[Congressional Record Volume 140, Number 33 (Tuesday, March 22, 1994)]
[Senate]
[Page S]
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[Congressional Record: March 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LOTT (for himself, Mr. Shelby, Mr. Hatch, Mr. Brown, Mr. 
        Burns, Mr. Coats, Mr. Coverdell, Mr. Dole, Mr. Grassley, Mr. 
        Gregg, Mr. Helms, Mrs. Kassebaum, Mr. Mack, Mr. McCain, Mr. 
        Nickles, Mr. Simpson, and Mr. Smith):
  S. 1955. A bill to amend the Congressional Budget and Impoundment 
Control Act of 1974 to reform the budget process, and for other 
purposes; to the Committee on the Budget and the Committee on 
Governmental Affairs, jointly, pursuant to the order of August 4, 1977, 
with instructions that if one committee reports, the other committee 
has 30 days to report or be discharged.


                       budget process reform act

  Mr. LOTT. Mr. President, today as we begin debate on the budget 
resolution for the next fiscal year, I think it is appropriate that we 
also think at this time about the need for budget process reform.
  Twenty years ago, we passed the Congressional Budget and Impoundment 
Control Act of 1974. I supported it at that time because I thought we 
needed some process to take a look at how much we were spending, what 
it was going for, and just basically adding up what we were doing. Up 
until that time, there was no budget. We had authorization bills and 
appropriations bills out of the various subcommittees of Appropriations 
Committee, and nobody ever added them up to see what we were spending 
really, in total, and what it was doing to the deficit.
  So we passed the Budget and Impoundment Control Act, and I thought it 
was a good idea at the time. This bill established our basic budget 
process as we know it today. Twenty years has been long enough to see 
what has worked and what has not worked. Some of it has been fine; some 
of it has not accomplished all we would like for it to have 
accomplished. So, as the old adage says, ``Hindsight is 20/20.'' It is 
time for us to take advantage of what we can see behind us, learn from 
it, and make some changes.
  As we consider this fiscal year 1995 budget, we should also make 
significant changes in the budget process that the Budget Act, the 
Budget and Impoundment Control Act, established in 1974.
  That is why I am introducing a bill today to overhaul the Federal 
budget process, along with a number of our colleagues, including 
Democrats and Republicans. Process reform may not seem very glamorous. 
Indeed, it is not. But it is the foundation upon which all of our 
annual spending and taxing decisions are made. Without a strong 
foundation, a house will not stand.
  There are two fundamental components of the budget which must be 
addressed to achieve effectiveness and efficiency in budgeting, as well 
as deficit reduction. After all, that should be our goal.
  As we debate the budget, we will see this week that as a matter of 
fact we continue to have deficits every year, and the debt continues to 
go up every year. In fact, it will go up, some estimate, to $5 trillion 
over the next 5 years unless we find some way to better address the 
problem.
  But the two components of the budget go hand in hand. The first is 
the process for development and implementation of a budget, and the 
second is the actual determination of the taxing and spending levels 
within that budget.
  This bill addresses the first component, process reform, as its 
title, ``The Budget Process Reform Act,'' indicates. I am introducing 
this bill with my friend Senator Shelby and 15 other original Senate 
cosponsors. This bill would radically change the way Congress does 
business.
  With budget reform in place, we could then effectively administer the 
second component of budgeting, the resource allocation process: where 
and how much do we spend of the taxpayers money. We will have a 
structure designed to permit clear, rational, and accountable choices 
among competing priorities.
  That is the difficult part. If we would just basically says we have 
this much coming in, and that is all we are going to spend, there would 
be a ferocious debate about what our priorities would be and how we 
would spend that money.
  But that is what we are here for, and in the end we could make, I 
think, rational decisions about our priorities for spending and keep 
the budget deficits and eventually the debt under control.
  I do think deficits matter, and as far as pointing fingers, I am not 
doing that. I think we all have contributed to this problem. But I 
think instead of looking back at the past, and how we got here, we need 
to be looking forward to how we stop this problem.
  I believe the momentum behind the balanced budget amendment, which we 
have debated and which got a very strong vote--it came within four 
votes in the Senate, and I believe five votes in the House of 
Representatives--is an indication of a continuing and, I believe, 
growing concern about this problem.
  Our Nation is facing a fiscal crisis. Our deficit for fiscal year 
1993 was $255 billion. Our debt for fiscal year 1994 is projected to be 
$4.734 trillion. That is $13,345 for every man, woman, and child in 
America. We must do something about this.
  Why are we debating these types of changes? Because Congress needs 
handcuffs. Unfortunately, Congress has not been willing to make the 
tough choices and cut spending enough.
  There have been some starts and fits and stops, back and forth, and 
we have accomplished some things. I remember in 1981 and 1982, we 
actually cut the deficit some. Last year, the process I think actually 
did contribute to cutting the deficit some. I objected because I 
thought too much of it was done in the tax area. But the net result was 
that we still have not made enough tough choices to deal with the 
problem.
  I can understand why each one of us were sent here by constituencies 
to protect the interests of our various States. In my own State, we 
have a lot of poverty; we have a lot of needs. We need better roads. We 
need better schools. Naturally, I am interested in trying to help my 
State with those needs.
  Putting procedural changes in place such as the balanced budget 
amendment and some of the provisions of this bill would force Congress 
to be more responsible stewards of our constituents' hard-earned money.
  I do want to point out that even if we had a budget surplus, I would 
still believe the changes in this bill are necessary. The system needs 
to be tweaked. As it stands currently, it does not allow the budget to 
reflect the current priorities of our Nation.
  This bill was also introduced in the House by my friend Congressman 
Chris Cox. He and Congressman Charles Stenholm have worked very hard on 
this and there are now over 160 cosponsors in the House.
  The bill will achieve the following objectives: simplification of the 
process, a shift from its current bias toward higher spending, and 
compliance with current law.
  The Budget Process Reform Act would accomplish these goals through 
the following specific provisions:
  First, it requires the budget resolution to be a joint one, voted on 
by April 15. Making it legally binding by requiring the President's 
signature will involve the President in the process at an early stage 
and ensure a shared effort.
  I think that would be very important. You may say: Well, this 
President is not involved. But maybe he is more than others. I think 
until we get this requirement for a joint resolution, the President 
will not be as involved. We really need him.
  The bill espouses a wise concept: Budget first, spend second. No 
spending bills--either authorizations or appropriations--could be 
considered prior to passage of the budget resolution. This will allow 
spending bills to move through the appropriations process in a logical 
and timely manner.
  Second, the bill forces overall spending decisions to be made at a 
macro level. This year's budget is 4 volumes, 2,013 pages, and weighs 6 
pounds.
  How many of us are actually going to read it?
  It takes a budget guru just to figure out what we're spending on a 
specific program. Our system seems designed to keep us all confused.
  This bill would simplify the budget process by first requiring a 1-
page budget document reflecting the total spending levels in the 19 
summary categories currently used.
  This would facilitate an easier decisionmaking process and the 
ability to prioritize--and see--where we are spending the American 
taxpayers' money.
  We should not get bogged down in the details. That job belongs to the 
authorizers and appropriators.
  The budget would also set ceilings on all Federal spending for the 
coming fiscal year, except for Social Security and interest on the 
debt. The bill does not say what those ceilings would be, but merely 
that Congress would set them and then live by them.
  The President would be required to submit the detailed support 2 
weeks later, after the overall spending decisions had been addressed.
  The bill would eliminate baseline budgeting as we know it. This 
concept of budgeting allows automatic spending increases every year. 
This is the only place I know in the world where you allow for an 
increase and then you begin deciding how much you are going to add to 
that from that particular point.
  I believe there are two fundamental problems with this: First, this 
means spending automatically goes up every year. Period. Second, this 
does not allow Congress to make decisions about where we should spend 
more or less.
  I think anyone who considers this issue in terms of their own 
financial position would agree that this is poor policy and it is not 
even honest. For instance, how many of you automatically plan to spend 
3 or 4 percent--or whatever the annual inflation rate is--more each 
year than you did the year before?
  I was very encouraged by the vote on this issue in the Senate Budget 
Committee markup last Thursday. The Budget Committee voted 15 to 5 for 
a sense-of-the-Congress to eliminate baseline budgeting. This provision 
was also included in the House passed budget resolution. This is a 
change whose time has come. I urge that we adopt this provision.
  The bill also contains a bias in favor of spending constraint which 
is in sharp contrast to our current situation. Any spending which 
exceeds the caps set in the budget resolution would be subject a three-
fifth's vote of the Senate. Thus, the only way to adopt spending 
proposals by simple majority would be to authorize and appropriate 
within the ceilings of a duly enacted budget law.
  Additionally, the ceilings on spending would also apply to 
entitlements. Again, this merely means that Congress would decide on 
specific spending totals for these programs. Congress has abdicated 
their control over the largest Government programs. As a result, these 
programs have grown uncontrollably. We must reign them in and make 
conscious decisions about the Government spending instead of just 
signing the blank check year after year.
  The head of each executive agency that administers any entitlement 
program would be authorized to adjust benefit levels and eligibility 
requirements, so that the program costs exactly what Congress has 
appropriated and no more.
  To maintain the integrity of congressional control over the 
legislative process, the CBO--rather than the OMB--would be the 
scorekeeper for determining whether particular authorization and 
appropriations measures were consistent with the budget ceilings. In 
his State of the Union speech last year, President Clinton said that 
the CBO should be the official scorekeeper. I do not have any bias for 
CBO. In fact, I have a lot of reservations about it. But, we need to 
decide who it is going to be, so we will have consistent numbers.
  President Clinton has also repeatedly stated his support for the line 
item veto. This bill would give it to him. Why shouldn't the President 
of the United States have the same ability as 43 Governors to reduce 
targeted, pork-barrel projects?
  This bill gives the President the authority to rescind over-budget 
spending unless Congress were to enact legislation expressly 
overturning it. This gives the President the power to selectively 
reduce individual programs by a percentage, leaving intact some 
portions of programs budgeted by Congress if he chooses. This would 
help control spending.
  The bill also precludes the need for continuing resolutions by 
automatically reverting any unfinished appropriations bills to the 
prior year's spending level. It amazes me, by law, Congress is to 
finish all appropriations bills by June 30. Yet, every year we miss 
this legal deadline and are forced to pass continuing resolutions 
because we can't get our work done in a timely manner. Various 
Government agencies and programs do not know whether they are going to 
be able to continue or not. We always talk about shutting down the 
Washington Monument. It is time to stop that insanity.
  This provision of the bill will prevent actual or threatened annual 
shut-downs of the Federal Government.
  In addition, this reversion would encourage spending restraint--if no 
action were taken on the appropriations bills, spending would not 
increase from year to year.
  In conclusion, through the Budget Process Reform Act we will enforce 
the law. We will require cooperation between the President and 
Congress. We will bring entitlement programs under budget control. 
Above all, we will make the system clear and understandable to the 
people whose money we are spending.
  As we annualy translate our Nation's priorities into a Federal 
budget, we can use this new process to both plan and discipline our 
spending while still achieving our goals. The final result will be a 
meaningful budget which allows Congress to focus on the effects of the 
bottom line on the economy and on the tradeoffs which must be made 
among priorities to control overall levels of spending.
  This is a bipartisan plan. In preparing this legislation, we drew 
upon the experience and ideas of Democratic and Republican 
administration officials, congressional leaders, and academic experts 
across the past seven decades. This bill is a good starting point for 
real deficit reduction.
  It sets the mechanisms in place to facilitate a more efficient and 
effective budget system.
  I am hopeful that the grounds swell of support for reform will enable 
us to get this bill through this Congress. We need to put aside old 
ways of thinking and doing things. I believe Congress can do what it 
must do. We can win back the people's trust.
  Our fiscal problems are not unsurmountable. A child must learn to 
step before he walks, and walk before he runs.
  I remind my colleagues of a quote by St. Francis of Assisi:

       Start by doing what's necessary; then do what is possible; 
     and suddenly you are doing the impossible.

  So I urge my colleagues to join me and the cosponsors of this bill in 
taking this step towards restoring fiscal responsibility, discipline, 
and accountability.
  Mr. President, I ask unanimous consent that the Budget Process Reform 
Act be printed in it's entirety at the conclusion of my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1955

       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 ``Budget 
     Process Reform Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

              TITLE I--STATEMENT OF CONGRESSIONAL PURPOSE

Sec. 101. Improvement in decisionmaking process.
Sec. 102. Reform of fiscal management.
Sec. 103. Safeguards against delay and inaction.

                      TITLE II--BINDING BUDGET LAW

Sec. 201. Joint resolution establishing binding budget law.
Sec. 202. Budget required before spending bills may be considered.
Sec. 203. ``baseline'' budgeting prohibited; unadjusted year-to-year 
              comparisons required in budget law.
Sec. 204. President's budget submissions.

                    TITLE III--ENFORCEMENT MECHANICS

         Subtitle A--Supermajority Required to Break Budget Law

Sec. 301. Three-fifths requirement for all spending bills in absence of 
              budget law.
Sec. 302. Three-fifths requirement for over-budget spending bills.
Sec. 303. Three-fifths requirement for waiver of this Act.

           Subtitle B--Limited Enhanced Rescission Authority

Sec. 304. Rescission authority limited to spending above limits of 
              congressional budget law.
Sec. 305. Application.

         Subtitle C--``Blank Check'' Appropriations Prohibited

Sec. 306. Intent of Senate.
Sec. 307. Fixed-dollar appropriations required.
Sec. 308. Agency-adjusted benefits.
Sec. 309. Budget authority and entitlement authority may cover only a 
              single fiscal period.

       Subtitle D--``Pay As You Go'' Requirement for New Spending

Sec. 310. Spending offsets required.
Sec. 311. Three-fifths vote required to waive point of order.

                     TITLE IV--SUSTAINING MECHANISM

Sec. 401. Automatic continuing resolution.
Sec. 402. Contingency regulations.
Sec. 403. Unauthorized appropriations prohibited.

                 TITLE V--PROTECTION OF SOCIAL SECURITY

Sec. 501. Benefits protected against deficit reduction.
Sec. 502. Conforming amendment.

                          TITLE VI--TIMETABLE

Sec. 601. Revision of timetable.

                    TITLE VII--CONFORMING AMENDMENTS

Sec. 701. Conforming and technical amendments changing ``concurrent'' 
              to ``joint'' resolutions.
Sec. 702. Further conforming and technical amendments.
Sec. 703. Conforming amendments to the Impoundment Control Act of 1974.
Sec. 704. Conforming amendment to title 31, United States Code.

          TITLE VIII--DEFINITIONS AND RULES OF INTERPRETATION

Sec. 801. Definitions.
Sec. 802. Amendments to Congressional Budget and Impoundment Control 
              Act of 1974.
Sec. 803. Use of terms.

                        TITLE IX--EFFECTIVE DATE

Sec. 901. General provision.
Sec. 902. Fiscal year 1993.
              TITLE I--STATEMENT OF CONGRESSIONAL PURPOSE

     SEC. 101. IMPROVEMENT IN DECISIONMAKING PROCESS.

       Because the Federal budget process is the principal vehicle 
     by which many of the most fundamental policy choices in 
     Government are made, the purpose of this Act is to facilitate 
     rational, informed, and timely decisions by the Congress in 
     the course of that process.

     SEC. 102. REFORM OF FISCAL MANAGEMENT.

       It is the sense of the Congress that a properly functioning 
     Federal budget process should focus the attention of 
     policymakers and the public on the aggregate impact of 
     Federal spending on the economy, and on the tradeoffs that 
     must be made among priorities in order to control overall 
     levels of spending. To this end, the Act is intended to 
     establish a budget process that, in each fiscal period--
       (1) requires the adoption of a budget before, not after, 
     any spending begins;
       (2) produces decisions on that budget early in the 
     budgeting cycle;
       (3) encourages cooperation between Congress and the 
     President in adopting the budget;
       (4) ties each subsequent spending decision to an overall, 
     binding budget total;
       (5) requires regular, periodic decisions on appropriate 
     spending levels for all Federal programs, not just those 
     arbitrarily deemed ``controllable''; and
       (6) produces a bias in favor of fiscal responsibility that 
     can be overcome only if the Congress expressly determines to 
     do so.

     SEC. 103. SAFEGUARDS AGAINST DELAY AND INACTION.

       The Congress further finds that a properly functioning 
     budget process should contain safeguards against delay and 
     inaction, so that temporary shut-downs of the Federal 
     Government may be avoided when the President and the Congress 
     fail to complete work on the budget prior to the beginning of 
     a fiscal period. Accordingly, this Act is intended to provide 
     an enforcement mechanism that gives meaning and importance to 
     the timely adoption of a budget, and a sustaining mechanism 
     that ensures a continuation of the Government should the 
     political process produce deadlock or a failure to act in a 
     timely fashion.
                      TITLE II--BINDING BUDGET LAW

     SEC. 201. JOINT RESOLUTION ESTABLISHING BINDING BUDGET LAW.

       To encourage early consultation and cooperation between the 
     Congress and the President on decisions concerning overall 
     spending levels for all Federal programs, the Congress shall 
     enact a binding budget law, in the form of a joint 
     resolution, by April 15 of the calendar year before that in 
     which the fiscal period commences. The technical amendments 
     contained in title VI and section 701 of this Act are 
     intended to assist in the establishment of this requirement. 
     The budget law itself shall fit on a single page, which sets 
     forth specific budget ceilings in the following 19 major 
     functional categories, which together comprise the entire 
     Federal budget.
       Function 050: National Defense
       Function 150: International Affairs
       Function 250: General Science, Space and Technology
       Function 270: Energy
       Function 300: Natural Resources and Environment
       Function 350: Agriculture
       Function 400: Transportation
       Function 450: Community and Regional Development
       Function 500: Education, Training, Employment and Social 
     Services
       Function 550: Health
       Function 570: Medicare
       Function 600: Income Security
       Function 650: Social Security
       Function 700: Veterans Benefits and Services
       Function 750: Administration of Justice
       Function 800: General Government
       Function 900: Net Interest
       Function 920: Allowances
       Function 950: Undistributed Offsetting Receipts.
       By thus requiring that the budget process begin with highly 
     generalized macroeconomic decisions about spending in 19 
     overall categories, this section is intended to facilitate 
     agreement within Congress itself, and between Congress and 
     the President, on how much the Federal Government should 
     spend in the ensuing fiscal period.

     SEC. 202. BUDGET REQUIRED BEFORE SPENDING BILLS MAY BE 
                   CONSIDERED.

       Unless and until a joint resolution on the budget is 
     enacted with respect to any major functional category for a 
     fiscal period, it shall not be in order in either the House 
     of Representatives or the Senate, or any committee or 
     subcommittee thereof, to consider any spending bill affecting 
     spending in that category, except as provided in Title III of 
     this Act. The purpose of this provision is to ensure that 
     until the budget is signed into law, no authorization or 
     appropriations bill shall be considered in the Congress.

     SEC. 203. ``BASELINE'' BUDGETING PROHIBITED; UNADJUSTED YEAR-
                   TO-YEAR COMPARISONS REQUIRED IN BUDGET LAW.

       Section 301(e) of the Congressional Budget Act of 1974 is 
     amended by--
       (1) inserting after the second sentence the following: 
     ``The starting point for any deliberations in the Committee 
     on the Budget of each House on the joint resolution on the 
     budget for the next fiscal period shall be the estimated 
     level of outlays for the current period in each function and 
     subfunction. Any increases or decreases in the Congressional 
     budget for the next fiscal period shall be from such 
     estimated levels.'';
       (2) striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) a comparison of levels for the current fiscal period 
     with proposed spending for the subsequent fiscal periods 
     along with the proposed increase or decrease of spending in 
     percentage terms for each function and subfunction;
       ``(3) information, data, and comparisons indicating the 
     manner in which, and the basis on which, the committee 
     determined each of the matters set forth in the joint 
     resolution, including information on outlays for the current 
     fiscal period and the decisions reached to set funding for 
     the subsequent fiscal years;'';
       (3) inserting ``and'' after the semicolon in paragraph (7);
       (4) striking paragraph (8); and
       (5) redesignating paragraph (9) as paragraph (8).
       The technical amendments contained in sections 702(g) and 
     704(b) of this Act are intended to apply the same prohibition 
     against ``baseline'' budgeting to the budgets prepared by the 
     President and the Congressional Budget Office reports to the 
     Budget Committees.

     SEC. 204. PRESIDENT'S BUDGET SUBMISSIONS.

       On or before the fifteenth day after a joint resolution on 
     the budget is enacted, the President shall submit to the 
     Congress a detailed budget for the fiscal period beginning on 
     October 1 of the current calendar year, including all 
     summaries and explanations required under section 1105(a) of 
     title 31, United States Code.
                    TITLE III--ENFORCEMENT MECHANICS
         Subtitle A--Supermajority Required to Break Budget Law

     SEC. 301. THREE-FIFTHS REQUIREMENT FOR ALL SPENDING BILLS IN 
                   ABSENCE OF BUDGET LAW.

       Unless and until a joint resolution on the budget is 
     enacted with respect to any major functional category for a 
     fiscal period, it shall not be in order in the Senate or any 
     committee or subcommittee thereof, to consider any spending 
     bill affecting spending in that category unless it is 
     approved by the affirmative vote of three-fifths of the 
     Members voting, a quorum being present.

     SEC. 302. THREE-FIFTHS REQUIREMENT FOR OVER-BUDGET SPENDING 
                   BILLS.

       (a) Determination of Budget Effect of All Proposed Spending 
     Bills.--The Congressional Budget Office shall provide to the 
     Senate (or the appropriate committee, subcommittee, or 
     conference thereof) as soon as practicable after the 
     introduction of any spending bill, its estimate of the costs 
     in each major functional category attributable to that bill 
     during the fiscal period in which it is to become effective 
     and in each of the next 4 fiscal years, together with the 
     basis for such estimate. The Congressional Budget Office 
     report shall not be required, however, if the Congressional 
     Budget Office certifies that a spending bill will likely 
     result in applicable costs of less than $10,000,000. For 
     purposes of estimating the costs attributable to any spending 
     bill that includes new credit authority, the report shall 
     deem the market value of any loan (if it were sold by the 
     Federal Government) or the assumption cost of any guarantee 
     (if it were assumed at market rates) to be the costs 
     attributable to such loan or guarantee in the fiscal period 
     in which it is made.
       (b) CBO Report Required Before Consideration of Spending 
     Bills.--It shall not be in order in the Senate, or in any 
     committee thereof, to consider any spending bill, unless and 
     until the report referred to in subsection (a) has been made 
     available to the Senate or the appropriate committee or 
     subcommittee thereof.
       (c) Three-Fifths Requirement for All Over-Budget Spending 
     Bills.--It shall not be in order in the Senate (or in any 
     committee, subcommittee, or conference) to consider any 
     spending bill for a fiscal period that the report referred to 
     in subsection (a) indicates would in such fiscal period 
     exceed a budget ceiling, unless such bill is approved by the 
     affirmative vote of three-fifths of the Members voting, a 
     quorum being present.
       (d) Determination of Spending in a Category.--A spending 
     bill shall be deemed to break a budget ceiling if--
       (1) its cost in any major functional category as estimated 
     in the report referred to in subsection (a); and
       (2) all other budget authority, budget outlays, and 
     entitlement authority, if any, in that major functional 
     category for the relevant fiscal period contained in any 
     previously enacted legislation for the fiscal period; and
       (3) to the extent that new budget authority or entitlement 
     authority for the relevant fiscal period has not been granted 
     (or modified from the level of the previous fiscal period) in 
     any other enacted legislation for any program within such 
     major functional category, the amounts of budget authority 
     and entitlement authority for such major functional category 
     (or part thereof) for the previous fiscal period;

     exceed the budget ceiling for such major functional category.

     SEC. 303. THREE-FIFTHS REQUIREMENT FOR WAIVER OF THIS ACT.

       No waiver of any provision of this Act, including the 
     calendar deadlines for completion of Congressional action and 
     the provisions concerning over-budget spending, shall be 
     effective unless approved by the affirmative vote of three-
     fifths of the Members of the Senate, a quorum being present. 
     No committee of the Senate shall have jurisdiction to report 
     a rule governing procedures for consideration of spending 
     bills covered by this Act, if such rule would violate the 
     provisions of this section. Nothing in this provision shall 
     be deemed to require a supermajority vote to amend this Act.

           Subtitle B--Limited Enhanced Rescission Authority

     SEC. 304. RESCISSION AUTHORITY LIMITED TO SPENDING ABOVE 
                   LIMITS OF CONGRESSIONAL BUDGET LAW.

       The Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) 
     is amended by redesignating sections 1013 through 1017 as 
     sections 1014 through 1018, respectively, and inserting after 
     section 1012 the following new section:


   ``RESCISSION OF SPENDING ABOVE LIMITS OF CONGRESSIONAL BUDGET LAW

       ``Sec. 1013. (a) Transmittal of Special Message.--The 
     President may transmit to both Houses of Congress for 
     consideration in accordance with this section one or more 
     special messages to rescind (in whole or in part) items of 
     budget authority or entitlement authority sufficient to 
     ensure that the levels of budget authority, entitlement 
     authority, and outlays in a functional category do not exceed 
     the levels stated in the budget law for the applicable fiscal 
     period (or, in the absence of a budget law, do not exceed 
     such levels in the previous fiscal period).
       ``(b) Limitations.--For purposes of this section--
       ``(1) continuing appropriations made pursuant to section 
     1311 of title 31, United States Code, shall be treated as 
     continuing appropriations for an entire fiscal period; and
       ``(2) the levels of budget authority, entitlement 
     authority, and outlays shall be determined on the basis of 
     the reports made by the Congressional Budget Office pursuant 
     to section 202 of the Budget Process Reform Act of 1990.
       ``(c) Contents of Special Message.--Each special message 
     transmitted under subsection (a) shall specify, with respect 
     to each item of budget authority to be rescinded, the matters 
     referred to in paragraphs (1) through (5) of section 1012(a).
       ``(d) Requirement Not To Make Available for Obligation.--
     Any item of budget authority to be rescinded as set forth in 
     such special message shall not be made available for 
     obligation unless, within the prescribed 45-day period, 
     Congress completes action on a rescission bill disapproving 
     the rescission of the amount to be rescinded. Funds made 
     available for obligation under this procedure may not be 
     included in a special message again.
       ``(e) Procedures.--
       ``(1)(A) Before the close of the third day beginning after 
     the day on which a special message to rescind an item of 
     budget authority is transmitted to the House of 
     Representatives and the Senate under subsection (a), a bill 
     may be introduced (by request) by the majority leader or 
     minority leader of the House of the Congress in which the 
     appropriation Act providing the budget authority originated 
     to disapprove the rescission set forth in the special 
     message. If such House is not in session on the day on which 
     a special message is transmitted, the bill may be introduced 
     in such House, as provided in the preceding sentence, on the 
     first day thereafter on which such House is in session.
       ``(B) A bill introduced in the House of Representatives or 
     the Senate pursuant to subparagraph (A) shall be referred to 
     the Committee on Appropriations of such House. The Committee 
     shall report the bill without substantive revision (and with 
     or without recommendation) not later than 15 calendar days of 
     continuous session of the Congress after the date on which 
     the bill is introduced. A committee failing to report a bill 
     within the 15-day period referred to in the preceding 
     sentence shall be automatically discharged from consideration 
     of the bill and the bill shall be placed on the appropriate 
     calendar.
       ``(C) A vote on final passage of a bill introduced in a 
     House of the Congress pursuant to subparagraph (A) shall be 
     taken on or before the close of the 25th calendar day of 
     continuous session of the Congress after the date of the 
     introduction of the bill in such House. If the bill is agreed 
     to, the Clerk of the House of Representatives (in the case of 
     a bill agreed to in the House of Representatives) or the 
     Secretary of the Senate (in the case of a bill agreed to in 
     the Senate) shall cause the bill to be engrossed, certified, 
     and transmitted to the other House of the Congress on the 
     same calendar day on which the bill is agreed to.
       ``(2)(A) A bill transmitted to the House of Representatives 
     or the Senate pursuant to paragraph (1)(C) shall be referred 
     to the Committee on Appropriations of such House. The 
     committee shall report the bill without substantive revision 
     (and with or without recommendation) not later than 10 
     calendar days of continuous session of the Congress after the 
     bill is transmitted to such House. A committee failing to 
     report the bill within the 10-day period referred to in the 
     preceding sentence shall be automatically discharged from 
     consideration of the bill and the bill shall be placed upon 
     the appropriate calendar.
       ``(B) A vote on the final passage of a bill transmitted to 
     a House of the Congress pursuant to paragraph (1)(C) shall be 
     taken on or before the close of the 10th calendar day of 
     continuous session of the Congress after the date on which 
     the bill is transmitted to such House. If the bill is agreed 
     to in such House, the Clerk of the House of Representatives 
     (in the case of a bill agreed to in the House of 
     Representatives) or the Secretary of the Senate (in the case 
     of a bill agreed to in the Senate) shall cause the engrossed 
     bill to be returned to the House in which the bill 
     originated, together with a statement of the action taken by 
     the House acting under this paragraph.
       ``(3)(A) A motion in the House of Representatives to 
     proceed to the consideration of a bill under this section 
     shall be highly privileged and not debatable. An amendment to 
     the motion shall not be in order, nor shall it be in order to 
     move to reconsider the vote by which the motion is agreed to 
     or disagreed to.
       ``(B) Debate in the House of Representatives on a bill 
     under this section shall be limited to not more than 2 hours, 
     which shall be divided equally between those favoring and 
     those opposing the bill. A motion further to limit debate 
     shall not be debatable and shall require an affirmative vote 
     of two-thirds of the Members voting, a quorum being present. 
     It shall not be in order to move to recommit a bill under 
     this section or to move to reconsider the vote by which the 
     bill is agreed to or disagreed to.
       ``(C) All appeals from the decisions of the Chair relating 
     to the application of the Rules of the House of 
     Representatives to the procedure relating to a bill under 
     this section shall be decided without debate.
       ``(D) Except to the extent specifically provided in the 
     preceding provisions of this subsection, consideration of a 
     bill under this section shall be governed by the Rules of the 
     House of Representatives applicable to other bills in similar 
     circumstances.
       ``(4)(A) A motion in the Senate to proceed to the 
     consideration of a bill under this section shall be 
     privileged and not debatable. An amendment to the motion 
     shall not be in order, nor shall it be in order to move to 
     reconsider the vote by which the motion is agreed to or 
     disagreed to.
       ``(B) Debate in the Senate on a bill under this section, 
     and all debatable motions and appeals in connection 
     therewith, shall be limited to not more than 2 hours. The 
     time shall be equally divided between, and controlled by, the 
     majority leader and the minority leader or their designees.
       ``(C) Debate in the Senate on any debatable motion or 
     appeal in connection with a bill under this section shall be 
     limited to not more than 1 hour, to be equally divided 
     between, and controlled by, the mover and the manager of the 
     bill except that in the event the manager of the bill is in 
     favor of any such motion or appeal, the time in opposition 
     thereto shall be controlled by the minority leader or his 
     designee. Such leaders, or either of them, may, from time 
     under their control on the passage of a bill, allot 
     additional time to any Senator during the consideration of 
     any debatable motion or appeal.
       ``(D) A motion in the Senate to further limit debate on a 
     bill under this section is not debatable. A motion to 
     recommit a bill under this section is not in order.
       ``(f) Amendments Prohibited.--No amendment to a bill 
     considered under this section shall be in order in either the 
     House of Representatives or the Senate. No motion to suspend 
     the application of this subsection shall be in order in 
     either House, not shall it be in order in either House for 
     the presiding officer to entertain a request to suspend the 
     application of this subsection by unanimous consent.''.

     SEC. 305. APPLICATION.

       The amendments made by section 304 shall apply to items of 
     budget authority (as defined in subsection (g)(1) of section 
     1013, as added by section 103(b) of this Act) provided by 
     appropriation Acts (as defined in subsection (g)(3) of such 
     section) that become law after the date of enactment of this 
     Act.

         Subtitle C--``Blank Check'' Appropriations Prohibited

     SEC. 306. INTENT OF SENATE.

       It is the intent of the Senate, by this provision, to put 
     an end to open-ended, ``blank check'' appropriations, which 
     typically authorize the spending of ``such sums as may be 
     necessary.'' By requiring explicit decisions concerning the 
     desired level of spending for each federal program (except 
     social security and interest on the debt), it is intended 
     that currently uncontrolled programs will be brought within 
     the discipline of an overall budget.

     SEC. 307. FIXED-DOLLAR APPROPRIATIONS REQUIRED.

       (a) Fixed-Dollar Appropriations.--For every account except 
     social security and interest on the debt, every appropriation 
     for a fiscal period for any program, project, or activity 
     shall be for a specific, fixed dollar amount. Any 
     appropriations of ``such sums as may be necessary'' (except 
     with respect to the automatic continuing resolution provided 
     for by section 401 of this Act) are hereby prohibited.
       (b) Point of Order.--It shall not be in order in the Senate 
     (or in any committee, subcommittee, or conference) to 
     consider any appropriation that is in violation of subsection 
     (a).

     SEC. 308. AGENCY-ADJUSTED BENEFITS.

       The head of each Executive agency that administers any 
     entitlement program is authorized to adjust benefit levels 
     and eligibility requirements, or both, with respect to the 
     program such that aggregate outlays for a fiscal period do 
     not exceed the fixed-dollar appropriation proved pursuant to 
     this title such fiscal period. Such adjustment shall be made 
     by rule or, pending adoption of appropriate rules, informal 
     guideline. The purpose of any such rule or guideline shall be 
     to ensure that the fixed-dollar appropriations for the 
     program authorized by Congress are not exceeded.

     SEC. 309. BUDGET AUTHORITY AND ENTITLEMENT AUTHORITY MAY 
                   COVER ONLY A SINGLE FISCAL PERIOD.

       Chapter 13 of title 31, United States Code, is amended by 
     inserting after section 1312 the following new section:

     ``Sec. 1313. Budget authority and entitlement authority must 
       cover single fiscal period

       ``(a) Notwithstanding any other provision of law and except 
     as provided by subsection (b), no budget authority or 
     entitlement authority--
       ``(1) enacted on or after the date of enactment of this 
     section shall be effective for more than one fiscal period; 
     or
       ``(2) enacted before the date of enactment of this section 
     shall continue in effect beyond the end of the first fiscal 
     period beginning after the date of enactment of this section.
       ``(b) Subsection (a) does not apply with respect to 
     appropriations for the repayment of indebtedness incurred 
     under chapter 31 or benefits payable under the old-age, 
     survivors, and disability insurance program established under 
     title II of the Social Security Act.''.

       Subtitle D--``Pay As You Go'' Requirement for New Spending

     SEC. 310. SPENDING OFFSETS REQUIRED.

       It shall not be in order in the Senate to consider any 
     supplemental appropriation measure, or any other bill, 
     resolution, or amendment which authorizes, requires, or 
     provides new entitlements/mandatory spending as defined in 
     section 3 (12)(A) of the Congressional Budget and Impoundment 
     Control Act of 1974, or which authorizes spending for a 
     fiscal period that the report referred to in section 302(a) 
     of this Act indicates would in such fiscal period exceed a 
     budget ceiling, unless any such increased spending called for 
     therein is offset fully in each such fiscal period in such 
     measure, bill, resolution or amendment by an equal amount of 
     reductions in existing spending.

     SEC. 311. THREE-FIFTHS VOTE REQUIRED TO WAIVE POINT OF ORDER.

       The point of order established by this subtitle may be 
     waived or suspended in the Senate, and an appeal of the 
     ruling of the Chair on a point of order raised under this 
     section may be sustained, only by the affirmative vote of 
     three-fifths of the Members voting, a quorum being present.
                     TITLE IV--SUSTAINING MECHANISM

     SEC. 401. AUTOMATIC CONTINUING RESOLUTION.

       Chapter 13 of title 31, United States Code, is amended by 
     inserting after section 1310 the following new section:

     ``Sec. 1311. Continuing appropriation

       ``(a) If for any account an appropriation for a fiscal 
     period does not become law before the beginning of such 
     fiscal period, there are hereby appropriated, out of any 
     moneys in the Treasury not otherwise appropriated, and out of 
     applicable corporate or other revenues, receipts, and funds, 
     such sums as may be necessary to continue any program, 
     project, or activity provide for in the most recent 
     appropriation Act at a rate of operations not in excess of 
     the rate of operations provided for such program, project, or 
     activity in such Act. In no case shall the total dollar 
     amount of appropriations for any program, project or activity 
     pursuant to this section exceed the appropriation for such 
     program, project, or activity in the most recent 
     appropriation Act, determined on a fiscal-period basis.
       ``(b) Amounts appropriated pursuant to subsection (a) for a 
     program, project, or activity shall be available during a 
     fiscal period until the earlier of--
       ``(1) the day on which the appropriation bill for such 
     fiscal period which would include the program, project, or 
     activity takes effect; or
       ``(2) the last day of such fiscal period.''.

     SEC. 402. CONTINGENCY REGULATIONS.

       Chapter 13 of title 31, United States Code, is amended by 
     inserting after section 1311 the following new section:

     ``Sec. 1312. Contingency regulations

       ``(a) Notwithstanding any other provisions of law and 
     except as provided by subsection (b), the head of each 
     Executive agency that administers any entitlement program 
     shall, by rule, (or informal guideline, pending adoption of 
     appropriate rules), provide for the adjustments of benefit 
     levels or eligibility requirements, or both, with respect to 
     the program such that aggregate outlays for a fiscal period 
     do not exceed the fixed-dollar appropriation provided 
     pursuant to section 314 (requiring fixed-dollar 
     appropriations) or section 401 (providing for an Automatic 
     Continuing Resolution) of this Act for such fiscal period.
       ``(b) In the case of social safety net programs, the rules 
     shall provide each State the option of receiving an aggregate 
     amount for the fiscal period for such programs equal to the 
     amount it received for the preceding fiscal period for such 
     programs (in which case such State could, in its discretion, 
     allocate the benefits among such programs to best meet the 
     needs of recipients in its State) or the amounts it received 
     for each such program for such preceding fiscal period.
       ``(c) As used in this section--
       ``(1) the term `Executive agency' has the meaning given 
     such term in section 105 of title 5, United States Code;
       ``(2) the term `entitlement program' means any spending 
     authority as defined in section 401(c)(2)(C) of the 
     Congressional Budget Act of 1974; and
       ``(3) the term `social safety net programs' means the 
     following programs: family support payments, adoption 
     assistance, child support enforcement, food stamps, foster 
     care, medicaid, child nutrition programs, social services 
     block grant, and supplemental security income (SSI).''.

     SEC. 403. UNAUTHORIZED APPROPRIATIONS PROHIBITED.

       Section 401(b) is amended to read as follows:
       ``(b) Controls on Legislation Providing Funding.--(1) It 
     shall not be in order in either the House of Representatives 
     or the Senate to consider any bill, resolution, or conference 
     report that provides budget authority or spending authority 
     described in subsection (c)(2)(C) except a bill or resolution 
     reported by the Committee on Appropriations of that House or 
     a conference report made by a committee or conference all of 
     whose conferees are member of the Committee on 
     Appropriations.
       ``(2) Paragraph (1) shall not apply to benefits payable 
     under the old-age, survivors, and disability insurance 
     program established under title II of the Social Security 
     Act.''.
                 TITLE V--PROTECTION OF SOCIAL SECURITY

     SEC. 501. BENEFITS PROTECTED AGAINST DEFICIT REDUCTION.

       Nothing in this Act shall be construed to require or permit 
     reductions in Social Security benefits otherwise payable 
     pursuant to applicable law or regulations.

     SEC. 502. CONFORMING AMENDMENT.

       Chapter 13 of title 31, United States Code, is amended by 
     inserting after section 1313 the following new section:

     ``Sec. 1314. Protection of social security from budget 
       deficit reduction measures

       ``No reductions in benefits payable under the old-age, 
     survivors, and disability insurance program established under 
     title II of the Social Security Act shall be made as a 
     consequence of the Budget Process Reform Act''.
                          TITLE VI--TIMETABLE

     SEC. 601. REVISION OF TIMETABLE.

       Section 300 (2 U.S.C. 631) is amended to read as follows:


                              ``timetable

       ``Sec. 300. The timetable with respect to the Congressional 
     budget process for any Congress (beginning with the One 
     Hundred Third Congress) is as follows:

Action to be completed:
President submits short-form budget recommendations....................
Congressional Budget Office submits report to Budget Committees........
Committees submit views and estimates to Budget Committees.............
Budget Committees report joint resolution on the budget................
Congress completes action on joint resolution on the budget and .......
  transmits it to the President for signature or veto.
Authorization and appropriations bills may be considered in the .......
  Congress.
President submits complete budget and support documents................
Appropriations Committees report last of annual appropriation bills....
Congress completes action on reconciliation legislation and annual ....
  appropriation bills.
Fiscal period begins. Congress completes all necessary action on ......
  budget, authorizations and appropriations, or automatic continuing 
  resolution takes effect.''.
                    TITLE VII--CONFORMING AMENDMENTS

     SEC. 701. CONFORMING AND TECHNICAL AMENDMENTS CHANGING 
                   ``CONCURRENT'' TO ``JOINT'' RESOLUTIONS.

       (a) Sections 300, 301, 302, 303, 304, 305, 308, 310, and 
     311 (2 U.S.C. 631 et seq.) are amended by striking 
     ``concurrent resolutions'' each place it appears and by 
     inserting ``joint resolution''.
       (b) The table of contents set forth in section 1(b) is 
     amended by striking ``Concurrent'' in the items relating to 
     sections 301, 303, and 304 and inserting ``Joint''.
       (c) Clauses 4(a)(2), 4(b)(2), 4(g), and 4(h) of rule X, 
     clause 8 of rule XXIII, and rule XLIX of the Rules of the 
     House of Representatives are amended by striking 
     ``concurrent'' and by inserting in its place ``joint''.
       (d) Section 258C(b)(1) of the Deficit Control Action of 
     1985 is amended by striking ``concurrent'' and by inserting 
     ``joint''.

     SEC. 702. FURTHER CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Section 302(f) (2 U.S.C. 633(f)) is amended--
       (1) in paragraph (1) by striking ``(1) In the House of 
     Representatives.--'', by striking ``new budget authority for 
     such fiscal year, new entitlement authority effective during 
     such fiscal year, or'' and by striking ``new discretionary 
     budget authority, new entitlement authority, or''; and
       (2) by striking paragraph (2).
       (b) Section 303 is amended--
       (1) in its heading by striking ``new budget authority, new 
     spending authority,'' and the comma before ``or changes'';
       (2) in subsection (a) by striking paragraphs (1), (4) and 
     (5) and by redesignating paragraphs (2), (3), and (6) as 
     paragraphs (1), (2), and (3), respectively; and
       (3) in subsection (b) by striking paragraph (1)(A), by 
     striking ``(B)'', by striking the dash after ``resolution'', 
     and by striking the last sentence.
       (c) The table of contents set forth in section 1(b) is 
     amended by striking ``new budget authority, new spending 
     authority,'' and the comma before ``or changes'' in the item 
     relating to section 303.
       (d) Section 311 is amended--
       (1) in its heading by striking ``new budget authority, new 
     spending authority, and'';
       (2) in subsection (a)(1) by striking ``providing new budget 
     authority for such fiscal year, providing new entitlement 
     authority effective during such fiscal year, or''; by 
     striking ``the appropriate level of total new budget 
     authority or total budget outlays set forth in the most 
     recently agreed to concurrent resolution on the budget to be 
     exceeded, or'';
       (3) by repealing subsection (b); and
       (4) by redesignating subsection (c) as subsection (b), and 
     by striking ``new budget authority, budget outlays, new 
     entitlement authority, and'' in subsection (c) (as 
     redesignated).
       (e) The table of contents set forth in section 1(b) is 
     amended by striking ``new budget authority, new spending 
     authority, and'' in the item relating to section 311.
       (f) The last sentence of clause 4(b) of rule XI of the 
     Rules of the House of Representatives is amended by inserting 
     before the period at the end of the following: ``; nor shall 
     it report any rule or order which would waive any point of 
     order set forth in title III of the Budget Process Reform 
     Act''.
       (g) The first sentence of section 202(f)(1) of the 
     Congressional Budget Act of 1974 is amended to read as 
     follows: ``On or before February 15 of each year, the 
     Director shall submit to the Committees on the Budget of the 
     House of Representatives and the Senate a report, for the 
     fiscal year commencing on October 1 of that year, with 
     respect to fiscal policy, including (A) estimated budget 
     outlays in all functions and subfunctions for appropriated 
     accounts for the current fiscal year and estimated budget 
     outlays under current law for all entitlement programs for 
     the next fiscal year, (B) alternative levels of total 
     revenues, total new budget authority, and total outlays 
     (including related surpluses and deficits), and (C) the 
     levels of tax expenditures under existing law, taking into 
     account projected economic factors and any changes in such 
     levels based on proposals in the budget submitted by the 
     President for such fiscal year.''.

     SEC. 703. CONFORMING AMENDMENTS TO THE IMPOUNDMENT CONTROL 
                   ACT OF 1974.

       (a) Section 1011(5) (2 U.S.C. 682(5)) is amended--
       (1) by striking ``1012, and'' and inserting ``1012, the 20-
     day periods referred to in paragraphs (1)(b) and (2)(A) of 
     section 1013(c), the 45-day period referred to in section 
     1013(b), and'';
       (2) by striking ``1012 during'' and inserting ``1012 or 
     1013 during'';
       (3) by striking ``of 45'' and inserting ``of the applicable 
     number of''; and
       (4) by striking ``45-day period referred to in paragraph 
     (3) of this section and in section 1012'' and inserting 
     ``period or periods of time applicable under such section''.
       (b) Section 1011 is further amended--
       (1) in paragraph (4) by striking ``1013'' and inserting 
     ``1014''; and
       (2) in paragraph (5)--
       (A) by striking ``1016'' and inserting ``1017''; and
       (B) by striking ``1017(b)(1)'' and inserting 
     ``1018(b)(1)''.
       (c) Section 1015 (as redesignated) is amended--
       (1) by striking ``1012 or 1013'' each place it appears and 
     inserting ``1012, 1013, or 1014'';
       (2) in subsection (b)(1) by striking ``1012'' and inserting 
     ``1012 or 1013'';
       (3) in subsection (b)(2) by striking ``1013'' and inserting 
     ``1014''; and
       (4) in subsection (e)(1)--
       (A) by striking ``and'' at the end of subparagraph (A),
       (B) by redesignating subparagraph (B) as subparagraph (C),
       (C) by striking ``1013'' in subparagraph (C) (as 
     redesignated), and
       (D) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) he has transmitted a special message under section 
     1013 with respect to a proposed rescission; and''.
       (d) Section 1016 (as redesignated) is amended by striking 
     ``1012 or 1013'' each place it appears and inserting ``1012, 
     1013, or 1014''.
       (e) Section 1012(b) is amended by inserting before the last 
     sentence the following new sentence: ``The preceding sentence 
     shall not apply to any item of budget authority proposed by 
     the President to be rescinded under this section that the 
     President has also proposed to rescind under section 1013 and 
     with respect to which the 45-day period referred to in 
     subsection (e) of such section has not expired.''.
       (f) The table of sections set forth in section 1(b) is 
     amended--
       (1) by redesignating the items relating to sections 1013 
     through 1017 as items relating to sections through 1018, 
     respectively; and
       (2) by inserting after the item relating to section 1012 
     the following new item:

``Sec. 1013. Rescission of spending above limits of congressional 
              budget law.''.

     SEC. 704. CONFORMING AMENDMENT TO TITLE 31, UNITED STATES 
                   CODE.

       (a) The analysis of chapter 13 of title 31, United States 
     Code, is amended by inserting after the item relating to 
     section 1310 the following new items:

``Sec. 1311. Continuing appropriation.
``Sec. 1312. Contingency regulations.
``Sec. 1313. Budget authority and entitlement authority must cover 
              single fiscal period.
``Sec. 1314. Protection of Social Security from budget deficit 
              reduction measures.''.

       (b) Paragraph (5) of section 1105(a) of title 31, United 
     States Code, is amended to read as follows:
       ``(5) except as provided in subsection (b) of this 
     section--
       ``(A) estimated expenditures and proposed appropriations 
     for each function and subfunction in the current fiscal year;
       ``(B) estimated expenditures and proposed appropriations 
     the President decides are necessary to support the Government 
     for each function and subfunction in the fiscal year for 
     which the budget is submitted; and
       ``(C) a comparison of levels of estimated expenditures and 
     proposed appropriations for each function and subfunction in 
     the current fiscal year and the fiscal year for which the 
     budget is submitted, along with the proposed increase or 
     decrease of spending in percentage terms for each function 
     and subfunction;''.
       (b) Section 1105(a) of title 31, United States Code, is 
     amended--
       (1) in the first sentence, by inserting ``on a single page, 
     which sets forth specific budget ceilings for that fiscal 
     period in the nineteen major functional categories described 
     in section 201 of the Budget Process Reform Act'' before the 
     period; and
       (2) by repealing the second sentence and all of the third 
     sentence preceding the colon and inserting the following: 
     ``On or before the fifteenth day after a joint resolution on 
     the budget for that budget period is enacted, the President 
     shall submit a detailed budget for that fiscal period, 
     including a budget message and summary and supporting 
     information, as follows''.
          TITLE VIII--DEFINITIONS AND RULES OF INTERPRETATION

     SEC. 801. DEFINITIONS.

       (a) Definition of Budget Law.--Section 3(4) (2 U.S.C. 
     622(4)), containing general definitions under the Budget Act 
     is amended to read as follows:
       ``(4) The term `budget law' or `joint resolution on the 
     budget' means--
       ``(A) a joint resolution setting forth the simplified 
     budget for the United States Government for a fiscal period 
     as provided in section 301; and
       ``(B) any other joint resolution revising the budget for 
     the United States Government for a fiscal period as described 
     in section 304.''.
       (b) Other Definitions.--Section 3 (2 U.S.C. 622) is further 
     amended by adding at the end the following new paragraphs:
       ``(11) The term `major functional category' refers to the 
     groupings of budget authority, budget outlays, and credit 
     authority (including continuing appropriations pursuant to 
     section 1331 of title 31, United States Code) into any one of 
     the following:
       ``Function 050: National Defense
       ``Function 150: International Affairs
       ``Function 250: General Science, Space and Technology
       ``Function 270: Energy
       ``Function 300: Natural Resources and Environment
       ``Function 350: Agriculture
       ``Function 400: Transportation
       ``Function 450: Community and Regional Development
       ``Function 500: Education, Training, Employment and Social 
     Services
       ``Function 550: Health
       ``Function 570: Medicare
       ``Function 600: Income Security
       ``Function 650: Social Security
       ``Function 700: Veterans Benefits and Services
       ``Function 750: Administration of Justice
       ``Function 800: General Government
       ``Function 900: Net Interest
       ``Function 920: Allowances
       ``Function 950: Undistributed Offsetting Receipts.''.
       ``(12) The term `budget ceiling' means the dollar amount 
     set forth in a budget law for a major functional category.
       ``(13) The term `spending bill' means any bill or 
     resolution, or amendment thereto or conference report 
     thereon, which provides budget authority, spending authority, 
     credit authority, or outlays.
       ``(14) The term `fiscal period' means the twelve-month 
     fiscal year beginning October 1 currently in use, or any 
     other fiscal period (such as a biennial period) that may 
     subsequently be adopted for the management of the budget of 
     the United States.''.

     SEC. 802. AMENDMENTS TO CONGRESSIONAL BUDGET AND IMPOUNDMENT 
                   CONTROL ACT OF 1974.

       Except as otherwise expressly provided, whenever any 
     provision of this Act is expressed as an amendment to a 
     section or other provision, the reference shall be deemed to 
     be made to a section or other provision of the Congressional 
     Budget and Impoundment Control Act of 1974.

     SEC. 803. USE OF TERMS.

       Whenever any term is used in this Act which is defined in 
     section 3 of the Congressional Budget Impoundment Control Act 
     of 1974, the term shall have the meaning given to such term 
     in that Act.
                        TITLE IX--EFFECTIVE DATE

     SEC. 901. GENERAL PROVISION.

       Except as provided in section 902, this Act and the 
     amendments made by it shall become effective January 1, 1995, 
     and shall apply to fiscal periods beginning after September 
     30, 1995.

     SEC. 902. FISCAL YEAR 1993.

       Notwithstanding subsection (a), the provisions of--
       (1) the Congressional Budget Impoundment Control Act of 
     1974,
       (2) title 31, United States Code, and
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985, (as such provisions were in effect on the day before 
     the effective date of this Act) shall apply to the fiscal 
     year beginning on October 1, 1994.

  Mr. SHELBY. Mr. President, next year, we will pay close to $300 
billion just on interest on the national debt--$300 billion. Mr. 
President. That is about one-fifth of the budget for 1995.
  Because we will spend so much on our budget in 1995 on just financing 
our national debt, just paying the interest alone, not paying anything 
off, I remain unconvinced that we are on the right track, that we are 
doing what we need to do to address our chronic deficit and national 
debt problems.
  While CBO's recent projection of the 1995 deficit is lower than 
originally expected, it does not speak to our long-term deficit and 
debt future, because we have not changed the way we spend money around 
here. Our system has not changed; yet, our problems are systemic.
  Indeed, Mr. President, although deficit reduction was the 
justification for last year's tax bill, which raised over $230 billion 
in new taxes, Federal spending continues to increase at a progressive 
rate through the next 5 years. From 1994 through 1998, spending will 
continue to increase from $1.5 trillion to $1.8 trillion.
  So, Mr. President, in reality, at the same time Congress was raising 
new taxes, it was also increasing spending.
  Mr. President, I ask you: Is this fiscal restraint? Is this a sign of 
a Government on a diet? It would not appear so. Rather, it looks more 
like the kind of diet that ends up putting 10 pounds on you instead of 
taking 10 pounds off.
  Let us not forget spending cuts. The President claims over 300 
specific program cuts in the fiscal 1995 budget, and several proposals 
have been offered over the past few months which would have similarly 
made specific program cuts in order to lower the deficit.
  The fact is, however, Mr. President, that many of these proposals had 
nothing to do with lowering the deficit. Instead, they would only have 
authorized a shift in spending. These proposals would not only have had 
no affect on shrinking the size of the Federal pie, but, in fact, even 
with the proposed cuts, the Federal pie would continue to get larger 
through Federal spending.
  So, Mr. President, I submit that while we may be slowing the growth 
of the debt, we are still accelerating toward fiscal disaster.
  Mr. President, if we want to put the brakes on excess Federal 
spending, we need to change how we go about spending the Federal 
dollar. We need to reform our annual budget process.
  What role does our budget process play today if we have to wait to 
pass a 5-year budget agreement locking in spending levels before we can 
address spending cut proposals? And why should it be necessary for 
Congress to always promise spending cuts in the future, or as we say, 
in the ``outyears,'' and deliver tax increases today or--or in the case 
of the 1994 tax bill--yesterday? You will recall that it was 
retroactive taxes.
  The reason is because Congress is unaccountable--unaccountable by 
choice as well as by nature. Congress has no real incentives and faces 
no threatened penalties to encourage fiscally responsible behavior 
here.
  Thus far, Mr. President, Congress has sought and approved simple, 
politically expedient solutions to our complex deficit and debt 
problems. In fact, the rallying call for deficit reduction that started 
this past summer may have proved to be more of a cloak than a standard 
in combating the deficit and our national debt.

  Our current budget process favors increased Federal spending, not 
less spending. It is impotent in enforcing current budget ceilings and 
remains hostile to cuts in Federal programs. In short, Mr. President, 
the budget process that we have today itself is impervious to efforts 
to cut the Federal deficit and national debt.
  Indeed, Mr. President, the budget process can strengthen or weaken 
Congress' ability and Congress' resolve to gain control over its 
excessive spending habits.
  Senator Lott and I have joined the efforts of Representatives Cox and 
Stenholm in trying to create a budgetary framework that is receptive to 
efforts to curb Federal spending and facilitate fiscal responsibility 
here.
  The Budget Process Reform Act seeks to take Federal spending off of 
automatic pilot and put it under stricter fiscal controls. It proposes 
to reform the process to provide greater budget discipline and stronger 
budget enforcement mechanisms.
  The act would require that a legally binding budget resolution be in 
place prior to the consideration of any appropriations or authorization 
bills. Such a budget would fit on one page, setting aggregate spending 
totals for each of the 19 spending categories we deal with.
  The bill would eliminate baseline budgeting and require that all 
entitlements, excepting Social Security and interest on the debt, are 
given fixed-sum appropriations.
  In addition, in order to have effective enforcement, the bill would 
require a three-fifths supermajority to spend overbudget and would 
grant the President enhanced rescission authority when a budget 
category exceeds its allowable spending level.
  Mr. President, this is effective legislation. It contains no 
gimmicks. Rather, the bill establishes a process for spending Federal 
dollars that imposes discipline and order while providing the 
flexibility to prioritize Federal spending without draconian measures 
such as across-the-board cuts or unlimited line-item veto authority.
  While many may seek solace in the fact that the annual deficit is 
less than predicted for this year, it is a hollow promise for our 
future and for our children's future.
  Without doubt, Mr. President, Congress must reform its budget process 
if it is ever to effectively address this country's sinister deficits 
and heavy debt--and ensure its citizens of a bright economic future.
  I ask my colleagues in the Senate to join Senator Lott and me in 
cosponsoring this important piece of legislation.
                                 ______

      By Mr. SHELBY (for himself, Mr. Conrad, Mr. Johnston, Mr. Breaux, 
        and Mr. Faircloth):
  S. 1956. A bill to amend the Consumer Credit Protection Act to 
improve disclosures made to consumers who enter into rental-purchase 
transactions, to set standards for collection practices, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.


                   rental purchase reform act of 1994

 Mr. SHELBY. Mr. President, today I introduce the Rental-
Purchase Reform Act of 1994, a bill that would regulate the rental-
purchase industry. This legislation would ensure that consumers are 
provided straightforward disclosures of the important terms in rental-
purchase agreements.
  Under a rental-purchase transaction, consumers rent televisions, 
stereos, VCR's, refrigerators, furniture, and other household items by 
the week or by the month. There is no long-term obligation to rent the 
property beyond the initial rental period. However, after renting the 
property for a specified period of time, ownership of the item 
transfers automatically to the consumer.
  Consumers have found rental-purchase transactions to be an attractive 
means of obtaining goods that may be out of reach through traditional 
purchase transactions. It is my understanding that renters become 
owners in approximately 25 percent of rental-purchase transactions.
  There have been some abuses in this industry. Passage of this 
legislation will help curb these abuses. While this bill is similar to 
legislation enacted in 36 States, it goes farther than many of these 
State statutes. This legislation requires 11 contract disclosures, 
including the amount and timing of rental payments, the total number 
and the total dollar amount of rental payments and other charges 
necessary to acquire ownership, whether the property is new or used, 
the cash price of the property, and other disclosures important to 
consumers when shopping for merchandise for their homes.
  This bill also requires price tags on all of the merchandise in 
rental-purchase stores showing consumers the important aspects of the 
transaction. The bill would ensure that consumers may terminate a 
rental-purchase agreement voluntarily at any time with no penalty. This 
bill also contains substantive consumer protections, including 
reinstatement rights for consumers, which allow them up to 90 days to 
catch up on any past-due payments.
  This bill also regulates the collection practices of rental merchants 
and the advertising of rental-purchase products. Specifically, the bill 
will require lessors to disclose important financial information in the 
advertising of rental rates or the right to acquire ownership. Finally, 
this bill would allow consumers to file suit for violations of the act 
with statutory damages and would preempt State laws which do not 
provide the same level of protection to rental-purchase consumers as 
that contained in this bill. Although 36 States have passed legislation 
to regulate this industry, uniform Federal regulation is still needed. 
I urge my colleagues to support this legislation and I ask unanimous 
consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1956

       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 ``Rental-Purchase Reform Act 
     of 1994''.

     SEC. 2. REQUIREMENTS FOR RENTAL-PURCHASE TRANSACTIONS.

       The Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) 
     is amended by adding at the end the following new title:
                ``TITLE X--RENTAL-PURCHASE TRANSACTIONS

     ``Sec. 1001. Short title

       ``This title may be cited as the `Rental-Purchase Reform 
     Act of 1994'.

     ``Sec. 1002. Findings and purposes

       ``(a) The Congress finds that a significant number of 
     consumers engage in rental-purchase transactions. These 
     transactions have taken place, in many instances, without 
     provision of adequate disclosures and other protections to 
     consumers.
       ``(b) The purposes of this title are the following:
       ``(1) To assure meaningful disclosure of the terms of 
     rental-purchase agreements, including disclosure of all costs 
     to consumers under those agreements.
       ``(2) To regulate the collection practices of rental-
     purchase merchants.
       ``(3) To provide certain substantive rights to consumers 
     under rental purchase agreements.

     ``Sec. 1003. Definitions

       ``(a) For purposes of this title:
       ``(1) The term `advertisement' means a commercial message 
     in any medium intended to aid, promote, or assist, directly 
     or indirectly, a rental-purchase agreement.
       ``(2) The term `agricultural purpose' includes--
       ``(A) the production, harvest, exhibition, marketing, 
     transportation, processing, or manufacture of agricultural 
     products by a natural person who cultivates plants or 
     propagates or nurtures agricultural products; and
       ``(B) the acquisition of farmlands, real property with a 
     farm residence, or personal property and services used 
     primarily in farming.
       ``(3) The term `Board' means the Board of Governors of the 
     Federal Reserve System.
       ``(4) The term `consumer' means an individual that, as a 
     party to a rental-purchase agreement, is provided use of 
     personal property.
       ``(5) The term `date of consummation' means the date on 
     which a consumer becomes contractually obligated under a 
     rental-purchase agreement.
       ``(6) The term `merchant' means a person who provides the 
     use of property through a rental-purchase agreement and to 
     whom a consumer's initial obligation under the agreement is 
     payable.
       ``(7) The term `personal property' means property that is 
     not real property under the laws of the State where the 
     property is located when it is made available under a rental-
     purchase agreement.
       ``(8) The term `rental-purchase agreement'--
       ``(A) means an agreement between a consumer and a 
     merchant--
       ``(i) under which the merchant agrees to provide to the 
     consumer the use of personal property for an initial period 
     of 4 months or less;
       ``(ii) that is automatically renewable with each payment by 
     the consumer; and
       ``(iii) that permits but does not obligate the consumer to 
     become the owner of the property; and
       ``(B) does not include any credit sale (as that term is 
     defined in section 103(g)).
       ``(9) The term `State' means any State, the District of 
     Columbia, the Commonwealth of Puerto Rico, and any territory 
     or possession of the United States.
       ``(b) References to Regulations.--Any reference to any 
     provision of this title shall be considered to include 
     reference to the regulations prescribed by the Board under 
     this title.

     ``Sec. 1004. Exempted transactions

       ``This title does not apply to rental-purchase agreements 
     primarily for business, commercial, or agricultural purposes, 
     or those made with government agencies or instrumentalities 
     or with organizations.

     ``Sec. 1005. General disclosure requirements

       ``(a) The merchant under a rental-purchase agreement shall 
     disclose to the consumer under the agreement the information 
     required by this title. In a transaction involving more than 
     one merchant, only one merchant is required to make the 
     disclosures.
       ``(b) The disclosures required under this title shall be 
     made--
       ``(1) at or before the date of consummation of the rental-
     purchase agreement;
       ``(2) clearly and conspicuously in writing, in a form that 
     the consumer may keep; and
       ``(3) in the case of disclosures required under section 
     1006, segregated from all other terms, data, or information 
     provided to the consumer.
       ``(c) If a disclosure required to be made by a merchant 
     under this title becomes inaccurate as the result of any act, 
     occurrence, or agreement occurring after delivery of the 
     required disclosure, the resulting inaccuracy is not a 
     violation of this title.

     ``Sec. 1006. Rental-purchase disclosures

       ``For each rental-purchase agreement, the merchant shall 
     disclose to the consumer under the agreement the following, 
     as applicable:
       ``(1) The amount of the initial rental payment, including 
     any fees, taxes, or other charges which may be required at or 
     before the date of consummation of the agreement.
       ``(2) The amount and timing of rental renewal payments.
       ``(3) The total number and the total dollar amount of 
     rental payments and other charges necessary to acquire 
     ownership of the property.
       ``(4) A statement that the consumer will not own the 
     property until the consumer has made the total dollar amount 
     necessary to acquire ownership.
       ``(5) A statement that the total dollar amount of payments 
     does not include other charges, such as late payment or 
     reinstatement fees, and that the consumer should examine the 
     rental-purchase agreement for an explanation of these 
     charges, if applicable.
       ``(6) A statement that the consumer may be responsible for 
     the fair market value of the property if it is lost, stolen, 
     damaged, or destroyed.
       ``(7) A statement indicating whether the property is new or 
     used, except that a statement that indicates that new 
     property is used property is not a violation of this title.
       ``(8) A statement of--
       ``(A) the manufacturer's suggested retail price, where 
     applicable; or
       ``(B) the price for which the property is available from 
     the merchant in a cash sale.
       ``(9) A clear statement of the terms of the consumer's 
     option to purchase.
       ``(10) A statement--
       ``(A) identifying the party that is responsible for 
     maintaining or servicing the property while it is being 
     rented;
       ``(B) describing that responsibility; and
       ``(C) disclosing that if any part of a manufacturer's 
     express warranty covers the property at the time the consumer 
     acquires ownership of the property, the warranty will be 
     transferred to the consumer if allowed by the terms of the 
     warranty.
       ``(11) The date of consummation of the transaction and the 
     identities of the merchant and consumer.

     ``Sec. 1007. Point-of-sale disclosures

       ``Each item of property displayed or offered pursuant to a 
     rental-purchase agreement shall have affixed to it a point-
     of-sale card, tag, or label that clearly and conspicuously 
     discloses only the following:
       ``(1) Whether the property is new or used.
       ``(2) The price of the property in a cash sale.
       ``(3) The amount of each rental payment under the 
     agreement.
       ``(4) The total number of rental payments necessary to 
     acquire ownership of the property under the agreement.
       ``(5) The total dollar amount of rental payments necessary 
     to acquire ownership of the property under the agreement.

     ``Sec. 1008. Prohibited practices

       ``(a) A rental-purchase agreement may not contain--
       ``(1) a confession of judgment;
       ``(2) a negotiable instrument;
       ``(3) a security interest or any other claim of a property 
     interest in any goods except those goods the use of which is 
     provided by the merchant pursuant to the agreement;
       ``(4) a wage assignment; or
       ``(5) a waiver by the consumer of a claim or defense.
       ``(b) Each rental-purchase agreement shall--
       ``(1) provide a statement of any obligation of the consumer 
     and the merchant under the agreement to repair any defect or 
     malfunction of the property covered by the agreement, and any 
     limitation of those obligations;
       ``(2) provide that the consumer may terminate the agreement 
     without penalty by voluntarily surrendering or returning the 
     property covered by the agreement upon expiration of any 
     rental term; and
       ``(3) contain a provision for reinstatement of the 
     agreement, which at a minimum--
       ``(A) permits a consumer who fails to make a timely rental 
     renewal payment to reinstate the agreement, without losing 
     any rights or options which exist under the agreement, by the 
     payment of all past due rental charges and any late fee, 
     within 7 days after the renewal date;
       ``(B) if the consumer returns or voluntarily surrenders the 
     property covered by the agreement, other than through 
     judicial process, during the applicable reinstatement period 
     set forth in subparagraph (A), permits the consumer to 
     reinstate the agreement during a period of at least 30 days 
     after the date of the return or surrender of the property by 
     the payment of all past due rental charges, and any 
     applicable redelivery, repair, or late fees; and
       ``(C) if the consumer has paid 60 percent or more of the 
     total dollar amount of payments necessary to acquire 
     ownership of the property under the agreement and returns or 
     voluntarily surrenders the property, other than through 
     judicial process, during the applicable reinstatement period 
     set forth in subparagraph (A), permits the consumer to 
     reinstate the agreement during a period of at least 90 days 
     after the date of the return of the property by the payment 
     of all past due rental charges, and any applicable 
     redelivery, repair, or late fees.
       ``(c) Subsection (b) shall not be construed to prevent a 
     merchant from attempting to repossess property during the 
     reinstatement period, but such a repossession does not affect 
     the consumer's right to reinstate. Upon reinstatement, the 
     merchant shall provide the consumer with the same property, 
     or substitute property of comparable quality and condition.

     ``Sec. 1009. Collection practices

       ``(a) A merchant under a rental-purchase agreement, in 
     communicating with any person other than the consumer for the 
     purpose of acquiring information as to the location of a 
     consumer--
       ``(1) shall identify himself or herself and state that he 
     or she is confirming or correcting location information 
     concerning the consumer;
       ``(2) shall not communicate with any person more than once, 
     unless--
       ``(A) requested to do so by the person; or
       ``(B) the merchant reasonably believes that the earlier 
     response is erroneous or incomplete and that the person now 
     has correct or complete location information;
       ``(3) shall not communicate by postcard;
       ``(4) shall not use any language or symbol on any envelope 
     or in the contents of any communication which indicates that 
     the communication relates to the recovery or repossession of 
     property; and
       ``(5) shall not communicate with any person other than the 
     consumer's attorney, after the merchant knows the consumer is 
     represented by an attorney with regard to the rental-purchase 
     agreement and has knowledge of, or can readily ascertain, the 
     attorney's name and address, unless the attorney fails to 
     respond within a reasonable period of time to communication 
     from the merchant or unless the attorney consents to direct 
     communication with the consumer.
       ``(b)(1) Without the prior consent of the consumer given 
     directly to the merchant or the express permission of a court 
     of competent jurisdiction, a merchant shall not communicate 
     with a consumer in connection with the recovery or 
     repossession of property--
       ``(A) at the consumer's place of employment;
       ``(B) at any unusual time or place or a time; or
       ``(C) at any place known or which should be known to be 
     inconvenient to the consumer.
       ``(2) In the absence of knowledge of circumstances to the 
     contrary, a merchant shall assume that the convenient time 
     for communicating with a consumer is after 8:00 a.m. and 
     before 9:00 p.m., local time at the consumer's location.
       ``(c) A merchant may not communicate, in connection with a 
     rental-purchase agreement, with any person other than the 
     consumer, the consumer's attorney, or the merchant's 
     attorney, except--
       ``(1) as reasonably necessary to acquire location 
     information concerning the consumer in accordance with 
     subsection (a);
       ``(2) after receiving prior consent from the consumer given 
     directly to the merchant;
       ``(3) after receiving express permission of a court of 
     competent jurisdiction; or
       ``(4) as reasonably necessary to effectuate a post-judgment 
     judicial remedy.
       ``(d) If a consumer notifies the merchant in writing that 
     the consumer desires the merchant to cease further 
     communication with the consumer, the merchant shall not 
     communicate further with the consumer with respect to the 
     rental-purchase agreement, except--
       ``(1) to advise the consumer that the merchant's further 
     efforts to communicate are being terminated;
       ``(2) to notify the consumer that the merchant may invoke 
     specified remedies allowable under law which are ordinarily 
     invoked by the merchant; or
       ``(3) as necessary to effectuate any post-judgment remedy.
       ``(e) A merchant shall not--
       ``(1) use or threaten to use violence or criminal means to 
     harm the physical person, reputation, or property of any 
     person;
       ``(2) use obscene, profane, or abusive language;
       ``(3) cause a telephone to ring, or engage any person in 
     telephone conversation, repeatedly or continuously with 
     intent to annoy, abuse, or harass any person;
       ``(4) place any telephone call without disclosing the 
     caller's identity; or
       ``(5) perform any other act intended to harass or abuse a 
     consumer.

     ``Sec. 1010. Receipts and accounts

       ``A merchant shall provide the consumer a written receipt 
     for each payment made by cash or money order.

     ``Sec. 1011. Renegotiations and extensions

       ``A renegotiation of a rental-purchase agreement is deemed 
     to be a new agreement for purposes of this title, requiring 
     new disclosures. A renegotiation shall be considered to occur 
     when an existing rental-purchase agreement is satisfied and 
     replaced by a new agreement undertaken by the same merchant. 
     Events such as the following shall not be treated as 
     renegotiations:
       ``(1) The addition or return of property in a multiple-item 
     agreement or the substitution of property, if in either case 
     the average payment allocable to a payment period is not 
     changed by more than 25 percent.
       ``(2) A deferral or extension of one or more periodic 
     payments, or portions of a periodic payment.
       ``(3) A reduction in charges in the agreement.
       ``(4) An agreement involving a court proceeding.
       ``(5) Any other event described in regulations prescribed 
     by the Board.

     ``Sec. 1012. Rental-purchase advertising

       ``(a) If an advertisement refers to or states the amount of 
     any payment or the right to acquire ownership, the merchant 
     that makes the advertisement shall also clearly and 
     conspicuously state in the advertisement the following items, 
     as applicable:
       ``(1) That the transaction advertised is to occur under a 
     rental-purchase agreement.
       ``(2) The total number and total dollar amount of rental 
     payments necessary to acquire ownership under the agreement.
       ``(3) That the consumer acquires no ownership rights in the 
     property if the total dollar amount of rental payments 
     necessary to acquire ownership is not paid.
       ``(b) The owner or personnel of any medium in which an 
     advertisement appears or through which it is disseminated 
     shall not be liable for a violation of this section.
       ``(c) Subsection (a) does not apply to an advertisement 
     which--
       ``(1) does not refer to or state the amount of any payment,
       ``(2) is published in the yellow pages of a telephone 
     directory or in any similar directory of businesses, or
       ``(3) is displayed in the merchant's place of business.

     ``Sec. 1013. Administrative enforcement

       ``(a) The requirements imposed by this title shall be 
     enforced by the Board.
       ``(b) All of the functions and powers of the Board under 
     this Act are available to the Board to enforce compliance by 
     any person with the requirements imposed by this title.

     ``Sec. 1014. Civil liability

       ``(a) Except as otherwise provided in this title, a 
     merchant who willfully violates this title with respect to a 
     consumer is liable to the consumer in an amount equal to the 
     following:
       ``(1) In an action by an individual consumer, the sum of--
       ``(A) actual damages sustained by the consumer as a result 
     of the violation; and
       ``(B) not less than $100.
       ``(2) In a class action, the amount the court determines to 
     be appropriate with no minimum recovery as to each member.
       ``(b)(1) An action under this section may be brought in any 
     United States district court of competent jurisdiction, by 
     not later than one year of the date of the occurrence of the 
     violation.
       ``(2) This subsection does not bar a consumer from 
     asserting a violation of this title in an action to collect a 
     debt brought more than one year after the date of the 
     occurrence of the violation as a matter of defense by 
     recoupment or set off, except as otherwise provided by State 
     law.
       ``(c)(1) A consumer may not take any action to offset any 
     amount for which a merchant is potentially liable under 
     subsection (a) against any amount owed by the consumer, 
     unless the amount of the merchant's liability has been 
     determined by judgment of a court of competent jurisdiction 
     in an action in which the merchant was a party.
       ``(2) This subsection does not bar a consumer who is in 
     default on the obligation from asserting a violation of this 
     title as an original action, or as a defense or counterclaim 
     to an action brought by the merchant to collect amounts owed 
     by the consumer.

     ``Sec. 1015. Defenses

       ``(a) A merchant is not liable under section 1014 for a 
     violation of the requirements of section 1006 if within 15 
     days after first having knowledge of the violation, and 
     before an action under section 1014 is filed or written 
     notice of the violation is received from the consumer, the 
     merchant notifies the consumer of the violation and makes 
     whatever adjustments in the account are necessary to assure 
     that the consumer will not be required to pay an amount in 
     excess of the amounts actually disclosed.
       ``(b)(1) A merchant is not liable under this title for any 
     act done or omitted in good faith in conformity with any 
     rule, regulation, interpretation, or approval promulgated by 
     the Board or by an official duly authorized by the Board.
       ``(2) Paragraph (1) applies even if, after the act or 
     omission has occurred, the rule, regulation, interpretation, 
     or approval is amended, rescinded, or determined by judicial 
     or other authority to be invalid for any reason.
       ``(c) A merchant is not liable under this title for a 
     violation if the merchant establishes, and at the time of the 
     violation is implementing, procedures reasonably calculated 
     to prevent the violation.

     ``Sec. 1016. Liability of assignees

       ``(a) For purposes of sections 1014 and 1015, the term 
     `merchant' includes an assignee of a merchant. However, an 
     action under section 1014 for a violation of this title may 
     be brought against an assignee only if the violation is 
     apparent on the face of the rental-purchase agreement to 
     which it relates. A violation apparent on the face of a 
     rental-purchase agreement includes a disclosure that can be 
     determined to be incomplete or inaccurate from the face of 
     the agreement. An assignee has no liability in a case in 
     which the assignment is involuntary.
       ``(b) In an action by or against an assignee, the 
     consumer's written acknowledgement of receipt of a disclosure 
     shall be conclusive proof that the disclosure was made, if 
     the assignee had no knowledge that the disclosure had not 
     been made when the assignee acquired the rental-purchase 
     agreement to which it relates.

     ``Sec. 1017. Regulations

       ``(a) The Board shall issue regulations to carry out the 
     purposes of this title, to prevent its circumvention, and to 
     facilitate compliance with its requirements. The regulations 
     may contain classifications and differentiations and may 
     provide for adjustments and exceptions for any class of 
     transaction.
       ``(b) The Board shall publish model disclosure forms and 
     clauses to facilitate compliance with the disclosure 
     requirements of this title and to aid consumers in 
     understanding transactions under rental-purchase agreements. 
     In designing forms, the Board shall consider the use by 
     merchants of data processing or similar automated equipment. 
     Use of the models shall be optional. A merchant who properly 
     uses the model disclosure forms shall be deemed to be in 
     compliance with the disclosure requirements.
       ``(c) Any regulation issued by the Board, or any amendment 
     or interpretation thereof, that requires a disclosure 
     different from the disclosures previously required by 
     regulations of the Board shall not be effective before the 
     October 1 that follows the date of promulgation by at least 6 
     months. The Board may at its discretion lengthen that period 
     of time to permit merchants to adjust their forms to 
     accommodate new requirements. The Board may also shorten that 
     period of time, notwithstanding the first sentence, if it 
     makes a specific finding that such action is necessary to 
     comply with the findings of a court or to prevent unfair or 
     deceptive practices. In any case, merchants may comply with 
     any newly promulgated disclosure requirement prior to its 
     effective date.

     ``Sec. 1018. Relation to state laws

       ``This title does not annul, alter, affect, or exempt any 
     person subject to this title from complying with the laws of 
     any State with respect to a matter covered by this title, 
     except to the extent that those laws--
       ``(1) are inconsistent with this title; and
       ``(2) provide a lesser degree of protection for consumers.

     ``Sec. 1019. Effect on government agencies

       ``No civil liability under this title may be imposed on the 
     United States or any of its departments or agencies, any 
     State or political subdivision, or any agency of a State or 
     political subdivision.''.
                                 ______

      By Mr. PELL (by request):
  S. 1957. A bill to provide for a United States contribution to the 
Interest Subsidy Account of the successor [EASF II] to the Enhanced 
Structural Adjustment Facility of the International Monetary Fund; to 
the Committee on Foreign Relations.


                            easf legislation

  Mr. PELL. Mr. President, by request, I introduce for appropriate 
reference a bill to provide for a United States contribution to the 
interest subsidy account of the successor [ESAF II] to the Enhanced 
Structural Adjustment Facility of the International Monetary Fund.
  This proposed legislation has been requested by the Department of the 
Treasury, and I am introducing it in order that there may be a specific 
bill to which Members of the Senate and the public may direct their 
attention and comments.
  I reserve my right to support or oppose this bill, as well as any 
suggested amendments to it, when the matter is considered by the 
Committee on Foreign Relations.
  I ask unanimous consent that the bill be printed in the Record at 
this point, together with the letter from the general counsel of the 
Department of the Treasury, which was received on March 16, 1994.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1957

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That the 
     Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is 
     amended by adding at the end thereof the following new 
     section:

     ``SEC. 61. CONTRIBUTION TO THE INTEREST SUBSIDY ACCOUNT OF 
                   THE SUCCESSOR (ESAF II) TO THE ENHANCED 
                   STRUCTURAL FACILITY OF THE INTERNATIONAL 
                   MONETARY FUND.

       ``(a) Contribution Authorized.--
       ``(1) In general.--Subject to paragraph (2), the United 
     States Governor of the Fund may contribute $100,000,000 to 
     the Interest Subsidy Account of the successor (ESAF II) to 
     the Enhanced Structural Adjustment Facility of the Fund on 
     behalf of the United States.
       ``(2) Contribution.--The contribution authorized in 
     paragraph (1) shall be effective only to such extent or in 
     such amounts as are provided in advance in appropriations 
     Acts.
       ``(b) Limitation on Authorization of Appropriations.--To 
     pay for the contribution authorized in subsection (a), there 
     are authorized to be appropriated $100,000,000 without fiscal 
     year limitation for payment by the Secretary of the 
     Treasury.''.
                                  ____



                                   Department of the Treasury,

                                       Washington, March 14, 1994.
     Hon. Al Gore,
     President of the Senate, Washington, DC.
       Dear Mr. President: I am pleased to transmit herewith a 
     draft bill, ``To provide for a United States contribution to 
     the Interest Subsidy Account of the successor (ESAF II) to 
     the Enhanced Structural Adjustment Facility of the 
     International Monetary Fund.''
       The bill would authorize the United States Governor of the 
     International Monetary Fund (Fund) to contribute $100,000,000 
     on behalf of the United States to the Interest Subsidy 
     Account of ESAF II. The commitment to make this contribution 
     is subject to obtaining the necessary appropriations.
       The original ESAF was established in 1987 to enable the 
     Fund to provide balance of payments assistance on 
     concessional terms of low-income developing countries that 
     have protracted payments problems and that are prepared to 
     adopt a multi-year economic and structural reform program. On 
     December 15, 1993, the Fund adopted a decision to establish 
     ESAF II once the Executive Board determines that sufficient 
     contributions have been made to the facility's Interest 
     Subsidy Account. The establishment of ESAF II would help 
     assure that countries with minimum access to resources that 
     are willing to initiate reforms are provided with continued 
     access to resources on concessional terms.
       It would be appreciated if you would lay the draft bill 
     before the Senate. An identical draft bill has been 
     transmitted to the Speaker of the House of Representatives.
       The Office of Management and Budget has advised that there 
     is no objection to the transmittal of this draft bill to the 
     Congress, and that enactment would be in accord with the 
     Administration's program.
           Sincerely,
                                                   Jean E. Hanson.
                                 ______

      By Mr. MURKOWSKI (for himself, Mr. Stevens, and Mr. Akaka):
  S. 1958. A bill to amend title 38, United States Code, to exclude 
certain payments received under the Alaska Native Claims Settlement Act 
from the determination of annual income for purposes of eligibility for 
veterans pension; to the Committee on Veterans Affairs.


                      veterans pension legislation

  Mr. MURKOWSKI. Mr. President, often when proposed legislation is 
presented to this body by its sponsors, they state that they are 
pleased to be introducing the bill in question. Usually, Mr. President, 
that is the case with me. Today, however, I am not entirely happy to be 
introducing a bill which, in my view, should not be necessary. 
Unfortunately, the failure of one Federal agency, the Department of 
Veterans Affairs [VA], to perceive accurately the clear intent of the 
Congress when it enacted amendments to the Alaska Native Claims 
Settlement Act [ANCSA] in 1987 makes this bill, which is purely 
technical and which seeks only to put into practical affect 
congressional intent as expressed in ANCSA, necessary. Before I launch 
into an explanation of the legislation I propose today, however, I want 
to thank my distinguished colleagues, Senators Stevens and Akaka, for 
joining me as cosponsors of this bill.
  As many Members of this body will recall, the Congress has labored 
hard over the years to reach a series of compromises relating to the 
settlement of the land claims of Alaska's Native peoples. Those 
compromises are reflected in the text, and the underlying purposes of, 
the Alaska Native Claims Settlement Act, codified at 43 U.S.C. section 
1601 et seq., as enacted in 1971, and amended in 1988. By the 
legislation that I introduce today, I do not intend to upset--or to 
effect in any way whatsoever--the delicate balance of compromises 
reflected in this landmark legislation; indeed, I would not amend ANCSA 
at all. My only purpose is to see to it that ANCSA, as amended in 1988, 
be put into full effect by requiring that the VA disregard payments 
received by Alaska Natives under ANCSA--as intended by the 1988 
amendments to ANCSA--when it computes Alaska Natives' eligibility for 
VA's means-tested pensions programs. My amendment would amend statutes 
which govern VA's pension program to accomplish that result.
  To fully explain why this legislation is necessary, I need to outline 
briefly the general terms of ANCSA and, in particular, a relatively 
minor--but absolutely critical--provision of the statute relating to 
needs-based Federal benefits. The overall purpose of ANCSA, as stated 
in the legislation itself, is to provide ``a fair and just settlement 
of all claims by Natives and Native groups of Alaska, based on 
aboriginal land claims.'' Public Law 92-203, section 2(a), 85 Stat. 688 
(1971). ANCSA was, and remains, an unusual--indeed, a landmark--piece 
of legislation in resolving Native land claims. In the words of our 
colleague, Senator Bingaman, ANCSA adopted ``a novel, experimental 
approach in [the Federal Government's] relationship with Native 
Americans. It departed from the conventional method of * * * settling 
tribal land claims [by] creating * * * a framework for * * * 
administering Native lands and funds through a * * * [Native]-run 
corporate structure.'' S. Rept. No. 100-201 at 45, additional views.

  To summarize, under ANCSA, Native Alaskans received a combination of 
cash, mineral lease proceeds, and land in exchange for the 
extinguishment of aboriginal land claims. Those assets, however, were 
not distributed directly to individual Native Alaskans when ANCSA was 
enacted in 1971. Rather, ANCSA authorized the creation of 12 Native 
owned and operated regional corporations to administer those assets for 
the benefit of Alaska Native shareholders. These corporations continue 
to exist today, and they distribute funds received in settlement of 
Native land claims, and funds generated from corporate earnings, to 
Native village corporations and to Alaska Native shareholders.
  When ANCSA was enacted, the question arose as to whether these 
distributions should be taken into account in determining whether an 
Alaska Native would be eligible to receive Federal Food Stamp 
assistance. The Congress concluded--wisely, I think--that it would not 
be fair to penalize Alaska Natives for settling their land claims by 
causing them to lose eligibility for food stamps as a result of 
receiving settlement payments. Thus, ANCSA, as originally enacted, 
contained a provision, codified at 43 U.S.C. section 1626(b), which 
stated that ``in determining the eligibility of any household to 
participate in the Food Stamp Program, any compensation, remuneration, 
revenue, or other benefit received by any member of such household * * 
* shall be disregarded.'' It was only when ANCSA was amended in 1988 
that this ``compensation disregard'' provision was expanded.
  As was stated in the Senate report accompanying the 1988 amendments 
to ANCSA,

       Currently, section 29 of ANCSA directs that any 
     compensation, remuneration, revenue or other benefit received 
     pursuant to ANCSA ``shall be disregarded'' in determining 
     eligibility to participate in the Food Stamp Program. Natives 
     have been denied benefits or have received diminished 
     benefits in other Federal or federally-assisted programs, 
     because of benefits received under ANCSA. Accordingly, the 
     new subsection (c) in this section clarifies the present 
     protections as including all Federal or federally-assisted 
     programs. It also specifically exempts dividends up to $2,000 
     per individual per year and dividends and distribution of 
     stock from consideration in eligibility determinations. 
     Application of less restrictive eligibility tests are not 
     prohibited by this language. S. Rept. 100-201 at 39 (emphasis 
     added).

  Based on this clear expression of intent to broaden and expand the 
already-existing ``disregard'' provisions within section 29 of ANCSA, 
the statute was amended to read as follows:

       In determining the eligibility of a household, an 
     individual Native, or a descendant of a Native * * * to--

                           *   *   *   *   *

       (3) receive financial assistance or benefits, based on 
     need, under any Federal program or federally-assisted 
     program,

     none of the following received from a Native corporation, 
     shall be considered or taken into account as an asset or 
     resource:
       (A) cash (including cash dividends on stock received from a 
     Native corporation) to the extent that it does not, in the 
     aggregate, exceed $2,000 per individual per annum;
       (B) stock (including stock issued or distributed by a 
     Native corporation as a dividend or distribution on stock);
       (C) a partnership interest;
       (D) land or an interest in land (including land or an 
     interest in land received from a Native Corporation as a 
     dividend or distribution on stock); and
       (E) an interest in a settlement trust.
     43 U.S.C. section 1626(c) (emphasis added).

  It seems to me, Mr. President, that the law could hardly be clearer. 
By any reading of this statute, and the explanation of it contained in 
the Senate Energy and Natural Resources Committee's report, one can 
only conclude that ANCSA payments are to be disregarded not only for 
purposes of food stamps, but for any and all Federal needs-based 
benefits programs. To the extent that the words of the statute, or the 
Senate's expression of purpose, might have admitted to any ambiguity--
and, frankly, I do not see how anyone could contend that they do--the 
requirement that ANCSA be construed in a fashion sympathetic to Native 
interests, see, e.g., Cape Fox Corp. v. U.S., 4 Cl. Ct. 223, 231 
(1983), would require that any such ambiguity be resolved to require 
the ``disregarding'' of ANCSA payments. When one considers that the 
needs-based benefit program in question is a veterans program--a 
program which embodies a longstanding tradition of resolving doubt in 
the veteran's favor--the door should have been slammed, I think, on any 
thought that ANCSA dividends might be used to reduce pension benefits 
to which a veteran might be eligible.

  Unfortunately, the VA's general counsel has taken a differing view. 
In two separate legal opinions, the general counsel has stated, in 
effect, that despite the foregoing, VA shall take ANCSA dividends into 
account for purposes of determining eligibility for, and the amount of 
benefit received under, VA's veterans pension program. This, Mr. 
President, is totally indefensible in my view.
  As is made clear in ANCSA, payments received under ANSCA--whether 
they be cash, cash dividends, up to $2,000 per year, stock dividends, 
land, whatever--are not to be ``considered'' or ``taken into account'' 
for purposes of determining eligibility for ``benefits, based on need, 
under any Federal program.'' Equally, ANCSA payments are not to be 
taken into account for purposes of diminishing needs-based Federal 
benefits. See S. Rept. 100-201, supra. VA's pension program--which is 
not a retirement pension program but is, rather, an ``income 
maintenance'' program which assures that wartime veterans who are 
permanently and totally disabled due to nonservice connected disability 
will not be forced to live below subsistence income levels--is clearly 
a ``benefit, based on need.'' See 38 U.S.C. chapter 15. And yet, VA 
allows payments received pursuant to ANCSA to be taken into account in 
determining if one is eligible to receive pension benefits. So, for 
example, a veteran having an annual income of $6,000 who would 
otherwise be eligible for pension would be disqualified if he or she 
were to receive $2,000 per year in cash dividends under ANCSA. 
Equally--and more importantly for practical purposes--VA offsets ANCSA 
dividends on a dollar-for-dollar basis when it computes the amount of 
pension benefits to be paid. So, for example, a VA pension recipient 
who would otherwise receive $7,397 per year in pension benefits would 
only receive $5,397 if he or she were also to be a recipient of $2,000 
per year in ANCSA distributions. This despite the clear indication of 
congressional intent to the contrary.
  My colleagues might ask how VA justifies such action. I am told that 
VA reasons as follows: ANCSA says that cash paid to Alaska Natives 
shall not be taken into account as ``assets'' or ``resources;'' a 
person's ``assets'' or ``resources'' are akin to his or her ``net 
worth;'' therefore, Congress intended that ANCSA payments not be taken 
into account for determining eligibility only for a certain kind of 
means tested benefits programs--those that rely on ``net worth'' 
computations--as distinguished from ``annual income'' computations--to 
determine eligibility; eligibility for VA pension programs is governed 
by the applicant's ``annual income,'' not his or her ``net worth;'' 
therefore, ANCSA's directive that Native Corporation dividends be 
disregarded does not apply to VA pension programs, even though 
eligibility is based on need, since pension eligibility is determined 
by reference to annual income, not net worth. I will only comment, at 
this point, that this chain of reasoning stretches out of all 
proportion any considered interpretation of what Congress actually 
intended when it amended ANCSA in 1988.
  Mr. President, the Congress had no such income versus net worth 
distinction in mind when it expanded the disregard provision of ANCSA. 
It had in mind something more direct: It wanted to preclude ANCSA 
payments from causing Alaska Natives to be ineligible for food stamps, 
and any other needs-based Federal benefits; and it wanted to assure 
that such benefits would not be diminished as a result of ANCSA 
receipts. My bill, Mr. President, would see to it that that clear 
intent would be put into effect by forbidding VA from taking ANCSA 
payments into account for purposes of its pension programs.
  As I stated, Mr. President, when I opened these comments, I am not 
particularly pleased to introduce this legislation. In light of VA's 
interpretation of the law, this legislation is necessary. But it should 
not be necessary since, to my way of thinking, the words and policy of 
ANCSA clearly required the result dictated by this bill: a disregarding 
of Native Corporation payments under ANCSA for purposes of both 
eligibility for veterans pension payments and the amounts of those 
payments. If there is a lesson to be learned here it is that whatever 
words we choose in legislating we cannot rely on logic and common sense 
to guide the interpretation of those words.
  I ask my colleagues to support this common sense piece of 
legislation. Mr. President, I ask unanimous consent that the 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. 1958

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

     SECTION 1. EXCLUSION OF PAYMENTS FROM DETERMINATION OF ANNUAL 
                   INCOME.

       Section 1503(a) of title 38, United States Code, is 
     amended--
       (1) by striking out ``and'' at the end of paragraph (9);
       (2) by striking out the period at the end of paragraph 
     (10)(B) and inserting in lieu thereof ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(11) cash, stock, land, or other interest referred to in 
     subparagraphs (A) through (E) below paragraph (3) of section 
     29(c) of the Alaska Native Claims Settlement Act (43 U.S.C. 
     1626(c)), whether attributable to the disposition of real 
     property, profits from the operation of real property, or 
     otherwise, that is received from a Native Corporation under 
     such Act (43 U.S.C. 1601 et seq.).''.
                                 ______

      By Mr. GRAHAM:
  S. 1959. A bill to prevent delay in the completion of Federal 
construction projects, and for other purposes; to the Committee on 
Governmental Affairs.


                federal construction project legislation

  Mr. GRAHAM. Mr. President, I rise today to introduce a bill to speed 
up Federal construction projects. My bill is similar to a Florida State 
law which speeds up funding for State construction projects. The 
purpose was to accelerate the progress of getting capital outlay 
projects started. According to William Scaringe, the director of the 
Florida division of building construction, the Florida law has been 
very ``effective and the State likes it.'' Mr. Scaringe said that 
during the first 3 to 4 years under the Florida law, projects would 
bunch up that agencies wanted to get bid. Now Mr. Scaringe says the 
State has no problem with the mandated deadlines. The State has the 
controls in place so projects get funded and the funds don't sit 
waiting for a project.
  My bill is very similar to the State of Florida's law. Under my bill, 
a Federal project would lose its funding unless work begins within 2 
years of the Federal appropriation. The goal is to speed up 
construction, to create jobs, and to use Federal dollars more 
efficiently. We should not leave Federal money sitting around and 
gathering dust when it could be used for worthwhile projects.
  Under my bill, work on each phase of the project would have to begin 
within 2 years of Federal appropriation for that phase. If a project 
were funded for design, design would have to begin within 2 years. If a 
project were fully funded, construction would have to begin within 2 
years.
  Since 1992, my staff has reviewed federally funded construction 
projects in Florida. At this time we have found that more than one-
fourth of Florida's federally funded construction projects are running 
behind schedule.
  When we see that projects are delayed, I have written letters to the 
Federal and State agencies whenever a project is behind schedule. In 
these letters, I have tried to determine why the projects are lagging 
and whether I can help expedite them.
  The bill would provide the incentive to diminish these delays, and to 
find alternatives for projects that are hopelessly behind schedule. It 
would also discourage Congress from appropriating money to projects 
that have not been carefully planned out and would help ensure that 
construction begins on projects before their design is obsolete.
  In December 1993, 30 percent of Florida's projects--or 396 million 
dollars' worth--were listed as delayed.
  Among the construction projects that are substantially delayed around 
the country are:
  IRS Complex, Chamblee, GA--Site acquisition appropriated in 1990. 
Work has not begun.
  Federal Building-Courthouse, Boston, MA--Construction appropriated in 
1990. Construction has not begun.
  Southeast Federal Center-Infrastructure, Washington, DC--Appropriated 
in 1991. Construction delayed until 1996.
  The bill also requires each Federal agency to report to the Director 
of the Office of Management and Budget on a quarterly basis on the 
status of each ongoing construction project that is under the agency's 
jurisdiction. The agencies shall identify each project, which projects 
are delayed and the reason for the delay. This information shall be 
given to the Director of OMB who shall work with each agency to 
facilitate removal of the delay on each project. The Director will then 
report to the Congress on a annual basis on the construction projects.
  The bill would only affect projects authorized after its enactment.
  Mr. President, the bill is an important step to improve the Federal 
Government's fiscal responsibility and I encourage my colleagues to 
review and cosponsor this bill.
                                 ______

      By Mr. McCAIN:
  S. 1960. A bill to increase housing opportunities for Indians; to the 
Committee on Indian Affairs.


           indian housing development and reform act of 1994

  Mr. McCAIN. Mr. President, I rise today to introduce the Indian 
Housing Development and Reform Act of 1994.
  Before I begin my remarks, I want to publicly express my appreciation 
to Senator Mikulski, Senator Gramm, and their staffs for their efforts 
to secure and preserve increased funding for Indian housing. I know 
their efforts have given Indian people a renewed sense of hope that 
their housing needs have not been forgotten.
  While the majority of our Nation has been served under the public 
housing program since it was first established in 1937, American 
Indians and Alaska Natives were not declared eligible for Federal 
housing programs until 1961. And in fact, a substantial number of 
Indian housing units were not authorized until the early 1970's. The 
Office of Indian Housing at the Department of Housing and Urban 
Development was not permanently established until 1978. Given the slow 
evolution of the Indian housing program, it is not hard to understand 
why there continues to be a substantial number of Indian families in 
need of safe, decent, and sanitary housing.
  I want to briefly highlight a few key provisions contained in this 
bill.
  First, the bill increases the current Indian housing authorization 
from 3,000 to 4,000 units. The primary concern of Indian tribes 
continues to be the authorization level for the development of new 
housing units. While appropriations for Indian housing have been near 
the presently authorized level for the past several years, I believe we 
can do better.
  Second, my bill would reform Federal Indian housing programs by 
taking the Housing Improvement Program now administered by the Bureau 
of Indian Affairs at the Department of the Interior and consolidating 
it with the primary Federal Indian housing programs now administered by 
the Office of Native American Programs at the Department of Housing and 
Urban Development.
  The objective of this consolidation is not--repeat--not to eliminate 
the Housing Improvement Program [HIP]. No one disputes the fact that 
HIP is a valuable source of housing assistance. Unfortunately, 
according to five separate audits by the Department of the Interior's 
inspector general, HIP has been seriously mismanaged and abused. In 
response to these audit findings, the former Assistant Secretary for 
Indian Affairs wrote the following memorandum chastising bureau 
personnel for failing to do their job:

                                   Department of the Interior,

                                   Washington, DC, April 12, 1993.
     To: All Area Directors, Director, Office of Self-Governance.
     Through: Acting Deputy Commissioner of Indian Affairs.
     From: Assistant Secretary-Indian Affairs.
     Subject: Program Management.
       The Housing Improvement Program (HIP) started informally in 
     1964 as an outgrowth of disaster relief efforts in California 
     and Montana. Regulations were developed in 1975 and 
     contracting pursuant to P.L. 93-638 began in late 1978. In 
     1983, Congress removed HIP funding from what was then known 
     as the ``Band'' placing it in a construction account and 
     directing that: ``HIP be more cost effective and better meet 
     housing need.'' The result was the redirected HIP which, 
     among other things, included (1) inventory of housing need 
     and (2) use of model contract.
       A General Accounting Office (GAO) report in 1987 showed 
     that redirected HIP internal controls needed strengthening in 
     three areas. The Acting Assistant Secretary--Indian Affairs 
     issued a five page memorandum on August 7, 1987, mandating 
     corrective action covering model contracting enforcement, 
     construction monitoring and inspection, and use of the 
     selection criteria.
       In 1992, the Office of the Inspector General (OIG) began 
     HIP audits for selected Bureau of Indian Affairs (BIA) 
     operated programs in Albuquerque and Sacramento Areas. They 
     also audited one tribal P.L. 93-638 contract in Aberdeen and 
     one in Sacramento. All reports pointed out serious management 
     problems with the Housing Improvement Program. Similar 
     weaknesses were identified by BIA staff in those Areas who 
     applied A-123 reviews to HIP. It is noted that not all Areas 
     fulfilled their responsibility with this internal review.
       The OIG has also completed a HIP audit for the Portland 
     Area. The pending report covers two BIA Agency HIP operations 
     and three tribally contracted programs. It is anticipated 
     that the Portland Audit will also be highly critical of HIP 
     management.
       In the past eighteen months we have been embarrassed by GAO 
     and OIG reports on Social Services, Credit and Financing, and 
     now HIP. A common thread which runs through these audits is 
     that we are not being responsible program managers. We are 
     not insuring compliance to regulations as to client 
     eligibility and requirements. We are not verifying, 
     documenting, and enforcing.
       It doesn't seem to matter whether the program is BIA 
     operated or the services provided pursuant to P.L. 93-638 
     contracts, we are failing to do our job. Public funds are 
     being wasted; clients not eligible are being served and 
     clients who should be served are not receiving needed 
     assistance. This must stop.
       As to HIP, we are working towards revision of 25 CFR 256 
     and updating the 64 BIAM. This will take some time. We are 
     also developing an instrument for review of Area HIP. This 
     will also take time. Meanwhile, each Area Director and the 
     Director, Office of Self-Governance is required to do the 
     following:
       1. Review the Albuquerque, Sacramento and Pit River OIG 
     Audits. Reports for Omaha and Portland will be distributed 
     when they become final.
       2. Review the position paper on redirected HIP which was 
     approved by the Deputy Assistant Secretary--Indian Affairs on 
     April 30, 1985, and transmitted to all Area Directors on May 
     21, 1985, by the Deputy Director, Office of Indian Services.
       3. Review the August 7, 1987, memorandum to All Area 
     Directors from the Acting Assistant Secretary--Indian Affairs 
     entitled ``General Accounting Office Audit Report on Indian 
     Housing.''
       4. Review 25 CFR 256.
       5. Certify that housing personnel are knowledgeable of 
     those trade crafts required by page 11 of the redirected HIP 
     Position Paper.
       6. Certify that P.L. 93-638 contractors are using the model 
     contract as required by ``redirected HIP'' and specifically 
     mandated by the above referenced August 7, 1987, memorandum.
       7. Certify that all units for which HIP funds are being 
     expended have been inspected pursuant to 25 CFR 256.9, 
     required by page 10 of the ``Redirect'' and mandated by page 
     2 of the August 7, 1987, memorandum.
       8. Certify that all HIP recipients are eligible pursuant to 
     25 CFR 256.6 and selected in accord with 256.7 and page 2 of 
     the 1987 memorandum.
       9. Certify that Contracting Officers award HIP Contracts 
     only after concurrence from the Housing Officers as to work 
     plans, eligibility of homeowners, and funding. A copy of 
     final inspection should become part of the contract file and 
     Housing office records.
       I expect a personal certification from each Area Director 
     to the above nine (9) requirements by COB May 17, 1993. Your 
     certification is to be addressed to the Deputy Commissioner 
     of Indian Affairs. Any certification which cannot assure 
     total compliance shall include a specific Action Plan not to 
     exceed six (6) months for corrective action.
       In conclusion, and perhaps waxing philosophically, a few 
     words need to be said about public officials. Private 
     citizens can do anything they so desire so long as it is not 
     specifically prohibited by law. Public officials can only do 
     those things which are specifically authorized. This is a 
     very significant difference. Our authorizations derive from 
     Public Laws, regulations, manuals, policies, court cases and 
     IBIA decisions. If it is not authorized, we cannot do it.
       Regardless of whether the desired action is perceived as 
     good or bad, we do not possess the authority to act unless 
     specifically authorized. We do not possess authority to serve 
     ineligible clients, approve less than professional work (such 
     as shoddy work on a HIP house) or fail to verify basic 
     requirements.
       Simply put, we have been acting outside of our authority (a 
     very incriminating comment against public officials in a 
     liberal democracy) to allow those things to occur which now 
     have been documented in audits going back for a decade. We 
     must become professional public officials.

  The final report of the National Commission on American Indian, 
Alaska Native, and Native Hawaiian Housing did not mince words about 
the BIA's administration of HIP:

       The BIA has consistently failed to fulfill its 
     responsibility to Native American people mandated by the 
     Snyder Act. In testimony before the Commission, the BIA has 
     admitted that it failed to meet its own goals for providing 
     basic housing needs. Its major housing program for Indians, 
     the Housing Improvement Program, has functioned for over 20 
     years as a self-perpetuating bureaucracy unable to bring 
     about any significant improvements in the Native housing 
     crisis. BIA has underestimated housing needs and has built 
     only a fraction of the new homes desperately required in 
     Indian country. Annual HIP appropriations have been 
     significantly below the BIA's own declared need.

  Despite this criticism, the Commission recommended increased funding 
for HIP. Apparently, the Commission concluded that the need for housing 
assistance outweighed the need for HIP reform. I strongly disagree with 
the Commission. I believe it is important to ensure that all levels of 
government possess the integrity, accountability, and capability to 
meet the needs of Indian citizens. The overriding goal should be to 
strengthen and improve the capacity of the Federal and tribal 
governments to effectively and efficiently provide the necessary 
programs and services to the Indian people. I believe the best way to 
accomplish this goal for Indian housing is to transfer HIP to HUD.
  In addition, I believe the transfer of HIP to HUD is consistent with 
the administration's proposals for reinventing government 
which seeks to lower administrative expenses by improving productivity 
and efficiency. In fact, the report of the National Performance Review 
included several recommendations for the consolidation of various 
Federal programs that have a common goal. The transfer would also 
contribute to the President's goal of reducing Federal employment by 
252,000 full-time employees by 1999.
  I want to point out to my friends in Indian country that while I see 
merit in transferring HIP to HUD, it does not represent a general 
belief on my part that there needs to be a wholesale division and 
transfer of BIA programs to other Federal agencies as some people will 
argue.
  Finally, section 8 of the bill authorizes $500,000 in grants to 
Indian tribal governments to obtain technical assistance. In the past, 
the Congress has seen fit to identify one organization for Indian 
tribes to secure such assistance. After thinking carefully about this 
particular approach, I believe technical assistance is best arranged 
between an Indian tribe and the service provider that the tribe 
believes can best meet its needs. The service provider is then made 
directly accountable to the tribe and is likely to deliver a higher 
quality of service in return. I do not believe any organization is 
entitled to Federal assistance which establishes them as the sole 
provider. Organizations should earn the trust of the constituency they 
seek to serve.
  Mr. President, I ask unanimous consent that a copy of the bill and 
the section-by-section analysis to the bill be printed in the Record 
immediately following my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1960

       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 ``Indian Housing Development 
     and Reform Act of 1994''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) Indian tribes face an unprecedented crisis due to the 
     lack of shelter for a growing number of individuals and 
     families, including elderly persons, persons with 
     disabilities, and families with children;
       (2) the demand for Indian housing has become more severe 
     and, in the absence of more effective efforts and consistent 
     funding, is expected to become dramatically worse, 
     endangering the lives and safety of Indian and Alaska Native 
     people;
       (3) the Federal Government has a historical and special 
     legal relationship with, and resulting responsibility to, 
     Indian tribes;
       (4) included within the relationship referred to in 
     paragraph (3) is a trust responsibility to provide decent, 
     safe, sanitary, and affordable housing to the members of 
     Indian tribes residing on reservations;
       (5) the Inspector General of the Department of the Interior 
     has issued several audit reports on various area offices of 
     the Bureau of Indian Affairs and has concluded that the 
     Housing Improvement Program has been severely mismanaged and 
     abused;
       (6) as a result of the mismanagement and abuse of the 
     Housing Improvement Program, persons who are not eligible for 
     the Program are receiving assistance while persons who are 
     eligible for the Program are not receiving needed assistance;
       (7) the Secretary of Housing and Urban Development has the 
     primary responsibility for the delivery of Indian housing 
     services; and
       (8) the transfer of the Housing Improvement Program to the 
     Department of Housing and Urban Development will eliminate 
     useless bureaucracy and waste while allowing the Secretary of 
     Housing and Urban Development to administer the Housing 
     Improvement Program according to the Program's intended goals 
     and objectives.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Department.--The term ``Department'', unless otherwise 
     specified, means the Department of Housing and Urban 
     Development.
       (2) Incorporated definitions.--The terms ``Indian'', 
     ``Indian housing authority'', and ``Indian tribe'' have the 
     same meanings as in section 3 of the United States Housing 
     Act of 1937.
       (3) Program.--The term ``Program'' means the Housing 
     Improvement Program of the Bureau of Indian Affairs, 
     Department of the Interior, as set forth in part 256 of title 
     25, Code of Federal Regulations.
       (4) Secretary.--The term ``Secretary'', unless otherwise 
     specified, means the Secretary of Housing and Urban 
     Development.

     SEC. 4. HOUSING IMPROVEMENT PROGRAM.

       (a) Transfer of Program.--
       (1) In general.--The Program is hereby transferred to the 
     Department.
       (2) Effective date.--Paragraph (1) shall take effect on the 
     expiration of the 180-day period following the date of 
     enactment of this Act.
       (b) Program Goals.--Notwithstanding any other provision of 
     law, the goals of the Program are--
       (1) to benefit Indian families by providing decent, safe, 
     and sanitary shelter and by reducing the health and social 
     costs created by an unsafe and unsanitary environment; and
       (2) to provide for renovations, repairs, and additions to 
     existing Indian houses, including repairs to houses that 
     remain substandard but need repairs for the health or safety 
     of the occupants and repairs to bring Indian houses to 
     standard condition.
       (c) Administration of the Program.--
       (1) In general.--The Secretary shall carry out the Program 
     in accordance with this section.
       (2) Limitation on assistance.--Notwithstanding paragraph 
     (3) or any other provision of law, the Secretary, unless 
     otherwise authorized by the governing body of an Indian 
     tribe--
       (A) shall provide assistance under the Program only to the 
     governing body of an Indian tribe; and
       (B) shall not provide any such assistance to an Indian 
     housing authority.
       (3) Modifications to program.--The Secretary is authorized 
     to modify or otherwise change the Program to meet the goals 
     set forth in subsection (b).
       (d) Transfer and Allocations of Appropriations.--Except as 
     otherwise provided in this section, the assets, liabilities, 
     contracts, property, records, and unexpended balances of 
     appropriations, authorizations, allocations, and other funds 
     employed, used, held, arising from, available to, or to be 
     made available in connection with the Program, subject to 
     section 1531 of title 31, United States Code, shall be 
     transferred to the Department. Unexpended funds transferred 
     pursuant to this section shall be used only for the purposes 
     for which the funds were originally authorized and 
     appropriated.
       (e) Transfer of Personnel.--
       (1) In general.--Except as otherwise provided in this 
     section, the Secretary of the Interior shall transfer such 
     personnel to the Department to administer the Program as the 
     Secretary considers necessary and appropriate.
       (2) No separation or reduction in grade or compensation for 
     1 year.--Except as otherwise provided in this section, any 
     transfer pursuant to this section of full-time personnel 
     (except special Government employees) and part-time personnel 
     holding permanent positions shall not cause any such employee 
     to be separated or reduced in grade or compensation during 
     the 1-year period beginning on the date on which the employee 
     is transferred to the Department.
       (3) Executive schedule employees.--Except as otherwise 
     provided in this section, any person who, on the day 
     preceding the date on which such person is transferred to the 
     Department under this section, holds a position compensated 
     in accordance with the Executive Schedule prescribed in 
     chapter 53 of title 5, United States Code, and who, without a 
     break in service, is appointed in the Department to a 
     position having duties comparable to the duties performed 
     immediately preceding such appointment shall continue to be 
     compensated in such new position at not less than the rate 
     provided for such previous position, for the duration of the 
     service of such person in such new position.
       (4) Presidential appointees.--Positions whose incumbents 
     are appointed by the President, by and with the advice and 
     consent of the Senate, the functions of which are transferred 
     pursuant to this section, shall terminate on the effective 
     date of this section.
       (f) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, is authorized to make such determinations as 
     may be necessary with regard to the Program, and to make such 
     additional incidental dispositions of personnel, assets, 
     liabilities, grants, contracts, property, records, and 
     unexpended balances of appropriations, authorizations, 
     allocations, and other funds held, used, arising from, 
     available to, or to be made available in connection with the 
     Program, as may be necessary to carry out this section. The 
     Director of the Office of Management and Budget shall provide 
     for the termination of the affairs of all entities terminated 
     by this section and for such further measures and 
     dispositions as may be necessary to effectuate the purposes 
     of this section.
       (g) Continuing Effect of Legal Documents.--All orders, 
     determinations, rules, regulations, permits, agreements, 
     grants, contracts, certificates, licenses, registrations, 
     privileges, and other administrative actions--
       (1) that have been issued, made, granted, or allowed to 
     become effective by the President, any Federal agency or 
     official, or by a court of competent jurisdiction, in the 
     performance of the Program which are transferred under this 
     section; and
       (2) that are in effect on the effective date of subsection 
     (a)(1), or that were final before such date and are to become 
     effective on or after such date;

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, the Secretary, or other 
     authorized official, a court of competent jurisdiction, or by 
     operation of law.
       (h) Proceedings Not Affected.--The provisions of this 
     section shall not affect any proceedings, including notices 
     of proposed rulemaking, or any application for any license, 
     permit, certificate, or financial assistance pending before 
     the Department of the Interior on the effective date of 
     subsection (a)(1), with respect to the Program, and such 
     proceedings and applications shall be continued. Orders shall 
     be issued in such proceedings, appeals shall be taken 
     therefrom, and payments shall be made pursuant to such 
     orders, as if this section had not been enacted, and orders 
     issued in any such proceedings shall continue in effect until 
     modified, terminated, superseded, or revoked by a duly 
     authorized official, by a court of competent jurisdiction, or 
     by operation of law. Nothing in this section shall be deemed 
     to prohibit the discontinuance or modification of any such 
     proceeding under the same terms and conditions and to the 
     same extent that such proceeding could have been discontinued 
     or modified if this section had not been enacted.
       (i) Actions Not Affected.--The provisions of this section 
     shall not affect actions commenced before the effective date 
     of subsection (a)(1), and in all such actions, proceedings 
     shall be had, appeals taken, and judgments rendered in the 
     same manner and with the same effect as if this section had 
     not been enacted.
       (j) Nonabatement of Actions.--No action or other proceeding 
     commenced by or against the Department of the Interior, or by 
     or against any individual in the official capacity of such 
     individual as an officer of the Department of the Interior, 
     shall abate by reason of the enactment of this section.
       (k) Administrative Actions Relating to Promulgation of 
     Regulations.--Any administrative action relating to the 
     preparation or promulgation of a regulation by the Department 
     of the Interior relating to the Program may be continued by 
     the Department with the same effect as if this section had 
     not been enacted.
       (l) Transition.--The Secretary is authorized to utilize--
       (1) the services of such officers, employees, and other 
     personnel of the Department of the Interior with respect to 
     the Program; and
       (2) funds appropriated to the Program for such period of 
     time as may reasonably be needed to facilitate the orderly 
     implementation of this section.
       (m) References.--Reference in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or relating to--
       (1) the Secretary of the Interior, with regard to the 
     Program, shall be deemed to refer to the Secretary; and
       (2) the Department of the Interior, with regard to the 
     Program, shall be deemed to refer to the Department.
       (n) Regulations.--The Secretary shall, by notice published 
     in the Federal Register, establish such requirements as may 
     be necessary to carry out this section. The Secretary shall 
     issue final regulations to carry out this section, based on 
     such notice, after providing opportunity for public comment 
     on the notice.
       (o) Authorization of Appropriations.--There are authorized 
     to be appropriated $34,000,000 for fiscal years 1996, 1997, 
     1998, 1999, and 2000 to carry out the Program.

     SEC. 5. AUTHORIZATION.

       Section 5(c) of the United States Housing Act of 1937 (42 
     U.S.C. 1437c(c)) is amended by adding at the end the 
     following new paragraph:
       ``(9) Using the additional budget authority that becomes 
     available during fiscal years 1996, 1997, 1998, 1999, and 
     2000, the Secretary shall, to the extent approved in 
     appropriation Acts, reserve authority to enter into 
     obligations aggregating, for public housing grants for Indian 
     families under subsection (a)(2), an amount sufficient to 
     provide assistance for an additional 4,000 units of Indian 
     housing for each such year.''.

     SEC. 6. ELIGIBLE INDIANS.

       Section 201 of the United States Housing Act of 1937 (42 
     U.S.C. 1437aa) is amended by adding at the end the following 
     new subsection:
       ``(d) Eligible Families.--
       ``(1) In general.--Except as provided in section 202(d) of 
     this title and paragraph (2) of this subsection, low-income 
     housing developed or operated pursuant to a contract between 
     the Secretary and an Indian housing authority shall be 
     limited to Indian low-income families.
       ``(2) Exception.--An Indian housing authority may provide 
     assistance to any non-Indian family on an Indian reservation 
     or other Indian area if the Indian housing authority 
     determines that the need for housing for such families on the 
     Indian reservation or other Indian area cannot reasonably be 
     met without such assistance.
       ``(3) Existing assistance.--Nothing in this subsection 
     shall be construed to prohibit or otherwise affect any 
     assistance provided to a family served by an Indian housing 
     authority on the date of enactment of this subsection.''.

     SEC. 7. CERTAIN WAGE RATES NOT APPLICABLE.

       (a) Wage Rates.--Beginning on the date of enactment of this 
     Act, the provisions of the Davis-Bacon Act shall not be 
     applicable to any construction, alteration, or repair, 
     including painting and decorating, carried out pursuant to 
     any contract entered into after the date of enactment of this 
     Act, except as provided in subsection (b), in connection with 
     any housing project of 40 units or less involving Indian 
     housing developed or operated by an Indian housing authority.
       (b) Existing Contracts.--The provisions of subsection (a) 
     shall not affect any contract in effect on the date of 
     enactment of this Act, or any contract that is entered into 
     on or after such date of enactment pursuant to invitations 
     for bids that were outstanding on such date of enactment.

     SEC. 8. TECHNICAL ASSISTANCE.

       (a) Technical Assistance Grants.--The Secretary is 
     authorized to make grants to Indian tribes for use by such 
     tribes in obtaining technical assistance in connection with 
     Indian housing programs.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated $500,000 to carry out the provisions of 
     subsection (a).
                                  ____


   Section-by-Section Analysis of the Indian Housing Development and 
                           Reform Act of 1994

       Section 1. Short Title.
       Section 2. Congressional findings.
       Section 3. Definitions.
       Section 4. This section transfers the Housing Improvement 
     Program at the Bureau of Indian Affairs to the Department of 
     Housing and Urban Development. The department would use the 
     same goals, standards and objectives of the existing HIP 
     program. In addition, program funding would still be made to 
     Indian tribal governments. The bill authorizes $34 million 
     per year through FY 2000. HIP funding has generally ranged 
     between $17 million to $20 million per year.
       Section 5. This section authorizes budget authority 
     sufficient to provide 4,000 units of Indian housing per year 
     through FY 2000. The current authorization is 3,000 units.
       Section 6. (a) Amends the 1937 Housing Act by requiring 
     that the HUD Indian housing program is limited to low-income 
     Indian families.
       (b) An Indian housing authority is authorized to assist 
     non-Indian families only if it is determined that the housing 
     needs of non-Indian families on an Indian reservation cannot 
     be reasonably met without such assistance.
       (c) Any non-Indian family currently being served by an 
     Indian housing authority is not affected by this section.
       Section 7. (a) provides that the prevailing wage rates 
     shall not apply to an Indian housing project that involves 40 
     units or less.
       (b) provides that existing contracts, contracts signed on 
     the date of enactment or invitations for bids issued before 
     the date of enactment shall not be affected by this section.
       Section 8. This section authorizes technical assistance 
     grants to be made to Indian tribes. Tribes may then purchase 
     technical assistance from the provider of choice. The bill 
     authorizes $500,000 for this section.
                                 ______

      By Mr. KENNEDY (for himself, Mr. Dodd, Mr. DeConcini, and Mr. 
        Kerry):
  S. 1961. A bill to provide for necessary medical care for former 
civilian prisoners of war; to the Committee on Labor and Human 
Resources.


           civilian ex-pow health and disability legislation

  Mr. KENNEDY. Mr. President, on behalf of Senators Dodd, DeConcini, 
Kerry, and myself, I am introducing legislation to address the health 
and disability needs of civilian ex-prisoners of war.

  The bill concerns basic issues of fairness and justice for a group of 
Americans who have endured a great deal of suffering and who urgently 
need relief. In 1948, Congress passed the War Claims Act which extended 
health disability and detention benefits to more than 6,000 American 
civilians interned by the Japanese during World War II. Most of them 
were private citizens residing in the Philippines at the outbreak of 
the war.
  Like military ex-POW's, civilian internees suffer from a number of 
physical and psychological disabilities caused by their imprisonment. 
Among the most common are gum disease caused by their poor diet in the 
internment camps, and post-traumatic stress syndrome.
  The War Claims Act created a War Claims Commission to administer 
benefits to these individuals. That function was later taken over by 
the Department of Labor's Office of Worker's Compensation Program 
[OWCP]. It also established eligibility criteria, benefit levels, and 
procedural requirements that claimants must meet in order to receive 
medical and disability benefits. Of close to 5,000 cases administered 
since the War Claims Act was passed, between 75-100 cases remain 
active.
  By the time War Claims Act became law, the needs of other POW groups 
had already been addressed. Former military POW's had access to health 
and disability benefits through the Veterans' Administration. 
Compensation programs for Federal employees interned in wartime prison 
camps had been authorized in 1916 by the Federal Employees Compensation 
Act. Similar benefits for the employees of independent Federal 
contractors were established in 1942 under the Defense Base Act.
  Despite the importance of the 1948 law in securing health and 
disability benefits for civilian ex-POW's, the act is deficient in a 
number of important respects.
  First, the 1948 law covers only those who were interned in the 
Philippines and other Japanese-controlled territories during World War 
II. This provision excludes a majority of WWII-era detainees. According 
to the Committee on Civilian Internee Rights, eliminating this 
exclusion would extend coverage by an additional 5,600 survivors, 
raising the total number of civilian ex-POW's covered by Federal health 
and disability benefits to 8,600. It also denies coverage to 
approximately 100 American civilians detained in Korea and Vietnam 
during the conflicts in those regions.
  Second, the process for filing claims is unnecessarily burdensome and 
out of step with the more streamlined approach used to administer 
medical and disability benefits to other POW's. The Department of 
Veterans Affairs automatically approves claims related to presumptive 
conditions--conditions widely recognized as caused or exacerbated by 
periods of internment. But former civilian POW's must document that an 
injury or medical condition is related to their detainment, no matter 
how common the condition.
  Finally, the disability benefits established by the War Claims Act 
have been unfairly eroded by four and a half decades of inflation. 
Under the act, the level of disability benefits is set at $25 a week--
an amount derived by taking 66 percent of the National Average Weekly 
Wage in 1948.
  Further, the maximum amount of disability benefits is set by the law 
at $7,500 per claimant. By contrast, the law covering those who were 
Federal workers or Federal contractors at the time of their capture 
imposes no such limit, benefit levels are automatically adjusted for 
increases in the cost of living.
  The Civilian Ex-Prisoner of War Health and Disability Benefits Act of 
1994 corrects these deficiencies. All civilian POW's from WWII and the 
Korean and Vietnam wars will be eligible to receive health and 
disability benefits. This eligibility extension also applies to 
civilians who went into hiding to avoid becoming prisoners of war in 
those conflicts.
  In determining eligibility, the bill extends to civilian POW's the 
same presumptive conditions used by the VA to evaluate claims filed by 
former military POW's.
  Benefit levels are also updated by the measure. The bill eliminates 
the per claimant cap on total disability payments under the War Claims 
Act. In addition, the bill sets weekly disability payment levels at the 
levels established by FECA, thereby creating parity with ex-POW's who 
were Federal workers of Federal contractors when they were interned. 
Linking compensation levels to FECA also assures that disability 
benefit levels will be adjusted every year of increases in the cost of 
living.
  Mr. President, this bill is long overdue as a matter of simple 
justice. I hope that Congress will expedite its action, and I ask 
unanimous consent that its text may be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1961

       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 ``Civilian Ex-Prisoner of War 
     Health and Disability Benefits Act of 1994''.

     SEC. 2. MEDICAL CARE AND DISABILITY BENEFITS.

       (a) Eligibility.--A former civilian prisoner of war is 
     entitled to receive necessary medical care and disability 
     benefits for any injury or disability resulting from the 
     period of internment or hiding. Any presumptive medical and 
     dental condition related to a period of internment provided 
     for former military prisoners of war under section 1112(b) of 
     title 38, United States Code, shall be extended to former 
     civilian prisoners of war and shall be considered to have 
     been incurred in or aggravated by such period of internment 
     or hiding without regard to the absence of any record of such 
     injury.
       (b) Payment of Benefits.--Prompt monetary payment or 
     reimbursement shall be facilitated for reasonable and 
     necessary expenditures for all medical treatment, including 
     rehabilitation, mental health services, and dental care, 
     provided for under this section for which a claim and any 
     documentation determined necessary by the Secretary of Labor 
     has been filed with the Secretary of Labor.
       (c) Waiver of Limitations.--There shall be no limitation on 
     the total medical or disability benefits which a person may 
     receive for any injury or disability resulting from the 
     period of internment or hiding.
       (d) Rate of Compensation.--Compensation for disability 
     shall be equal to the weekly equivalent of the minimum 
     monthly rate of compensation payable for a total disability 
     covered by chapter 81 of title 5, United States Code, as 
     computed under section 8112(a) of such title.
       (e) Crediting Benefits Under the Social Security Act.--The 
     benefits provided by this section to any individual shall be 
     reduced to the extent such benefits are provided under title 
     XVIII of the Social Security Act, or any private insurance, 
     for the same medical condition or disability.

     SEC. 3. ADVISORY COMMITTEE.

       (a) Establishment.--The Secretary of Labor shall establish 
     an advisory committee to be known as the Former Civilian 
     Prisoner of War Committee (herafter in this section referred 
     to as the ``advisory committee''). The members of the 
     advisory committee shall be appointed by the Secretary of 
     Labor from the general public and shall include appropriate 
     representatives of former civilian prisoners of war and 
     individuals who are recognized authorities in fields 
     pertinent to the injuries and disabilities prevalent among 
     former civilian prisoners of war.
       (b) Authority of the Secretary of Labor.--The Secretary of 
     Labor shall determine the number, terms of service, and pay 
     and allowances of members of the advisory committee. The 
     Secretary of Labor shall consult with and seek the advice of 
     the advisory committee with respect to the administration of 
     benefits under this Act.
       (c) Report.--Not later than January 1, 1996, the Secretary 
     of Labor shall submit to Congress a report on the programs 
     and activities of the Department of Labor that pertain to 
     those former civilian prisoners of war. The Secretary of 
     Labor shall include in the report--
       (A) an assessment of the needs of such civilian prisoners 
     of war with respect to health and disability benefits;
       (B) a review of the programs and activities of the Office 
     of Workers' Compensation Program designed to meet such needs; 
     and
       (C) such recommendations as the advisory committee 
     considers to be appropriate.
       (d) Information on Benefits.--Not later than 90 days after 
     the date of enactment of this Act, and at appropriate times 
     thereafter, the Secretary of Labor shall seek out former 
     civilian prisoners of war and provide them with information 
     regarding applicable changes in law, regulations, and 
     services to which such citizens are entitled by virtue of 
     this Act.

     SEC. 4. REGULATIONS.

       The Secretary of Labor shall prescribe regulations as may 
     be necessary to ensure that benefits provided to former 
     civilian prisoners of war under this Act are coordinated with 
     and do not duplicate any benefits provided such persons under 
     the War Claims Act.

     SEC. 5. DEFINITIONS.

       For purposes of this Act--
       (1) the term ``former civilian prisoner of war'' means a 
     person determined by the Department of Labor, in consultation 
     with the Department of State and the Department of Defense, 
     as being someone who, being then a citizen of the United 
     States was forcibly interned by an enemy government or its 
     agents, or a hostile force, or who went into hiding in order 
     to avoid capture by such government, its agents, or hostile 
     force, during a period of war, or other period for at least 
     30 days, including those interned or who went into hiding 
     during the Asian-Pacific Theater or in the European Theater 
     of World War II during the period beginning September 1, 
     1939, and ending December 31, 1946, in Korea during the 
     period beginning June 25, 1950, and ending July 1, 1955, or 
     in Vietnam during the period beginning February 28, 1961, and 
     ending on the date designated by the President by Executive 
     order as the date of termination of the Vietnam conflict, 
     except--
       (A) a person who at any time voluntarily gave aid to, 
     collaborated with, or in any manner served such a government, 
     or
       (B) a person who at the time of his capture or entrance 
     into hiding was--
       (i) a person within the purview of the Act entitled ``An 
     Act to provide compensation for employees of the United 
     States suffering injuries while in the performance of their 
     duties, and for other purposes'', approved September 7, 1916, 
     as amended, and as extended;
       (ii) a person within the purview of the Act entitled ``An 
     Act to provide benefits for the injury, disability, death, or 
     enemy detention of employees of contractors with the United 
     States, and for other purposes'', approved December 2, 1942, 
     as amended; or
       (iii) a regularly appointed, enrolled, enlisted, or 
     inducted member of any military or naval force; and
       (2) the term ``hostile force'' means any nation, or any 
     national thereof, or any other person serving a foreign 
     nation--
       (A) engaged in war against the United States or any of its 
     allies; or
       (B) engaged in armed conflict, whether or not war has been 
     declared, against the United States or any of its allies.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act, such sums as may be necessary for each of the fiscal 
     years 1995 through 2000.
                                 ______

      By Mr. DODD (for himself and Mr. Rockefeller):
  S. 1962. A bill to provide for demonstration projects in 6 States to 
establish or improve a system of assured minimum child support 
payments; to the Committee on Finance.


                  child support assurance act of 1994

  Mr. DODD. Mr. President, I rise today to introduce a piece of 
legislation whose subject should be central to our debate over welfare 
reform. This bill, the Child Support Assurance Act of 1994, seeks to 
put a stop to one of the principal causes of child poverty in this 
country, lack of financial support from absent parents. I am delighted 
to be joined in this effort by my colleague from West Virginia, Senator 
Rockefeller, who has long been a champion of children's causes and this 
concept in particular.
  If I had to sum this legislation in one word, it would be 
responsibility: Parents' responsibility to support their kids and our 
responsibility as a nation to support struggling families. If we can 
begin to live up to these responsibilities, we will go a long way 
toward solving the problems that lead people to turn to welfare.


                   welfare reform, welfare prevention

  I firmly believe we will not succeed in reforming welfare until we 
succeed in reforming child support. In my view, the term welfare reform 
does not do justice to the task at hand. Of course, we need welfare 
reform that will encourage people to become self-sufficient and leave 
government assistance. But just as important, we need welfare 
prevention--policies to allow people to avoid welfare in the first 
place. We need to seriously ask ourselves, what can we as a nation do 
to support families in danger of sliding into poverty?
  At or near the top of our list of answers should be putting some 
teeth and some assurances into our child support system. Lack of child 
support is one of the principal causes of poverty for one-parent 
families. The census bureau illustrated this fact when it estimated 
that between 1984 and 1986 approximately half-a-million children fell 
into poverty after their father left home.
  In 1989 alone, the children and single parents of America were owed 
$5.1 billion in unpaid child support. This week, we will discuss a 
budget resolution in which we had to squeeze and cut just to come up 
with an extra $700 million for Head Start this year. And that $700 
million should make a real difference in the fight against child 
poverty. But $700 million is tiny in comparison with the amount of 
money owed in back child support. Can you imagine the difference it 
would make for the children of America if they received that $5 billion 
they are being cheated out of annually?
  Connecticut is no different from any other State. Despite a child 
support enforcement system that ranks among the best in the Nation, its 
child support delinquencies now total nearly half-a-billion dollars. 
That is half-a-billion dollars in a State of only 3\1/2\ million 
people.


                            clear connection

  The clear connection between child support and welfare was 
illustrated for the subcommittee on children last August during a 
hearing I chaired on this topic. Geraldine Jensen testified about 
struggling as a single mother, receiving no help from her ex-husband. 
She had to work 60 hours a week just to make ends meet. One day she 
realized her kids had gone from two parents to one parent when her 
husband left, and then from one parent to none when she had to take her 
second job. She was working so much that she had no time for her 
children.
  So Ms. Jensen quit her jobs and went on AFDC. She finally collected 
the child support owed her 7 years later, and she was able to get back 
on her feet. As president of the Association for Children for the 
Enforcement of Support, Ms. Jensen is now working to fashion a child 
support system that will make stories like hers a thing of the past.
  But the reality today is that there are far too many families out 
there like Ms. Jensen's. And far too many children are plunged into 
poverty when their parents do not live up to their responsibilities.
  The poverty rate for single-parent families headed by women is nearly 
33 percent. This compares to a poverty rate of under 8 percent for 2-
parent families.
  Why is the poverty rate so high for households led by single women? 
The primary reason is a lack of support from absent fathers. Forty-two 
percent of single mothers do not even have child support orders for 
their children. For poor women, this figure is 57 percent. And a child 
support order is no guarantee of support. In 1989, half of all mother-
let families with child support orders received no support at all or 
less than the amount due.


                            childhood's end

  As a recent report titled ``Childhood's End'' by the National Child 
Support Assurance Consortium poignantly illustrated, these are much 
more than simply numbers on a page for the children involved. For far 
too many young Americans, the lack of child support means poverty. It 
means not being able to go to the doctor when they're sick. It means 
going to bed hungry. It means teetering on the brink of homelessness.
  We have known for some time now that our child support system needs a 
major overhaul. The Child Support Amendments of 1984 and the Family 
Support Act of 1988 made modest improvements. For every 100 child 
support cases in 1983, there were 15 in which there was a collection. 
In 1990, there were 18. Out of 100, 15 to 18 is a step in the right 
direction, but we clearly have a long, long way to go.
  The bill we are introducing today would take us further down the road 
toward an effective child support system. It would create incentives 
for responsible behavior: Incentives for custodial parents to seek 
child support orders, incentives for noncustodial parents to follow 
those orders, and incentives for States to make sure this whole process 
works. As a last resort, it would provide a minimum level of support 
for all children not living with both parents.
  Right now, the poor children of America are the ones paying for the 
failings of our families and the failings of our child support system. 
It is time for all of us to help shoulder this burden.


                         rigorous requirements

  The bill would authorize demonstrate grants to six States for use in 
guaranteeing and assured child support benefit. Participating States 
would have to meet a rigorous set of requirements. To qualify, States 
would already have to be doing a good job of collecting child support 
and would have to be at, or above, the national median for paternity 
establishment. And during the course of the grant, the State would have 
to show real, measurable improvement in paternity establishment, child 
support orders, and collections.
  Just as the Child Support Assurance Act calls on participating States 
to meet their obligations, it would do the same for participating 
families. To qualify, the custodial parent would have to possess, or be 
seeking, a child support award or have a good reason not to.
  We hope that this approach will serve as a model for the country. To 
test this proposition, the Department of Health and Human Services 
would conduct 3-and 5-year evaluations of the demonstration programs to 
gauge whether the approach should be extended nationally.
  I hope my colleagues will join Senator Rockefeller and me in 
supporting this legislation and demanding that we all meet our 
responsibilities to America's children.
  I ask unanimous consent that the full text of this bill be printed in 
the Record, along with several letters of support.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1962

       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 ``Child Support Assurance Act 
     of 1994''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) the number of single-parent households has increased 
     significantly;
       (2) there is a high correlation between childhood poverty 
     and growing up in a single-parent household;
       (3) family dissolution often brings the economic 
     consequence of a lower standard of living for the custodian 
     and children;
       (4) children are nearly twice as likely to be in poverty 
     after a family dissolution as before a family dissolution;
       (5) one-fourth of the single mothers who are owed child 
     support receive none and another one-fourth of such mothers 
     receive only partial child support payments;
       (6) single mothers above and below the poverty line are 
     equally likely to receive none of the child support they are 
     owed; and
       (7) the failure of children to receive an adequate level of 
     child support limits the ability of such children to thrive 
     and to develop their potential and leads to long-term 
     societal costs in terms of health care, welfare, and loss in 
     labor force productivity.
       (b) Purpose.--It is the purpose of this Act to enable 
     participating States to establish child support assurance 
     systems in order to improve the economic circumstances of 
     children who do not receive a minimum level of child support 
     from the noncustodial parents of such children and to 
     strengthen the establishment and enforcement of child 
     support awards. The child support assurance approach is 
     structured on a demonstration basis in order to implement 
     and evaluate different options with respect to the 
     provision of intensive support services and mechanisms for 
     administering the program on a national basis.

     SEC. 3. ESTABLISHMENT OF CHILD SUPPORT ASSURANCE 
                   DEMONSTRATION PROJECTS.

       (a) In General.--In order to encourage States to provide a 
     guaranteed minimum level of child support for every eligible 
     child not receiving such support, the Secretary of Health and 
     Human Services (hereafter in this section referred to as the 
     ``Secretary'') shall make grants to not more than 6 States to 
     conduct demonstration projects for the purpose of 
     establishing or improving a system of assured minimum child 
     support payments in accordance with this section.
       (b) Contents of Application.--An application for grants 
     under this section shall be submitted by the Governor of a 
     State and shall--
       (1) contain a description of the proposed child support 
     assurance project to be established, implemented, or improved 
     using amounts provided under this section, including the 
     level of the assured benefit to be provided, the specific 
     activities to be undertaken, and the agencies that will be 
     involved;
       (2) specify whether the project will be carried out 
     throughout the State or in limited areas of the State;
       (3) estimate the number of children who will be eligible 
     for assured minimum child support payments under the project, 
     and the amounts to which they will be entitled on average as 
     individuals and in the aggregate;
       (4) describe the child support guidelines and review 
     procedures which are in use in the State and any expected 
     modifications;
       (5) contain a commitment by the State to carry out the 
     project during a period of not less than 3 and not more than 
     5 consecutive fiscal years beginning with fiscal year 1996;
       (6) contain assurances that the State--
       (A) is currently at or above the national median paternity 
     establishment rate (as defined in section 452(g)(2) of the 
     Social Security Act),
       (B) will improve the performance of the agency designated 
     by the State to carry out the requirements under part D of 
     title IV of the Social Security Act by at least 4 percent 
     each year in which the State operates a child support 
     assurance project under this section in--
       (i) the number of cases in which paternity is established 
     when required;
       (ii) the number of cases in which child support orders are 
     obtained; and
       (iii) the number of cases with child support orders in 
     which collections are made; and
       (C) to the maximum extent possible under current law, will 
     use Federal, State, and local job training assistance to 
     assist individuals who have been determined to be unable to 
     meet such individuals' child support obligations;
       (7) describe the extent to which multiple agencies, 
     including those responsible for administering the Aid to 
     Families With Dependent Children Program under part A of 
     title IV of the Social Security Act and child support 
     collection, enforcement, and payment under part D of such 
     title, will be involved in the design and operation of the 
     child support assurance project; and
       (8) contain such other information as the Secretary may 
     require by regulation.
       (c) Use of Funds.--A State shall use amounts provided under 
     a grant awarded under this section to carry out a child 
     support assurance project designed to provide a minimum 
     monthly child support benefit for each eligible child in the 
     State to the extent that such minimum child support is not 
     paid in a month by the noncustodial parent.
       (d) Requirements.--(1) A child support assurance project 
     funded under this section shall provide that--
       (A) any child (as defined in paragraph (2)) with a living 
     noncustodial parent for whom a child support order has been 
     sought (as defined in paragraph (3)) or obtained and any 
     child who meets ``good cause'' criteria for not seeking or 
     enforcing a support order is eligible for the assured child 
     support benefit;
       (B) the assured child support benefit shall be paid 
     promptly to the custodial parent at least once a month and 
     shall be--
       (i) an amount determined by the State which is--
       (I) not less than $1,500 per year for the first child, 
     $1,000 per year for the second child, and $500 per year for 
     the third and each subsequent child, and
       (II) not more than $3,000 per year for the first child and 
     $1,000 per year for the second and each subsequent child;
       (ii) offset and reduced to the extent that the custodial 
     parent receives child support in a month from the 
     noncustodial parent;
       (iii) indexed and adjusted for inflation; and
       (iv) in the case of a family of children with multiple 
     noncustodial parents, calculated in the same manner as if all 
     such children were full siblings, but any child support 
     payment from a particular noncustodial parent shall only be 
     applied against the assured child support benefit for the 
     child or children of that particular noncustodial parent;
       (C) for purposes of determining the need of a child or 
     relative and the level of assistance, one-half of the amount 
     received as a child support payment shall be disregarded from 
     income until the total amount of child support and Aid to 
     Families With Dependent Children benefit received under part 
     A of title IV of the Social Security Act equals the Federal 
     poverty level for a family of comparable size;
       (D) in the event that the family as a whole becomes 
     ineligible for Aid to Families With Dependent Children under 
     part A of the Social Security Act due to consideration of 
     assured child support benefits, the continuing eligibility of 
     the caretaker for Aid to Families With Dependent Children 
     under such title shall be calculated without consideration of 
     the assured child support benefit; and
       (E) in order to participate in the child support assurance 
     project, the child's caretaker shall apply for services of 
     the State's child support enforcement program under part D of 
     title IV of the Social Security Act.
       (2) For purposes of this section, the term ``child'' means 
     an individual who is of such an age, disability, or 
     educational status as to be eligible for child support as 
     provided for by the law of the State in which such individual 
     resides.
       (3) For purposes of this section, a child support order 
     shall be deemed to have been ``sought'' where an individual 
     has applied for services from the State agency designated by 
     the State to carry out the requirements of part D of title IV 
     of the Social Security Act or has sought a child support 
     order through representation by private or public counsel or 
     pro se.
       (e) Consideration and Priority of Applications.--(1) The 
     Secretary shall consider all applications received from 
     States desiring to conduct demonstration projects under 
     this section and shall approve not more than 6 
     applications which appear likely to contribute 
     significantly to the achievement of the purpose of this 
     section. In selecting States to conduct demonstration 
     projects under this section, the Secretary shall--
       (A) ensure that the applications selected represent a 
     diversity of minimum benefits distributed throughout the 
     range specified in subsection (d)(1)(B)(i);
       (B) consider the geographic dispersion and variation in 
     population of the applicants;
       (C) give priority to States the applications of which 
     demonstrate--
       (i) significant recent improvements in--
       (I) establishing paternity and child support awards,
       (II) enforcement of child support awards, and
       (III) collection of child support payments;
       (ii) a record of effective automation; and
       (iii) that efforts will be made to link child support 
     systems with other service delivery systems;
       (D) ensure that the proposed projects will be of a size 
     sufficient to obtain a meaningful measure of the effects of 
     child support assurance;
       (E) give priority, first, to States intending to operate a 
     child support assurance project on a statewide basis, and, 
     second, to States that are committed to phasing in an 
     expansion of such project to the entire State, if interim 
     evaluations suggest such expansion is warranted; and
       (F) ensure that, if feasible, the States selected use a 
     variety of approaches for child support guidelines.
       (2) Of the States selected to participate in the 
     demonstration projects conducted under this section, the 
     Secretary shall require, if feasible--
       (A) that at least 2 provide intensive integrated social 
     services for low-income participants in the child support 
     assurance project, for the purpose of assisting such 
     participants in improving their employment, housing, health, 
     and educational status; and
       (B) that at least 2 have adopted the Uniform Interstate 
     Family Support Act.
       (f) Duration.--(1) During fiscal year 1995, the Secretary 
     shall develop criteria, select the States to participate in 
     the demonstration, and plan for the evaluation required 
     under subsection (h). The demonstration projects conducted 
     under this section shall commence on October 1, 1995, and 
     shall be conducted for not less than 3 and not more than 5 
     consecutive fiscal years, except that the Secretary may 
     terminate a project before the end of such period 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 section.
       (g) Cost Savings Recovery.--The Secretary shall develop a 
     methodology to identify any State cost savings realized in 
     connection with the implementation of a child support 
     assurance project conducted under this Act. Any such savings 
     realized as a result of the implementation of a child support 
     assurance project shall be utilized for child support 
     enforcement improvements or expansions and improvements in 
     the Aid to Families With Dependent Children Program conducted 
     under part A of title IV of the Social Security Act within 
     the participating State.
       (h) Evaluation and Report to Congress.--(1) The Secretary 
     shall conduct an evaluation of the effectiveness of the 
     demonstration projects funded under this section. The 
     evaluation shall include an assessment of the effect of an 
     assured benefit on--
       (A) income from nongovernment sources and the number of 
     hours worked;
       (B) the use and amount of government supports;
       (C) the ability to accumulate resources;
       (D) the well-being of the children, including educational 
     attainment and school behavior; and
       (E) the State's rates of establishing paternity and support 
     orders and of collecting support.
       (2) Three and 5 years after commencement of the 
     demonstration projects, the Secretary shall submit an interim 
     and final report based on the evaluation to the Committee on 
     Finance and the Committee on Labor and Human Resources of the 
     Senate, and the Committee on Ways and Means and the Committee 
     on Education and Labor of the House of Representatives 
     concerning the effectiveness of the child support assurance 
     projects funded under this section.
       (i) State Reports.--The Secretary shall require each State 
     that conducts a demonstration project under this section to 
     annually report such information on the project's operation 
     as the Secretary may require, except that all such 
     information shall be reported according to a uniform format 
     prescribed by the Secretary.
       (j) Restrictions on Matching and Use of Funds.--(1) A State 
     conducting a demonstration project under this section shall 
     be required--
       (A) except as provided in paragraph (2), to provide not 
     less than 20 percent of the total amounts expended in each 
     calendar year of the project to pay the costs associated with 
     the project funded under this section;
       (B) to maintain its level of expenditures for child support 
     collection, enforcement, and payment at the same level, or at 
     a higher level, than such expenditures were prior to such 
     State's participation in a demonstration project provided by 
     this section; and
       (C) to maintain the Aid to Families With Dependent Children 
     benefits provided under part A of title IV of the Social 
     Security Act at the same level, or at a higher level, as the 
     level of such benefits on the date of the enactment of this 
     Act.
       (2) A State participating in a demonstration project under 
     this section may provide no less than 10 percent of the total 
     amounts expended to pay the costs associated with the project 
     funded under this section in years after the first year such 
     project is conducted in a State if the State meets the 
     improvements specified in subsection (b)(6)(B).
       (k) Coordination With Certain Means-Tested Programs.--For 
     purposes of--
       (1) the United States Housing Act of 1937;
       (2) title V of the Housing Act of 1949;
       (3) section 101 of the Housing and Urban Development Act of 
     1965;
       (4) sections 221(d)(3), 235, and 236 of the National 
     Housing Act;
       (5) the Food Stamp Act of 1977;
       (6) title XIX of the Social Security Act; and
       (7) child care assistance provided through part A of title 
     IV of the Social Security Act, the Child Care and Development 
     Block Grant, or title XX of the Social Security Act,

     any payment made to an individual within the demonstration 
     project area for child support up to the amount which an 
     assured child support benefit would provide shall not be 
     treated as income and shall not be taken into account in 
     determining resources for the month of its receipt and the 
     following month.
       (l) Treatment of Child Support Benefit.--Any assured child 
     support benefit received by an individual under this Act 
     shall be considered child support for purposes of the 
     Internal Revenue Code of 1986.
       (m) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary in each of 
     the fiscal years 1995, 1996, 1997, 1998, 1999, and 2000 to 
     carry out the purposes of this Act.
                                  ____



                             Center for Law and Social Policy,

                                   Washington, DC, March 21, 1994.
     Hon. Christopher Dodd,
     Committee on Labor and Human Resources, Subcommittee on 
         Children, Families, Drugs and Alcoholism, Washington, DC.
       Dear Senator Dodd, the Center for Law and Social Policy 
     commends you for sponsoring the Child Support Assurance Act 
     of 1994.
       In recent times, a great deal of attention has been paid to 
     the idea of ``ending welfare as we know it.'' The real issue, 
     however, is ending poverty as we know it. In particular, we 
     must be committed to eliminating the poverty of children 
     being raised in single-parent families. To ameliorate this 
     poverty, a child support assurance system is absolutely 
     essential. Your bill takes a strong positive step toward 
     creating such a system.
       The Child Support Assurance Act of 1994 authorizes up to 
     six demonstration projects. In a demonstration project site, 
     any eligible child could receive a monthly guaranteed child 
     support payment. If the child's non-custodial parent paid 
     support, that money would be used to reimburse the government 
     for the assured benefit. If the non-custodial parent paid no 
     support or paid less than the guaranteed amount, the child 
     would still receive the guaranteed payment. Each site would 
     set its own payment structure (within the limits set out in 
     the bill) and would use a variety of guideline approaches to 
     determine what the non-custodial parent should pay.
       Three aspects of the Child Support Assurance Act of 1994 
     are particularly important. First, it gives priority to 
     states which have already shown a commitment to improving 
     child support enforcement and requires all participating 
     states to improve enforcement over the life of the 
     demonstration project. Any test of child support assurance 
     ought to be conducted in conjunction with improving 
     enforcement. Not only is this fiscally prudent, but also it 
     emphasizes that the child's parent is and should be the 
     primary source of his/her support.
       Second, the bill gives priority to state's wishing to 
     operate state-wide demonstration projects. The primary reason 
     for having demonstration projects, rather than moving 
     immediately to a national child support assurance system, is 
     to learn how to phase in an assurance system nationwide. To 
     learn as much as we can, large scale projects are needed and 
     your bill recognizes this.
       Third, the bill helps the most vulnerable children--those 
     receiving AFDC. By providing a partial disregard of the 
     assurance payment, it allows children subsisting on meager 
     AFDC benefits the chance to obtain a family income that is 
     closer to the poverty line. By providing a source of reliable 
     child support to supplement the wages of a parent when the 
     family leaves AFDC, it makes escape from poverty possible.
       We look forward to working with you to make child support 
     assurance a reality.
           Sincerely,
                                                    Paula Roberts,
                                            Senior Staff Attorney.
                                  ____



                                   Women's Legal Defense Fund,

                                   Washington, DC, March 21, 1994.
     Hon. Christopher J. Dodd and Hon. Jay D. Rockefeller IV,
     U.S. Senate,
     Washington, DC.
       Dear Senators Dodd and Rockefeller, the Women's Legal 
     Defense Fund is a national, nonprofit advocacy organization 
     that for more than twenty years has worked for policies that 
     help women and their families achieve economic security, 
     equal opportunity in the workplace, and access to quality 
     health care. For more than ten years, we have worked in 
     Congress, the executive branch, and the states, to improve 
     this country's child support system. We write to express our 
     strong support for a program of child support assurance, and 
     to commend the important steps in that direction that would 
     be taken under the Child Support Assurance Act of 1994.
       Children need and deserve the support of both parents. 
     Single parents, usually mothers, struggle to provide both 
     nurturance and economic support for their children. They 
     confront a labor market that offers many of them only low 
     wage, part time, and insecure jobs, if any; often unavailable 
     or unaffordable child care; and still insufficient 
     flexibility to combine paid work and caretaking, even with 
     the improvements of the Family and Medical Leave Act. As a 
     result, over half of the children in single parent families 
     live in poverty.
       Despite reforms, a majority of single mothers and their 
     children cannot count on the child support system to deliver 
     economic support from the other parent. Now, when a 
     noncustodial parent fails to pay, and the state fails to 
     collect, the burden of these failures falls on children. 
     Child support assurance would protect children from this 
     loss, just as Social Security survivors' insurance protects 
     against the loss of a parent. Thus, child support assurance 
     is needed as a matter of simple justice.
       In addition, child support assurance is an effective route 
     to both child support and welfare reform. With child support 
     assured, mothers who now despair of ever actually receiving 
     child support will have a greater incentive to seek child 
     support awards. The states will have a greater incentive to 
     collect them. And a child support assurance program that 
     allows mothers to combine paid work and an assured minimum 
     benefit can truly ``make work pay.'' With a reliable source 
     of income in place to supplement their wages, many mothers 
     will be able to avoid applying for public assistance. If the 
     program is designed so that mothers receiving public 
     assistance do not experience a dollar for dollar reduction in 
     income, they will be able to improve their families' economic 
     security with the assured benefit. The disincentives to work 
     that are part of the current public assistance program will 
     be reduced. And the fathers of children now receiving public 
     assistance will have a greater incentive to pay. Most 
     importantly, child support assurance can alleviate the 
     poverty that far too many children and single mothers must 
     bear.
       The Women's Legal Defense Fund believes that every child 
     deserves an assurance of child support. Although the Child 
     Support Assurance Act of 1994 authorizes only demonstration 
     projects, not a universal program, the demonstration projects 
     it would authorize include several crucial features:
       Participation would be open to custodial parents who have 
     child support awards; are seeking awards; or have good cause 
     not to seek a child support award. This creates an incentive 
     for single parents to seek to establish child support, 
     without penalizing them for system delays or failures, or 
     putting them at risk of additional abuse.
       There would be real economic benefits for all families, and 
     work incentives would remain, because half of the assured 
     benefit would be disregarded from income for families 
     receiving AFDC.
       At least some demonstration projects would assure a minimum 
     benefit large enough to make a real difference in children's 
     lives.
       The Child Support Assurance Act of 1994 would represent 
     real progress toward equity and security for children in 
     single parent families, goals the Women's Legal Defense Fund 
     will work to help achieve.
           Sincerely,
                                               Judith L. Lichtman,
                                                        President.
                                  ____



                                      Children's Defense Fund,

                                   Washington, DC, March 21, 1994.
     Hon. Christopher J. Dodd and Hon. John D. Rockefeller,
     U.S. Senate,
     Washington, DC 20510.
       Dear Senators Dodd and Rockefeller, we want to congratulate 
     you for your leadership in developing a proposal to create 
     six state demonstrations of child support assurance. We 
     believe your partnership in supporting this concept will 
     provide the impetus to help make child support assurance a 
     reality.
       Child support assurance is a key building block in a long-
     term strategy to meet the needs of children and families. 
     With its emphasis on personal responsibility and incentives 
     to work, as well as on reducing child poverty and economic 
     insecurity, the proposal will unite advocates for children. 
     It will make a genuine difference in children's lives by 
     making child support a regular, reliable source of income 
     that encourages custodial parents to work because they can 
     anticipate having reliable contributions from the non-
     custodial parent or the government. It is an essential 
     component of a welfare reform strategy that encourages work 
     and parental responsibility.
       We are heartened by your expectation that states must 
     improve the way they establish paternity and enforce support 
     in order to participate in child support assurance. We agree 
     that child support assurance must be coupled with aggressive 
     efforts to improve child support enforcement, both to keep 
     government cost down and to underscore the message that every 
     child deserves the support of both parents.
       Child support assurance is built on the premise that 
     government will insure children against harm when parents 
     fail to meet their responsibilities, but will continue to 
     hold parents responsible. When a parent leaves the household, 
     this parental responsibility does not end. Child support 
     assurance protects children and reinforces parent 
     responsibility by helping provide a stable economic base for 
     children, but also by aggressively pursuing reimbursement 
     from the non-custodial parent when he or she fails to pay 
     support.
       We appreciate your longstanding work to help children, and 
     look forward to working with you on this important proposal.
           Sincerely,
                                                        Nancy Ebb,
                                            Senior Staff Attorney.

  Mr. ROCKEFELLER. Mr. President, I am proud to join my distinguished 
colleague from Connecticut [Mr. Dodd] in introducing a demonstration 
project which will help us chart a bold course in promoting parental 
responsibility and stable support for children. It truly is an honor to 
join with such a dedicated, effective advocate for children in 
promoting a new concept of security for children.
  Today, we are joining forces to promote a demonstration project, the 
Child Support Assurance Act of 1994. It is a combination of our 
previous individual initiatives, but we are united in our commitment to 
aggressively push this concept as part of comprehensive welfare reform. 
Child support assurance, we believe, will be the effective carrot to 
get the Federal Government, States, and individuals working to collect 
the billions of dollars that parents owe their children in child 
support.
  This demonstration is just one piece of the puzzle--but, I believe, 
is a key piece to link others together. We understand and agree that 
child support assurance will not be effective unless we dramatically 
improve child support enforcement efforts. But our child support 
assurance demonstration will provide tremendous incentives for States 
and parents to work with the Federal Government to establish paternity, 
get child support awards in place, and collect the money from all 
parents who have an obligation to support their children. Only as a 
last resort would a minimum benefit kick in for the child if the parent 
did not pay after all efforts were made to collect. The minimum benefit 
will ensure that children aren't penalized when an absent parent shirks 
their obligations.
  Such stable, consistent support is vital for children. A recent study 
by the National Institute of Child Health and Human Development noted 
that children of single-parent families are at increased risk. It noted 
that the single most important factor in accounting for the lower 
achievement of children in single-parent families is poverty and 
economic insecurity. Income differences account for half of the 
increased risk for disadvantages. The researchers noted that because 
income is such an important factor in the increased risk for 
disadvantages among children in single-parent families, policies that 
serve to minimize the negative economic impact on children may help 
reduce their difficulties.
  The National Child Support Assurance Consortium issued a compelling 
report called Childhood's End in January 1993 that outlined what 
happens to children when child support payments are missing or just 
late. Let me share just a few of the report's significant findings 
about what happens to children when child support is not paid:

  Fifty-five percent of mothers reported that their children missed 
regular health check-ups.
  Thirty-six percent of mothers reported that their children did not 
get medical care when they became ill.
  Fifty-seven percent of the mothers reported that their children lost 
their regular child care.
  The list goes on and on, and it is tragic that parents are not living 
up to their financial obligations and placing their own children at 
risk. And demographers warn us that one out of every two children 
growing up today will spend some time living with only one parent, and 
therefore half of our children will be dependent on child support.
  All these statistics indicate that we must dramatically strengthen 
our child support enforcement system to protect all children who are at 
risk, and I believe this child support assurance demonstration will do 
exactly that.
  As chairman of the National Commission on Children, I wanted to put 
this initiative into perspective. Our bipartisan commission issued a 
unanimous report entitled ``Beyond Rhetoric, A New American Agenda for 
Children and Families.'' This historic report clearly stated that the 
best way to help children is to strengthen families, and I wish that 
every child could grow up in a stable home, with two loving parents and 
financial security.
  But in reality, over 15.7 million children are living in single-
parent families and dependent on child support. Only 26 percent of 
those children receive the financial support they deserve from their 
absent parent. This means that 74 percent are placed at risk. These 
children deserve our compassion and support, not penalties and 
sanctions. We believe our child support assurance demonstration which 
will require improved child support enforcement, should help.
  I believe this demonstration will promote parental responsibility and 
over the long-run strengthen families by sending a clear signal we 
believe every parent has obligation to support their children.
  This demonstration should also promote work and responsibility for 
single-parents on welfare. While our child support assurance program is 
not means tested, it will offer stronger incentives for parents on 
welfare to return to work. For example, if a parent on welfare goes to 
work, their AFDC benefits are reduced, but if that same parent returns 
to work their child support award is continued and the family is better 
off. Our hope is that the vast majority of the child support awards 
will be paid by the absent parent. But when it is impossible to collect 
from the absent parent, and the single-parent has fully cooperated, the 
assured minimum benefit will ensure that the child is not penalized and 
put at risk.

  The concept of child support assurance has attracted interest from 
groups across a broad range of the political spectrum, and it holds 
enormous potential to offer security to children. It deserves to be 
tested and this demonstration project is an ideal opportunity to 
explore this innovative idea.
  I ask for unanimous consent that background information on child 
support facts be printed in the Record following my remarks.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

                   Facts and Figures on Child Support

       One out of every two children growing up today will spend 
     some time living with only one parent, and therefore will be 
     dependent on child support.\1\
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     \1\Irwin Garfinkel and Sara McLanahan, ``Single Mothers and 
     Their Children: A New American Dilemma'' (Washington, DC: The 
     Urban Institute Press, 1986) p.1.
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       10 million women are custodial parents of 15.7 million 
     children, but only 58 percent have a child support award in 
     place, and of those women, only 26 percent receive full 
     payment.\2\
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     \2\U.S. Census Bureau, ``Statistical Brier: Who's Supporting 
     the Kids?'' October 1991.
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       $11.2 billion was collected in child support in 1989, but 
     $5.1 billion more was due in support.\3\
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     \3\Same.
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       (This does not include arrearages, which are estimated by 
     the Office of Child Support Enforcement at about 22 billion 
     cases in the system. Nor does it include support for 42 
     percent of cases in which an award has not been established.)
       If all eligible mothers had child support award pegged to 
     current state guidelines, children would be eligible for 
     about $30 billion in support payments each year.\4\
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     \4\David Good and Maureen Pirog-Good, ``The efficiency of 
     State Child Support Enforcement Programs'' in Public 
     Budgeting and Finance,'' Fall 1990, p. 25.
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       Researchers estimate that if we improved child support 
     enforcement and established a national child support 
     assurance system, the results could yield:
       A reduction of 8 percent to 9 percent in the poverty rate, 
     and
       A decline of 12 percent to 20 percent in welfare 
     dependency.\5\
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     \5\Daniel Meyer, Irwin Garfinkel, Philip Roobins, and Donald 
     Oellerich, ``The Costs and Effects of a National Child 
     Support Assurance System'' (University of Wisconsin-Madison 
     Institute for Research on Poverty, Discussion Paper 940-91, 
     March 1991), p. 28.
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Footnotes

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