children themselves.
  A portion of the welfare population--perhaps a small but significant 
portion--is unlikely to respond to stronger inducements and penalties. 
In a recent Los Angeles Times article, Adela de la Torre, and economist 
at California State University at Long Beach, writes that the children 
of such parents ``become victims of trickle down welfare programs--if 
we deem the parent unfit for welfare support, the child, too, loses.'' 
De la Torre rejects the notion that building stronger parental 
inducements into the welfare system will change the behavior of all 
parents and calls instead for a more child-centered social service 
agenda that recognizes and serves the needs of children in a more 
direct, comprehensive, and integrated fashion. She makes an important 
point.
  Similarly, Thomas Corbett of the University of Wisconsin asks in a 
spring 1993, Focus article whether it is ``compassionate to throw a 
little bit of welfare into troubled families and do little else to aid 
the children?'' The answer is, of course, relative. AFDC reflects our 
best intentions toward these children, but it often fails them. Whether 
cash payments to unresponsive parents is the most compassionate 
approach, Corbett concludes, ``depends partly on how many children are 
involved and whether we can design and finance the technologies 
required to assist them.'' It is incumbent on us, as part of welfare 
reform, to explore the alternatives to a largely parent-based system, 
and find the answers to his question. One way to do this is to enable 
States to reduce and convert part or all of AFDC payments to block 
grants and combine the grants with other funds available under this 
bill to care for children, strengthen families, and implement other 
reforms.
  Taken together, these reforms, I believe, would begin to address the 
underlying problems that Ellwood and Murray have highlighted.
  Changing the welfare system to move people back into the work force 
and to better serve the needs of children will require changing the way 
the welfare bureaucracy does business. Many welfare offices don't know 
how many children they have in foster care. Many still operate out of 
cardboard files and lose people in the shuffle of paper. Offices often 
suffer from interagency rivalry and bureaucratic bickering. It is 
tragic when a child suffers needlessly because the system fails under 
the weight of its own inefficiency.
  This need not happen. Some innovative States and municipalities have 
tried to make their welfare systems more efficient and service 
oriented. At a hearing I held last December, Carmen Nazario, the 
secretary of Health and Human Services in Delaware, testified that her 
State has brought public and private social services together in a 
single location and is now developing a computer network to link 
programs.
  David Truax from the Maryland Department of Human Resources described 
a second approach to improving services. Maryland now provides each 
participant with a debit card that has AFDC, Food Stamps, and General 
Assistance benefits on it. Electronic benefit cards have several 
advantages: They preclude the trading of food stamps for drugs; they 
introduce people to the banking system; they make it easier for them to 
budget their money since they don't have to cash one single check; and, 
they reduce their vulnerability to crime.
  Further, offices should encourage and empower, not discourage and 
demean, those they serve. It can be done. America Works, a private 
organization that trains people on welfare for work and places them in 
jobs, provides proof. During my visit to their Hartford, CT office I 
found that clients felt they were getting the help they needed to 
succeed, and were motivated and optimistic. I asked one young woman who 
had just completed her training if she expected to be placed 
successfully in a job. She responded with enthusiasm, ``absolutely.'' 
This spirit does not typically pervade traditional welfare offices.
  Most important, welfare offices should be held accountable for 
results. They need to make the shift from writing checks to moving 
people on welfare into jobs. To promote this change, we should seek to 
establish competition among agencies and greater choice for people on 
welfare. We should encourage public agencies to contract with effective 
private sector companies and to better reward those public employees 
who successfully help people become self-sufficient.
  These welfare reform goals are a tall order, and we cannot, and 
should not, expect far-reaching reform to happen overnight. In fact, 
several factors will temper our pace.
  First, cost. Changing the disincentives for work in the current 
system, providing recipients with the tools they need to return to the 
work force, strengthening the family and increasing efforts to prevent 
teen pregnancy--these reforms will cost money.
  In a recent article in The New Republic, Paul Offner of the Senate 
Finance Committee staff advises us to learn an important lesson from 
the 1988 Family Support Act: Overly ambitious and underfunded reform 
efforts are doomed to failure. They do little to change the 
expectations of those working in the system or those using it.
  Second, uncertainty. We have few proven reforms, and those that have 
been tested, such as the model education and training programs launched 
in California and Florida, have delivered only marginal results to 
date. Absent better information, we would be wise to heed the advice of 
Proverbs: ``It is not good to have zeal without knowledge.'' Changes in 
welfare are consequential. They affect people's lives, children's 
lives.
  How then should we proceed?
  First, we should implement on a national level reforms about whose 
effects we are most certain. For example, the Federal Government should 
take the lead in making work pay. Congress has already taken an 
important step in this direction by increasing the earned income tax 
credit. And I hope and expect that this Congress will pass a health 
care reform bill that ensures all individuals have health insurance, 
regardless of their economic status, so that health care worries will 
no longer provide a disincentive for leaving welfare.
  We must also make returning to work the primary focus of the welfare 
system. President Clinton's pending legislation establishing a 2-year 
time limit followed by work will be central to this effort. To avoid 
the dangers of underfunding, the administration appears to be 
considering targeting its program to younger, new entrants, those most 
at risk for welfare dependency. This approach makes sense. And I fully 
support the administration's effort.
  The Federal Government must also take the lead in improving child 
support enforcement. As a starting point, it should fully implement the 
recommendations of the U.S. Commission on Interstate Child Support. 
Senator Bill Bradley, a member of the Commission, has introduced S. 
689, the Interstate Child Support Enforcement Act, to implement the 
Commission's recommendations. My Connecticut colleague, Congresswoman 
Kennelly, also a Commission member, has introduced a similar bill, H.R. 
1961, in the House. I am cosponsoring Senator Bradley's bill, which 
will, among other things: Mandate hospital-based paternity 
acknowledgment programs; require employers to submit W-4 forms for all 
new employees to State child support enforcement agencies; and provide 
States the authority they need to assert jurisdiction over nonresident 
parents. The era of deadbeat dads should end.
  Further, the Federal Government should take the lead on improving our 
understanding of the causes of and solutions to welfare dependency. 
Senator Moynihan advocates, and I support, a national effort to develop 
and track indicators or correlates of poverty, welfare participation, 
and the performance of welfare programs. That kind of baseline 
information is essential if we are to measure the benefits of reforms.
  And while we are studying the problem, we should aggressively test 
new solutions. That is the part of the puzzle my bill targets. States 
should be the testing ground for those proposals that are promising but 
unproven, or that involve some human or financial risk. States have 
both the willingness and the ability to test multifaceted, targeted 
solutions to the problem. They understand the unique needs of their 
citizens and are best able to creatively bring together public and 
private resources to affect change.
  States are willing and eager to play this role. In testimony before 
the Senate Finance Committee's Subcommittee on Social Security and 
Family Policy, the American Public Welfare Association and other State 
organizations indicated their strong desire to pursue innovative 
strategies. My own State of Connecticut has developed a comprehensive 
reform proposal, and I believe the Federal Government should assist in 
implementing it. While States can already pursue their own welfare 
reform initiatives through a Federal waiver process, certain waiver 
conditions, particularly the requirement for budget neutrality, limit 
their ability to move forward.
  My bill will provide States with the resources, technical support and 
flexibility necessary to organize and test the additional solutions we 
need. The bill authorizes the Department of Health and Human Services 
to spend $500 million over 3 years to support a series of specific 
demonstration projects set forth in the bill as well as other, State-
initiated reforms. These State demonstrations will be reviewed and 
approved by the Department's Secretary. At the end of the 3 years of 
demonstration projects, the Secretary will recommend to Congress which 
are ready to be imposed nationally. My proposal requires States to 
obtain independent evaluations of these projects, but allows for 
flexibility in how such evaluations are conducted so as not to hinder 
program design. Some of the demonstration projects in the bill are 
already underway in one or two States, but have not yet been fully 
evaluated. The added resources and flexibility will allow more States 
to test a broader range of ideas.
  Specifically, the bill supports the following reforms:
  Title I includes initiatives to move people on welfare into the work 
force. Two pilot programs focus on teenage parents. The first allows 
States to condition AFDC benefits for single parents under 20 years of 
age on: First, attending school, participating in job training or 
holding a job; and second, living at home. The second allows States to 
include young AFDC clients in the Jobs Corps--a successful, residential 
antipoverty program for youths 16 to 22 years of age.
  Title I also permits States to require 30 days of State-assisted job 
search or, where appropriate, substance abuse treatment, during the 
usual lag time between application for and receipt of benefits. Other 
provisions in this title assist people on welfare in accumulating 
assets to invest in education or to start a small business.
  Title II supports State demonstrations that strengthen families and 
break the cycle of welfare dependency. States could establish a more 
child-centered welfare program through conversion of all or part of 
AFDC and JOBS funds into a block grant. Under this pilot program, 
States could apply the block grant funds, supplemented by additional 
funds made available under the act, to: Establish residential homes for 
teenage mothers and their children which include enhanced social and 
employment services; improve child care; speed adoption; made available 
residential schooling for children enrolled at the request of their 
parents; and provide other services to needy children. No State program 
under this title could move forward unless the Secretary of the 
Department of Health and Human Services found that the program fully 
protected the well-being of affected children. State welfare 
administrators I spoke with were interested in the block grant approach 
because they felt it could provide the flexibility and resources they 
need to tackle real program reforms.
  Another section of title II allows States to discourage people on 
welfare from having additional children. States could eliminate the 
payment increase for additional children while increasing the financial 
reward for work. The title also allows States to liberalize eligibility 
rules for two-parent families to encourage marriage. It also supports 
States seeking to strengthen child support collection by raising the 
amount of child support people on welfare can keep without reducing 
their benefits, by holding parents accountable for the child support 
obligations of their sons who are minors, and through other means 
proposed by the State. Finally, title II supports innovative State 
teenage pregnancy prevention programs.
  Title III seeks to diversify and improve the performance of welfare 
services and change the culture of welfare offices. The title supports 
State pilots to provide incentives to private sector, for-profit and 
nonprofit groups to place people on welfare in private sector jobs. 
Companies would keep a portion of welfare savings as payment for 
successful job placements. Title III also supports State pilots to 
improve the performance of welfare office employees through, for 
example, providing direct bonuses to employees and judging their 
performance based on the clients' progress toward self-sufficiency.
  Finally, title IV authorities offsetting expenditure reductions to 
ensure the bill is budget neutral. In other words, the bill pays for 
itself. Specifically, it eliminates the three-entity rule. Currently, 
an individual farmer can qualify for up to $125,000 per year in certain 
Government subsidies. If he forms two other business entities with two 
other individuals, say, a friend and a sister, each of these entities 
can qualify for another $125,000 per year. So the individual farmer can 
receive up to $250,000 in subsidies per year--$125,000 for his first 
business entity, and half of $125,000 for each of his second and third 
entities. My bill says, ``enough is enough,'' and caps the amount of 
agricultural subsidies any one person gets from the Federal Government 
at $125,000. A preliminary Congressional Budget Office estimate 
indicates this change will save $675 million over 5 years--money that 
is better spent on the truly needy.
  Americans continue to show concern for the poor, and particularly 
poor children. A recent poll commissioned by the Children's Defense 
Fund and others found that 64 percent of Americans believe we should 
spend more on poor children. But the same poll found that 55 percent 
think we spend too much on welfare, and 68 percent think we should not 
increase payments to parents for any additional children they have 
while on welfare.
  Our current approach to helping the poor is clearly not working. The 
goal of welfare reform is to transform the status quo into a system 
that promotes work, family and responsibility, and protects children 
from a life of poverty. This bill, with the administration's proposal, 
will begin to allow us to do just that.
  Mr. President, I ask unanimous consent that the full text of the bill 
and a short summary of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1932

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Welfare 
     Reform Through State Innovation Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. General provisions relating to demonstration projects.
Sec. 5. Authorization of appropriations.

  TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE

Sec. 101. Demonstration projects which condition AFDC benefits for 
              certain individuals on school attendance or job training, 
              limit the time period for receipt of such benefits, and 
              require teenage parents to live at home.
Sec. 102.  Pilot Job Corps program for recipients of aid to families 
              with dependent children.
Sec. 103. Demonstration projects requiring up-front 30-day assisted job 
              search, or substance abuse treatment before receiving 
              AFDC benefits.
Sec. 104. Disregard of education and employment training savings for 
              AFDC eligibility.
Sec. 105. Incentives and assistance in starting a small business.
Sec. 106. Increased emphasis in JOBS program on moving people into the 
              work force.
Sec. 107. Additional demonstration projects to move AFDC recipients 
              into the work force. 

  TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF 
                           WELFARE DEPENDENCY

Sec. 201. Demonstration projects to establish child centered programs 
              through conversion of certain AFDC and JOBS payments into 
              block grants.
Sec. 202. Demonstration projects providing no additional benefits with 
              respect to children born while a family is receiving AFDC 
              and allowing increases in the earned income disregard.
Sec. 203. Demonstration projects providing incentives to marry.
Sec. 204. Demonstration projects reducing AFDC benefits if school 
              attendance is irregular or preventive health care for 
              dependent children is not obtained.
Sec. 205. Demonstration projects to increase child support collection.
Sec. 206. Demonstration projects to develop community-based programs 
              for teenage pregnancy prevention and family planning.
Sec. 207. Additional demonstration projects to strengthen families and 
              break the cycle of welfare dependency.

  TITLE III--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF 
                            WELFARE SERVICES

Sec. 301. Demonstration projects for providing placement of AFDC 
              recipients in private sector jobs.
Sec. 302. Demonstration projects providing performance-based incentives 
              for State public welfare providers.

              TITLE IV--OFFSETTING EXPENDITURE REDUCTIONS

Sec. 401. Offsetting expenditure reductions.

     SEC. 2. PURPOSE.

       It is the purpose of this Act to implement the 
     demonstration projects established under this Act as part of 
     a comprehensive national program which would--
       (1) terminate aid to families with dependent children after 
     2 years; and
       (2) make employment available to such families where 
     necessary.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) Aid to families with dependent children.--The term 
     ``aid to families with dependent children'' has the meaning 
     given to such term by section 406(b) of the Social Security 
     Act (42 U.S.C. 606(b)).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 4. GENERAL PROVISIONS RELATING TO DEMONSTRATION 
                   PROJECTS.

       (a) Applications.--
       (1) In general.--Each State desiring to conduct a 
     demonstration project under this Act shall prepare and submit 
     to the Secretary an application in such manner and containing 
     such information as the Secretary may require. The Secretary 
     shall actively encourage States to submit such applications.
       (2) Approval.--The Secretary shall consider all 
     applications received from States desiring to conduct 
     demonstration projects under this Act and shall approve such 
     applications in a number of States to be determined by the 
     Secretary, taking into account the overall funding levels 
     available under section 5.
       (b) Duration.--A demonstration project under this Act shall 
     be conducted for not more than 3 years plus an additional 
     time period of up to 12 months for final evaluation and 
     reporting. The Secretary may terminate a project if the 
     Secretary determines that the State conducting the project is 
     not in substantial compliance with the terms of the 
     application approved by the Secretary under this Act.
       (c) Evaluation Plan.--
       (1) In general.--Each State conducting a demonstration 
     project under this Act shall submit an evaluation plan 
     (meeting the standards developed by the Secretary under 
     paragraph (2)) to the Secretary not later than 90 days after 
     the State is notified of the Secretary's approval for such 
     project. A State shall not receive any Federal funds for the 
     operation of the demonstration project or be granted any 
     waivers of the Social Security Act necessary for operation of 
     the demonstration project until the Secretary approves such 
     evaluation plan.
       (2) Standards.--Not later than 3 months after the date of 
     the enactment of this Act, the Secretary shall develop 
     standards for the evaluation plan required under paragraph 
     (1) which shall include the requirement that an independent 
     expert entity provide an evaluation of each demonstration 
     project to be included in the State's annual and final 
     reports to the Secretary under subsection (d)(1).
       (d) Reports.--
       (1) State.--A State that conducts a demonstration project 
     under this Act shall prepare and submit to the Secretary 
     annual and final reports in accordance with the State's 
     evaluation plan under subsection (c)(1) for such 
     demonstration project.
       (2) Secretary.--The Secretary shall prepare and submit to 
     Congress annual reports concerning each demonstration project 
     under this Act.
       (e) Legislative Proposal.--Within 6 months after the date 
     that the Secretary has received the last final report due 
     under subsection (d)(1), the Secretary shall submit proposed 
     legislation to Congress which would nationally implement 
     (taking into account factors important in determining 
     implementation of a demonstration project on a national 
     scale, including population density and poverty) those 
     demonstration projects--
       (1) which are established under this Act; and
       (2) for which the Secretary has made a determination of 
     effectiveness in breaking the cycle of welfare dependency, 
     unemployment, and poverty after evaluation of the final 
     report for such project.
       (f) Provisions Subject To Waiver.--The Secretary may waive 
     such requirements of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) as the Secretary determines to be 
     necessary to carry out the purposes of the demonstration 
     projects established under this Act.
       (g) Expenditures Otherwise Included Under the State plan.--
     The costs of a demonstration project under this Act which 
     would not otherwise be included as expenditures under the 
     applicable State plan under title IV of the Social Security 
     Act (42 U.S.C. 601 et seq.) shall to the extent and for the 
     period prescribed by the Secretary, be regarded as 
     expenditures under the applicable State plan under such 
     title, or for administration of such State plan or plans, as 
     may be appropriate.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated 
     $150,000,000 for each of fiscal years 1995 and 1996, and 
     $200,000,000 for fiscal year 1997 to carry out the provisions 
     of sections 101, 103, 105(b), 105(c), 105(d), 107, 201, 202, 
     203, 204, 205, 206, 207, 301, and 302.
       (b) Allocation of Funds.--Of the amount appropriated 
     pursuant to subsection (a), the Secretary shall obligate--
       (1) 75 percent of such amount to--
       (A) offset any increase in the amount of the Federal share 
     resulting from any demonstration project established under a 
     section described in subsection (a) (other than demonstration 
     projects established under sections 107 and 207 of this Act); 
     and
       (B) to the extent such amount remains after any such 
     offset--
       (i) increase the otherwise applicable Federal share rate 
     under a State plan under title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.) for such demonstration projects; and
       (ii) increase the amount of a State's block grant under the 
     demonstration project under section 201 of this Act; and
       (2) 25 percent of such amount to--
       (A) offset any increase in the amount of the Federal share 
     resulting from any demonstration project established under 
     sections 107 and 207 of this Act; and
       (B) to the extent such amount remains after any such offset 
     increase the otherwise applicable Federal share rate under a 
     State plan under title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) for such demonstration projects.
       (c) Reservation of Certain Amounts Until Final Report 
     Submitted.--The Secretary shall reserve 10 percent of any 
     amounts obligated to a State for a demonstration project 
     under subsection (b), and shall not pay such reserved amounts 
     until such State has submitted a final report on such 
     demonstration project.
  TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE

     SEC. 101. DEMONSTRATION PROJECTS WHICH CONDITION AFDC 
                   BENEFITS FOR CERTAIN INDIVIDUALS ON SCHOOL 
                   ATTENDANCE OR JOB TRAINING, LIMIT THE TIME 
                   PERIOD FOR RECEIPT OF SUCH BENEFITS, AND 
                   REQUIRE TEENAGE PARENTS TO LIVE AT HOME.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--
       (1) In general.--Except as provided in paragraph (2), each 
     State conducting a demonstration project under this section 
     shall provide that--
       (A) a family described in paragraph (3) shall not receive 
     aid to families with dependent children--
       (i) unless the individual described in paragraph (3)(A) is, 
     for a minimum of 35 hours a week--

       (I) attending school,
       (II) studying for a general equivalency diploma, or
       (III) participating in a job, job training, or job 
     placement program; and

       (ii) except in the case of a situation described in clause 
     (i) through (v) of section 402(a)(43)(B) of the Social 
     Security Act (42 U.S.C. 602(a)(43)(B))--

       (I) such individual is residing in a place of residence 
     maintained by a parent, legal guardian, or other adult 
     relative of such individual as such parent's, guardian's, or 
     adult relative's own home, or residing in a foster home, 
     maternity home, or other adult-supervised supportive living 
     arrangement, and
       (II) such aid (where possible) shall be provided to the 
     individual's parent, legal guardian, or other adult relative 
     on behalf of such individual and the individual's dependent 
     child; and

       (B) such family shall be entitled to receive such aid for a 
     time period determined appropriate by the State which shall, 
     at a minimum, permit such individual to complete the 
     activities described in subparagraph (A)(i).
       (2) Limitation.--A State conducting a demonstration project 
     under this section shall not apply the provisions of 
     paragraph (1) to a family unless--
       (A) the State has made adequate child care available to 
     such family;
       (B) the State has paid all tuition and fees applicable to 
     the activities described in paragraph (1)(A); and
       (C) such application does not endanger the welfare and 
     safety of a dependent child who is a member of such family.
       (3) Family described.--A family described in this paragraph 
     is a family which--
       (A) includes a parent under 20 years of age;
       (B) includes at least 1 dependent child of such parent; and
       (C) does not include a child under 6 months of age.

     SEC. 102. PILOT JOB CORPS PROGRAM FOR RECIPIENTS OF AID TO 
                   FAMILIES WITH DEPENDENT CHILDREN.

       Section 433 of the Job Training Partnership Act (29 U.S.C. 
     1703) is amended by adding at the end the following new 
     subsection:
       ``(f)(1) The Secretary may enter into appropriate 
     agreements with agencies as described in section 427(a)(1) 
     for the development of pilot projects to provide services at 
     Job Corps centers to eligible individuals--
       ``(A) who are eligible youth described in section 423;
       ``(B) whose families receive aid to families with dependent 
     children under part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.); and
       ``(C) who are mothers of children who have not reached the 
     age of compulsory school attendance in the State in which the 
     children reside.
       ``(2) A Job Corps center serving the eligible individuals 
     shall--
       ``(A) provide child care at or near the Job Corps center 
     for the individuals;
       ``(B) provide the activities described in section 428 for 
     the individuals; and
       ``(C) provide for the individuals, and require that each 
     such individual participate in, activities through a parents 
     as teachers program that--
       ``(i) establishes and operates parent education programs, 
     including programs of developmental screening of the children 
     of the eligible individuals;
       ``(ii) provides group meetings and home visits for the 
     family of each such individual by parent educators who have 
     had supervised experience in the care and education of 
     children and have had training; and
       ``(iii) provides periodic screening, by such parent 
     educators, of the educational, hearing, and visual 
     development of the children of such individuals.
       ``(3) The Secretary shall prescribe specific standards and 
     procedures under section 424 for the screening and selection 
     of applicants to participate in pilot projects carried out 
     under this subsection. In addition to the agencies described 
     in the second sentence of such section, such standards and 
     procedures may be implemented through arrangements with 
     welfare agencies.
       ``(4) As used in this subsection:
       ``(A) The term `developmental screening' means the process 
     of measuring the progress of children to determine if there 
     are problems or potential problems or advanced abilities in 
     the areas of understanding and use of language, perception 
     through sight, perception through hearing, motor development 
     and hand-eye coordination, health, and physical development.
       ``(B) The term `parent education' includes parent support 
     activities, the provision of resource materials on child 
     development and parent-child learning activities, private and 
     group educational guidance, individual and group learning 
     experiences for the eligible individual and child, and other 
     activities that enable the eligible individual to improve 
     learning in the home.''.

     SEC. 103. DEMONSTRATION PROJECTS REQUIRING UP-FRONT 30-DAY 
                   ASSISTED JOB SEARCH, OR SUBSTANCE ABUSE 
                   TREATMENT BEFORE RECEIVING AFDC BENEFITS.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--
       (1) In general.--Except as provided in paragraph (2), each 
     State conducting a demonstration project under this section 
     shall require a parent or other relative of a dependent child 
     to undergo 30 days of assisted job search or substance abuse 
     treatment (or both) before the family may receive aid to 
     families with dependent children as part of the application 
     process for the receipt of such aid.
       (2) Limitation.--A State conducting a demonstration project 
     under this section shall not apply the provisions of 
     paragraph (1) to a family unless--
       (A) all of the dependent children in the family are over 6 
     months of age;
       (B) the State has made adequate child care available to 
     such family;
       (C) the State has paid all fees applicable to the 
     activities described in paragraph (1); and
       (D) such application does not endanger the welfare and 
     safety of a dependent child who is a member of such family.

     SEC. 104. DISREGARD OF EDUCATION AND EMPLOYMENT TRAINING 
                   SAVINGS FOR AFDC ELIGIBILITY.

       (a) Disregard as Resource.--Subparagraph (B) of section 
     402(a)(7) of the Social Security Act (42 U.S.C. 602(a)(7)) is 
     amended--
       (1) by striking ``or'' before ``(iv)'', and
       (2) by inserting ``, or (v) except in the case of the 
     family's initial determination of eligibility for aid to 
     families with dependent children, any amount up to $10,000 in 
     a qualified education and employment account (as defined in 
     section 406(i)(1))'' before ``; and''.
       (b) Disregard as Income.--
       (1) In general.--Subparagraph (A) of section 402(a)(8) of 
     such Act (42 U.S.C. 602(a)(8)) is amended--
       (A) by striking ``and'' at the end of clause (vii), and
       (B) by inserting after clause (viii) the following new 
     clause:
       ``(ix) shall disregard any qualified distributions (as 
     defined in section 406(i)(2)) made from any qualified 
     education and employment account (as defined in section 
     406(i)(1)) while the family is receiving aid to families with 
     dependent children; and''.
       (2) Nonrecurring lump sum exempt from lump sum rule.--
     Section 402(a)(17) (42 U.S.C. 602(a)(17)) is amended by 
     adding at the end the following: ``; and that this paragraph 
     shall not apply to earned and unearned income received in a 
     month on a nonrecurring basis to the extent that such income 
     is placed in a qualified education and employment account (as 
     defined in section 406(i)(1)) the total amount which, after 
     such placement, does not exceed $10,000.''.
       (c) Qualified Education and Employment Accounts.--Section 
     406 of such Act (42 U.S.C. 606) is amended by adding at the 
     end the following:
       ``(i)(1) The term `qualified education and employment 
     account' means a mechanism established by the State (such as 
     escrow accounts or education savings bonds) that allows 
     savings from the earned income of a dependent child or parent 
     of such child in a family receiving aid to families with 
     dependent children to be used for qualified distributions.
       ``(2) The term `qualified distributions' means 
     distributions from a qualified education and employment 
     account for expenses directly related to the attendance at an 
     eligible postsecondary or secondary institution or directly 
     related to improving the employability (as determined by the 
     State) of a member of a family receiving aid to families with 
     dependent children.
       ``(3) The term `eligible postsecondary or secondary 
     institution' means a postsecondary or secondary institution 
     determined to be eligible by the State under guidelines 
     established by the Secretary.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) for calendar 
     quarters beginning on or after January 1, 1995.

     SEC. 105. INCENTIVES AND ASSISTANCE IN STARTING A SMALL 
                   BUSINESS.

       (a) Authority for States To Permit Certain Self-Employment 
     Program Participants a One-Time Election To Purchase Capital 
     Equipment for a Small Business in Lieu of Depreciation; 
     Repayments by Such Persons of the Principal Portion of Small 
     Business Loans Treated as Business Expenses for Purposes of 
     AFDC.--
       (1) Amendments to the social security act.--Section 
     402(a)(8) of the Social Security Act (42 U.S.C. 602(a)(8)) is 
     amended--
       (A) in subparagraph (B)(ii)(II), by striking ``and'' after 
     the semicolon;
       (B) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (C) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) provide that, in determining the earned income of a 
     family any of the members of which owns a small business and 
     is a participant in a self-employment program offered by a 
     State in accordance with section 482(d)(1)(B)(ii), the State 
     may--
       ``(i)(I) during the 1-year period beginning on the date the 
     family makes an election under this clause, treat as an 
     offset against the gross receipts of the business the sum of 
     the capital expenditures for the business by any member of 
     the family during such 1-year period; and
       ``(II) allow each such family eligible for aid under this 
     part not more than 1 election under this clause; and
       ``(ii) treat as an offset against the gross receipts of the 
     business--
       ``(I) the amounts paid by any member of the family as 
     repayment of the principal portion of a loan made for the 
     business; and
       ``(II) cash retained by the business for future use by the 
     business; and''.
       (2) Amendment to the internal revenue code of 1986.--
     Section 167 of the Internal Revenue Code of 1986 (relating to 
     depreciation), as amended by section 13261(b) of the Omnibus 
     Budget Reconciliation Act of 1993, is amended by 
     redesignating subsection (g) as subsection (h) and by 
     inserting after subsection (f) the following new subsection:
       ``(g) Certain Property of AFDC Recipients Not 
     Depreciable.--No depreciation deduction shall be allowed 
     under this section (and no depreciation or amortization 
     deduction shall be allowed under any other provision of this 
     subtitle) with respect to the portion of the adjusted basis 
     of any property which is attributable to expenditures treated 
     as an offset against gross receipts under section 
     402(a)(8)(C)(i) of the Social Security Act.''.
       (3) Effective date.--
       (A) Social security act amendments.--The amendments made by 
     paragraph (1) shall apply to payments made under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
     on or after January 1, 1995.
       (B) Internal revenue code amendment.--The amendments made 
     by paragraph (2) shall apply to property placed in service on 
     or after January 1, 1995.
       (b) Demonstration Projects Establishing Public-Private 
     Partnerships for Technical Assistance to Self-Employed AFDC 
     Recipients.--
       (1) In general.--The Secretary shall provide for 
     demonstration projects to be conducted in States with 
     applications approved under this Act under which one or more 
     partnerships are developed between State agencies and 
     community businesses or educational institutions to provide 
     assistance to eligible participants.
       (2) Eligible participants.--For purposes of this 
     subsection, the term ``eligible participants'' means--
       (A) individuals who are receiving aid to families with 
     dependent children; and
       (B) individuals who cease to be eligible to receive such 
     aid who have been participating in a demonstration project 
     conducted by a State under this subsection.
       (3) Permissible expenditures.--Funds from any demonstration 
     project conducted under this subsection may be used to pay 
     the costs associated with developing and implementing a 
     process through which businesses or educational institutions 
     would work with the State agency to provide assistance to 
     eligible participants seeking to start or operate small 
     businesses, including--
       (A) mentoring;
       (B) training for eligible participants in administering a 
     business;
       (C) technical assistance in preparing business plans; and
       (D) technical assistance in the process of applying for 
     business loans, marketing services, and other activities 
     related to conducting such small businesses.
       (c) Demonstration Projects for Training AFDC Recipients as 
     Self-Employed Providers of Child Care Services.--
       (1) In general.--The Secretary shall provide for 
     demonstration projects to be conducted in States with 
     applications approved under this Act under which one or more 
     partnerships are developed between State agencies and 
     community businesses or educational institutions to provide 
     assistance to eligible participants in the establishment and 
     operation of child care centers in the home or in the 
     community which would provide child care services.
       (2) Eligible participants.--For purposes of this 
     subsection, the term ``eligible participants'' means--
       (A) individuals who are receiving aid to families with 
     dependent children; and
       (B) individuals who cease to be eligible to receive such 
     aid who have been participating in a demonstration project 
     conducted by a State under this subsection.
       (3) Permissible expenditures.--Funds from any demonstration 
     project conducted under this subsection may be used to pay 
     the costs associated with developing and implementing a 
     process through which businesses or educational institutions 
     would work with the State agency to provide assistance to 
     train eligible participants to provide licensed child care 
     services, including--
       (A) mentoring;
       (B) training in the provision of child care services;
       (C) training for eligible participants in administering a 
     business;
       (D) training in early childhood education;
       (E) technical assistance in preparing business plans;
       (F) technical assistance in the process of applying for 
     loans, marketing services, qualifying for Federal and State 
     programs, and other activities related to the provision of 
     child care services; and
       (G) technical assistance in obtaining a license and 
     complying with Federal, State, and local regulations 
     regarding the provision of child care.
       (d) Demonstration Project To Promote Ownership of Family-
     Owned Businesses by AFDC Recipients.--
       (1) Establishment.--The Secretary shall provide for 
     demonstration projects described in paragraph (2) in States 
     with applications approved under this Act.
       (2) Project described.--Each State conducting a 
     demonstration project under this subsection shall develop a 
     program under which the State shall--
       (A) encourage incentives for families receiving aid to 
     families with dependent children to work together as managers 
     and employees in family-owned businesses;
       (B) develop State and private partnerships for making or 
     guaranteeing small business loans, including seed money, 
     available to such families;
       (C) provide such families with technical training in small 
     business management, accounting, and bookkeeping;
       (D) regularly evaluate the status of the recipients of 
     assistance under the project; and
       (E) continue a transitional period of benefits under title 
     IV and title XIX of the Social Security Act for recipients of 
     assistance under the project until such time as the State 
     determines such family is self-sufficient.

     For purposes of this paragraph, a family-owned business may 
     include other relatives of the family receiving aid to 
     families with dependent children regardless if such relatives 
     are also receiving aid to families with dependent children.

     SEC. 106. INCREASED EMPHASIS IN JOBS PROGRAM ON MOVING PEOPLE 
                   INTO THE WORK FORCE.

       Section 481(a) of the Social Security Act (42 U.S.C. 
     681(a)) is amended by adding at the end the following new 
     sentence: ``It is further the purpose of this part to 
     encourage individuals receiving education and training to 
     enter the permanent work force by developing programs through 
     which such individuals enter the work force and then receive 
     post-employment education and training.''.

     SEC. 107. ADDITIONAL DEMONSTRATION PROJECTS TO MOVE AFDC 
                   RECIPIENTS INTO THE WORK FORCE.

       (a) Establishment.--The Secretary shall provide for 
     additional demonstration projects described in subsection (b) 
     in States with applications approved under this Act.
       (b) Project Described.--Each State conducting a 
     demonstration project under this section shall develop a 
     program or programs to better move recipients of aid to 
     families with dependent children into the work force.
  TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF 
                           WELFARE DEPENDENCY

     SEC. 201. DEMONSTRATION PROJECTS TO ESTABLISH CHILD CENTERED 
                   PROGRAMS THROUGH CONVERSION OF CERTAIN AFDC AND 
                   JOBS PAYMENTS INTO BLOCK GRANTS.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--
       (1) In general.--Each State conducting a demonstration 
     project under this section shall elect to receive payments 
     under paragraph (2) in lieu of--
       (A) all payments to which the State would otherwise be 
     entitled to under section 403 of the Social Security Act (42 
     U.S.C. 603) for aid to families with dependent children under 
     part A of title IV of such Act or the job opportunities and 
     basic skills training program under part F of such title; or
       (B) any portion of the payment described in subparagraph 
     (A) to which the State would otherwise be entitled under such 
     section for benefits (identified by the State) under part A 
     or part F of such title for populations (identified by the 
     State) who receive such benefits.
       (2) Payment.--The Secretary shall make payment under this 
     paragraph for each year of the project in an amount equal 
     to--
       (A) during fiscal year 1995--
       (i) 100 percent of the total amount to which the State was 
     entitled under section 403 of the Social Security Act (42 
     U.S.C. 603) for aid to families with dependent children under 
     part A of title IV of such Act or the job opportunities and 
     basic skills training program under part F of such title; or
       (ii) the amount to which the State was entitled to under 
     such section for those benefits and populations identified by 
     the State in paragraph (1)(B),

     for fiscal year 1994 plus the product of such amount and the 
     percentage increase in the consumer price index for all urban 
     consumers (U.S. city average) during fiscal year 1995; and
       (B) during each subsequent fiscal year, the amount 
     determined under this paragraph in the previous fiscal year 
     plus the product of such amount and the percentage increase 
     in such consumer price index during such previous fiscal 
     year.
       (3) Description of activities.--
       (A) In general.--Each State which is paid under paragraph 
     (2) shall expend the amount received under such paragraph and 
     the amount, if any, made available to such State under 
     section 5(b)(1)(B)(ii) for one or more of the following 
     purposes:
       (i)(I) Establish residential programs for teenage mothers 
     with dependent children where education, job training, 
     community service, or other employment is provided.
       (II) Support the pilot project described in section 433(f) 
     of the Jobs Training Partnership Act, as added by section 102 
     of this Act, to provide such services to teenage mothers with 
     dependent children.
       (ii) Establish programs to promote, expedite, and ensure 
     adoption of children, particularly neglected or abused 
     children.
       (iii) Expand child care assistance for the children of 
     needy working parents (as determined by the State).
       (iv) Establish residential schooling with appropriate 
     support services for children from needy families (as 
     determined by the State) enrolled at the request of the 
     parents of such children.
       (v) Establish other services which will be provided 
     directly to children from needy families (as determined by 
     the State).
       (vi) Implement other reforms consistent with this Act.
       (4) Community-based activities.--The Secretary shall ensure 
     that each State receiving a grant under this section--
       (A) takes adequate steps to assure the well-being of the 
     children affected by the State's receipt of the grant; and
       (B) to the fullest extent possible, utilizes the grant 
     under this section to support community-based services in 
     communities affected by the State's receipt of the grant.

     SEC. 202. DEMONSTRATION PROJECTS PROVIDING NO ADDITIONAL 
                   BENEFITS WITH RESPECT TO CHILDREN BORN WHILE A 
                   FAMILY IS RECEIVING AFDC AND ALLOWING INCREASES 
                   IN THE EARNED INCOME DISREGARD.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--If a child is born to a family 
     after the date on which such family begins receiving aid to 
     families with dependent children, a State conducting a 
     demonstration project under this section--
       (1) shall not take such child into account in determining 
     the need of such family for such aid; and
       (2) shall increase the amounts disregarded from earned 
     income under section 402(a)(8)(A) of such Act (42 U.S.C. 
     602(a)(8)(A)).

     SEC. 203. DEMONSTRATION PROJECTS PROVIDING INCENTIVES TO 
                   MARRY.

       (a) Aid to Two-Parent Families.--
       (1) Establishment.--The Secretary shall provide for 
     demonstration projects described in paragraph (2) in States 
     with applications approved under this Act.
       (2) Project described.--
       (A) In general.--Each State conducting a demonstration 
     project under this subsection shall not apply the 
     requirements described in subparagraph (B) to a parent of a 
     dependent child who is married to the natural parent of such 
     child.
       (B) Requirements waived.--The requirements described in 
     this subparagraph are:
       (i) The work history requirement described in section 
     407(b)(1)(A)(iii) of such Act (42 U.S.C. 607(b)(1)(A)(iii)).
       (ii) The 100-hour rule under section 233.100(a)(1)(i) of 
     title 45, Code of Federal Regulations.
       (b) Increase in Stepparent Earned Income Disregard.--
       (1) Establishment.--The Secretary shall provide for 
     demonstration projects described in paragraph (2) in States 
     with applications approved under this Act.
       (2) Project described.--For purposes of making 
     determinations for any month under section 402(a)(7) of the 
     Social Security Act (42 U.S.C. 602(a)(7)), each State 
     conducting a demonstration project under this subsection 
     shall modify the income disregards provided in subparagraphs 
     (A) through (D) of section 402(a)(31) of such Act (42 U.S.C. 
     602(a)(31)) in order to decrease the amount of income 
     determined under such section with respect to a dependent 
     child's stepparent.

     SEC. 204. DEMONSTRATION PROJECTS REDUCING AFDC BENEFITS IF 
                   SCHOOL ATTENDANCE IS IRREGULAR OR PREVENTIVE 
                   HEALTH CARE FOR DEPENDENT CHILDREN IS NOT 
                   OBTAINED.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--
       (1) In general.--Each State conducting a demonstration 
     project under this section shall reduce the amount of aid to 
     families with dependent children received by a family if the 
     State agency determines that one or both (at the State's 
     option) of the following conditions exist:
       (A) A member of such family is attending school or 
     participating in a course of vocational or technical training 
     and such family member is absent from such school or training 
     with no excuse for more than a number of days per month 
     determined appropriate by the State.
       (B) A member of such family is a child under the age of 6 
     who has not received appropriate immunizations (as determined 
     by the State).
       (2) Limitation.--Each State conducting a demonstration 
     project under this section shall establish procedures which 
     ensure that no reduction in aid to families with dependent 
     children under paragraph (1) will endanger the welfare and 
     safety of any dependent child.

     SEC. 205. DEMONSTRATION PROJECTS TO INCREASE CHILD SUPPORT 
                   COLLECTION.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--Each State conducting a 
     demonstration project under this section shall increase the 
     State's child support collection efforts through one or more 
     of the following methods:
       (1) Enhanced child support enforcement and collection, 
     including holding a parent accountable for supporting any 
     children of the parent's minor children.
       (2) Applying section 402(a)(8)(vi) of the Social Security 
     Act (42 U.S.C. 602(a)(8)(vi)) by substituting an amount 
     greater than $50 (to be determined by the State) for ``$50'' 
     each place such dollar amount appears.
       (3) Any other method that the State deems appropriate.

     SEC. 206. DEMONSTRATION PROJECTS TO DEVELOP COMMUNITY-BASED 
                   PROGRAMS FOR TEENAGE PREGNANCY PREVENTION AND 
                   FAMILY PLANNING

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--Each State conducting a 
     demonstration project under this section shall develop a 
     community-based program for teenage pregnancy prevention and 
     family planning.

     SEC. 207. ADDITIONAL DEMONSTRATION PROJECTS TO STRENGTHEN 
                   FAMILIES AND BREAK THE CYCLE OF WELFARE 
                   DEPENDENCY.

       (a) Establishment.--The Secretary shall provide for 
     additional demonstration projects described in subsection (b) 
     in States with applications approved under this Act.
       (b) Project Described.--Each State conducting a 
     demonstration project under this section shall develop a 
     program or programs to strengthen families and break the 
     cycle of welfare dependency.
  TITLE III--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF 
                            WELFARE SERVICES

     SEC. 301. DEMONSTRATION PROJECTS FOR PROVIDING PLACEMENT OF 
                   AFDC RECIPIENTS IN PRIVATE SECTOR JOBS.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects described in subsection (b) in States 
     with applications approved under this Act.
       (b) Project Described.--Each State conducting a 
     demonstration project under this section shall--
       (1) contract with private for-profit and nonprofit groups 
     to provide any individual receiving aid to families with 
     dependent children with training, support services, and 
     placement in a private sector job which permits such 
     individual to cease receiving aid to families with dependent 
     children; and
       (2) upon employment of such individual, pay such groups a 
     negotiated portion of the total amount that such individual's 
     family would have received over the course of the year in 
     which such individual began such employment in the form of 
     aid to families with dependent children.

     SEC. 302. DEMONSTRATION PROJECTS PROVIDING PERFORMANCE-BASED 
                   INCENTIVES FOR STATE PUBLIC WELFARE PROVIDERS.

       (a) Establishment.--The Secretary shall provide for 
     demonstration projects to establish performance-based 
     incentives for State public welfare providers in States with 
     applications described in subsection (b)(1) which are 
     approved under this Act.
       (b) Applications.--
       (1) Application described.--An application described under 
     this paragraph is an application which--
       (A) identifies the State offices or administrative units 
     which will participate in the demonstration project;
       (B) describes indicators of employee or program performance 
     based on outcome measures for--
       (i) training and education;
       (ii) job search and placement assistance;
       (iii) child support collection;
       (iv) teen pregnancy prevention programs; and
       (v) any other program objective that the State finds 
     appropriate;
       (C) describes budgetary incentives for program performance, 
     including direct financial incentives for employees where 
     appropriate;
       (D) describes a process for developing, in cooperation with 
     employees of participating offices or units, a job evaluation 
     system based on performance measures; and
       (E) describes the way in which State public welfare 
     providers, private providers, welfare clients, and members of 
     the community have been or shall be involved in the planning 
     and implementation of a performance based welfare delivery 
     system.
       (2) Technical assistance.--The Secretary shall provide a 
     State desiring to submit an application for a demonstration 
     project under this section with technical assistance in 
     preparing an application described under paragraph (1).
              TITLE IV--OFFSETTING EXPENDITURE REDUCTIONS

     SEC. 401. OFFSETTING EXPENDITURE REDUCTIONS.

       (a) In General.--Subparagraph (C) of section 1001(5) of the 
     Food Security Act of 1985 (7 U.S.C. 1308(5)(C)) is amended to 
     read as follows:
       ``(C) In the case of corporations and other entities 
     included in subparagraph (B) and partnerships, the Secretary 
     shall attribute payments to natural persons in proportion to 
     their ownership interests in an entity and in any other 
     entity, or partnership, that owns or controls the entity, or 
     partnership, receiving the payments.''.
       (b) Removal of 3-Entity Rule.--Section 1001A(a)(1) of the 
     Food Security Act of 1985 (7 U.S.C. 1308-1(a)(1)) is 
     amended--
       (1) in the first sentence--
       (A) by striking ``substantial beneficial interests in more 
     than two entities'' and inserting ``a substantial beneficial 
     interest in any other entity''; and
       (B) by striking ``receive such payments as separate 
     persons'' and inserting ``receives the payments as a separate 
     person''; and
       (2) by striking the second sentence.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1994.
                                  ____


       Summary of the Welfare Reform Through State Innovation Act

       Sections 1-4: Purpose of bill and general provisions 
     relating to state pilot projects.
       Sec. 2. States that the purpose of the bill is to implement 
     the demonstration projects established in the bill as part of 
     a comprehensive national program which would terminate aid to 
     families with dependent children after 2 years, and would 
     make employment available to such families where necessary to 
     ensure their employment (i.e. this bill complements, and is 
     not an alternative to, Administration's).
       Sec. 4. Sets forth general provisions relating to 
     demonstration projects. Authorizes $150 million/yr for two 
     years and $200 million in the third year to support pilots, 
     and requires states to have HHS-approved evaluation plans 
     before receiving funds. A portion of these funds (25%) would 
     support innovative pilot programs not specified in the bill 
     but proposed by states.


  title i.--initiatives to move welfare recipients into the work force

       Sec. 101. Supports State pilots to condition AFDC benefits 
     for single parents under 20 years of age with at least one 
     dependent child and no children under 6 months of age on 
     attending school or participating in a job or job training 
     program for a minimum of 35 hours per week and on living at 
     home. States would also impose a time limit (not specified) 
     on benefits, and make child care available during training 
     and work activities. Since the program would be expensive, it 
     targets those at greatest risk of long-term welfare 
     dependency--teenage mothers.
       Sec. 102. Authorizes the Secretary of HHS to establish a 
     pilot program with the Jobs Corps (a successful, residential 
     anti-poverty program for youths 16-22 years of age) targeting 
     teenage mothers on AFDC with below school-age children. The 
     pilot would include a Parents-as-Teachers type program 
     designed to teach parents how to help prepare their children 
     for school and learning.
       Sec. 103. Supports state pilots to require 30 days of 
     assisted job search or, where appropriate, substance abuse 
     treatment immediately following application for AFDC, 
     coinciding with the usual lag time between application for 
     and receipt of benefits. Applicants would have to complete 
     the assigned activities before receiving AFDC payments.
       Sec. 104. A national change to permit states to allow AFDC 
     families to save money (up to $10,000) for education and 
     training or starting a small business.
       Sec. 105. Expands on legislation introduced in 1993 with 
     Senator Dodd.
       A national change to permit states to help recipients start 
     a small business by allowing participants a one-time election 
     to fully deduct capital equipment purchases in one year;
       Supports state pilots to establish public-private 
     partnerships to provide technical assistance to self-employed 
     AFDC recipients;
       Supports state pilots to train AFDC recipients as self-
     employed providers of child care services; and
       Supports state pilot projects to promote ownership of 
     extended family-owned businesses by AFDC recipients. Would 
     provide incentives and assistance for families receiving aid 
     to families with dependent children to work together as 
     managers and employees in extended family-owned businesses.
       Sec. 106. Amends JOBS provisions to emphasize efforts to 
     move people into the work force over training and education.


  TITLE II--Initiatives to Strengthen Families and Break the Cycle of 
                           Welfare Dependency

       Sec. 201. Supports state pilots to establish child centered 
     programs through conversion of AFDC and JOBS payments into 
     block grants, plus funds available under other sections of 
     this bill. States could apply portions of funds to: (1) 
     establish residential homes for teenage mothers with 
     children, including supporting the pilot described in section 
     107; (2) expand programs to expedite and improve adoption of 
     children; (3) expand child care assistance for needy children 
     of working families; (4) establish supportive residential 
     schools for children enrolled at the request of their 
     parents; (5) provide other services directly to needy 
     children; and (6) fund other programs that are consistent 
     with the purposes of the Act. The Secretary of DHHS, in 
     reviewing the application, must ensure that the State's 
     program will protect the well-being of affected children.
       Sec. 202. Supports state pilots to discourage welfare 
     recipients from having additional children while on welfare 
     and increase the financial reward for work. Recipients who 
     had a second child would not get additional benefits but 
     would be allowed to keep a higher portion of job earnings.
       Sec. 203. Supports state pilots to improve incentives to 
     get married. States would disregard to a greater extent the 
     second parent's earnings and work patterns in determining 
     benefits.
       Sec. 204. Supports state pilots to reduce AFDC benefits if 
     school attendance of mother or child is irregular or 
     preventive health care for the dependent children is not 
     attained.
       Sec. 205. Supports demonstration projects to increase child 
     support collection, including: increasing the child support 
     disregard, from $50 to a higher level decided by the state; 
     and, holding parents accountable for the child support 
     obligations of their minor children.
       Sec. 206. Supports state demonstrations of innovative 
     teenage pregnancy prevention programs.


TITLE III--Initiatives to Diversify and Improve Performance of Welfare 
                                Services

       Sec. 301. Supports state pilots to provide incentives to 
     private sector, for-profit and non-profit groups to place 
     welfare recipients in private sector jobs. Companies would 
     keep a portion of welfare savings as payment for successful 
     job placements.
       Sec. 302. Supports state pilots to implement performance-
     based management systems for public welfare providers.


              TITLE IV--Offsetting Expenditure Reductions

       Sec. 401. Eliminates the ``three-entity'' rule, reducing 
     the amount of certain Federal subsidies individual farmers 
     can receive from $250,000 to $125,000 per year.
                                 ______

      By Mr. McCAIN:
  S. 1933. A bill to repeal the Medicare and Medicaid coverage data 
bank, and for other purposes; to the Committee on Finance.


                 repeal of medicare/medicaid data bank

  Mr. McCAIN. Mr. President, I am pleased to introduce a bill that 
would eliminate a large and unjustified administrative burden imposed 
on employers by an ill-considered piece of legislation passed last 
year. It would repeal a law that is extremely expensive, burdensome, 
punitive, and in my view, entirely unnecessary.
  Specifically, the bill would repeal section 13581 of OBRA 1993, which 
established the Medicare and Medicaid data bank. This remarkably 
intrusive law requires every employer who offers health care coverage 
to provide substantial and often difficult-to-obtain information on 
current and past employees and their dependents, including names, 
social security numbers, health care plans and period of coverage. This 
information would have to be provided on each employee's W-2 form 
beginning this year. Employers that do not satisfy this considerable 
reporting obligation are subject to substantial penalties, possibly up 
to $1,000 per violation.
  According to the law that created the requirement, the purpose of the 
Medicare and Medicaid data bank is to assist in ``the identification 
of, and the collection from, third parties responsible for the 
reimbursement of'' costs under Medicare and Medicaid. Thus, its 
purported objective is to ensure reimbursement of costs to Medicare or 
Medicaid when a third party is the primary payor. This is a legitimate 
objective. However, if the objective of the data bank is to preserve 
Medicare and Medicaid funds, why is it necessary to mandate information 
on all employees, the vast majority of whom have no direct association 
with either the Medicare or Medicaid program.
  While employers have to report on over 140 million individuals, HCFA 
has estimated that only about 5 percent of the work force is 
potentially affected by Medicare or Medicaid's coordination of benefits 
and secondary payor provisions. Private sector groups, such as those 
included in the Coalition on Employer Health Coverage Reporting and the 
Medicare/Medicaid Data Bank, believe that only 2 percent of employees 
would be subject to these provisions. This would mean that 98 percent 
of the required data is irrelevant to the stated objective of the data 
bank law. At the very least, the law is unduly broad and needs to be 
seriously reconsidered.
  I would add that the law applies only to employers that provide 
health insurance coverage to their employees. It is unconscionable that 
we are adding costs and penalties to those who have been most diligent 
in providing health coverage to their employees. The last thing that 
the Federal Government should do is impose disincentives to employee 
health care coverage. These are precisely the employers who we should 
be rewarding.
  We must not underestimate how burdensome the reporting requirement of 
this law is. The information required is often not maintained on a 
routine basis by employers for any business reason and will be 
expensive to obtain. For example, businesses typically do not maintain 
the names and social security numbers of the dependents of employees. 
Moreover, due to the vague statutory language and the lack of HCFA 
guidance, it is not clear exactly what information must be provided. 
For instance, employers do not know how far back they must go in 
reporting on former employees.
  What makes the reporting requirement particularly egregious is that 
HCFA is already obtaining this information in a much more efficient 
manner than that required under OBRA 1993. The data bank duplicates 
other legislative and administrative efforts to ensure that Medicare 
and Medicaid are reimbursed by primary payors. For example, OBRA 1989 
provides for HCFA to periodically match Medicare beneficiary data with 
Internal Revenue Service employment information. Also, HCFA directly 
asks beneficiaries about primary payor coverage. To the extent that the 
data bank duplicates these efforts, any potential savings will not be 
realized. It is clearly preferable to require HCFA to use the 
information it already has than to require the private sector to 
provide duplicative information.
  In addition to these administrative problems imposed on employers, no 
funds have been appropriated by Congress to implement the data bank and 
no administrative regulations have been drafted by HCFA. Still, 
employers are being required to provide the data with a threat of 
substantial penalties for failing to do so. Once again, the Federal 
Government is imposing substantial financial burdens on the private 
sector without fully accepting its share of the burden to implement a 
program. Mr. President, we should expect the worst case scenario to 
occur: employers will provide the required information at substantial 
administrative burden and there will be no data bank in which to make 
use of it.
  I do not want this bill to be construed, in any way, as opposition to 
HCFA obtaining the information it needs to administer the Medicare and 
Medicaid programs efficiently, and obtaining reimbursement from third 
party payors when appropriate. To assure that HCFA has the information 
it needs, the bill would also require the Secretary of HHS to conduct a 
study and report to Congress on how to achieve the purported objectives 
of the data bank in the most cost-effective manner possible.
  The Secretary's study would have to take into consideration the 
administrative costs and burden on the private sector and the 
Government of processing and providing the necessary information versus 
the benefits and savings that such reporting requirements would 
produce. It must also consider current HCFA reporting requirements and 
the ability of entities to obtain the required information.
  Too often, Congress considers only the cost savings to the Federal 
Government of legislation while ignoring costs to other parties. The 
Medicare and Medicaid data bank is a case in point. Congress required 
information on millions of employees to save the Federal Government 
money. Yet, it will cost employers more money to comply than the 
Government saves. Congress must stop passing laws that impose large, 
unjustified administrative burdens on other entities.
  I was initially planning to introduce this bill as an amendment to S. 
4, the Competitiveness Act, due to the adverse effect of the reporting 
requirement on businesses. However, I have decided instead to introduce 
it as a free standing bill to allow the Labor and Human Resources 
Committee or the Finance Committee an opportunity to consider it. I 
reserve the right to raise it as an amendment at a later time if it is 
not being addressed adequately and in a very timely manner to avoid 
further unnecessary costs to employers.
  In summary, the reporting requirement for the Medicare and Medicaid 
data bank is duplicative, burdensome, ineffective, and unnecessary. In 
addition, it penalizes employers who provide health care benefits to 
their workers--exactly the opposite of the goal we should be pursuing. 
The data bank should be repealed and a more cost-effective approach 
should be found to ensure that Medicare and Medicaid are appropriately 
reimbursed by primary payors.
  Mr. President, I request unanimous consent that the text of this bill 
be included in the Record, as well as a statement by the Coalition on 
Employer Health Coverage Reporting and the Medicare/Medicaid Data Bank 
and several representative letters from employers and employer groups.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1933

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REPEAL OF MEDICARE AND MEDICAID COVERAGE DATA 
                   BANK.

       (a) Repeal.--
       (1) In general.--Section 13581 of the Omnibus Budget 
     Reconciliation Act of 1993 is hereby repealed.
       (2) Application of the social security act.--The Social 
     Security Act shall be applied and administered as if section 
     13581 of the Omnibus Budget Reconciliation Act of 1993 (and 
     the amendments made by such section) had not been enacted.
       (b) Study and Report.--
       (1) Study.--The Secretary of Health and Human Services 
     (hereafter in this subsection referred to as the 
     ``Secretary'') shall conduct a study on how to achieve the 
     objectives of the data bank described in section 1144 of the 
     Social Security Act (as in effect on the day before the date 
     of the enactment of this Act) in the most cost-effective 
     manner, taking into account--
       (A) the administrative burden of such data bank on private 
     sector entities and governments,
       (B) the possible duplicative reporting requirements of the 
     Health Care Financing Administration in effect on such date 
     of enactment, and
       (C) the legal ability of such entities and governments to 
     acquire the required information.
       (2) Report.--The Secretary shall report to the Congress on 
     the results of the study described in paragraph (1) by not 
     later than 180 days after the enactment of this Act.
                                  ____

         Coalition on Employer Health Coverage Reporting and the 
           Medicare/Medicaid Data Bank,
                                                   March 14, 1994.
     Hon. John McCain,
     U.S. Senate, Russell SOB, Washington, DC.
       Dear Senator McCain: I have been informed that you may 
     offer an amendment to S. 4, the National Competitiveness Act 
     of 1994, to repeal the employer reporting requirement 
     associated with the Health Care Financing Administration's 
     Medicare and Medicaid Data Bank. I am writing to urge you to 
     offer the amendment and to urge all your colleagues in the 
     Senate to support it.
       Enclosed is a copy of the written statement submitted by 28 
     members of the Coalition on Employer Health Coverage 
     Reporting and the Medicare/Medicaid Data Bank for inclusion 
     in the record of the Senate Finance Committee's February 23, 
     1994 hearing on the President's fiscal year 1995 budget. The 
     written statement urges the Committee to help ensure that 
     implementation of the data bank is excluded from the 1995 
     budget until the current employer reporting requirement is 
     replaced with a more efficient and cost-effective source of 
     health coverage information.
       The Coalition is a broad-based, ad hoc group of more than 
     70 associations, organizations and individual companies 
     reflecting a cross-section of the employer community. It was 
     formed to work with Congress and the Administration to 
     identify an alternative means to address the secondary payer 
     enforcement and compliance needs of the Health Care Financing 
     Administration (HCFA) that does not impose such a 
     disproportionate financial and administrative burden on 
     employers.
       On behalf of the Coalition, I would like to thank you for 
     your efforts and again urge you to offer the amendment to 
     repeal the employer reporting requirement. You have our 
     strong support for this effort.
           Sincerely,
     Anthony J. Knettel,
       Director, Health Policy, The ERISA Industry Committee, 
     Coalition Coordinator.
                                  ____

         Coalition on Employer Health Coverage Reporting and the 
           Medicare /Medicaid Data Bank,
                                                    March 9, 1994.
     Wayne Hosier,
     Committee on Finance, U.S. Senate, Dirksen Senate Office 
         Building, Washington, DC.
       Dear Mr. Hosier: Enclosed please find five copies of a 
     written statement, submitted jointly by the undersigned 
     associations, organizations and companies, for the record of 
     the Finance Committee's February 23, 1994 hearing on the 
     President's fiscal year 1995 budget. Per your request, we are 
     also submitting a copy of the written statement on computer 
     disk in both Wordperfect (document databank.wpf) and ASCII 
     (document databank.asc) format.
       Each of the associations, organizations and companies 
     jointly submitting this statement is a participating member 
     in the Coalition on Employer Health Coverage Reporting and 
     the Medicare/Medicaid Data Bank.
           Submitted by
       Aetna Life & Casualty.
       American Express Co.
       American Restaurant Group Inc.
       American Telephone & Telegraph Co.
       American Trucking Associations.
       Associated Builders & Contractors.
       Atlantic Richfield Co.
       Bell Atlantic--NSI.
       Chevron Corp.
       Employers Council on Flexible Compensation.
       The ERISA Industry Committee.
       Food Marketing Institute.
       William M. Mercer, Incorporated.
       Motorola Inc.
       National Association of Manufacturers.
       National Association of Wholesalers.
       National Employee Benefits Institute.
       National Retail Federation.
       NYNEX Corp.
       PPG Industries.
       Profit Sharing Council of America.
       Ralston Purina Co.
       Small Business Council of America.
       Society of Professional Benefit Administrators.
       U.S. Chamber of Commerce.
       United Technologies Corp.
       Washington Business Group on Health.
       Zeneca Inc.
                                  ____


 [From members of the Coalition on Employer Health Coverage Reporting 
          and the Medicare/Medicaid Data Bank, Feb. 23, 1994]

The President's Budget for Fiscal Year 1995--Committee on Finance, U.S. 
                                 Senate

       Members of the Coalition on Employer Health Coverage 
     Reporting and the Medicare/Medicaid Data Bank submit to the 
     Committee on Finance, U.S. Senate, the following written 
     testimony regarding the implementation and operation of the 
     data bank as proposed by the President's fiscal year 1995 
     federal budget. Specifically, Coalition members urge the 
     Committee to ensure that the implementation and operation of 
     HCFA's Medicare and Medicaid Data Bank be excluded from the 
     fiscal year 1995 budget until the current employer reporting 
     requirement is replaced with a more efficient and cost-
     effective source of health coverage information.
       The Coalition is a broad-based, ad hoc group of 
     associations, organizations and individual companies 
     reflecting a cross-section of the employer community. The 
     Coalition was formed to work with Congress and the 
     Administration to identify an alternative means to address 
     the secondary payer enforcement and compliance needs of the 
     Health Care Financing Administration (HCFA) that does not 
     impose a disproportionate financial and administrative burden 
     on employers.


                               background

       Beginning with calendar year 1994, an employer that ``has, 
     or contributes to, a group health plan, with respect to which 
     at least 1 employee of such employer is an electing 
     individual,'' must annually report to a new HCFA Medicare and 
     Medicaid Data Bank information relating to the health 
     insurance coverage status of covered employees, their 
     dependents, and other covered electing individuals. An 
     ``electing individual'' is ``an individual associated or 
     formerly associated with the employer in a business 
     relationship who elects coverage under the employer's group 
     health plan.''
       The reporting requirement was created by Sec. 13581 of the 
     Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66). This 
     provision adds a new Sec. 1144 at the end of Part A of title 
     XI of the Social Security Act (see 42 U.S.C. 1301 et seq.). 
     The information supplied to the data bank is intended to be 
     used to help prevent mistaken payments to physicians and 
     hospitals by Medicare and Medicaid.
       The budget the President recently submitted to Congress 
     requested a supplemental amount of $15 million for fiscal 
     year 1994 to implement the data bank, as well as budget 
     authority for the ongoing administration of the data bank 
     in fiscal year 1995 and subsequent years.


                                analysis

       The Coalition's analysis suggests that, so long as the 
     Medicare and Medicaid Data Bank is based on the current 
     employer reporting requirement, it will neither successfully 
     address HCFA's concerns regarding mistaken primary payments 
     nor justify the financial and administrative burdens imposed 
     on employers.

                         1. Employer compliance

       In many cases it will be impossible for employers to fully 
     comply with current law. Employers cannot easily obtain from 
     employees any missing information that must be reported. For 
     example, employees' responses are frequently unreliable and 
     are time-consuming and expensive to verify. Further, 
     employers' ability to request documentation to verify certain 
     information to be reported, such as dependents' social 
     security numbers, is limited by privacy laws.
       Obtaining information about dependents, in particular, will 
     be difficult, time consuming, expensive, and in many cases 
     impossible--especially for employers with high work force 
     turnover. The statute is sufficiently broad that employers 
     appear to be required to report such information about 
     retirees and their spouses, employees' separated/divorced 
     spouses and noncustodial dependent children who are still 
     covered under the employer's health plan, franchisees, 
     participants in Taft-Hartley plans, and many other persons 
     who may fit the definition of ``electing individuals'' under 
     the statute--all of whom are either geographically dispersed 
     and difficult to locate, or otherwise pose significant 
     administrative problems for employers trying to obtain 
     accurate information.
       As a result, employers are at risk to be assessed 
     significant penalties for failure to report information that 
     they do not routinely possess and which they may not be able 
     to obtain from any other source.

          2. Administrative and financial burden on employers

       The administrative and financial burden imposed on 
     employers by full compliance with the law is enormous. A 
     significant portion of the information to be reported to the 
     data bank is not currently maintained by employers for any 
     business purpose. Nor is all of the required information 
     routinely maintained by insurers. In many cases, it will have 
     to be compiled manually, at tremendous cost. In the 
     aggregate, employers will have to expend hundreds of millions 
     of dollars annually to comply.
       The only persons who have all the information HCFA needs 
     are Medicare and Medicaid enrollees themselves. HCFA claims 
     it is too difficult for the government to obtain this 
     information directly from enrollees; instead, HCFA wants to 
     burden employers and their insurers. HCFA is relying on a 
     false premise, however. The information will be far more 
     difficult and expensive for employers to obtain that it is 
     for HCFA to obtain, in part because employers are required to 
     obtain it from tens of millions of additional persons who are 
     neither Medicare nor Medicaid enrollees.

                   3. Utility of the data collected:

       The rationale for the reporting requirement to allow HCFA 
     to march the health coverage information received against 
     other government records in an effort to identify employer 
     plans that should be paying ``primary'' and thus prevent 
     mistaken reimbursements for health care services by Medicare 
     and Medicaid. However, employer reporting is an extremely 
     inefficient means to obtain the information HCFA is seeking.
       Employers will have to report coverage information for more 
     than 140 million individuals. But only a minute amount of the 
     information employers will report will be relevant to the 
     data bank's purpose because, according to a preliminary 
     General Accounting Office report, only about 2 percent of 
     employees and their dependents are Medicare and Medicaid 
     beneficiaries subject to secondary payer rules. In many 
     industries with a young work force, such as food service and 
     hospitality, the percentage may be even less.
       Even where the data reported by employers is relevant, it 
     will still not be sufficient in many cases to enable HCFA to 
     identify or prevent mistaken payments. Moreover, by the time 
     the information is reported to HCFA, processed by the data 
     bank, and incorporated into claims payment systems it will 
     often be a year old or more, further limiting its usefulness.

               4. Availability of other sources of data:

       HCFA should already receive, when claims are filed, much of 
     the information that is part of the employer reporting 
     requirement. For example, under Medicare the UB-92 and other 
     claims forms require secondary payer information to be 
     reported. In fact, HCFA has not been successful at enforcing 
     this claims-based reporting requirement or fully 
     incorporating the information it does receive into its 
     systems. HCFA has also been unable to take full advantage of 
     additional information it receives from other sources, such 
     as beneficiaries themselves and the Medicare Secondary Payer 
     data match. It makes far more sense to ensure HCFA makes 
     better use of the information that it currently receives than 
     to overwhelm it with data generated by the new employer 
     reporting requirement.

                     5. Effective date and guidance

       Not only has the federal government imposed an unclear and 
     unworkable reporting requirement on employers, it also has 
     compounded the problem with an unrealistic effective date. 
     Due to several vague provisions in the statutory language, as 
     well as the complete lack of any timely guidance from HCFA, 
     many employers either are unaware that they have an 
     obligation to report this data or cannot determine with any 
     certainty what their obligation is.
       It is already too late to provide the guidance employers 
     need to prepare to collect and report data on employees' 
     health coverage status for calendar year 1994. Employers 
     would need to learn about and understand their obligation, 
     train staff, rewrite payroll computer programs, modify health 
     plan open season election forms, and otherwise prepare to 
     report such information before they can successfully comply 
     with the law. Despite employers' good-faith efforts, there is 
     likely to be widespread noncompliance for calender year 1994 
     and for an indeterminable period following the eventual 
     publication of guidance.


                               conclusion

       The employer reporting requirement effectively forces 
     employers to perform HCFA's program administration, 
     enforcement and compliance responsibilities in a very 
     inefficient manner. Further, even if the reporting 
     requirement itself were feasible--which it emphatically is 
     not--employers who spend (in the aggregate) hundreds of 
     millions of dollars annually attempting to comply with the 
     law in good faith will find their effort and expense 
     squandered since the date received by HCFA will be 
     incomplete, incompatible, or unusable due to the impossibly 
     short effective date and the complete lack of any timely 
     guidance.
       Coalition members urge the Committee to ensure that the 
     implementation and operation of HCFA's Medicare and Medicaid 
     Data Bank be excluded from the fiscal year 1995 budget until 
     the current employer reporting requirement is replaced with a 
     more efficient and cost-effective source of health coverage 
     information. We hope to work with you and others in Congress 
     and the Administration to find an alternative means to 
     address HCFA's secondary payer enforcement and compliance 
     needs that does not impose such disproportionate financial 
     and administrative burdens on employers. In particular, we 
     urge that the multiple sources of data and data collection 
     vehicles already available to HCFA be adequately funded and 
     implemented rather than imposing this massive new reporting 
     burden on employers.
                                  ____

                                            National Federation of


                                         Independent Business,

                                   Washington, DC, March 15, 1994.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: On behalf of the 600,000 members of 
     the National Federation of Independent Business (NFIB), I am 
     writing to support your efforts to repeal the Medicare and 
     Medicaid data bank reporting requirement. This requirement 
     will be a new paperwork nightmare for America's small 
     business men and women who are creating the majority of our 
     country's new jobs.
       The burdensome provision requires all employers to provide 
     the names, addresses, tax identification numbers, types of 
     coverage, and enrollment dates for all individuals (including 
     dependents and part-time workers) participating in any 
     employer-sponsored health insurance plan to the Health Care 
     Financing Administration (HCFA). Employers are at risk of 
     being assessed significant penalties for failure to report 
     information that they do not routinely possess.
       In order to solve a small problem, the government is 
     requiring far-reaching reporting, resulting in needless 
     paperwork for employers and the government. The General 
     Accounting Office has reviewed the data bank proposal 
     determining it was an expensive and inefficient way to 
     address the problem of coordination of benefits with 
     Medicare.
       What is a problem of communication between a patient, the 
     health care provider, Medicare, and insurance companies is 
     ``solved'' by placing a tremendous burden on small business. 
     Business is not part of the problem, but under the Medicare 
     data bank they must bear the expense of the solution.
       Currently, HCFA receives through other sources much of the 
     information this requirement would mandate. We believe HCFA 
     should better manage the information it already has before 
     creating new burdens on business.
       Thank you for your efforts against excessive paperwork 
     burdens on small business. We look forward to working with 
     you.
           Sincerely,

                                               John J. Motley,

                                                   Vice President,
                                     Federal Government Relations.
                                  ____

         Employee Assistance Program and Behavioral Health Managed 
           Care Service,
                                     Tempe, AZ, February 22, 1994.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: I am the Vice President, 
     Administration at CONTACT which employs 75 employees in the 
     Phoenix area. I am writing you today to urge you to repeal 
     the Medicare/Medicial Data Bank provisions enacted as part of 
     OBRA 93.
       As you may know, the Data Bank law requires employers to 
     submit extensive information on their employees and the 
     employees' spouses and dependents. Like Section 89, which 
     Congress hastily enacted and then repealed, the burdens 
     imposed by the Data Bank law far outweigh any possible 
     benefit that could be produced.
       The Data Bank provisions were enacted without the benefit 
     of proper analysis or the input of the employers and human 
     resource professionals who have to comply with the law and 
     were slipped into OBRA 1993 just before the bill was passed.
       The information to be requested from the employee is overly 
     broad. Under the new law, an employee is defined as any 
     individual associated or formerly associated with the 
     employer in a business relationship. Therefore, employers 
     have to submit information, not just on employees but on 
     independent contractors and former employees such as retires 
     and COBRA recipients. Gathering the detailed information 
     required is nearly impossible. Should an employer take all 
     the steps necessary to collect the data about employees, 
     spouses, and dependents, they risk completely alienating 
     their workforce or even violating the Privacy Act.
       Now, employers are faced with a huge reporting requirement 
     with penalties of up to $10,000 for each employee or 
     dependent whose information is not submitted. In addition, 
     Congress has not appropriated any funding for the Data Bank 
     to be set up. As a result, employers are being asked to spend 
     tens of thousands of dollars to gather and submit information 
     to a Data Bank that does not even exist, or face enormous 
     fines and penalties.
       Enactment of this Data Bank would be overly burdensome and 
     costly for both the government and employers. I urge you to 
     enact legislation to repeal the Data Bank law.
           Sincerely,

                                              Angela Williams,

                                                   Vice President,
                                                   Administration.
                                  ____

                                                 National Employee


                                           Benefits Institute,

                                   Washington, DC, March 14, 1994.
     Re Medicare and Medicaid data bank.

     Hon. John McCain,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McCain: The National Employee Benefits 
     Institute (NEBI) supports legislation you propose to 
     introduce to repeal the employer health coverage reporting 
     requirement associated with the Medicare & Medicaid Data Bank 
     (``Data Bank''). NEBI also supports provisions in the 
     proposed legislation to require the Health Care Financing 
     Administration (HCFA) to conduct a study of alternative 
     methods to collecting this information.
       As you know, the Medicare & Medicaid Data Bank was enacted 
     under OBRA '93 (P.L. 103-66) to assist HCFA to identify 
     mistaken reimbursements for health care services paid by 
     Medicare and Medicaid. NEBI supports legislation to repeal 
     the employer reporting requirement for the following reasons:
       (1) Inefficient Collection Method. The employer reporting 
     requirement is not the most efficient method of collecting 
     the intended information because only a small percentage of 
     employees are Medicare and Medicaid beneficiaries. Therefore, 
     only a small amount of the information will fulfill HCFA's 
     objectives. Employers and HCFA will spend unnecessary 
     resources and time on processing the information to identify 
     very little useful data. Alternative methods should be 
     explored to collect this information more efficiently.
       (2) Administrative Burden. The employer reporting 
     requirement imposes significant administrative and financial 
     costs on employers. Employers have to install costly new 
     programs to track the required information and to submit the 
     reports to HCFA.
       (3) Employer Compliance. This information is difficult to 
     collect due to high employee turnover, incomplete employee 
     responses, and locating geographically diverse employee 
     dependents and other ``electing individuals'' for whom the 
     employer has to report. Therefore, even with good faith 
     efforts, employers may not be able to fully comply with the 
     requirement.
       (4) Lack of Funding. OBRA '93 did not provide funding for 
     the Data Bank. A funding request was defeated earlier this 
     year under the supplemental funding bill for the FY1994 
     budget and a new proposal under the Administration's FY1995 
     federal budget is still under consideration. Without funding, 
     HCFA will not be able to effectively process nor enforce the 
     reporting requirement.
       (5) Limited Guidance. HCFA has not yet issued guidance for 
     employers to use to comply with the requirement. HCFA has 
     indicated it may release limited guidance in the form of a 
     press release or some other publication. This underscores the 
     belief that HCFA is not prepared to utilize the data 
     effectively.
       NEBI is an organization composed of Fortune 1,000-sized 
     companies which monitors, evaluates and comments upon pending 
     legislation and regulations affecting employee benefits. NEBI 
     provides Congress and the federal agencies with facts and 
     information, positions and alternatives so that Congress and 
     regulatory agencies understand the impact of proposed 
     legislation and regulations on employers and the employee 
     benefit programs maintained by employers.
       NEBI urges you to introduce your legislation to repeal the 
     reporting requirement. NEBI supports the efforts of you and 
     your Senate colleagues to identify a more effective and less 
     costly method to collect this information.
       Please feel free to contact NEBI Legislative Assistant, 
     Laura Tomarchio, at (202) 872-8080, with any questions.
           Sincerely,
                                                      Joseph Semo,
                                                         Director.
                                  ____



                                      ERISA Industry Committee

                                   Washington, DC, March 14, 1994.
     Hon. John McCain,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McCain: We understand that you may offer an 
     amendment to S. 4, the National Competitiveness Act of 1994, 
     to repeal the requirement that employers report certain 
     health coverage information to the Health Care Financing 
     Administration (HCFA) for use by the Medicare and Medicaid 
     Data Bank. The members of the ERISA Industry Committee (ERIC) 
     urge you to offer the amendment and urge your colleagues in 
     the Senate to support it.
       ERIC is a non-profit employer association committed to the 
     advancement of the employee retirement, health and welfare 
     benefit plans of America's major employers. ERIC represents 
     the employee benefits interests of more than 125 of the 
     nation's largest employers. As sponsors of health, 
     disability, pension, savings, life insurance, and other 
     welfare benefit plans directly covering approximately 25 
     million plan participants and beneficiaries, ERIC's members 
     provide coverage to about 10 percent of the U.S. population.
       Beginning January 1, 1994, employers must report employees' 
     and dependents' health insurance coverage status, social 
     security numbers, and related information to HCFA's data 
     bank. This reporting requirement was created by last year's 
     budget reconciliation law (OBRA '93, P.L. 103-66). ERIC's 
     analysis has concluded that the employer reporting 
     requirement neither successfully addresses HCFA's concerns 
     regarding the prevention of mistaken primary payments nor 
     justifies the burdens it imposes on employers.
       First, it will be impossible for employers (small and 
     large) to fully comply with the requirement to report 
     information regarding health coverage to the data bank 
     because employers do not possess all the information to be 
     reported and are prohibited by other laws from requesting 
     documentation from employees to verify the accuracy of some 
     of the information they must collect from employees.
       Second, even if full compliance were possible, the 
     financial and administrative burden imposed on employers by 
     full compliance with the current data bank reporting 
     requirement is enormous--far exceeding any actual savings to 
     be realized by HCFA. These hundreds of millions of dollars in 
     annual employer compliance costs would be far better spent on 
     benefits for employees and dependents.
       Third, the manner in which employers are required to 
     collect data for HCFA is incredibly inefficient and 
     impracticable--less than 5 percent of the information 
     reported by employers will be relevant to Medicare and 
     Medicaid. Even this data won't prevent most mistaken 
     Medicare/Medicaid payments.
       Fourth, the government has been unable to make use of the 
     relevant information that it currently receives from other 
     sources. It would be more efficient to help HCFA manage the 
     information that will not be effectively utilized.
       Fifth, the unrealistic effective date for the reporting 
     requirement (January 1, 1994), together with the complete 
     lack of any timely guidance from HCFA, compounds the unclear 
     and unworkable reporting burden imposed on employers.
       ERIC hopes to work with you and others in Congress and the 
     Administration to find alternative means to address HCFA's 
     secondary payer enforcement and compliance needs that does 
     not impose such disproportionate financial and administrative 
     burdens on employers. In particular, we urge that the 
     multiple sources of data and data collection vehicles already 
     available to HCFA be adequately funded and implemented rather 
     than imposing this massive new reporting burden on employers.
       Thank you for your efforts to repeal the employer reporting 
     requirement. You have our strong support for this effort.
           Sincerely,
                                                  Mark J. Ugoretz,
                                                        President.
                                  ____

                                         Washington Business Group


                                                    on Health,

                                   Washington, DC, March 14, 1994.
     Hon. John McCain,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator McCain: On behalf of the Washington Business 
     Group on Health (WBGH), I would like to express our support 
     of your efforts to repeal the Medicare and Medicaid Health 
     Coverage Data Bank, authorized by the Omnibus Budget 
     Reconciliation Act of 1993, and its attendant reporting 
     requirements imposed on employers. The WBGH is a nonprofit 
     organization of 200 of the nation's largest employers, 
     representing all sectors of American industry, and is devoted 
     exclusively to health policy and related worksite issues. 
     WBGH members provide health care benefits to more than 30 
     million employees, retirees, and dependents.
       We have been concerned about the design and implementation 
     of the Data Bank and the mandate for employers to report 
     certain health coverage information about employees, their 
     dependents, and ``other eligible employees'' in the absence 
     of any regulations or other guidance. Although we support 
     efforts to ease the administration of the Medicare and 
     Medicaid programs, we firmly believe that the Data Bank will 
     not provide meaningful assistance to HCFA. We also know that 
     it will impose tremendous costs on employers, with little of 
     value being produced.
       We appreciate your recognition of the serious problems the 
     Data Bank and its reporting requirements pose for employers. 
     We hope that your colleagues will joint you in supporting 
     repeal of the Data Bank as designed under OBRA 93.
           Sincerely,
                                              Kelly L. Traw, J.D.,
                                                          Manager.
                                  ____



                                        The Associated General

                                       Contractors of America,

                                   Washington, DC, March 14, 1994.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: The Associated General Contractors of 
     America (AGC), representing 33,000 firms, including 8,000 of 
     America's leading general contractors, supports your efforts 
     to repeal the employer reporting requirement included in 
     Section 13851 of the Omnibus Budget Reconciliation Act of 
     1993 (OBRA '93) establishing a Medicare/Medicaid Coverage 
     Data Bank to be housed in the Health Care Financing 
     Administration (HCFA) at the Department of Health and Human 
     Services.
       I understand that you may offer an amendment repealing the 
     reporting requirement and replacing it with a requirement 
     that HCFA conduct a study to identify a better source of 
     information for the data bank. AGC would support such an 
     amendment.
       The current employer requirement in our estimation will not 
     solve HCFA's secondary payer enforcement problems while at 
     the same time imposing enormous new annual compliance 
     problems on construction industry employers who must comply 
     with a host of existing burdensome paperwork requirements.
       Again, we support your amendment and urge you to offer it 
     as soon as possible.
           Sincerely,

                                          Stephen E. Sandherr,

                                               Executive Director,
                                          Congressional Relations.
                                  ____



                                     Food Marketing Institute,

                                   Washington, DC, March 14, 1994.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain: We strongly support your effort to 
     repeal the employer health coverage reporting requirement to 
     the Health Care Financing Administration (HCFA) associated 
     with the Medicare and Medicaid Data Bank. The requirement is 
     unduly burdensome to business and will not serve its intended 
     purpose of recouping the estimated billion dollars owning to 
     the government by employers to finance Medicare as Secondary 
     Payer rules (MSP).
       The Food Marketing Institute (FMI) is a nonprofit 
     association conducting programs in research, education, 
     industry relations and public affairs on behalf of its 1,500 
     members--food retailers and wholesalers and their customers 
     in the United States and around the world. FMI's domestic 
     member companies operate approximately 19,000 retail food 
     stores with a combined annual sales volume of $190 billion--
     more than half of all grocery store sales in the United 
     States. FMI's retail memberships is composed of large multi-
     store chains, small regional firms and independent 
     supermarkets.
       Less than two percent of all employees and dependents are 
     subject to the Medicare as secondary payer provision. Thus, 
     98 percent of the data collected will be irrelevant to the 
     problem being addressed. This unnecessary overkill would be 
     disastrous and indicates how poorly thought out this measure 
     is.
       Much of the data required to be reported is not routinely 
     maintained by employers. Food retailers employ many part-
     timers and have a high employee turnover rate. It is 
     virtually impossible to gather the required information for 
     thousands of current and former employees and dependents.
       Even if it were possible for employers to comply in spite 
     of privacy of information concerns and the lack of available 
     data, the information gathered will be useless. HCFA 
     acknowledges that it simply does not have the resources--
     human or financial--or even a data bank system in place--to 
     begin to handle the data required to be collected.
       On behalf of our nation's food distributors, we strongly 
     support the repeal of this ill-conceived requirement.
           Sincerely,
                                                     Tim Hammonds,
                                                        President.
                                  ____


                 Health Coverage Reporting Requirements

       Under existing law Medicare is generally the secondary 
     payer (MSP) when an individual is covered by employer 
     provided group health insurance. The Health Care Financing 
     Administration (HCFA) believes that noncompliance with these 
     rules costs the U.S. Treasury close to a billion dollars a 
     year in Medicare overpayments.
       The Omnibus Budget Reconciliation Act of 1993 includes a 
     new provision establishing a data bank to identify employers 
     responsible for health benefits provided to employees and 
     their dependents by Medicare or Medicaid. This new law went 
     into effect on January 1st of this year, with the first 
     report to be filed on Feb. 28, 1995. As part of the data bank 
     program, all employers will have to submit a new form (H-2) 
     that identifies for the prior year:
       Name and social security number of each employee and former 
     employee electing coverage under the employer's health plan.
       Name and social security number of each covered dependent.
       Type of coverage (single/family).
       Name/Address/identifying number of the plan.
       The period during the year the coverage was in effect.
       This creates huge new burdens for employers because much of 
     this information is not currently collected. Amazingly, this 
     data collection and paperwork nightmare will produce little 
     of value for HCFA. For the following reasons, these reporting 
     requirements should be repealed:


                            Enormous burden

       Much of the information to be reported to the data bank 
     (especially the names and social security numbers of 
     dependents) is not maintained on a routine basis by 
     employers. There is no business reason to do so. New programs 
     to collect this data will depend on employee cooperation and 
     will certainly be effected by privacy concerns. Food 
     retailers employ many part-timers (more than half of store 
     employees) and have high employee turnover rates. Their 
     ability to gather the required data for hundreds, even 
     thousands of current and former employees and dependents is 
     problematic. Also, many food distributors' employees are in 
     multiemployer health plans and do not receive information 
     from the plan about the type of coverage elected.


                           paperwork overkill

       Less than two percent of all employees and dependents are 
     subject to the medicare as secondary payer provision. Thus, 
     98 percent of the data collected will be irrelevant to the 
     problem being addressed. This is incredible even for a 
     government program. Even for the covered two percent, HCFA 
     will be receiving huge amounts of data to find a small number 
     of violations--and still won't be able to identify those 
     violators without significant further investigation.


                          information overload

       The magnitude of the data that will be generated by these 
     reports is so huge that HCFA will be overwhelmed with the 
     information. HCFA acknowledges that it simply does not have 
     the resources--human or financial--or the systems in place to 
     begin to handle the data that will be collected. The agency 
     is asking for increased funding to handle the data. Reporting 
     this information to HCFA will be a futile and wasteful 
     exercise.


               employers must comply without instructions

       Despite the fact that employers are already required to 
     comply with the law, no guidance has been issued yet on how 
     to comply. Employers will be penalized for failing to report 
     information that they do not routinely possess and which they 
     may not be able to obtain from any other source. The 
     Department of Labor may assess civil penalties of up to 
     $1,000 for each violation of the new reporting requirements. 
     A violation is per participant or beneficiary, not per group 
     of employees as a whole. Employers would also be subject to 
     the same penalties as those for failure to file W-2's--
     generally $50/violation, or $1,000/violation with no limit, 
     if the violation is willful.


                      health care reform is coming

       Health care reform legislation is likely to mean 
     fundamental changes in employer plans. What is the point of 
     initiating the extremely costly new systems necessary to 
     comply with these new requirements when the whole program 
     could be moot in short order.
       For all these reasons, these new reporting requirements 
     must be repealed.
                                 ______

      By Mr. DOLE:
  S.J. Res. 172. A joint resolution designating May 30, 1994, through 
June 6, 1994, as a ``Time for the National Observance of the Fiftieth 
Anniversary of World War II''; to the Committee on the Judiciary.


                   the 50th anniversary of world war ii

  Mr. DOLE. Mr. President, I rise today to introduce a joint resolution 
to designate the week of May 30, through June 7, 1994, for the National 
Observance of the 50th Anniversary of World War II.
  1944 was a turning point in the war that was a turning point in 
America's history and in world history. It is fitting that Americans 
remember that year, and that we remember the soldiers who fought and 
died in places like Anzio, Bastogne, and the Phillipine Sea.
  On course, June 6 will also mark the 50th anniversary of D-Day--the 
greatest amphibious operation in military history. Led by Kansas native 
Dwight Eisenhower, allied forces landed on the beaches of Normandy, 
marking the beginning of the end of the war in Europe.
  We should also remember the words of Franklin Roosevelt, who told 
Americans, ``We are all in (this war)--all the way. Every single man, 
woman, and child is a partner in the most tremendous undertaking of our 
* * * history.''
  And here at home, that partnership could be seen as American 
agriculture and industry worked together to form the greatest war 
machine the world had ever seen. Ships, aircraft, tanks and vehicles 
were manufactured at an unprecedented rate, while American farmers 
produced enough food to feed the world.
  The ingenuity, creativity, and patriotism demonstrated by the 
American people not only contributed to victory, but after the war, 
also transformed the United States into an unmatched industrial giant.
  Mr. President, by commemorating the 50th anniversary of World War II, 
we will not only be remembering the past, we will also be looking to 
the future, reminding all Americans that we must always be prepared, so 
that we may always be free.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                             S.J. Res. 172

       Whereas the brave men and women of the United States of 
     America made tremendous sacrifices during World War II to 
     save the world from tyranny and aggression;
       Whereas the winds of freedom and democracy sweeping the 
     globe today spring from the principles for which over four 
     hundred thousand Americans gave their lives in World War II;
       Whereas World War II and the events that led up to that war 
     must be understood in order that we may better understand our 
     own times, and more fully appreciate the reasons why eternal 
     vigilance against any form of tyranny is so important;
       Whereas the World War II era, as reflected in its family 
     life, industry, and entertainment, was a unique period in 
     American history and epitomized our Nation's philosophy of 
     hard work, courage, and tenacity in the face of adversity;
       Whereas, between 1991 and 1995, over nine million American 
     veterans of World War II will be holding reunions and 
     conferences and otherwise commemorating the fiftieth 
     anniversary of various events relating to World War II; and
       Whereas June 4, 1994, marks the anniversary of the Battle 
     of Midway, and June 6, 1994, marks the anniversary of D-Day: 
     Now, therefore, be it
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That May 30, 
     1994, through June 6, 1994, is designated as a ``Time for the 
     National Observance of the Fiftieth Anniversary of World War 
     II'', and the President is authorized and requested to issue 
     a proclamation calling on the people of the United States to 
     observe that period with appropriate ceremonies and 
     activities.

                          ____________________