[Congressional Record Volume 140, Number 96 (Thursday, July 21, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ROTH (for himself, Mr. Breaux, Mr. Ford, Mr. Dole, Mr. 
        Simpson, Mr. Boren, Mr. Riegle, Mr. Grassley, Mr. Wallop, Mr. 
        Hatch, Mr. Lautenberg, Mr. Coats, Mr. Shelby, Mr. Warner, Mr. 
        Smith, Mr. Johnston, Ms. Mikulski, Mr. Bond, Mr. Craig, Mr. 
        Helms, Mr. Pressler, Mr. Stevens, Mr. Faircloth, Mr. Brown, Mr. 
        Cochran, Mr. Lott, Mr. Thurmond, Mr. Bennett, Mr. Gregg, Mrs. 
        Hutchison, Mr. Inouye, Mr. Hatfield, Mrs. Feinstein, Mr. Burns, 
        Mr. D'Amato, Mr. Mack, Mr. Hollings, Mr. Nickles, Mr. Specter, 
        Mr. Exon, Mr. Simon, Mr. Dodd, Mr. Murkowski, Mr. DeConcini, 
        Mr. Lieberman, Mr. Bryan, Mr. Robb, Ms. Moseley-Braun, Mr. 
        Akaka, Mr. McConnell, Mr. Nunn, Mr. Gramm, Mr. Kohl, Mr. Pell, 
        Mr. Heflin, and Mr. Biden):
  S. 2301. A bill to amend the Internal Revenue Code of 1986 to 
encourage savings and investment through individual retirement 
accounts, and for other purposes; to the Committee on Finance.


              savings and investment incentive act of 1994

  Mr. ROTH. Mr. President, I rise today to announce the reintroduction 
of the now well-known Bentsen-Roth IRA Plan. The former chairman of the 
Finance Committee, and now Secretary of the Treasury, Lloyd Bentsen, 
joined with me to offer his leadership on this bill during the last 
session of Congress--and now I believe we have to continue with the 
work that he and I started.
  I am proud to be joined by my friend, John Breaux, in introducing 
this bill today. I believe now, as I did last Congress, that this bill 
is extremely well conceived and promotes the two most important issues 
facing us today: the family and the future of our economy. Never has 
strengthening the family and our economy been more important than it is 
today--at a time when, once again, the family is being recognized as 
the most valuable unit of our society, and when the global community is 
redefining the nature of superpowers by the strength of their 
economies, and not by the size of their arms.
  It is clear, after passing the Bentsen-Roth IRA twice in 1992, that 
Congress not only understands these changes, but is willing to 
advance--in a strong bipartisan way--this proposal that addresses the 
needs of our changing environment. As many will remember, the Bentsen-
Roth IRA was vetoed by President Bush for other reasons in 1992.


                          the need for savings

  There is a growing consensus in Congress that demonstrates Members 
agree Americans must save their money and become self-reliant. The lack 
of savings in this country has reached crisis proportions--there is a 
savings crisis. The Chairman of the Federal Reserve, Alan Greenspan, 
has said that the single most important long-term economic issue for 
this country is that of national savings. There is a growing consensus 
that it is the responsibility of Congress to help Americans save, to 
empower our families toward self-reliance. And I strongly believe that 
the Tax Code is the best way to increase this Nation's savings rate and 
self-reliance.
  We all know the statistics: the Japanese save at a rate approximately 
three times that of our countrymen, largely--I believe--because of 
their tax incentives. Consequently, Japan has the highest personal 
saving rate among advanced nations, and ample funds needed to finance 
capital investment in the best and most productive equipment. Thus 
Japanese business and workers have the most advanced tools available in 
the global marketplace. Meanwhile, the U.S. Government levies a heavy 
tax burden on saving and capital. Though the American economy has many 
strengths, our tax policy hampers our ability to compete with the 
advantages offered by Japan. Our punitive anti-savings and anti-
investment Tax Code is crippling our competitiveness at a turning point 
in economic history. We must remember that we cannot tax ourselves into 
prosperity. By suppressing saving and capital investment now, we are 
crippling our economy for the challenges of the future.


                          encouraging savings

  One of the most important questions is how to encourage Americans to 
save more. That is why we have crafted this bill to bring new savers 
into the act. We must recognize that there are other important reasons 
for Americans to save long term, besides the pressing economic needs of 
our country and the need for retirement. For example, our young people 
today have an almost impossible time scraping together a downpayment 
for their first home. Our families find it more and more difficult to 
save for their children's college education. And, our older Americans 
worry about their security as retirement approaches.
  Consequently, the best answer to meet our savings needs is to allow 
Americans to save for what they need most. And that is the approach 
that we have taken in drafting this legislation. This legislation 
allows savers the chance to use the IRA to help them pay for a college 
education, buy their first home, pay for financially devastating health 
costs or cover family costs during an extraordinary period of 
unemployment. By allowing Americans the ability to withdraw IRA 
savings--savings once reserved for retirement only--for these four 
additional purposes, without a penalty for early withdrawal, we have 
greatly enhanced the flexibility of the IRA and strongly encouraged 
Americans to put more savings away. One of the primary benefits of this 
new withdrawal feature is that parents and grandparents would be 
allowed to draw down their IRA without penalty to pay their children's 
college education, or contribute toward their children's first home. 
This is what real empowerment is all about--empowerment for the 
family--empowerment because once again Americans can save for their 
own, and their family's own, self-reliance.
  This is what personal responsibility is all about. The individual 
should provide for his or her family, and should not rely on the 
limited hand of Government for their support. This Government cannot 
continue the course it is on by creating more and expenditures to pay 
for every need, but it can afford to encourage individuals to provide 
for themselves.


                    increasing u.s. competitiveness

  I mentioned earlier, this new IRA offers a renewed opportunity to 
increase America's competitiveness in the emerging global economy. It's 
an opportunity born by the fact that savings equal investment, 
investment equals jobs, and jobs equal a strong, vibrant economy. It 
has been estimated that after the first year this legislation in 
enacted, IRA deposits will increase by as much as $40 billion. This 
represents long-awaited capital that the United States needs for 
investment, manufacturing, education, infrastructure, and other 
important goals. With a Japanese savings rate of about three times the 
United States rate, and a cost of capital of about one-fourth that of 
the United States, it is no wonder that we are lagging behind in the 
international race to compete in the world.
  Added savings of $40 billion and more from increasing annual IRA 
deposits is likely to be the best solution. And don't forget the 
benefit to the already weakened financial infrastructure in this 
country. The estimated additional deposits in U.S. banks in the first 
year alone from this legislation would be about $16 billion--money 
needed to provide productive loans and investment in this country for 
years to come. I recognize the President's efforts to bring relief to 
small businesses by easing the credit crunch, and I believe the IRA 
will go a long way toward helping our financial institutions provide 
the loans to business that they must.
  Perhaps with the added savings from IRA's we can further our own 
investment in the United States rather than U.S. investments by others. 
In fact, in recent years, over half of net domestic investment has been 
financed by capital from abroad. While this foreign saving has 
contributed to U.S. economic growth over the years, we are beginning to 
see why continued reliance on these inflows is not a viable policy. 
Over long periods, for advanced countries, the rate of domestic 
investment tracks closely the supply of domestic saving. Ultimately, 
the United States must move from a position of current account deficit 
to surplus and capital outflow, as foreigners receive the returns on 
their investment in the United States. If that is to happen without a 
relative reduction in U.S. living standards, U.S. productive capacity 
must be increased and so must U.S. savings.


                   the most important reason to save

  It's clear to see why this is a bill whose time has come, however, 
the most important reason to pass it is to meet the needs of the 
most basic unit of our society. It's time we get back to the family. 
Only by allowing American families the opportunity--and even the 
right--to strengthen themselves can we expect society to be 
strengthened as a whole. We've tried to work around this elementary 
truth for years now--some thinking that Government programs can replace 
the basic family unit. Well, we've come full circle--back to the 
understanding that it was family and community values that built a 
strong America. The aging of our citizens brings an ever-increasing 
urgency to the need to encourage national savings. As the baby-boom 
bulge grows older and reaches retirement, the family cost of long-term 
care and other health costs as well as leisure activities during 
retirement will grow dramatically. At the same time the size of the 
working population will be declining. Our children cannot continue to 
pay the cost of our retirement--the answer is to begin planning now. 
Recent statistics show that the average American family is ill-prepared 
for retirement. For example, in 1985 the median financial assets for 
all American families headed by persons between 45-54 was only $600; 
for ages 55-64 the median was only $5,250.

  A detailed study by two Princeton economists, and released by Merrill 
Lynch, shows that members of the baby-boom generation are saving at 
just one-third the rate needed to provide them with a secure retirement 
at age 65. The baby-boom index was determined to be 33.79 percent. This 
index measures the rate at which the oldest baby boomers, those born 
between 1946 and 1956, are accumulating the savings they will need to 
retire at age 65, and maintain a standard of living consistent with 
pre-retirement years. This study makes it absolutely clear that unless 
the 76 million baby boomers begin to save and invest at a far higher 
rate in the next few years, they will face an insecure retirement, that 
could last as long as the time they spent in the work force. This 
generation of baby boomers will begin to retire in just 18 short years. 
President Clinton, a baby boomer himself, should be acutely aware of 
this problem, and it is crucial that he address it.
  The fact is, this study understates the severity of the baby-boom 
savings shortfall. First, it assumes that all of a household's 
financial assets will be available to help pay for retirement, but in 
reality, these funds will be used for other things, like a child's 
education or a parent's health care. Second, baby boomers are expected 
to live longer in retirement than earlier generations and, therefore, 
will need more savings at the outset.


                                summary

  So there are really two primary reasons to increase our country's 
national savings rate. First, it will allow the American family to 
provide for themselves through their own resources, and second, it will 
allow our children and our children's children to become more 
productive because of badly needed new capital. The national crisis we 
face because of a decade of low savings rates will only grow worse If 
we fail to act--particularly as foreign investors begin to withdraw 
their funds for their own country's needs and as our ever-increasing 
aging population continues. We must agree that increasing our saving 
rate will lower interest rates, cut the cost of capital, reduce our 
reliance on foreign investment and improve our standard of living.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2301

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Savings 
     and Investment Incentive Act of 1994''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
                 TITLE I--RETIREMENT SAVINGS INCENTIVES
                Subtitle A--Restoration of IRA Deduction

     SEC. 101. RESTORATION OF IRA DEDUCTION.

       (a) In General.--Section 219 (relating to deduction for 
     retirement savings) is amended by striking subsection (g) and 
     by redesignating subsection (h) as subsection (g).
       (b) Technical and Conforming Amendments.--
       (1) Subsection (f) of section 219 is amended by striking 
     paragraph (7).
       (2) Paragraph (5) of section 408(d) is amended by striking 
     the last sentence.
       (3) Section 408(o) is amended by adding at the end the 
     following new paragraph:
       ``(5) Termination.--This subsection shall not apply to any 
     designated nondeductible contribution for any taxable year 
     beginning after December 31, 1994.''
       (4) Subsection (b) of section 4973 is amended by striking 
     the last sentence.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.

     SEC. 102. INFLATION ADJUSTMENT FOR DEDUCTIBLE AMOUNT.

       (a) In General.--Section 219, as amended by section 101, is 
     amended by redesignating subsection (g) as subsection (h) and 
     by inserting after subsection (f) the following new 
     subsection:
       ``(g) Cost-of-Living Adjustments.--
       ``(1) Deduction amount.--
       ``(A) In general.--In the case of any taxable year 
     beginning in a calendar year after 1995, the $2,000 amount 
     under subsection (b)(1)(A) shall be increased by an amount 
     equal to the product of $2,000 and the cost-of-living 
     adjustment for the calendar year.
       ``(B) Rounding to next lowest $500.--If the amount to which 
     $2,000 would be increased under subparagraph (A) is not a 
     multiple of $500, such amount shall be rounded to the next 
     lowest multiple of $500.
       ``(2) Related amounts.--Each of the dollar amounts 
     contained in subsection (c)(2) shall be increased at the same 
     time, and by the same amount, as the increase under paragraph 
     (1).
       ``(3) Cost-of-living adjustment.--For purposes of this 
     subsection--
       ``(A) In general.--The cost-of-living adjustment for any 
     calendar year is the percentage (if any) by which--
       ``(i) the CPI for such calendar year, exceeds
       ``(ii) the CPI for 1994.
       ``(B) CPI for any calendar year.--The CPI for any calendar 
     year shall be determined in the same manner as under section 
     1(f)(4).''
       (b) Conforming Amendments.--
       (1) Section 408(a)(1) is amended by striking ``in excess of 
     $2,000 on behalf of any individual'' and inserting ``on 
     behalf of any individual in excess of the amount in effect 
     for such taxable year under section 219(b)(1)(A)''.
       (2) Section 408(b)(2)(B) is amended by striking ``$2,000'' 
     and inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (3) Section 408(j) is amended by striking ``$2,000''.

     SEC. 103. HOMEMAKERS ELIGIBLE FOR FULL IRA DEDUCTION.

       (a) Spousal IRA Computed on Basis of Compensation of Both 
     Spouses.--Subsection (c) of section 219 (relating to special 
     rules for certain married individuals) is amended to read as 
     follows:
       ``(c) Special Rules for Certain Married Individuals.--
       ``(1) In general.--In the case of an individual to whom 
     this paragraph applies for the taxable year, the limitation 
     of paragraph (1) of subsection (b) shall be equal to the 
     lesser of--
       ``(A) $2,000, or
       ``(B) the sum of--
       ``(i) the compensation includible in such individual's 
     gross income for the taxable year, plus
       ``(ii) the compensation includible in the gross income of 
     such individual's spouse for the taxable year reduced by the 
     amount allowable as a deduction under subsection (a) to such 
     spouse for such taxable year.
       ``(2) Individuals to whom paragraph (1) applies.--Paragraph 
     (1) shall apply to any individual if--
       ``(A) such individual files a joint return for the taxable 
     year, and
       ``(B) the amount of compensation (if any) includible in 
     such individual's gross income for the taxable year is less 
     than the compensation includible in the gross income of such 
     individual's spouse for the taxable year.''
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 219(f) (relating to other 
     definitions and special rules) is amended by striking 
     ``subsections (b) and (c)'' and inserting ``subsection (b)''.
       (2) Paragraph (2) of section 219(g), as added by section 
     102, is amended by striking ``Each of the dollar amounts'' 
     and inserting ``The dollar amount''.
       (3) Section 408(d)(5) is amended by striking ``$2,250'' and 
     inserting ``$2,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.

     SEC. 104. CERTAIN COINS AND BULLION NOT TREATED AS 
                   COLLECTIBLES.

       (a) In General.--Paragraph (3) of section 408(m) (relating 
     to exception for certain coin) is amended to read as follows:
       ``(3) Exception for certain coins and bullion.--For 
     purposes of this subsection, the term `collectible' shall not 
     include--
       ``(A) any coin certified by a recognized grading service 
     and traded on a nationally recognized electronic network, or 
     listed by a recognized wholesale reporting service, and--
       ``(i) which is or was at any time legal tender in the 
     country of issuance, or
       ``(ii) issued under the laws of any State, and
       ``(B) any gold, silver, platinum, or palladium bullion 
     (whether fabricated in the form of a coin or otherwise) of a 
     fineness equal to or exceeding the minimum fineness required 
     for metals which may be delivered in satisfaction of a 
     regulated futures contract subject to regulation by the 
     Commodity Futures Trading Commission under to the Commodity 
     Exchange Act,

     if such coin or bullion is in the physical possession of a 
     trustee described under subsection (a) of this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.
                Subtitle B--Nondeductible Tax-Free IRAs

     SEC. 111. ESTABLISHMENT OF NONDEDUCTIBLE TAX-FREE INDIVIDUAL 
                   RETIREMENT ACCOUNTS.

       (a) In General.--Subpart A of part I of subchapter D of 
     chapter 1 (relating to pension, profit-sharing, stock bonus 
     plans, etc.) is amended by inserting after section 408 the 
     following new section:

     ``SEC. 408A. IRA PLUS ACCOUNTS.

       ``(a) General Rule.--Except as provided in this section, an 
     IRA Plus account shall be treated for purposes of this title 
     in the same manner as an individual retirement plan.
       ``(b) IRA Plus Account.--For purposes of this title, the 
     term `IRA Plus account' means an individual retirement plan 
     which is designated at the time of establishment of the plan 
     as an IRA Plus account.
       ``(c) Treatment of Contributions.--
       ``(1) No deduction allowed.--No deduction shall be allowed 
     under section 219 for a contribution to an IRA Plus account.
       ``(2) Contribution limit.--The aggregate amount of 
     contributions for any taxable year to all IRA Plus accounts 
     maintained for the benefit of an individual shall not exceed 
     the excess (if any) of--
       ``(A) the maximum amount allowable as a deduction under 
     section 219 with respect to such individual for such taxable 
     year, over
       ``(B) the amount so allowed.
       ``(3) Rollover contributions.--
       ``(A) In general.--No rollover contribution may be made to 
     an IRA Plus account unless such contribution consists of a 
     payment or distribution out of another IRA Plus account.
       ``(B) Coordination with limit.--A rollover contribution 
     shall not be taken into account for purposes of paragraph 
     (2).
       ``(d) Tax Treatment of Distributions.--
       ``(1) In general.--Except as provided in this subsection, 
     any amount paid or distributed out of an IRA Plus account 
     shall not be included in the gross income of the distributee.
       ``(2) Exception for earnings on contributions held less 
     than 5 years.--
       ``(A) In general.--Any amount distributed out of an IRA 
     Plus account which consists of earnings allocable to 
     contributions made to the account during the 5-year period 
     ending on the day before such distribution shall be included 
     in the gross income of the distributee for the taxable year 
     in which the distribution occurs.
       ``(B) Cross reference.--

  ``For additional tax for early withdrawal, see section 72(t).

       ``(C) Ordering rule.--
       ``(i) First-in, first-out rule.--Distributions from an IRA 
     Plus account shall be treated as having been made--

       ``(I) first from the earliest contribution (and earnings 
     allocable thereto) remaining in the account at the time of 
     the distribution, and
       ``(II) then from other contributions (and earnings 
     allocable thereto) in the order in which made.

       ``(ii) Allocations between contributions and earnings.--Any 
     portion of a distribution allocated to a contribution (and 
     earnings allocable thereto) shall be treated as allocated 
     first to the earnings and then to the contribution.
       ``(iii) Allocation of earnings.--Earnings shall be 
     allocated to a contribution in such manner as the Secretary 
     may by regulations prescribe.
       ``(iv) Contributions in same year.--Under regulations, all 
     contributions made during the same taxable year may be 
     treated as 1 contribution for purposes of this subparagraph.
       ``(3) Rollovers.--
       ``(A) In general.--Paragraph (2) shall not apply to any 
     distribution which is transferred to another IRA Plus 
     account.
       ``(B) Contribution period.--For purposes of paragraph (2), 
     the IRA Plus account to which any contributions are 
     transferred from another IRS Plus account shall be treated as 
     having held such contributions during any period such 
     contributions were held (or are treated as held under this 
     subparagraph) by the account from which transferred.''
       (b) Early Withdrawal Penalty.--Section 72(t), as amended by 
     section 201(c), is amended by adding at the end the following 
     new paragraph:
       ``(8) Rules relating to ira plus accounts.--In the case of 
     an IRA Plus account under section 408A--
       ``(A) this subsection shall only apply to distributions out 
     of such account which consist of earnings allocable to 
     contributions made to the account during the 5-year period 
     ending on the day before such distribution, and
       ``(B) paragraph (2)(A)(i) shall not apply to any 
     distribution described in subparagraph (A).''
       (c) Excess Contributions.--Section 4973(b) is amended by 
     adding at the end the following new sentence: ``For purposes 
     of paragraphs (1)(B) and (2)(C), the amount allowable as a 
     deduction under section 219 shall be computed without regard 
     to section 408A.''
       (d) Conforming Amendment.--The table of sections for 
     subpart A of part I of subchapter D of chapter 1 is amended 
     by inserting after the item relating to section 408 the 
     following new item:

``Sec. 408A. IRA Plus accounts.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.
                  TITLE II--PENALTY-FREE DISTRIBUTIONS

     SEC. 201. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED 
                   WITHOUT PENALTY TO PURCHASE FIRST HOMES OR TO 
                   PAY HIGHER EDUCATION OR FINANCIALLY DEVASTATING 
                   MEDICAL EXPENSES.

       (a) In General.--Paragraph (2) of section 72(t) (relating 
     to exceptions to 10-percent additional tax on early 
     distributions from qualified retirement plans) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Distributions from certain plans for first home 
     purchases or educational expenses.--Distributions to an 
     individual from an individual retirement plan, or from 
     amounts attributable to employer contributions made pursuant 
     to elective deferrals described in subparagraph (A) or (C) of 
     section 402(g)(3) or section 501(c)(18)(D)(iii)--
       ``(i) which are qualified first-time homebuyer 
     distributions (as defined in paragraph (6)), or
       ``(ii) to the extent such distributions do not exceed the 
     qualified higher education expenses (as defined in paragraph 
     (7)) of the taxpayer for the taxable year.''
       (b) Financially Devastating Medical Expenses.--
       (1) In general.--Section 72(t)(3)(A) is amended by striking 
     ``(B),''.
       (2) Certain lineal descendants and ancestors treated as 
     dependents.--Subparagraph (B) of section 72(t)(2) is amended 
     by striking ``medical care'' and all that follows and 
     inserting ``medical care determined--
       ``(i) without regard to whether the employee itemizes 
     deductions for such taxable year, and
       ``(ii) by treating such employee's dependents as 
     including--

       ``(I) all children and grandchildren of the employee or 
     such employee's spouse, and
       ``(II) all ancestors of the employee or such employee's 
     spouse.''

       (3) Conforming amendment.--Subparagraph (B) of section 
     72(t)(2) is amended by striking ``or (C)'' and inserting ``, 
     (C) or (D)''.
       (c) Definitions.--Section 72(t) is amended by adding at the 
     end the following new paragraphs:
       ``(6) Qualified first-time homebuyer distributions.--For 
     purposes of paragraph (2)(D)(i)--
       ``(A) In general.--The term `qualified first-time homebuyer 
     distribution' means any payment or distribution received by 
     an individual to the extent such payment or distribution is 
     used by the individual before the close of the 60th day after 
     the day on which such payment or distribution is received to 
     pay qualified acquisition costs with respect to a principal 
     residence of a first-time homebuyer who is such individual, 
     the spouse of such individual, or any child, grandchild, or 
     ancestor of such individual or the individual's spouse.
       ``(B) Qualified acquisition costs.--For purposes of this 
     paragraph, the term `qualified acquisition costs' means the 
     costs of acquiring, constructing, or reconstructing a 
     residence. Such term includes any usual or reasonable 
     settlement, financing, or other closing costs.
       ``(C) First-time homebuyer; other definitions.--For 
     purposes of this paragraph--
       ``(i) First-time homebuyer.--The term `first-time 
     homebuyer' means any individual if--

       ``(I) such individual (and if married, such individual's 
     spouse) had no present ownership interest in a principal 
     residence during the 2-year period ending on the date of 
     acquisition of the principal residence to which this 
     paragraph applies, and
       ``(II) subsection (a)(6), (h), or (k) of section 1034 did 
     not suspend the running of any period of time specified in 
     section 1034 with respect to such individual on the day 
     before the date the distribution is applied pursuant to 
     subparagraph (A)(ii).

       ``(ii) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 1034.
       ``(iii) Date of acquisition.--The term `date of 
     acquisition' means the date--

       ``(I) on which a binding contract to acquire the principal 
     residence to which subparagraph (A) applies is entered into, 
     or
       ``(II) on which construction or reconstruction of such a 
     principal residence is commenced.

       ``(D) Special rule where delay in acquisition.--If any 
     distribution from any individual retirement plan fails to 
     meet the requirements of subparagraph (A) solely by reason of 
     a delay or cancellation of the purchase or construction of 
     the residence, the amount of the distribution may be 
     contributed to an individual retirement plan as provided in 
     section 408(d)(3)(A)(i) (determined by substituting `120 
     days' for `60 days' in such section), except that--
       ``(i) section 408(d)(3)(B) shall not be applied to such 
     contribution, and
       ``(ii) such amount shall not be taken into account in 
     determining whether section 408(d)(3)(A)(i) applies to any 
     other amount.
       ``(7) Qualified higher education expenses.--For purposes of 
     paragraph (2)(D)(ii)--
       ``(A) In general.--The term `qualified higher education 
     expenses' means tuition, fees, books, supplies, and equipment 
     required for the enrollment or attendance of--
       ``(i) the taxpayer,
       ``(ii) the taxpayer's spouse, or
       ``(iii) any child (as defined in section 151(c)(3)), 
     grandchild, or ancestor of the taxpayer or the taxpayer's 
     spouse,
     at an eligible educational institution (as defined in section 
     135(c)(3)).
       ``(B) Coordination with savings bond provisions.--The 
     amount of qualified higher education expenses for any taxable 
     year shall be reduced by any amount excludable from gross 
     income under section 135.''
       (d) Penalty-Free Distributions for Certain Unemployed 
     Individuals.--Paragraph (2) of section 72(t) is amended by 
     adding at the end the following new subparagraph:
       ``(E) Distributions to unemployed individuals.--A 
     distribution from an individual retirement plan to an 
     individual after separation from employment, if--
       ``(i) such individual has received unemployment 
     compensation for 12 consecutive weeks under any Federal or 
     State unemployment compensation law by reason of such 
     separation, and
       ``(ii) such distributions are made during any taxable year 
     during which such unemployment compensation is paid or the 
     succeeding taxable year.

     To the extent provided in regulations, a self-employed 
     individual shall be treated as meeting the requirements of 
     clause (i) if, under Federal or State law, the individual 
     would have received unemployment compensation but for the 
     fact the individual was self-employed.''
       (e) Conforming Amendments.--
       (1) Section 401(k)(2)(B)(i) is amended by striking ``or'' 
     at the end of subclause (III), by striking ``and'' at the end 
     of subclause (IV) and inserting ``or'', and by inserting 
     after subclause (IV) the following new subclause:

       ``(V) the date on which qualified first-time homebuyer 
     distributions (as defined in section 72(t)(6)) or 
     distributions for qualified higher education expenses (as 
     defined in section 72(t)(7)) are made, and''.

       (2) Section 403(b)(11) is amended by striking ``or'' at the 
     end of subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, or'', and by inserting 
     after subparagraph (B) the following new subparagraph:
       ``(C) for qualified first-time homebuyer distributions (as 
     defined in section 72(t)(6)) or for the payment of qualified 
     higher education expenses (as defined in section 72(t)(7)).''
       (f) Effective Date.--The amendments made by this section 
     shall apply to payments and distributions after the date of 
     the enactment of this Act.
           TITLE III--AID TO FAMILIES WITH DEPENDENT CHILDREN

     SEC. 301. DISREGARD OF INCOME AND RESOURCES DESIGNATED FOR 
                   EDUCATION, TRAINING, AND EMPLOYABILITY.

       (a) Disregard as Resource.--Section 402(a)(7)(B) of the 
     Social Security Act (42 U.S.C. 602(a)(7)(B)) is amended--
       (1) by striking ``or'' before ``(iv)'', and
       (2) by inserting ``, or (v) at the option of the State, in 
     the case of a family receiving aid under the State plan (and 
     a family not receiving such aid but which received such aid 
     in at least 1 of the preceding 4 months or became ineligible 
     for such aid during the preceding 12 months because of 
     excessive earnings), any amount not to exceed $8,000 in a 
     qualified asset account (as defined in section 406(i)) of 
     such family'' before ``; and''.
       (b) Disregard as Income.--
       (1) In general.--Section 402(a)(8)(A) of such Act (42 
     U.S.C. 602(a)(8)(A)) is amended--
       (A) by striking ``and'' at the end of clause (vii), and
       (B) by inserting after clause (viii) the following new 
     clause:
       ``(ix) shall disregard any interest or income earned on a 
     qualified asset account (as defined in section 406(i)); 
     and''.
       (2) Nonrecurring lump sum exempt from lump sum rule.--
     Section 402(a)(17) of such Act (42 U.S.C. 602(a)(17)) is 
     amended by adding at the end the following: ``; and that this 
     paragraph shall not apply to earned or unearned income 
     received in a month on a nonrecurring basis to the extent 
     that such income is placed in a qualified asset account (as 
     defined in section 406(i)) the total amount in which, after 
     such placement, does not exceed $8,000;''.
       (3) Treatment as income.--Section 402(a)(7) of such Act (42 
     U.S.C. 602(a)(7)) is amended--
       (A) by striking ``and'' at the end of subparagraph (B),
       (B) by striking the semicolon at the end of subparagraph 
     (C) and inserting ``; and'', and
       (C) by adding at the end the following new subparagraph:
       ``(D) shall treat as income any distributions from a 
     qualified asset account (as defined in section 406(i)(1)) 
     which do not meet the definition of a qualified distribution 
     under section 406(i)(2);''.
       (c) Qualified Asset Accounts.--Section 406 of such Act (42 
     U.S.C. 606) is amended by adding at the end the following:
       ``(i)(1) The term `qualified asset account' means a 
     mechanism approved by the State (such as individual 
     retirement accounts, escrow accounts, or savings bonds) that 
     allows savings of a family receiving aid to families with 
     dependent children to be used for qualified distributions.
       ``(2) The term `qualified distributions' means 
     distributions for expenses directly related to one or more of 
     the following purposes:
       ``(A) The attendance of a member of the family at any 
     education or training program.
       ``(B) The improvement of the employability (including self-
     employment) of a member of the family (such as through the 
     purchase of an automobile).
       ``(C) The purchase of a home for the family.
       ``(D) A change of the family residence.''
       (d) Study of Use of Qualified Asset Accounts; Report.--The 
     Secretary of Health and Human Services shall conduct a study 
     of the use of qualified asset accounts established pursuant 
     to the amendments made by this section, and shall report on 
     such study and any recommendations for modifications of such 
     amendments to the Committee on Finance of the Senate and the 
     Committee on Ways and Means of the House of Representatives 
     not later than January 1, 1998.
       (e) Report on AFDC Asset Limit on Automobiles.--Within 3 
     months after the date of the enactment of this section, the 
     Secretary of Health and Human Services shall submit to the 
     Congress a report on--
       (1) the need to revise the limitation, established in 
     regulations pursuant to section 402(a)(7)(B)(i) of the Social 
     Security Act, on the value of a family automobile required to 
     be disregarded by a State in determining the eligibility of 
     the family for aid to families with dependent children under 
     the State plan approved under part A of title IV of such Act, 
     and
       (2) the extent to which such a revision would increase the 
     employability of recipients of such aid.
       (f)  Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1995, with respect to 
     accounts approved on or after such date and before October 1, 
     1998.
  Mr. BREAUX. Madam President, I thank my good friend for his 
persistence and determination in trying to achieve the goal of 
increasing the opportunity for savings for all Americans. It is very 
clear that this is a subject matter in this country that is deserving 
of the attention that my colleague has given to it with his various 
proposals over the past several years. He mentioned his cooperative 
work with the former chairman, now the distinguished Secretary of the 
Treasury, Lloyd Bentsen, in the last Congress, and in previous 
Congresses, in trying to really create a system that encourages 
individuals and families to do something that we in America do not do 
very well--that is, save money.
  It seems that particularly more and more of our young people, and 
more and more people in the so-called ``baby boomer generation'' really 
just live from day to day, from month to month. No matter how much they 
make, it seems that at the end of the month they end up with the same 
amount--zero. The more you make, the more you spend, the less you have.
  I think that what the distinguished Senator and I are presenting to 
the Congress today is an effort to change that way of thinking for all 
Americans. If you look at what other countries are doing, you will find 
they are way ahead of us in this particular area. Even countries that 
the United States may consider a little backward, or not as progressive 
as we are, do a lot better in this area than we as a country do. They 
save money, plan for the future, and plan for their children's 
education, and they plan for potential medical problems they may have, 
so that they may have a small nest egg from which they can take care of 
those needs. The bottom line is that they save money. We in America do 
not.
  Statistics, I think, are pretty frightening, and they are getting 
worse. The United States has dropped in the rate at which we save money 
very significantly since the 1980's.
  Today personal savings in other major countries is something like 2 
to 3 times greater than we have here in the United States, which is 
supposed to be a Nation that has a very strong economy, that has people 
who are wage earners who have a great deal of disposable income. The 
problem is we are disposing of it too fast, and we are not trying to 
save any of it for those rainy days which are becoming more and more 
frequent and more and more potentially catastrophic to the families 
that are faced with rainy days that actually become monsoons and floods 
that end up wiping out families because we are not prepared for that 
rainy day.
  I say that the legislation that the Senator from Delaware has very 
carefully outlined is a way of trying to encourage something that other 
countries already do and to encourage something that really we should 
be doing in the United States.
  I think that the plan that is presented is one that has a great deal 
of support. I only wish other legislation that we would bring to the 
Senate floor had this much support when the bill is introduced.
  I think of the health care bill that my colleague from Delaware and I 
are working on. If we could find 55 votes to support that as we have on 
this bill the day of introduction, what a major achievement that would 
be.
  Yet this bill is being introduced today, without a single hearing, 
with 55 Members of the Senate who said ``This is something that I can 
support; this is something that is a good idea and this is something 
that would be good for the constituents that I represent.''
  So 55 cosponsors to start with I think indeed is a very major 
accomplishment.
  I say to the Presiding Officer, who is in the Chair, it is also 
important to note the way these programs treat individual home workers. 
A number of families are penalized when there is one parent working in 
the home from being able to save in the same manner in which there 
happens to be two parents working outside the home. At a time in our 
society when more and more families find themselves with a single 
income, it is more and more important for us to make sure that we do 
not discriminate against that wife or husband who chooses to work in 
the home.
  What we want to do is to make sure that homemakers are given the same 
opportunity to save money.
  So the legislation we are offering corrects those inequities in a way 
that I think is good for the people of our Nation.
  I urge additional colleagues to take a look at what we have planned 
and to join with us in cosponsoring this legislation. I would like to 
see it done this year, but if it is not done this year, there will come 
a time when it will be done. It is right. It is important. It is 
necessary. It is something that will be good for this country.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Madam President, I wonder if I would ask my friends to 
include me. I would like to be included as an original cosponsor, if I 
may.
  Mr. ROTH. Madam President, as my distinguished colleague and I 
pointed out earlier, the Roth-Breaux super-IRA is good for the country 
and it is good for the family.
  As we have indicated, the United States faces a savings crisis. Alan 
Greenspan, the Chairman of the Federal Reserve, has stated that the 
lack of savings in this country is a critical problem of our long-term 
growth and prosperity.
  Unfortunately, the figures show that the U.S. national savings rate 
for the past decade has been worse than at any time since World War II. 
As a matter of fact, in the last quarter of this year, our savings 
dropped to roughly 3.5 percent. The U.S. personal savings dropped from 
6 percent to 4.3 percent immediately after the 1986 tax reform, which, 
unfortunately, limited those that could participate in the full IRA.
  Madam President, this chart here illustrates what happened as to 
total annual IRA contributions in the period from 1982 to 1991.
  In 1986, the personal savings under IRA contributions was $38 
billion. That $38 billion dropped in 1991 to $12.1 billion. That is a 
loss of savings that this country cannot afford.
  Just let me point out that where the U.S. consumers save less than 5 
cents out of every dollar, the Japanese save something like 16 cents, 
three times as much. That is of critical importance if we are going to 
compete with Japan. In our industrial facilities, our ability to 
manufacture, for example, if we are going to have the necessary 
research and development to make our products the best, we need the 
capital to create those assets. But, unfortunately, the Japanese are 
outsaving us 3 to 1, so there is no question where the advantage is. 
And that must be changed.
  That is one of the reasons we are introducing the Roth-Breaux super-
IRA today. We think is is critically important for this Nation's 
welfare, both long and short term, that we do something about savings.
  Madam President, this is an important initiative for the American 
family. It is important that American families save for the future.
  Let me point out that a study was just recently made by a 
distinguished Stanford professor that shows for the baby boomers, when 
they are 65 years old and ready to retire, that if something is not 
done to promote savings on their part, they are only going to have one-
third of the capital necessary to maintain their standard of living. 
That is deplorable. Something must be done about it, and that is what 
we propose to do through the IRA.
  There are a number of initiatives as part of the super-IRA that I 
think are worthwhile spelling out.
  First of all, we not only will have the front-ended IRA, where a 
family can contribute $2,000 tax free and then later on when the funds 
are withdrawn taxes will be paid on the earnings--that is one choice, 
the front-ended IRA--but we have a new initiative that would permit a 
back-ended IRA. In a back-ended IRA, you do not get any tax advantage 
when you make the contribution, but when you withdraw the earnings from 
that IRA, it is tax free. That is particularly important because that 
means those earnings are tax free and can be withdrawn upon retirement 
when most people have the greater need.
  But a family has a choice. They can go either way or a combination of 
the two, so there is tremendous flexibility built in.

  Another aspect of this legislation that is critically important is 
that it takes care of the housewife. Many years back, in the 1970's, I 
felt strongly that housewives, who work just as hard as anyone does 
here in the Senate or elsewhere, were entitled to an IRA. I proposed 
that they be entitled to the full IRA. Unfortunately, as the 
legislation worked its way through, it was limited to $250 for the 
spouse.
  I am happy to say that this legislation would once again establish 
the full allotment of $2,000 to a housewife or, for that matter, a 
househusband. This follows and is in keeping with the legislation 
introduced sometime ago by several women Senators who specifically 
proposed that housewives be granted this right. I think this is a very, 
very important initiative.
  Madam President, I would just like to point out some other 
flexibility we have built into this legislation. We know that families 
have differing needs as they start out as a young couple and grow 
older, so we provide a number of instances where a family may withdraw 
funds from their IRA for important needs.
  For many families, the most important first need is buying a home. 
Under our proposal, funds can be withdrawn after 5 years without 
penalty to buy that first home.
  I might point out that that is good for the economy, Madam President, 
because it is estimated that something like 50,000 houses a year 
ultimately would be built through these savings and that would create 
as many as 200,000 jobs a year.
  We would also permit funds to be withdrawn without penalty for higher 
education. Again, this is critically important because, as we all know, 
college education costs are skyrocketing.
  It is said to give a baby born today 4 years of college. It will cost 
something like $60,000 in a public institution; $200,000 in a private 
institution.
  Mr. HATCH. Mr. President, I rise to express my support for the Roth-
Breaux super-IRA legislation. This bill is designed to counter the 
dangerously low saving rate we have been experiencing over the last few 
years in America. I believe our low saving rate is one of the key 
domestic economic problems of this country.
  In this time of growing concern about America's economic future, I 
believe much of our focus should be on the national saving rate and the 
personal saving rate. There are many reasons why we should take 
immediate action to incite a national movement to stimulate savings and 
investment. This can be accomplished through establishing a prosaving 
tax policy. The super IRA should be an important part of that policy.
  Mr. President, it is no secret that the United States is experiencing 
anemic savings rates. In testimony before the Senate Banking Committee 
yesterday, Dr. Alan Greenspan, Chairman of the Federal Reserve, was 
optimistic about the economy in the short term, but expressed concern 
that the long-term outlook for growth is troubling because of the 
dangerously low saving rate.
  Today's national saving rate is at a historic low, a miserable 3.6 
percent. This rate is one-fifth the current rates of some of our 
economic competitors. It is significant to note that our saving rate 
averaged 6.7 percent in the 1960's and 7.8 percent in the 1970's. 
Beginning about 1985, however, the rate began a steady slide toward 
today's low rate.
  I would like to discuss some of the factors contributing to this 
saving rate, which are simultaneously burdening taxpayers' propensity 
to save. To begin with, the Federal Government has been a continually 
poor example of a saver. With the national debt exceeding $4.5 
trillion, representing a burden to each American of roughly $17,000, 
many taxpayers are feeling the blissful ease of spending beyond their 
means without fully comprehending the consequences. Abraham Lincoln 
once said, ``You cannot keep out of trouble by spending more than you 
earn.'' Yet, by continuing to spend more than we earn, the U.S. 
Government is establishing an attitude toward consumption and away from 
saving that will harm our efforts to instill in our citizens the value 
of saving for the future.
  Another factor is that Americans prefer debt to savings, and our 
current tax policy encourages this. For example, recent years have 
shown a tremendous increase in home equity loans. Individuals can 
deduct interest on debt secured by a primary residence as an itemized 
deduction, thus helping to reduce their taxable income. Consumers can 
enjoy current consumption that is subsidized by the tax code. 
Conversely, taxpayers who attempt to save for future consumption are 
penalized with taxes on interest earned, dividends received, or capital 
gains made. Is it any wonder our national saving rate is at a record 
low?

  Unfortunately, we have seen the attitude of our Nation about saving 
change over the last two decades. Those who have lived through the 
Depression and the World War II years truly know the value of hard work 
and the importance of thrift and saving for the future. The attitude in 
our society today is more one of free-spending and saving complacency.
  Mr. President, today's workers cannot count on Social Security alone 
to carry them financially in their older years. Too many of our 
families are ignoring the need to begin now to save for retirement. In 
today's environment, private retirement saving is needed more than 
ever. The super-IRA legislation introduced today would provide the 
vehicle to prompt many citizens to begin to see the way to put away a 
portion of today's earnings for the future.
  Reinstating the universal deduction for contributions to an IRA would 
give the American people an incentive to save. As people save more, 
interest rates will decline and the United States will not be so 
dependent on foreign capital. There is evidence that the American 
people want this deduction reinstated. Many taxpayers in my home State 
of Utah were extremely upset when the Tax Reform Act of 1986 repealed 
the universal deduction for contributions to an IRA. In 1986, two-
thirds of all taxpayers claiming an IRA deduction were individuals or 
families with adjusted gross incomes of under $50,000 a year. IRA's 
accounted for nearly a fourth of all personal savings in the United 
States. In 1987, under the new restrictions, IRA contributions fell by 
67 percent, or $24 billion, with a third of the decline, or $8 billion, 
coming from taxpayers with annual incomes below $15,000.
  Mr. President, under the Roth-Breaux plan, taxpayers will be 
encouraged to save. Today's tax code is punitive and antagonistic when 
it comes to saving. We need to ensure our tax policy encourages 
taxpayers to save for the future.
  This bill would allow a family to choose from a ``front-loaded'' or 
``back-loaded'' IRA. The bill would also allow a penalty-free 
withdrawal from the IRA for college education expenses, first-time home 
purchases, medical emergencies, and long unemployment periods. Thus, 
taxpayers would have flexibility to plan for the future without the 
fear of penalties or of tying up their money where it cannot be reached 
in an emergency.
  Mr. President, this legislation is long overdue. It has previously 
passed both Houses of Congress, but the tax bill which contained it was 
vetoed by President Bush for reasons unrelated to the super-IRA 
provision. The time is now to take hold of our national and personal 
saving by giving Americans an incentive to save. I congratulate 
Senators Roth and Breaux for their leadership on this bill, and I urge 
all of our colleagues to support it.
  Mr. SHELBY. Mr. President, I am pleased to join the Senators from 
Louisiana and Delaware today in supporting IRA tax relief that is long 
overdue.
  Giving Americans the opportunity to save and invest for their future 
and for their children's futures without penalty is vital to improving 
the well-being of the American family and this country.
  Mr. President, this is the kind of stimulus and investment package 
the American people want to see. Let the American people make their own 
choices and give them the opportunity to save and spend their own money 
without taxing them every time they do.
  That's what our Tax Code does right now--it penalizes individuals in 
this country for setting aside a little something for the future, for 
putting away something to fall back on in case of emergency or 
unemployment, or for saving for college or a first home.
  These are all valuable and important things that we want Americans to 
be able to afford, to be able to do--and yet we penalize them--we tax 
them--every time they try to do these good things. Every time they take 
money out of their individual retirement accounts to pay for a child's 
unexpected illness--every time they withdraw funds to pay for a better 
education, a better future--the tax collector is there to ensure they 
don't spend too much in one place and that they contribute their fair 
share to Uncle Sam.
  Rather than empowering American families, Mr. President, our tax 
policy and social policy would make them dependent on the Government 
for these important expenses. We would tax families' ability to pay for 
college, or a home or medical expenses--and then, turn around and 
encourage them to accept Government vouchers, Government loans or 
Government insurance to pay for them.
  Why not let families choose for themselves and abstain from 
penalizing their choices--choices, Mr. President--which everyone agrees 
are important policy goals.
  Health care, education, housing, jobs. These are all very important 
issues to the American family and to this country. And every year, 
Congress tries to find ways to help families who can't afford these 
things. This body's answer is usually a hand out rather than a hand 
up--another opportunity to force Government solutions to family needs. 
This bill is about a hand up, Mr. President and it is a real and 
meaningful one for many American families.
  I thank my colleagues from Louisiana and Delaware for offering this 
important legislation and urge the Senate to act quickly in removing 
one of the many tax penalties we currently place on efforts to make a 
better life in this country.
  Ms. MIKULSKI. Mr. President, I rise today in support of the Breaux-
Roth super-IRA legislation, which I am proud to cosponsor. I support 
this bill because it reflects our good values: rewarding those who 
practice self-help, encouraging all Americans to save, and 
acknowledging those who work as homemakers.
  The super-IRA legislation will expand the availability of Individual 
Retirement Accounts [IRA's] to all Americans, including those spouses 
who work in the home. It will also allow for penalty-free withdrawals 
for downpayments on first homes, education costs, emergency medical 
care expenses, and in cases of long-term employment.
  Mr. President, this legislation is good for America. It is getting 
harder and harder for working Americans to save money for their 
retirement, college expenses, or a first home. Moms and dads are 
struggling to give their kids a good education, and they should not be 
penalized for staying at home. Young families want to buy a home but 
cannot afford a downpayment. All Americans are facing skyrocketing 
medical expenses. The super-IRA bill will give these Americans an 
incentive to save, not only for retirement, but also for their 
children's education, their homes, and for unforeseen emergency medical 
care costs or expenses that build up during long-term unemployment.
  Super-IRA legislation will also help increase America's overall 
savings. This will contribute to lower interest rates, increased 
investments, and productivity growth in the economy. As a super-IRA 
cosponsor, I am pleased to join the bipartisan effort working for 
passage of this important legislation. I urge my colleagues to join our 
efforts.
  Mrs. FEINSTEIN. Mr. President, I rise today to join Senators Breaux, 
Roth, and others in introducing this super IRA bill.
  This legislation expands the existing individual retirement account 
program and makes the IRA more flexible by allowing penalty-free 
withdrawal for: first-time home purchases; college education expenses; 
catastrophic medical costs; and for periods of long and unusual 
unemployment.
  It also provides equity in the treatment of spouses who work in the 
home.
  I believe that our Nation's economic well being and our citizens' 
standard of living depend on increasing national savings. The U.S. net 
national savings rate has fallen in half from the 1960's to the 1980's, 
from 8.8 to 4.3 percent of net national product. In the 1990's, it has 
been even worse, falling to just 1.8 percent.
  From World War II until 1973, the living standards of Americans was 
doubling every 25 years. At post-1973 growth rates, it will take 80 
years to double our standard of living. In a nut shell, that is our 
economic problem.
  The Director of the Congressional Budget Office, Robert Reischauer, 
testified just last month that America's low national savings rate ``* 
* * pose[s] an increasing, cumulative threat to the growth of living 
standards for the people of the United States.''
  Economist Alan Auerbach testified that

       * * * a higher rate of national savings translates into 
     greater national wealth and hence a higher standard of living 
     and competitiveness. The U.S. savings rate, which even in 
     past decades was very low compared to the rates of other 
     developed nations, represents an obstacle to maintaining a 
     competitive international position.

  Savings is the pool of money from which businesses borrow and invest 
to create jobs. Without it, our Nation must either invest less or 
borrow more from abroad. According to economists at the Federal Reserve 
Bank of New York, the decline in national savings from our 1970's level 
had, by 1989, already resulted in a shortfall in output of nearly $240 
billion.
  In the last two decades, America's two greatest economic rivals--
Germany and Japan--have significantly closed the economic pay. How have 
they done it? For one thing, they have saved more. Germany saved at a 
rate nearly twice as high as the United States and Japan nearly 3 times 
as much.
  Clearly the United States must save more too, the difficult question 
is how to do it.
  One important way to increase national savings is to give Americans a 
greater incentive to save. That is what the super IRA legislation does.
  It would restore the widespread availability of the fully tax 
deductible IRA. Every American worker will be able to contribute up to 
$2,000 on a tax deductible basis annually for their retirement.
  Since the IRA program was limited by Congress in 1986, the number of 
Americans taking advantage of the IRA has fallen dramatically from 16.2 
million in 1985 to just 4.7 million in 1991. Under this legislation, 
millions of Americans would be eligible to participate in a tax-
deductible IRA plan. In California alone, more than 10 million people 
would be eligible to participate.
  This bill would also provide equity to nonworking spouses. The 
current tax law is biased against spouses who do not work outside the 
house. Under the law, if both spouses in a household being home a 
paycheck, then each is permitted a deductible IRA contribution of up to 
$2,000 annually--$4,000 in total. However, if only one spouse works 
outside the home, then the married couple is limited to a deductible 
IRA contribution of just $2,250 annually.

  This legislation corrects this inequity and permits spouses that work 
in the home to contribute up to $2,000 just like their working spouse. 
For a family with one working spouse, this bill could mean an increase 
of savings in retirement funds of nearly $300,000 over 40 years. In 
California alone, 200,000 spouses are affected by the current Tax Code 
inequity and another 2 million would become eligible for greater IRA 
participation.
  This legislation would also make important and needed changes to the 
treatment of individual retirement accounts. Under this bill, penalty-
free withdrawals from IRAs, and 401K plan, would be allowed for: 
college education expenses; first-time home purchases; financially 
devastating medical expenses; and during periods of long and unusual 
unemployment,
  In California, where the average house costs more than $188,000, 
nearly $82,000 more than the national average, and particularly in the 
urban areas of Los Angeles and San Francisco where average house costs 
$200,000 and $250,000 respectively, one of the greatest difficulties 
for hard working families is to save the down payment to buy their 
first home.
  America's home ownership rate is dropping. Two million more people 
would have owned a home at the end of the last decade had the ownership 
rate remained constant from the beginning of the decade. In California, 
the problem is even greater than the Nation as a whole. The U.S. home 
ownership rate is 64.5 percent. In California, however, it is just 56.8 
percent. By helping people save for a down payment, this IRA bill will 
give countless Californians the opportunity to buy a home and live part 
of the American dream.
  This will be good news for California's economy too. The real estate 
slump in the State has significantly harmed the economy. In 1989, 
housing was directly and indirectly responsible for more than 813,000 
jobs. In 1993 that fell to fewer than 365,000 jobs.
  The other great concern for average families is paying for their 
children's college education. The cost of both private and public 
college education has risen dramatically in the last two decades. By 
allowing penalty-free withdrawals for college education expenses, 
average families will have a better opportunity to afford their 
children's education.
  In short, I do not believe that Californians should be penalized for 
saving for their retirement, for their first home, or for their child's 
education. I also do not believe that Californians should be penalized 
for using their IRA funds to pay for catastrophic medical expenses or 
during long periods of unemployment.
  I have no doubt that this legislation will boost the Nation's savings 
rate. Best of all, it will promote greater investment in our economy 
making America more competitive internationally and creating 
desperately needed new jobs.
  I am proud to be a cosponsor of this important piece of legislation. 
I urge my colleagues to support it.
  Mr. BURNS. Madam President, I rise today as an original cosponsor of 
this bill. I know that Senator Roth and Senator Breaux have worked on 
this issue for a number of years. And Secretary of the Treasury 
Bentsen, when he was a Member of this body, also strongly supported 
this initiative.
  I am pleased to be among the many supporters of an expanded IRA here 
in the Senate.
  I think most folks know how important it is to save for a rainy day. 
But America's national savings rate is nothing to write home about.
  Many folks would like to save more for their retirement because, 
let's face it, it's tough to make ends meet on Social Security.
  But tying up that money in a traditional IRA means that early 
withdrawals for emergencies is subject to a penalty.
  Other folks would like to save with a traditional IRA but don't 
because they cannot make a tax-deductible contribution.
  I am concerned about this situation and think that more needs to be 
done to help Americans save.
  This bill would open eligibility to IRA's to everyone. This plan 
allows folks to choose a traditional IRA with tax-deductible 
contributions, or a super IRA, where contributions are taxed but 
withdrawals are not.
  The super IRA has a special feature which allows folks to take out 
money, without penalty, for a down payment on a home, college tuition, 
medical expenses, or living expenses when they are unemployed. And, 
homemakers--male or female--could have their own IRA on an equal basis, 
for the first time.
  Again, I strongly support this bill and urge my colleagues to become 
cosponsors.
  Mr. DODD. Mr. President, I rise in support of super-IRA legislation 
being introduced today by Senators Breaux and Roth. I am pleased to 
join them as a cosponsor of this important bill.
  The Breaux-Roth super-IRA bill would meet several critical national 
needs. It would increase personal savings, contribute to greater 
capital formation, and help Americans finance their family's college 
education, first-time home purchases, and devastating medical 
illnesses.
  The super-IRA bill would permit all Americans to benefit from IRA 
contributions. And, it would provide greater options and flexibility to 
those choosing to participate. The bill would provide all Americans the 
option of making a tax-deductible contribution of up to $2,000 per year 
to a traditional IRA or a new backloaded IRA in which contributions 
would not be deductible, but earnings would not be taxed when 
withdrawn.
  When Americans think of savings they think of IRA's. Yet, since the 
restrictions on IRA eligibility were imposed by the 1986 Tax Reform 
Act, IRA contributions have fallen by almost 70 percent.
  During consideration of the 1986 bill, Senator D'Amato and I led a 
floor effort to eliminate provisions limiting IRA eligibility forty-
seven of our colleagues voted in favor of the restoration. Since then, 
I have introduced legislation in two Congresses to restore the full 
deductibility of the IRA and have joined in cosponsoring this bill and 
its predecessor, introduced by former Senator and now Treasury 
Secretary, Lloyd Bentsen.
  This important legislation is needed to increase personal savings, 
and raise our dangerously low national savings rate. Our national 
savings dropped substantially in the 1980's, and has declined further 
since, falling far below the levels of our competitors. Low national 
savings translate into reduced investment, decreased productivity, 
increased trade deficits, and a lower standard of living.
  The decline in public savings and investment has been matched by a 
corresponding decline in private savings. While the Federal Government 
quadrupled our national debt, many American families, too, were living 
far beyond their means. As a nation, we have experienced a record low 
rate of personal savings and a record high rate of personal debt.
  I commend Senators Breaux and Roth for their leadership on this 
important issue, and am hopeful that we can soon enact legislation 
restoring IRA eligibility, and returning this important investment tool 
to all Americans.
                                 ______

      By Mrs. FEINSTEIN (for herself, Mrs. Boxer, and Mr. DeConcini):
  S. 2302. A bill to require the Secretary of the Treasury to mint 
coins in commemoration of the Old San Francisco Mint; to the Committee 
on Banking, Housing, and Urban Affairs.


           the old san francisco mint commemorative coin act

  Mrs. FEINSTEIN. Mr. President, I rise today to introduce the Old San 
Francisco Mint Commemorative Coin Act. I am pleased to be joined in 
this effort by Senator Boxer.
  This legislation would direct the Secretary of the Treasury to mint a 
million each of a specially designed silver dollar and a half dollar. 
The coins would sell for $10 and $2 respectively. Proceeds from this 
commemorative coin set would be earmarked for the preservation of the 
Old Mint and all that it represents in the emergence of the United 
States as a world economic power.
  The site for the mint was acquired in 1869 during the time of 
President Andrew Johnson's turbulent administration. The building 
itself was completed in 1874 and represents, with its solid stone 
exterior, the strength and endurance of our Nation. It was patterned 
after the columned Greek Revival architecture of many of the post-
Civil-War buildings in Washington DC, providing through its unique 
architecture the transcontinental reach of the reunited United States.
  It was one of the first stone buildings in San Francisco and remains 
now the city's oldest, having survived the devastating earthquakes of 
1906 and 1989. Through its coin presses came the gold from the Mother 
Lode and silver from the Comstock, the mines of the West producing the 
bullion and wealth that helped finance this Nation's transition from 
wilderness to world power.
  It remained an active mint until 1937 when a new, larger, and more 
modern structure was built. The old building's high ceilings and 
historic architecture became home for one of the most complete and 
historic collections of the coins and artifacts of that national 
emergence from the backwoods to industrial giant.
  In the collection are scales more than a century old but so amazingly 
accurate that they can discern so much as a pencil mark in weighing one 
sheet of paper against another. Along with coins that date back to the 
Indian pennies of the 19th century to the Kennedy dimes today are cases 
of military medals from the Civil and Indian wars of almost a century 
and a half ago to those from the battles in the Pacific and in Europe 
of 50 years ago to Vietnam and Desert Strom.
  School children by the hundreds flock to the museum each day to be 
immersed in the marvelous history of the American struggle from the 
days when covered wagons groaned across the Rockies to today when 
rockets soar into the heavens. Its cavernous rooms, with their turn-of-
the-century velvet drapes, are alive with the stateliness of a nation 
no longer with mud on its boots, but with aspirations of greatness, a 
democracy fulfilling itself.
  The Old San Francisco Mint is located in the heart of the city's 
downtown. It is a 120-year-old architectural treasure and national 
historic landmark and now a museum of distinction.
  This landmark, at the very hub of attractions for tourists and 
visitors from all parts of the United States and from around the world, 
is worth preserving. A block from Yerba Buena Gardens, the recently 
completed urban park that fronts on the Moscone Convention Center, 
which each year hosts tens of thousands of visitors from around the 
Nation, and across the street from the San Francisco Center, a new 
retail development, the Old Mint is vitally located as a major 
attraction in its own right.
  Since December, when the Department of the Treasury decided to close 
the mint because of the need for extensive seismic and other structural 
improvements, a groundswell of support has developed for keeping it 
open. In the forefront are numismatic societies from the Atlantic to 
the Pacific, which view the Old Mint as a hallmark of the Nation's 
economic development.
  San Franciscans have organized Friends of the Mint privately to raise 
money for its renovation, and San Francisco's two major newspapers, 
located directly across the street, are in strong editorial support.
  With the cooperation of the Department of the Treasury, the museum 
has been kept open while a detailed study was undertaken by a special 
task force appointed by San Francisco Mayor Frank Jordan on how the 
building could be upgraded and sustained as a major museum. The museum 
itself has a range of irreplaceable exhibits on the history of coins 
and on the dramatic growth of the West as center of finance and 
commerce and as gateway to the burgeoning economies of the Pacific rim. 
Studies by various architectural and museum experts conclude that the 
museum can attract upward of 350,000 visitors a year and can, with 
careful management, operate in the black without need of ongoing 
Federal funding.

  Heretofore the museum has operated 5 days a week and without any 
effort to publicize the uniqueness of its collections and promote 
attendance. The mayor's task force, after studying other museums around 
the United States, recommended a careful management plan, under a 
nonprofit trust. That attendance that last year fell below 100,000 can 
be more than tripled by keeping the museum open at least 1 day on 
weekends, actively promoting it in guides and tourbooks and charging 
nonstudents a modest admission fee.
  Cafes would be added and would bring in additional revenues, and the 
present small store would be expanded to sell commemorative coins and 
memorabilia of our Nation's history. As an indication of its national 
worth, the Smithsonian Institution has shown interest in providing 
special exhibits of historic significance. In fact, so important is the 
building as a historic landmark, the National Trust for Historic 
Preservation, has put it on its list of the 11 Most Endangered Historic 
Places in the United States. As Richard Moe, the president of the 
Historic Trust has pointed out, the Old Mint, fondly known as the 
Granite Lady was once the Nation's busiest mint ``thanks to abundant 
gold and Comstock silver.''
  An essential element to assuring the museum can be brought up to 
modern standards and operated in the black would be the issuance of the 
special commemorative coin set celebrating the long and rich history of 
the Old Mint. At minimum, these historic coins, based on the average 
revenues from other commemoratives, should bring in $8 to $10 million. 
But authorities from numismatic societies in California and nationally, 
pointing out that it would be the first set specifically dedicated to 
their principal interest, estimate proceeds will be $15 million.
  San Francisco will play its part in raising the needed funds. The 
mayor's office is planning to incorporate the Old Mint into neighboring 
redevelopment areas through which financing can be authorized through 
the sale of revenue bonds. Additionally, Mayor Jordan will be working 
closely with Friends of the Mint to raise funds privately to help 
finance reconstruction and continued maintenance of the building.
  Treasury Secretary Lloyd Bentsen has been extremely helpful and 
accommodating in keeping the museum open to the public while plans were 
developed for its continued operation. The planning process has been 
extensive and exacting, with a number of solid proposals for enhancing 
the museum into a world class attraction.
  Senator Boxer has secured an authorization of $18 million through the 
Environmental and Public Works Committee, of which she is a member, 
toward the needed seismic upgrade and other improvements needed to 
insure public safety. But other improvements for the construction of 
cafes and more attractive display place will depend on additional 
revenues as described earlier in this statement.
  The building is more than an impressive presence in downtown San 
Francisco. It is an irreplaceable part of the dynamic history of our 
Nation from a frontier society to superpower. It was the fountainhead 
through which the riches of the gold and silver fields were converted 
into the coins that financed the transition from wilderness to 
powerhouse.
  The commemorative coin set will proclaim this splendid history and 
will provide funding vital to the future of this remarkable building. 
After all the promising progress that has been made toward preserving 
the Old Mint, it would be tragic to see the effort brought to a halt 
and the fine old building closed to the public and boarded up and 
possibly demolished, denying future generations this link with our 
early history.
  I urge my colleagues to support and cosponsor this bill.
                                 ______

      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 2303. A bill to provide for the exchange of lands within Gates of 
the Arctic National Park and Preserve, and for other purposes, to the 
Committee on Energy and Natural Resources.


 the anaktuvuk pass land exchange and wilderness redesignation Act of 
                                  1994

 Mr. MURKOWSKI. Mr. President, I introduce, along with Senator 
Stevens, the Anaktuvuk Pass Land Exchange and Wilderness Redesignation 
Act of 1994.
  The legislation I am introducing today would prevent conflict between 
Federal officials and Alaska Natives exercising their subsistence 
hunting rights. The land to be affected will remain in the national 
park, merely redesignated from a wilderness status so as to allow the 
residents of Anaktuvuk Pass to continue a lifestyle they have known for 
generations.
  The Nunamiut people are the indigenous inhabitants of the Anaktuvuk 
Pass area and have traditionally depended upon the natural resources of 
their surroundings for physical and cultural survival. As inland 
Eskimos who once were able to roam the Endicott Mountains following the 
caribou, the Nunamiut through the passage of time settled in a village 
at Anaktuvuk Pass.
  While adopting elements of a contemporary lifestyle, the caribou 
culture of the Nunamiut remains very much alive. Because of this, 
traditional hunting in this area is authorized by law for subsistence 
purposes.
  In 1980, Anaktuvuk Pass found itself in a position all too familiar 
to many rural Alaskans--being surrounded by the Federal Government in 
establishment of wilderness and national parks, in this case, the Gates 
of Arctic.
  The unique siting of Anaktuvuk Pass now faced a new challenge to 
preservation of native culture. This village differs from most Native 
villages in that it is not located on a major river system, lake or 
coastline. Absent these usual avenues of transportation, the Nunamiut 
utilized dogs in their caribou hunt as transport of the meat back to 
Anaktuvuk Pass. But, when the feeding of game meat to dogs was 
outlawed, they found the only alernative was to use all terrian 
vehicles to convey food from the hunt.
  With the designation of wilderness in portions of Gates of the Arctic 
National Park, the use of all terrain vehicles was restricted, severely 
impacting the subsistence hunting rights of the Nunamiut.
  The State of Alaska currently has almost 56 million acres of land 
under National Park Service control. This legislation will only 
deauthorize approximately 73,000 acres within the park boundaries as 
wilderness, a small and practical solution to the problem that has 
arisen for the Nunamiut.
  Mr. President, this legislation is supported by the Native community 
of Alaska. I urge my colleagues to support this legislation.
 Mr. STEVENS. Mr. President, I support my colleague in the 
introduction of the Anaktuvuk Pass Land Exchange and Wilderness 
Redesignation Act of 1994 to resolve the conflicts between the National 
Park Service and the indigenous people of the Anaktuvuk Pass area.
  The Nunamiut lived and hunted in the northern reaches of Alaska for 
thousands of years before the Gates of the Arctic National Park and 
Preserve was created by the Alaska National Interest Lands Conservation 
Act [ANILCA] in 1980. The Nunamiut people settled in Anaktuvuk Pass to 
take advantage of the unique geography which brings the migration of 
the caribou close to their village.
  They relied on dog sleds for transportation to hunting areas until 
the feeding of game meat to dogs was restricted. Since then, they have 
relied on snowmobiles in the winter and all terrain vehicles [ATV] in 
the summer.
  The intent of authors of ANILCA was to specifically preserve the 
rights of rural Alaska residents to continue access for subsistence 
purposes on public lands. Section 811(b) of ANILCA provided that ``the 
Secretary shall permit on the public lands appropriate use for 
subsistence purposes of snowmobiles, motorboats and other means of 
surface transportation traditionally employed for such purposes by 
local residents * * *.''
  The National Park Service interprets that provision to exclude the 
use of ATV's in national parks in Alaska. The Native landowners, and I, 
disagree with that interpretation. That is the crux of the dispute.
  However, the Nunamiut Corp. [the Anaktuvuk Pass Village Corp.], the 
city of Anaktuvuk Pass, the Arctic Slope Regional Corp., and the 
National Park Service have negotiated an agreement to finally resolve 
the dispute. This legislation would ratify that agreement which will 
guarantee dispersed ATV access on specific areas of the park and 
improved public access across Native lands.
  The agreement would also exchange land and interests in land between 
the Native landowners and the Park Service and allow for ATV use in 
some of the nonwilderness acres of the park.
  This legislation and the agreement do not attempt to determine 
whether ATV's are permitted under ANILCA for subsistence access on 
conservation units in Alaska. It merely attempts to settle the dispute 
between the Anaktuvuk Pass residents and the National Park Service 
relating to subsistence access in the Gates of the Arctic National Park 
and Preserve. I ask that my colleagues join us in support of this 
important legislation.
                                 ______

      By Mr. BRADLEY (for himself and Mr. Wallop):
  S. 2304. A bill to amend the Internal Revenue Code of 1986 to phase 
out the tax subsidies for alcohol fuels involving alcohol produced from 
feedstocks eligible to receive Federal agricultural subsidies; to the 
Committee on Finance.


                   the clean fuels equity act of 1994

 Mr. BRADLEY. Mr. President, I introduce legislation aimed at 
restoring some level of financial equity in the marketplace for clean 
automotive fuels. My bill will phase out certain, targeted tax 
subsidies given to an industry that has too long received unique and 
favorable treatment under the tax code: the domestic ethanol industry. 
In this effort, I am very pleased to have as a cosponsor a fellow 
member of the Senate Finance Committee, Senator Wallop.
  The Clean Fuels Equity Act will phase out the ethanol tax subsidy for 
ethanol produced from feedstocks that are eligible for price and income 
support from the Department of Agriculture's programs. The phaseout 
would occur over 3 years to allow the existing industry an orderly 
transition to a less-sheltered marketplace. My legislation would 
continue to allow the tax credits for special energy crops, waste 
products, and other biomass that do not benefit from the USDA price 
support programs. These energy crops hold some promise of environmental 
and energy benefits. Furthermore, they still represent a technically 
immature industry, for which additional Federal support might be 
justified.
  As most people know, the bulk of the ethanol produced in the United 
States is derived from corn, and processed and sold in the midwest; 20 
years ago, there was no fuel ethanol industry. But, born from the 
crisis concerns of the late 1970's, this business grew from nothing, 
built by an array of special and substantial tax privileges. However, 
unlike many of the questionable policies developed during that period 
of energy crisis--from the Synfuels Corp. to the Fuel Use Act and plans 
for gas rationing--the ethanol subsidies continue to survive.
  When the credits were initiated over 15 years ago, they were intended 
to jumpstart an industry that would not otherwise exist. This policy 
has obviously succeeded. The ethanol industry is no longer a small, 
fledgling industry. It now produces in excess of a billion gallons of 
ethanol per year and consumes roughly one-half billion bushels of corn 
yearly. It is an industry that now benefits from a special tax credit 
worth roughly $700 million per year--a number that is growing.
  Recently, the ethanol industry succeeded by Federal regulation in 
securing a guaranteed market share for its product in some of the 
largest gasoline markets in the United States. My attitude toward this 
mandate is well-known: It does nothing positive for the environment, it 
is irrelevant with respect to energy security issues, and it will cost 
taxpayers and industry a fortune.
  In view of this latest policy, it seems the ethanol industry's 
attitude to subsidies can be characterized by the phrase ``never 
enough.'' Why worry what it costs to produce a product when you get a 
targeted tax credit, soon to be worth nearly $1 billion per year? Why 
worry about competition when you have a guaranteed market for your 
product?

  The cost to taxpayers and the cost to consumers are real. These 
subsidies take money out of Americans' pockets. Even without the 
mandate, I question a continued, substantial tax break to a single, 
well-established industry. But, in combination with a market guarantee, 
a tax subsidy is indefensible. By creating this market share for 
ethanol, the Government has instantly given a bill worth hundreds of 
millions of dollars to taxpayers and consumers.
  Ethanol competes in the marketplace with other chemicals that have no 
special tax break or guaranteed market share. These alternatives must 
compete based on price and performance. This legislation is not 
intended to be punitive to ethanol. Rather, it is an attempt to allow 
the markets a better chance to work for the benefit of all consumers, 
taxpayers, and the environment. Furthermore, it is acknowledgement that 
you cannot have it both ways. If there is to be a sheltered, guaranteed 
market for this fuel, there is no need for a tax credit to keep an 
industry afloat. It is that simple.
  I urge my colleagues to consider this legislation carefully. Although 
I have not yet received a revenue industry from the Joint Tax 
Committee, it seems clear to me that this bill will raise between $3 
and $5 billion over a 5-year period. In these times when we are 
struggling to reduce the deficits, to pay for health care reform, to 
pay for the GATT and other initiatives, it makes sense to reduce 
unneeded subsidies whenever possible.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2304

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

     SECTION 1. PHASE-OUT OF TAX SUBSIDIES FOR ALCOHOL FUELS 
                   PRODUCED FROM FEEDSTOCKS ELIGIBLE TO RECEIVE 
                   FEDERAL AGRICULTURAL SUBSIDIES.

       (a) Alcohol Fuels Credit.--Section 40 of the Internal 
     Revenue Code of 1986 (relating to credit for alcohol used as 
     a fuel) is amended by adding at the end the following new 
     subsection:
       ``(g) Phase-Out of Credit for Alcohol Produced From 
     Feedstocks Eligible To Receive Federal Agricultural 
     Subsidies.--
       ``(1) In general.--No credit shall be allowed under this 
     section with respect to any alcohol, or fuel containing 
     alcohol, which is produced from any feedstock which is a 
     subsidized agricultural commodity.
       ``(2) Phase-in of disallowance.--In the case of taxable 
     years beginning in 1995 and 1996, paragraph (1) shall not 
     apply and the credit determined under this section with 
     respect to alcohol or fuels described in paragraph (1) shall 
     be equal to 67 percent (33 percent in the case of taxable 
     years beginning in 1996) of the credit determined without 
     regard to this subsection.
       ``(3) Subsidized agricultural commodity.--For purposes of 
     this subsection, the term `subsidized agricultural commodity' 
     means any agricultural commodity which is supported, or is 
     eligible to be supported, by a price support or production 
     adjustment program carried out by the Secretary of 
     Agriculture.''
       (b) Excise Tax Reduction.--
       (1) Petroleum products.--Section 4081(c) of the Internal 
     Revenue Code of 1986 (relating to taxable fuels mixed with 
     alcohol) is amended by redesignating paragraph (8) as 
     paragraph (9) and by adding after paragraph (7) the following 
     new paragraph:
       ``(8) Phase-out of subsidy for alcohol produced from 
     feedstocks eligible to receive federal agricultural 
     subsidies.--
       ``(A) In general.--This subsection shall not apply to any 
     qualified alcohol mixture containing alcohol which is 
     produced from any feedstock which is a subsidized 
     agricultural commodity.
       ``(B) Phase-in of disallowance.--In the case of calendar 
     years 1995 and 1996, the rate of tax under subsection (a) 
     with respect to any qualified alcohol mixture described in 
     subparagraph (A) shall be equal to the sum of--
       ``(i) the rate of tax determined under this subsection 
     (without regard to this paragraph), plus
       ``(ii) 33 percent (67 percent in the case of 1996) of the 
     difference between the rate of tax under subsection (a) 
     determined with and without regard to this subsection.
       ``(C) Subsidized agricultural commodity.--For purposes of 
     this paragraph, the term `subsidized agricultural commodity' 
     means any agricultural commodity which is supported, or is 
     eligible to be supported, by a price support or production 
     adjustment program carried out by the Secretary of 
     Agriculture.''
       (2) Special fuels.--Section 4041 (relating to tax on 
     special fuels) is amended by adding at the end the following 
     new subsection:
       ``(n) Phase-Out of Subsidy for Alcohol Produced From 
     Feedstocks Eligible To Receive Federal Agricultural 
     Subsidies.--
       ``(1) In general.--Subsections (b)(2), (k), and (m) shall 
     not apply to any alcohol fuel containing alcohol which is 
     produced from any feedstock which is a subsidized 
     agricultural commodity.
       ``(2) Phase-in of disallowance.--In the case of calendar 
     years 1995 and 1996, the rate of tax determined under 
     subsection (b)(2), (k), or (m) with respect to any alcohol 
     fuel described in paragraph (1) shall be equal to the sum 
     of--
       ``(A) the rate of tax determined under such subsection 
     (without regard to this subsection), plus
       ``(B) 33 percent (67 percent in the case of 1996) of the 
     difference between the rate of tax under this section 
     determined with and without regard to subsection (b)(2), (k), 
     or (m), whichever is applicable.
       ``(3) Subsidized agricultural commodity.--For purposes of 
     this subsection, the term `subsidized agricultural commodity' 
     means any agricultural commodity which is supported, or is 
     eligible to be supported, by a price support or production 
     adjustment program carried out by the Secretary of 
     Agriculture.''
       (3) Aviation fuel.--Section 4084(c) (relating to reduced 
     rate of tax for aviation fuel in alcohol mixture) is amended 
     by redesignating paragraph (5) as paragraph (6) and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) Phase-out of subsidy for alcohol produced from 
     feedstocks eligible to receive federal agricultural 
     subsidies.--
       ``(A) In general.--This subsection shall not apply to any 
     mixture of aviation fuel containing alcohol which is produced 
     from any feedstock which is a subsidized agricultural 
     commodity.
       ``(B) Phase-in of disallowance.--In the case of calendar 
     years 1995 and 1996, the rate of tax under subsection (a) 
     with respect to any mixture of aviation fuel described in 
     subparagraph (A) shall be equal to the sum of--
       ``(i) the rate of tax determined under this subsection 
     (without regard to this paragraph), plus
       ``(ii) 33 percent (67 percent in the case of 1996) of the 
     difference between the rate of tax under subsection (a) 
     determined with and without regard to this subsection.
       ``(C) Subsidized agricultural commodity.--For purposes of 
     this paragraph, the term `subsidized agricultural commodity' 
     means any agricultural commodity which is supported, or is 
     eligible to be supported, by a price support or production 
     adjustment program carried out by the Secretary of 
     Agriculture.''
       (c) Effective Dates.--
       (1) Credit.--The amendment made by subsection (a) shall 
     apply to taxable years beginning after December 31, 1994.
       (2) Excise taxes.--
       (A) In general.--The amendments made by subsection (b) 
     shall take effect on January 1, 1995.
       (B) Floor stock tax.--
       (i) In general.--In the case of any alcohol fuel in which 
     tax was imposed under section 4041, 4081, or 4091 of the 
     Internal Revenue Code of 1986 before any tax-increase date, 
     and which is held on such date by any person, then there is 
     hereby imposed a floor stock tax on such fuel equal to the 
     difference between the tax imposed under such section on such 
     date and the tax so imposed.
       (ii) Liability for tax and method payment.--A person 
     holding an alcohol fuel on any tax-increase date shall be 
     liable for such tax, shall pay such tax no later than 90 days 
     after such date, and shall pay such tax in such manner as the 
     Secretary may prescribe.
       (iii) Exceptions.--The tax imposed by clause (i) shall not 
     apply--

       (I) to any fuel held in the tank of a motor vehicle or 
     motorboat, or
       (II) to any fuel held by a person if, on the tax-increase 
     date, the aggregate amount of fuel held by such person and 
     any related persons does not exceed 2,000 gallons.

       (iv) Tax-increase date.--For purposes of this subparagraph, 
     the term ``tax-increase date'' means January 1, 1995, and 
     January 1, 1996.
       (v) Other laws applicable.--All provisions of law, 
     including penalties applicable with respect to the taxes 
     imposed by sections 4041, 4081, and 4091 of such Code shall, 
     insofar as applicable and not inconsistent with the 
     provisions of this subparagraph, apply with respect to the 
     floor stock taxes imposed by clause (i).
                                  ____


                   The Clean Fuels Equity Act of 1994

       Senator Bradley's legislation would phase out the existing 
     tax credits for ethanol produced from certain feedstocks. The 
     tax will be phased out for ethanol if it is produced from 
     feedstocks, such as corn, that are eligible for various price 
     and income supports under the programs of the U.S. Department 
     of Agriculture. If the ethanol feedstock is a specialized 
     energy crop, not supported by USDA, or a waste product, the 
     tax credit will still be allowed.
       The phase-out will occur over 3 years. Unless exempt, 
     ethanol would be allowed: the full tax credits for calendar 
     year 1994; 67 percent of the existing credits for 1995; and 
     33 percent of the existing credits for 1996. No special tax 
     subsidies would be allowed for ethanol, unless exempt, after 
     December 31, 1996.
       The principal federal incentive for ethanol is a 6-cent 
     exemption from the federal motor fuel excise tax. Each gallon 
     of gasoline blended with at least 10 percent ethanol is 
     eligible for the exemption. Using a blend, each gallon of 
     ethanol can be blended with nine gallons of gasoline to make 
     ten gallons of a blended fuel. All ten gallons are eligible 
     for the exemption, which equates to a total exemption of 60 
     cents on each gallon of ethanol.
       Also, an equivalent 60-cent-per-gallon federal blenders' 
     income tax credit or refund is available to fuel distributors 
     that blend ethanol into motor fuels. The tax credit or refund 
     can be taken in lieu of the excise tax exemption described 
     above.
       Because of these tax subsidies, ethanol can be offered at a 
     dramatically lower price than would be the case otherwise. 
     The U.S. ethanol industry produces approximately 1.2 billion 
     gallons of ethanol for blending into fuel each year. This 
     equates to a total subsidy value in excess of $700 million 
     annually. It is estimated that the EPA ethanol mandate 
     recently approved will add at least another $300 million 
     annually to the tax subsidy total.
       Ethanol is produced today almost exclusively from 
     feedstocks that are eligible for USDA support.
                                 ______

      By Mr. AKAKA:
  S. 2305. A bill to provide that members of the Board of Veterans' 
Appeals be referred to as veterans law judges, to provide for the pay 
of such member, and for other purposes; to the Committee on Veterans' 
Affairs.


                     VETERANS LAW JUDGE ACT OF 1994

 Mr. AKAKA. Mr. President, I am today introducing legislation 
that would increase the pay, and establish certain procedures relating 
to the reappointment, of members of the Board of Veterans' Appeals 
[BVA], the highest adjudicatory body within the Department of Veterans 
Affairs [VA] for veterans benefits claims.
  The Veterans Law Judge Act of 1994 would do three things. First, it 
would provide that Board members would also be known as veterans law 
judges [VLJ's]. Second, it would provide for pay equity between Board 
members and administrative law judges [ALJ's], their counterparts in 
other executive branch agencies. Third, the measure would protect Board 
members from arbitrary dismissal at the expiration of their statutory 
terms, unless they do not meet objective standards established by the 
Secretary.
  Together, these provisions are designed to help forestall the 
imminent departure of potentially dozens of the most experienced Board 
members at a time when VA is experiencing a crisis in its adjudication 
system.
  Mr. President, the BVA is the highest adjudicatory body within the 
VA. Each year the Board renders decisions on tens of thousands of 
appeals for benefits claims. These cases span the range of veterans 
benefits, including claims for entitlement to service connection, 
increased disability ratings, pensions, insurance benefits, educational 
benefits, home loan guaranties, vocational rehabilitation, and 
dependency and indemnity compensation.
  The Board is comprised of 63 members--plus a chairman, vice chairman, 
and two deputy vice chairmen--who, until recently, sat in 21 3-member 
sections that held hearings in every VA regional office throughout the 
Nation. Board members must have the experience and skills to be able to 
handle all types of appeals, regardless of their complexity.
  Because of the varied and specialized requirements associated with 
the job, BVA members are necessarily selected through a highly 
exacting, competitive process. In fact, it takes between 7 and 10 years 
to adequately train someone for the position, according to BVA Chairman 
Charles Craigin. Because of the overriding need for individuals trained 
in BVA procedures and familiar with VA statutes, regulations, and 
practice, members are almost always chosen from among the ranks of 
experienced staff counsels to the Board sections.
  From its inception more than 60 years ago until recently, the BVA has 
processed appeals in a relatively timely and efficient manner. Today, 
however, the story is markedly different. The work of the BVA, while 
always difficult, has grown in complexity, which has resulted in 
additional delays and a rapidly increasing backlog of unadjudicated 
cases.

  In 1988, the Board rendered 43,792 decisions, with an average 
response time of 146 days, and a backlog of undecided cases of 16,642. 
By 1993, however, the number of decisions had dropped to 26,400, with 
average processing time increasing to 466 days and the case backlog to 
51,078. This year, 1994, the projected number of decisions will be 
19,650, less than half what it was in 1988, with an average response 
time of 830 days and a backlog of 51,078 cases. In fact, the 1994 
processing time figure may be misleading, since a new method of 
measuring response time was recently instituted for 1994. Under the 
previous time was recently instituted for 1994. Under the previous 
system, the average response time would have been estimated at 1,843 
days and 2,397 days by the end of 1995.
  The drastic decline in timeliness and the increase in case backlog 
are directly attributable to the additional administrative and legal 
burden imposed on the Board by the Veterans' Judicial Review Act 
[VJRA], Public Law 100-687, and decisions adopted by the new U.S. Court 
of Veterans Appeals [COVA] created by the act.
  Mr. President, the VJRA is rightfully considered a milestone in 
veterans affairs. It provided veterans with the fundamental right--
enjoyed by all other Federal beneficiaries--to appeal decisions to an 
entity outside of the granting agency. Judicial review added legal 
rigor to the adjudication process, and ensured that a veteran could 
have his day in court, in this case the Court of Veterans Appeals.
  Unfortunately, judicial review, while giving the veteran access to 
the courts, also fostered radical changes in the adjudication process 
that imposed significant additional demands on the BVA. For example, 
the act established a new, statutory duty to develop the record for 
judicial review. Further, the Board must be satisfied that the 
Department has fulfilled its new statutory duty to assist the claimant. 
This duty has been expansively interpreted by COVA, which has mandated 
not simply a mechanical, but a truly imaginative efforts to locate all 
possible evidence, not only in the possession of the Government, but 
also evidence held by private institutions or parties.
  In addition, COVA has imposed a formidable standard for providing 
detailed reasons or bases for BVA decisions. Under this standard, it is 
no longer sufficient simply to arrive at the correct substantive 
decision; rather, a decision of the Board must now explain in detail 
the complete thought processes behind the decisions. The VJRA and COVA 
has also imposed intricate new procedural standards for determining 
whether a claim is ``well grounded or whether a previously denied claim 
has been reopened. As a result of these requirements, the individual 
decisions of the Board are typically two or three times as long as they 
were before judicial review and the number of remands has increased by 
similar proportions to permit regional offices to develop the factual 
record or to address new procedural mandates.

  As the foregoing suggests, the work of the Board has become vastly 
more difficult and onerous as a result of judicial review; the VJRA has 
significantly hampered the ability of the Board to quickly and 
efficiently adjudicate claims. To its credit, Congress has attempted to 
resolve this problem by adopting this year legislation, authorized by 
Senator Rockefeller, that lifts the 65-member limitation on the number 
of Board members that may be appointed and permits decisions on claims 
to be made by a single Board member, rather than the 3-person section 
as required under previous law. According to VA, the authority to issue 
single-member decisions along would increase Board productivity by 27 
percent.
  Unfortunately, Mr. President, while the legislation we enacted this 
year is certain to provide VA with additional tools to fix the 
adjudication crisis, the legislation does not address a fundamental 
problem that could ultimately offset any advantages offered by single-
member decisional authority or lifting the 66-member limit.
  I am referring, of course, to the potential for dozens of the most 
experienced Board members to leave the Department to take up positions 
as administrative law judges in other Federal agencies. This is a real 
and imminent problem that, if left unresolved, could lead to the 
evisceration of BVA ranks precisely at a time when the VA can least 
afford to lose experienced members. This problem is driven by two 
egregious issues: the higher pay and additional job security enjoyed by 
ALJ's vis-a-vis Board members.
  As my colleagues recall, the Federal Pay Comparability Act of 1990, 
the Pay Act, converted the pay of all administrative law judges in 
Federal service from the General Schedule to a new ALJ compensation 
between ALJ's and Board members.
  By elevating the pay of ALJ's, the Pay Act set them apart and above 
Board members, who continue to be paid at the GS-15 level. The 
difference is significant. For fiscal year 1994, the pay range for a 
GS-15 is approximately $69,400 to $90,300. The pay of administrative 
law judges currently ranges from approximately $78,400 to $108,500 for 
most judges, with some supervisory judges receiving as much as 
$120,600. Thus, in general, ALJ's make between $9,000 and $18,200 more 
than Board members at comparable levels of seniority, and as much as 
$30,300 more in special circumstances.
  Yet, Mr. President, it is clear to all knowledgeable observers that 
the duties and responsibilities of ALJ's and Board members are 
virtually identical in every important respect; indeed, some, including 
several former Board members who are now employed as ALJ's, would argue 
that the work of Board members is much more difficult and complex than 
that of ALJ's.

  In addition to pay inequity, Board members enjoy less job security 
than their ALJ counterparts. As yet another, perhaps unintended, result 
of judicial review, the VJRA imposed terms of appointment on Board 
members for the first time, presumably to render them more accountable 
to political authority. VJRA established a standard 9-year term, with 
provision for reappointment at the Secretary's discretion. This action 
made Board members the only Federal workers under the General Schedule 
to have their civil service career positions converted to terms of 
appointment; their professional counterparts, ALJ's, are not subject to 
term restrictions.
  In addition to imposing term limits, the VJRA did not provide any 
standard or criteria for reappointment, leaving Board membership open 
to manipulation and possible politicization. This shortcoming has 
serious implications. According to Richard Frank, president of the BVA 
Professional Association, who testified at a Senate Veterans' Affairs 
Committee hearing on adjudication issues on March 24:

       The imposition of terms of appointment on these previously 
     career appointments has profoundly negative ramifications for 
     appellants as well as the Board. For sixty years, the reality 
     and perception has been that members of the Board have 
     decided cases by applying the law to the facts found, 
     regardless of any other considerations. The creation of what 
     is effectively a term at whim opens the adjudication process 
     to politicization and manipulation. While any single 
     Administration may find satisfaction in the belief in, or the 
     reality of, its ability to tug the substantive outcome of 
     appeals in any direction, once this process starts it will be 
     hard, if not impossible, to check. Tides that rise, also 
     fall. When individual merits no longer control the outcome of 
     appeals, we will have a lottery, not an adjudication process 
     and their dependents will lose both justice and faith.

  Mr. President, the practical effect of pay inequity and term limits 
is that BVA faces a potentially catastrophic loss of its most 
experienced members, a problem that has profound, negative implications 
for fair and timely adjudication of veterans' claims. Because of the 
compensation/ term limit problem, many BVA members have either left, or 
are planning to leave, the Board to become ALJ's.
  Since July 1993, nine Board members have been selected to be ALJ's. 
This figure represents 16 percent of the 55 attorneys who have held 
Board member positions since last July. Of the 46 current Board 
members--not including the 7 physician members whose terms expire in 
July 1994 who will not be reappointed--36, or 78 percent, have applied 
or intend to apply for ALJ positions. Eleven members--24 percent--are 
already on the register maintained by the Office of Personnel 
Management and subject to hiring at any time. Seven have actually 
submitted written applications; 9 are currently working on their 
applications. Of the 10 members who have indicated they do not intend 
to apply, at least 3 are at or very near retirement age.

  The value attached to the experience and skills of Board members is 
even more striking than these numbers indicate. Despite the fact that 
only 20 Board members are or were on the register of approximately 
1,000 individuals maintained by OPM, 9 of the 160 Social Security ALJ's 
hired in the past year were Board members. In other words, Board 
members are three times as likely as the average applicant to be 
selected to become an ALJ. Indeed the Board has also lost one of its 
senior attorneys, who provide the cadre from which Board members are 
selected, during this last year to the ALJ ranks. According to the best 
information now available, the Office of Hearings and Appeals of the 
Social Security Administration is gearing up for a class of another 54 
ALJ's in September; in addition, it projects hirings in excess of 
another 100 ALJ's during fiscal year 1995.
  The implications are clear. At a time when the duties of the Board 
are becoming more complex and onerous as a result of judicial review, 
an increasing number of Board members, including the most experienced 
among them, have either accepted positions, or are actively seeking 
employment, as ALJ's. The effect on the adjudication process will be 
enormous. Again, in the words of Richard Frank:

       The departure of experienced Board members will cause 
     irreparable damage to the claims adjudication process and 
     severely aggravate the timeliness crisis. Without a high 
     level of experience among Board members, literally thousands 
     of claimants will not receive every benefit due. Without a 
     high level of experience among Board members, every appellant 
     bringing a claim to the Board will be directly affected 
     because inexperienced Board members will not be able to 
     operate with the high productivity required to maintain 
     timeliness. We believe that the loss of large numbers of 
     experienced Board Members will more than offset any 
     productivity gains through automation, single member 
     decisional authority or administrative reforms. At least a 
     quarter of the veterans' population is 65 or over. Thus, 
     where claims for veterans' benefits are involved, the phrase 
     ``justice delayed is justice denied'' has a special sting, 
     for the grim reality is that ever more protracted delays in 
     claims adjudication mean that many claimants will literally 
     die before they receive an answer to their appeals.

  In addition to retention problems, it is clear that pay inequity and 
term limits must cause recruitment difficulties for the Board as well. 
All factors being equal, those most suited for Board employment would 
naturally seek employment as ALJ's first, given the higher pay and 
employment security guaranteed to ALJ's. Those who are generally 
selected to become Board members--staff attorneys who have served years 
of apprenticeship at the Board--are usually at the midpoint in their 
careers, probably with significant family obligations. In these 
circumstances, given a choice between a lower paying job with no 
guarantee of employment beyond 9 years, and a higher paying job with 
essentially career long tenure, few can doubt which career path would 
be more enticing to a prospective Board candidate.

  Mr. President, the bill I am introducing today, the Veterans Law 
Judge Act of 1994, directly addresses the recruitment and retention 
problems facing the Department as a consequence of pay comparability 
and term limits.
  Section 2 of the bill would permit Board members to be called 
veterans law judges. There is a widespread misperception, fueled by 
disparities in pay and term limits, that Board members are somehow 
inferior to administrative law judges in duties, authorities, and 
qualifications; allowing Board members to be called veterans law judges 
could help eliminate this negative misperception by underscoring the 
fact that the responsibilities of Board members, or VLJ's, are on a par 
with those of ALJ's, and bolster veterans' confidence in Board 
decisions.
  Section 3 would stipulate that Board members receive compensation and 
other benefits comparable to those provided ALJ's. This provision is 
based on legislation I introduced in the last Congress and is similar 
to the pay comparability provisions in H.R. 69 and H.R. 3240, 
introduced by Representative Mike Bilirakis and Representative Lane 
Evans, respectively. Judging from its testimony at a recent House 
hearing on these measures, VA strongly supports this initiative. 
According to the latest Congressional Budget Office estimate for H.R. 
69 and H.R. 3240, this provision has no pay-as-you-go implications and 
would cost only $5 million over 5 years; moreover, because Board member 
pay would be phased in over several years, there is no budget cost 
associated with this provision in either fiscal 1994 or fiscal 1995.
  Section 4 does several things. First, it would permit the chairman of 
the BVA and other Board members, at the discretion of the Secretary, to 
serve beyond the expiration of their terms until reapproved or until a 
successor is approved. The purpose of this provision is to ensure Board 
continuity in the event that a successor is not approved at the time a 
member's term expires.
  Second, it would require automatic reappointment of a Board member 
unless the Secretary specifically provides 120 days notice of 
nonreappointment and affords the member an opportunity to a hearing 
before the Secretary no later than 60 days prior to the expiration of 
the member's term. Also, the Secretary would be required to develop 
objective standards for reappointment, so that a Board member would be 
reasonably cognizant of the standards he or she must meet in order to 
secure reappointment. Together, these provisions would help relieve the 
anxiety that Board members' careers could expire without notice or 
reason, an anxiety that is impelling many of them to leave or consider 
leaving BVA ranks for more lucrative and secure employment as ALJ's. At 
the same time, term limits and the principle of accountability would be 
retained, as under current law.

  Third and finally, for those Board members who were career or career-
conditional civil servants prior to their appointment, Section 3 would 
allow them to revert to their original grade and step in the event that 
they were not reappointed.
  Mr. President, I urge my colleagues to support this important 
legislation. Unless we act soon to address the issues of pay equity and 
employment security for Board members, VA's ability to render quality 
decisions on claims in a timely fashion will be seriously compromised 
for many years to come. While adoption of my legislation would not 
necessarily improve BVA productivity or substantially reduce the 
already enormous backlog of veterans' claims, it would assuredly 
prevent these problems from becoming far worse. The Veterans Law Judge 
Act of 1994 represents a reasonable, cost-effective approach to these 
matters, which threaten to eviscerate the membership of the Board of 
Veterans' Appeals.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2305

       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 ``Veterans Law Judge Act of 
     1994''.

     SEC. 2. AUTHORITY TO REFER TO MEMBERS OF BOARD OF VETERANS' 
                   APPEALS AS VETERANS LAW JUDGES.

       Section 7101(b) of title 38, United States Code, is amended 
     by adding at the end the following:
       ``(5)(A) Except as provided in subparagraph (B), A member 
     of the Board, including the Chairman and the Vice Chairman, 
     shall be referred to as a veterans law judge.
       ``(B) Subparagraph (A) shall not apply to temporary member 
     of the Board.''.

     SEC. 3. CLASSIFICATION AND PAY OF MEMBERS OF BOARD OF 
                   VETERANS' APPEALS.

       (a) In General.--Section 7101(b) of title 38, United States 
     Code, as amended by section 2, is further amended by adding 
     at the end the following:
       ``(6) A member of the Board (other than the Chairman and 
     Vice Chairman) shall receive compensation under the 
     provisions of section 5372 of title 5 and other benefits 
     equal to those payable to an administrative law judge.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the first day of the first pay period 
     beginning after the date of the enactment of this Act.
       (c) Savings Provision.--The rate of basic pay payable to an 
     individual who is a member of the Board of Veterans' Appeals 
     on the date of the enactment of this Act may not be reduced 
     by reason of the amendment made by subsection (a) below the 
     rate payable to such individual on the day before the 
     effective date specified in subsection (b).

     SEC. 4. CONTINUATION OF SERVICE AND REAPPOINTMENT OF BOARD 
                   MEMBERS.

       (a) Chairman.--Paragraph (1) of section 7101(b) of title 
     38, United States Code, is amended to read as follows:
       ``(1)(A) The Chairman shall be appointed by the President, 
     by and with the advice and consent of the Senate, for a term 
     of six years.
       ``(B) Notwithstanding subparagraph (A), the Chairman may, 
     upon the approval of the Secretary, serve after the 
     expiration of the term of the Chairman under that 
     subparagraph. The Chairman may serve under this subparagraph 
     until--
       ``(i) the confirmation of the Chairman under subparagraph 
     (A) for an additional term to which the Chairman is appointed 
     under paragraph (3): or
       ``(ii) the confirmation of the successor to the Chairman.
       ``(C) The Chairman may be removed by the President for 
     misconduct, inefficiency, neglect of duty, or engaging in the 
     practice of law or for physical or mental disability which, 
     in the opinion of the President, prevents the proper 
     execution of the Chairman's duties. The Chairman may not be 
     removed from office by the President on any other grounds. 
     Any such removal may only be made after notice and 
     opportunity for hearing.''.
       (b) Other Members of Board.--Paragraph (2) of such section 
     is amended to read as follows:
       ``(2)(A) The other members of the Board (including the Vice 
     Chairman) shall be appointed by the Secretary, with the 
     approval of the President and based upon recommendations of 
     the Chairman, for a term of nine years.
       ``(B) Notwithstanding subparagraph (A), a member of the 
     Board may, upon the recommendation of the Chairman and the 
     approval of the Secretary, serve after the expiration of the 
     term of the member under that subparagraph. A member may 
     serve under this subparagraph until--
       ``(i) the appointment of the member to an additional term 
     under paragraph (3): or
       ``(ii) the appointment of the successor to the member.
       ``(C)(i) The Secretary shall notify a member of the Board 
     under this paragraph if--
       ``(I) the Chairman decides not to recommend the member for 
     appointment under paragraph (3) to an additional term; or
       ``(II) the Secretary decides not to appoint the member to 
     an additional term under that paragraph.
       ``(ii) The Secretary shall notify a member of the Board 
     under clause (i) not later than 120 days before the 
     expiration of the member's term.
       ``(iii) A notification under clause (i) shall include an 
     explanation of the Chairman's decision not to recommend the 
     member for appointment or the Secretary's decision not to 
     appoint the member, as the case may be.
       ``(iv) The Secretary shall provide a member of the Board 
     who receives a notice under this subparagraph an opportunity 
     for a hearing on the matters in the notice. The hearing shall 
     occur not later than 60 days before the expiration of the 
     member's term.
       ``(v) Upon completion of a hearing in the case of a member 
     of the Board under clause (iv), the Secretary shall determine 
     whether or not to appoint the member to an additional term 
     under paragraph (3). The Secretary's decision shall be final 
     and shall not be subject to judicial review.
       ``(D)(i) Except as provided in clause (ii), if the 
     Secretary fails to notify a member of the Board covered by 
     clause (i) of subparagraph (C) by the time specified in 
     clause (ii) of that subparagraph, the member shall be deemed 
     appointed by the Secretary to an additional term under 
     paragraph (3).
       ``(ii) The President may disapprove the appointment of a 
     member of the Board to an additional term under clause (i). A 
     member whose appointment is so disapproved shall not be 
     deemed appointed to such term under that clause.
       ``(E) Upon the expiration of the term, including any 
     service after such expiration under subparagraph (B), of a 
     member of the Board (other than the Chairman) who was a 
     career or career-conditional employee in the service before 
     commencement of the term, the member shall revert to the 
     civil service grade and series held by the member immediately 
     before the appointment of the member to the Board.
       ``(F)(i) Reversion of a member of the Board under 
     subparagraph (E) shall not affect the taking against the 
     member of an action referred to in clause (ii) if the action 
     was initiated before the expiration of the term of the 
     member.
       ``(ii) Clause (i) refers to the following actions:
       ``(I) Removal of a member of the Board.
       ``(II) Suspension of a member.
       ``(III) Reduction in grade of a member.
       ``(IV) Reduction in pay of a member.
       ``(V) Furlough of a member for 30 days or less.
       ``(VI) A reduction-in-force under section 3502 of title 5.
       ``(VII) An action initiated under section 1215 of title 
     5.''.
       (c) Criteria for Reappointment of Board Members.--(1) The 
     Secretary of Veterans Affairs shall prescribe criteria 
     applicable to the appointment of members of the Board of 
     Veterans' Appeals to a term on the Board under section 
     7101(b)(3) of title 38, United States Code.
       (2) The criteria prescribed under paragraph (1) shall not 
     apply to the Chairman of the Board.
       (3)(A) The criteria prescribed under paragraph (1) shall 
     take into consideration the timeliness of a member of the 
     Board, the case management of a member, the extent to which 
     substantive errors appear in the decisions of the Board 
     issued by the member, and the conduct of a member as a member 
     of the Board.
       (B) Such criteria shall not provide for an evaluation of a 
     member of the Board in accordance with the granting or 
     denying of appeals by the member.
       (d) Applicability.--Subparagraph (B) of section 7101(b)(2) 
     of title 38, United States Code, as amended by subsection 
     (b), shall apply to members of the Board of Veterans' Appeals 
     appointed under section 201(d) of the Veterans' Judicial 
     Review Act (division A of Public Law 100-687; 38 U.S.C. 7101 
     note).

     SEC. 5. BOARD MEMBERS HOLDING APPOINTMENTS IN THE SENIOR 
                   EXECUTIVE SERVICE.

       Notwithstanding any other provision of law, any member of 
     the Board of Veterans' Appeals who, on the date of the 
     enactment of this Act, is a member of the Senior Executive 
     Service shall--
       (1) continue as a member of the Senior Executive Service 
     while serving as a member of the Board; and
       (2) during the term of office of the member under section 
     7101(b) of title 38, United States Code, receive the pay, 
     leave, and other benefits (including benefits relating to 
     reassignment) to which members of the Senior Executive 
     Service are entitled.
                                 ______

      By Mr. METZENBAUM:
  S. 2306. A bill to amend the Securities Exchange Act of 1934; to the 
Committee on Banking, Housing, and Urban Affairs.


       The Securities Exchange Act of 1934 Amendment Act of 1994

 Mr. METZENBAUM.
  Mr. President, the purpose of this legislation is to amend the 
Securities Exchange Act of 1934 to reverse the decision in Central Bank 
of Denver versus First Interstate Bank of Denver, which held that a 
private plaintiff may not maintain an aiding and abetting fraud action 
under section 10(B) and to restore the status quo ante.
  I firmly believe that if allowed to stand, the Central Bank of Denver 
case will weaken the Federal securities laws more than any other case 
in the 60-year history of those laws.
  The Supreme Court's bizarre legal reasoning in this case will cause a 
great deal of damage. It gives clearly fraudulent behavior the green 
light. It immunizes those who have clearly helped others to commit 
securities fraud. It says to those who assisted S&L executives, BCCI, 
and Drexel Burnham in committing securities fraud--people like Michael 
Milken who have caused innocent investors to lose hundreds of millions 
of dollars--``go home, you're protected from liability, sorry to have 
bothered you, feel free to do this again''.
  The surprising 5 to 4 ruling is shocking because it overturns 25 
years of established Federal court precedents that have permitted 
private investors to sue aiders and abettors of securities fraud. That 
includes 11 circuit courts of appeal--every single circuit that has 
addressed the issue. But much more than just a bad decision, this case 
undermines fundamental protections for investors and the securities 
markets.
  Investors have long had the right to sue lawyers, accountants, 
bankers, brokers, and others who assist others in committing securities 
fraud. This right of action has played a vital role in compensating 
swindled investors in the major financial frauds of the last three 
decades.
  Innocent victims who lose money, and sometimes their life savings, in 
fraudulent securities schemes have recovered hundreds of millions of 
dollars from aiders and abettors. Just recently, 23,000 bond holders 
successfully sued the lawyers and accountants in a savings and loan 
case and recovered $275 million. If this ruling had been on the books 
at that time, it might have wiped out the recovery.

  Unless the Court decision is reversed by Congress, most defrauded 
investors will not recover their losses because, typically, the 
perpetrator of the fraud is insolvent by the time the case is filed or 
completed. For example, the cheated investors who recovered the $275 
million in the case I just referred to had won a $1.5 billion judgment 
against the executives directly responsible, but the judgment was 
uncollectible because they had no money left.
  In addition, this case also casts doubt upon the SEC's own ability to 
go after aiders and abettors. About 15 percent of the SEC's enforcement 
actions include charges of aiding and abetting. In those cases, the 
established right to proceed against aiders and abettors is critical to 
effective enforcement.
  Finally, the Central Bank decision severely weakens the deterrence of 
securities fraud. It sends a dangerous signal to the securities markets 
that a primary enforcement tool has been eliminated--and that includes 
all the independent bankers, accountants, and attorneys. This not only 
hurts defrauded investors, it hurts all investors.
  It is imperative that Congress act swiftly to rectify this situation 
because the Central Bank decision already is having immediate 
implications in a huge number of fraud claims. As we speak, people are 
writing up motions to dismiss and reopen cases. At least one major 
fraud case has already been dismissed. A judge has thrown out a $70 
million lawsuit by the shareholders of the bankrupt Bonneville Pacific 
Corp. against the accountants for the company, who allegedly 
misrepresented the company's financial condition and are now off the 
hook.
  A former general counsel of the SEC who now is a prominent securities 
defense lawyer has said: ``I am recommending to clients that if they've 
settled a case in the past with the SEC under aiding and abetting, they 
could get out of any injunctions.'' A major defense law firm has 
alerted its clients in a special dispatch: ``There are reports that 
legislation will be introduced in Congress in response to the Court's 
decision. Therefore, those clients who are defendants in section 10(B) 
cases involving private claims that allege aiding and abetting should 
immediately seek a final judgment dismissing those claims to minimize 
the impact of new legislation.'' Another major securities defense firm 
has sent an alert to clients to reopen SEC injunctions based on aiding 
and abetting, move to dismiss current SEC aiding and abetting cases, 
and take the position that Central Bank wipes out all forms of 
secondary liability under all provisions of the Federal securities 
laws.

  Obviously, the Central Bank decision has opened a Pandora's box of 
securities fraud and we must slam it shut.
  We must act immediately to amend the Securities Exchange Act of 1934 
to restore the right of private plaintiffs, and preserve the right of 
the SEC to sue aiders and abettors of securities fraud.
  In addition, I firmly believe that a logical extension of the Supreme 
Court's rationale in Central Bank could have a devastating impact upon 
the U.S. Treasury.
  One likely interpretation of that decision is that all Federal 
enforcement actions based upon aiding and abetting--or indeed any form 
of secondary liability--are now wiped out unless the relevant statute 
expressly provides for such liability. This would affect not only the 
SEC, but also the FDIC and RTC in their actions against failed savings 
and loans, the FTC, and other agencies who recover moneys for the 
Treasury based on aiding and abetting and other forms of secondary 
liability.
  This Supreme Court decision could end up costing the Federal 
Government billions of dollars. I hope that all of my colleagues will 
agree that this potential drain on the Treasury is a compelling reason 
to move forward as expeditiously as possible to rectify this 
situation.
                                 ______

      By Mr. PELL (by request):
  S. 2307. To make technical corrections to the Foreign Relations 
Authorization Act for fiscal years 1994 and 1995--Public Law 103-236; 
to the Committee on Foreign Relations.


  foreign relations authorization act for fiscal years 1994 and 1995 
                             amendments act

 Mr. PELL. Mr. President, by request, I introduce for 
appropriate reference a bill to make technical corrections to the 
Foreign Relations Authorization Act for Fiscal Years 1994 and 1995, 
Public Law 103-236.
  This proposed legislation has been requested by the Department of 
State, 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.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2307

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

     SEC. 1. SECTION 102(g) OF PUBLIC LAW 103-236.

       Section 102(g) of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended--
       (1) by inserting ``for the United Nations and its 
     affiliated agencies in'' before ```Contributions for 
     International Organizations''';
       (2) by striking ``reduced'' and inserting ``withheld'';
       (3) by striking ``each of the fiscal years 1994 and'' and 
     inserting ``fiscal year'';
       (4) by striking ``unless'' and inserting ``until'';
       (5) by inserting ``, to the best of his knowledge,'' after 
     ``that'';
       (6) by striking ``States'' and inserting ``Nations''; and
       (7) by striking the comma after ``promotes'' and inserting 
     ``and''.

     SEC. 2. SECTION 121 OF PUBLIC LAW 103-236

       Section 121 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     subsection (d)(1)--
       (1) by striking ``and the Director of the United States 
     Information Agency'' and inserting ``, the Director of the 
     United States Information Agency or the Administrator of the 
     Agency for International Development''; and
       (2) by striking ``or the United States Information Agency'' 
     and inserting ``, the United States Information Agency or the 
     Agency for International Development''.

     SEC. 3. SECTION 123 OF PUBLIC LAW 103-236.

       Section 38 of the State Department Basic Authorities Act of 
     1956 (22 U.S.C. 2710, as recently amended by section 123 of 
     the Foreign Relations Authorization Act, Fiscal Years 1994 
     and 1995 (P.L. 103-236)) is amended in subsection (c) by 
     inserting ``personal and'' before ``other support services''.

     SEC. 4. SECTION 127 OF PUBLIC LAW 103-236.

       The Act entitled ``An Act to regulate the issue and 
     validity of passports, and for other purposes'', approved 
     July 3, 1926 (44 Stat. 887, 22 U.S.C. 211a, as recently 
     amended by section 127(a) of the Foreign Relations 
     Authorization Act, Fiscal Years 1994 and 1995) is amended--
       (1) by inserting ``such'' before ``other employees''; and
       (2) by striking the comma after ``United States''.

     SEC. 5. SECTION 129(b) OF PUBLIC LAW 103-236.

       Section 129 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     subsection (b) by striking ``of'' after ``attendance'' and 
     inserting ``at''.

     SEC. 6. SECTION 139 OF PUBLIC LAW 103-236.

       Section 139 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended--
       (1) in subsection (20) by striking ``2349aa'' and inserting 
     ``4858(b)'';
       (2) by striking subsection (25); and
       (3) by redesignating subsections (26) and (27) as 
     subsections (25) and (26) respectively.

     SEC. 7. SECTION 140(c) OF PUBLIC LAW 103-236.

       Section 140 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     paragraph (2) of subsection (c) by striking ``serious loss of 
     life or property'' and inserting ``serious injury, loss of 
     life, or significant destruction of property''.

     SEC. 8. SECTION 142(a) OF PUBLIC LAW 103-236.

       Section 142 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended--
       (1) in paragraph (2) of subsection (a) by striking the 
     comma after ``not''; and
       (2) in paragraph (3) of subsection (a) by inserting a comma 
     after ``because''.

     SEC. 9. SECTION 161(a) OF PUBLIC LAW 103-236.

       Section 1 of the State Department Basic Authorities Act of 
     1956 (as recently amended by section 161(a) of the Foreign 
     Relations Authorization Act, Fiscal Years 1994 and 1995 (P.L. 
     103-236)) is amended in paragraph (2) of subsection (a) by 
     inserting ``and the Deputy Secretary of State'' after 
     ``Secretary''.

     SEC. 10. SECTION 161(b) OF PUBLIC LAW 103-236.

       Section 161 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (Public Law 103-236) is amended in 
     subsection (b) by striking ``133'' and inserting ``162''.

     SEC. 11. SECTION 161(f)(2) OF PUBLIC LAW 103-236.

       Section 161 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (Public Law 103-236) is amended in 
     paragraph (2) of subsection (f)--
       (1) by striking ``the principal duty of negotiations for'';
       (2) in clause (A) by striking ``Increased'' and inserting 
     ``The principal duty of negotiating increased''; and
       (3) in clause (B) by striking ``recoupment'' and inserting 
     ``In consultation with the Department of Defense, assist in 
     negotiations with the host governments for the recoupment''.

     SEC. 12. SECTION 162(g) OF PUBLIC LAW 103-236.

       The Omnibus Diplomatic Security and Antiterrorism Act of 
     1986 (as recently amended by section 162(g) of the Foreign 
     Relations Authorization Act, Fiscal Years 1994 and 1995 
     (Public Law 103-236)) is amended--
       (1) in subsection 103(a)(2) by striking ``operations'' and 
     inserting ``operation'';
       (2) by redesignating sections 106 and 107 as sections 104 
     and 105 respectively.

     SEC. 13. SECTION 162(q) OF PUBLIC LAW 103-236.

       Section 162 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (Public Law 103-236) is amended in 
     subsection (q) by striking ``2655'' and inserting ``2655a''.

     SEC. 14. SECTION 179 OF PUBLIC LAW 103-236.

       Section 179 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (Public Law 103-236) is amended in 
     subsection (b) by striking ``individual holding a career or 
     career candidate appointment'' and inserting ``individuals 
     holding career or career candidate appointments''.

     SEC. 15. SECTION 180(a) OF PUBLIC LAW 103-236.

       The Foreign Service Act of 1980 (as recently amended by 
     section 180(a) of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995) is amended--
       (1) in section 311--
       (A) by striking the title of the section and inserting 
     ``United States Citizens Hired Abroad.''; and
       (B) in subsection (d) by inserting ``by reason of such 
     employment'' after ``eligible''.
       (2) in section 610(a)(2) by inserting ``(other than a 
     United States citizen employed under section 311 who is not a 
     family member of a United States government employee assigned 
     abroad)'' after ``A member of the Service''.

     SEC. 16. SECTION 181(c) OF PUBLIC LAW 103-236.

       Section 181 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     subsection (c) by striking the ``)'' after ``system'' and 
     inserting ``)'' after ``that agency''.

     SEC. 17. SECTION 182(a) OF PUBLIC LAW 103-236.

       Section 182 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     subsection (a) by striking ``has'' and inserting ``have''.

     SEC. 18. SECTION 409(d) OF PUBLIC LAW 103-236.

       Section 409 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended by 
     striking subsection (d).

     SEC. 19. SECTION 506 OF PUBLIC LAW 103-236.

       Part 1 of title 18, United States Code (as recently amended 
     by section 506 of P.L. 103-236) is amended in paragraph (1) 
     of section 2340 (relating to the definition of torture) by 
     striking ``with'' and inserting ``within his''.

     SEC. 20. SECTION 564 OF PUBLIC LAW 103-236.

       Section 564 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended in 
     subsection (a) by striking ``primary or secondary'' and 
     inserting ``secondary or tertiary''.

     SEC. 21. EXTENSION OF PILOT VISA WAIVER PROGRAM.

       Section 217 of the Immigration and Nationality Act (8 
     U.S.C. 1187) is amended in subsection (f) by striking 
     ``1994'' and inserting ``1995''.

     SEC. 22. TRANSFER OF FUNDS.

       The Secretary of State is authorized to transfer from the 
     Department of State's ``Diplomatic and Consular Programs'' 
     appropriation up to $2,500,000 of the amount appropriated in 
     Title XI, Chapter 2 of the Dire Emergency Supplemental 
     Appropriations Act, 1992, including disaster assistance to 
     meet the present emergencies arising from the consequences of 
     Hurricane Andrew, Typhoon Omar, Hurricane Iniki, and other 
     natural disasters, and additional assistance to distressed 
     communities (P.L. 102-368) to appropriations available to the 
     General Services Administration which shall be obligated and 
     expended by that agency for the purchase of real property for 
     use by the Department of State for its Miami Regional Center, 
     and shall be available for the same time period as the 
     appropriation from which transferred.

     SEC. 23. SECTION 315 OF PUBLIC LAW 103-236.

       a. Section 315 of the Foreign Relations Authorization Act, 
     Fiscal Years 1994 and 1995 (P.L. 103-236) is amended--
       (1) by striking subsection (a); and
       (2) by redesignating subsections (b) and (c) as subsections 
     (a) and (b) respectively.
       b. Section 503 of the United States Information and 
     Educational Exchange Act of 1948 (22 U.S.C. 1463) is hereby 
     expressly revived.

     SEC. 24. USIA RESTRUCTURING--AMENDMENT TO FULBRIGHT-HAYS ACT.

       Section 112 of the Mutual Educational and Cultural Exchange 
     Act of 1961, as amended (22 U.S.C. 2460), is amended--
       (1) in subsection (a) by--
       (A) striking ``The Bureau'' at the beginning of the second 
     sentence and inserting ``Except as provided in subsection 
     (f), the Bureau'';
       (B) striking paragraph (4); and
       (C) renumbering paragraphs (5) through (9) as (4) through 
     (8), respectively; and
       (2) by inserting the following new subsection at the end:
       ``(f) The American Cultural Centers and Libraries Program 
     and the Academic Specialists Program, which are established 
     pursuant to this Act, shall be managed, coordinated, and 
     overseen by the Bureau of Information in the United States 
     Information Agency.''.

     SEC. 25. APPROPRIATIONS AUTHORITIES.

       Subsection (f) of section 701 of the United States 
     Information and Educational Exchange Act of 1948 (22 U.S.C. 
     1476 (f)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``the second'' and inserting ``either''; 
     and
       (B) by striking ``such second'' and inserting ``such''; and
       (2) by striking paragraph 4.
                                  ____


                           Sectional Analysis

       Sec. 1. Amendment to section 102(g):
       Section 102(g) requires that the amount authorized to be 
     appropriated for ``Contributions for International 
     Organizations'' be reduced by a certain amount each year 
     unless the President makes certain certifications aimed at 
     ensuring that United Nations agencies are not affiliated with 
     organizations that promote pedophilia. The proposed amendment 
     removes the inadvertent reference to ``United States 
     agencies'' and replaces it with ``United Nations agencies''. 
     It also changes the effective date of the provision from 
     fiscal year 1994 to fiscal year 1995, a change needed because 
     the provision was not enacted until more than halfway through 
     fiscal year 1994. Finally, it also makes several other 
     technical corrections to clarify the provision's intent.
       Sec. 2. Amendment to section 121:
       Section 121 sets limits on the number of Foreign Service 
     Officers and Senior Foreign Service Officers at the 
     Department of State, the United States Information Agency and 
     the Agency for International Development. The limits can be 
     waived under certain conditions. The purpose of this 
     technical correction is to include the Agency for 
     International Development in the waiver authority provided 
     under section 121(d).
       Sec. 3. Amendment to section 123:
       Section 123 gives the State Department the authority to 
     obtain support services (e.g., experts, printing) for 
     international claims and proceedings without regard to 
     competitive procurement procedures. (Several other U.S. 
     government agencies have similar authority for litigation 
     support services. The authority is necessary in order to 
     obtain these services in a timely manner.) The proposed 
     amendment would give the Department the authority to obtain 
     such services by means of personal services contracts. This 
     would permit the Department, for example, to hire a retired 
     accountant to work on a particular project, rather than 
     retaining an accounting firm at greater cost to perform the 
     same task.
       Sec. 4. Amendment to section 127:
       This proposed amendment corrects the inadvertent omission 
     of the word ``such'' in section 127.
       Sec. 5. Amendment to section 129:
       This proposed amendment corrects a typographical error.
       Sec. 6. Amendment to section 139:
       This proposed amendment corrects an erroneous citation, and 
     deletes subsection (25), which is a duplicate of subsection 
     (7).
       Sec. 7. Amendment to section 140(c)(2):
       This section was intended to apply the same criteria 
     (``serious injury, loss of life, or significant destruction 
     of property'') to the decision to convene an Accountability 
     Review Board as is applied in section 301 of the Omnibus 
     Diplomatic Security and Antiterrorism Act of 1986. Instead, 
     the phrase ``serious loss of life or property'' was 
     inadvertently included. The proposed amendment corrects the 
     error.
       Sec. 8. Amendment to section 142(a):
       This proposed amendment corrects typographical errors.
       Sec. 9. Amendment to section 161(a):
       This section inadvertently failed to refer to the Deputy 
     Secretary's position. The proposed amendment corrects the 
     error.
       Sec. 10. Amendment to section 161(b):
       The proposed amendment replaces an erroneous reference to 
     section 133 with the correct reference to section 162.
       Sec. 11. Amendment to section 161(f)(2):
       Section 161(f)(2)(B) adds a new responsibility to the 
     position of Ambassador for Burdensharing, namely the 
     responsibility for recoupment of residual value of United 
     States facilities in foreign countries when the United States 
     relinquishes such facilities to such countries. This new 
     provision appears to have the effect of transferring the 
     responsibility for such negotiations to the Ambassador for 
     Burdensharing, and away from the Department of Defense, which 
     currently has primary responsibility for such negotiations. 
     The proposed amendment makes it clear that the decision as to 
     which residual value negotiations will be conducted by the 
     Department of State will continue to be a matter dealt with 
     through consultations between the two departments.
       Sec. 12. Amendment to section 162(g)(2)(G):
       The proposed amendment would correct typographical and 
     numbering errors.
       Sec. 13. Amendment to section 162(q):
       The proposed amendment would correct an incorrect statutory 
     citation.
       Sec. 14. Amendment to section 179:
       The proposed amendment would correct grammatical errors.
       Sec. 15. Amendment to section 180(a):
       The proposed amendment addresses three technical problems. 
     First, section 180, dealing with United States citizens hired 
     abroad, excludes some persons hired under the authority 
     created by the section from Civil Service or Foreign Service 
     retirement benefits (because those persons will be eligible 
     for such benefits under local law). The proposed amendment 
     clarifies that persons hired under this section who are 
     otherwise eligible for Civil Service or Foreign Service 
     retirement benefits will not lose such eligibility as a 
     result of their employment under this section.
       Second, the proposed amendment would change the title of 
     section 311 of the Foreign Service Act of 1980 (FSA) to 
     conform to the changes in the text of that section made by 
     section 180.
       Third, section 180 excludes those U.S. citizens hired at 
     posts abroad who are not family members of U.S. government 
     employees assigned abroad from coverage under Chapter 11 of 
     the FSA (which establishes the grievance system). Such 
     employees will instead be covered by the laws of the host 
     country. The proposed amendment is a conforming change to 
     section 610 of the FSA, which also mentions the grievance 
     system.
       Sec. 16. Amendment to section 181(c):
       The proposed amendment corrects a typographical error.
       Sec. 17. Amendment to section 182(a):
       The proposed amendment corrects a grammatical error.
       Sec. 18. Amendment to section 409(d):
       This section inadvertently reestablishes a reporting 
     requirement that was repealed in section 139 (because the 
     information required in the report is already submitted in 
     another format). The proposed amendment corrects this error.
       Sec. 19. Amendment to section 506:
       The proposed amendment inserts a phrase that was 
     inadvertently omitted from this section.
       Sec. 20. Amendment to section 564:
       This section was intended to be identical to Senate section 
     903, which refers to the ``secondary or tertiary'' boycott of 
     Israel; instead section 564 incorrectly refers to the 
     ``primary or secondary boycott''. The proposed amendment 
     corrects the error.
       Sec. 21. Extension of pilot visa waiver program:
       The proposed amendment would extend (from September 30, 
     1994 to September 30, 1995) the expiration date of a pilot 
     visa waiver program established by section 217 of the 
     Immigration and Nationality Act.
       Sec. 22. Transfer of funds:
       This provision authorizes the Secretary of State to 
     transfer to the General Services Administration funds 
     previously appropriated to the State Department for, among 
     other purposes, the repair of a building in Miami that was 
     damaged by Hurricane Andrew. The building could not be 
     repaired, and the Department is now faced with relocating its 
     Miami Regional Center (MRC) for the second time since 
     Hurricane Andrew. The Department has reviewed several 
     options, including an extensive review of excess military 
     property in the Miami area, and has been unable to locate 
     suitable Government-owned property.
       The transfer of funds will enable GSA to acquire for the 
     Department a permanent building to house the MRC personnel 
     displaced by Hurricane Andrew. The MRC requires approximately 
     45-50,000 square feet of space in the Miami/Fort Lauderdale 
     area, near the Miami International Airport, in order to 
     provide support services to the Caribbean missions and 
     Central American embassies. The purchase of a building will 
     result in an annual rent savings to the United States 
     Government in the range of $700,000 to $1,000,000. The 
     Department's current temporary space arrangement with the 
     Navy Department expires in September 1994, with an option to 
     extend monthly. This extension cannot be long term due to the 
     Fort Lauderdale airport's interest in the Navy site.
       Sec. 23. Amendment to section 315 of Public Law 103-236:
       This provision reinstates the Voice of America Charter (22 
     U.S.C. 1463), which was repealed by Section 315(a) of the 
     Foreign Relations Authorization Act, Fiscal Years 1994 and 
     1995. Since 1977 the Charter has been a highly visible and 
     valued statutory embodiment of the voice of America's 
     journalistic integrity which should be kept in law.
       Sec. 24. USIA restructuring--amendment to Fulbright-Hays 
     Act:
       USIA is in the process of streamlining and restructuring 
     various information and cultural support functions in 
     Washington, and so notified Congress in a reprogramming 
     letter dated March 28, 1994. The Agency received no adverse 
     replies to that reprogramming letter. Part of the 
     restructuring involves the creation of a new technologically-
     advanced Bureau of Information. Certain programs of the 
     Bureau of Educational and Cultural Affairs are being shifted 
     into the new Bureau of Information. Certain provisions of the 
     Mutual Educational and Cultural Exchange Act of 1961 need to 
     be revised in order to align the provisions of that Act with 
     the new organization. Three Bureau of Educational and 
     Cultural Affairs programs are being transferred to the Bureau 
     of Information: the American Cultural Centers and Libraries 
     Program, the book program, and the Academic Specialists 
     Program.
       This provision would effect this correction.
       Sec. 25. Appropriations authorities:
       The House-passed version of the Foreign Relations 
     Authorization Act, Fiscal Years 1994 and 1995 (H.R. 2333), 
     contained a Section 235, which would expand and make 
     permanent for USIA certain authorization transfer authorities 
     that were previously extended to the Department of State. 
     Such authorities would facilitate the accommodation of 
     specific exchange programs within the various exchange 
     funding categories set forth in section 201 of P.L. 103-236. 
     Conference Report 103-482 states that the conferees adopted 
     House section 235, but the provision was inadvertently not 
     included in P.L. 103-236. The proposed amendment would 
     correct this error.
                                  ____



                                     U.S. Department of State,

                                    Washington, DC, July 18, 1994.
     Hon. Claiborne Pell,
     Chairman, Committee on Foreign Relations,
     U.S. Senate.
       Dear Mr. Chairman: This is to transmit draft legislation to 
     make technical corrections to the Foreign Relations 
     Authorization Act for Fiscal Years 1994 and 1995 (P.L. 103-
     236). This draft legislation constitutes the Administration's 
     official request with respect to a technical corrections 
     bill, including legislative requests from the Department of 
     State, the United States Information Agency, and the Agency 
     for International Development. I understand that the 
     Committee hopes to move a technical corrections package in 
     the near future, and we support your desire to consider this 
     legislation in a timely fashion.
       In addition, in signing P.L. 103-236 the President noted 
     constitutional and practical problems with section 824, which 
     prohibits assisting nuclear proliferation through financing. 
     The Administration has prepared language to correct these 
     problems for use during consideration of the Export 
     Administration Act reauthorization.
       The Office of Management and Budget advises that from the 
     standpoint of the Administration's program there is no 
     objection to the submission of this legislation.
       We appreciate your consideration of these provisions, and 
     stand ready to provide further information on any portions 
     thereof as you may require. Please do not hesitate to call if 
     we can be of further assistance.
           Sincerely,

                                             Wendy R. Sherman,

                                              Assistant Secretary,

                                      Legislative Affairs.

                                 ______

      By Mr. LIEBERMAN:
  S. 2308. A bill to establish a Commission on Retirement Income 
Policy, to the Committee on Labor and Human Resources.


           commission on retirement income policy act of 1994

 Mr. LIEBERMAN. Mr. President, I am pleased today to introduce 
S. 2308, which would establish a Commission on Retirement Income 
Policy. This Commission would examine the patchwork of laws and systems 
that make up our retirement system, would examine trends in retirement 
savings, existing Federal incentives and programs to encourage and 
protect retirement savings, and whether new Federal incentives and 
programs are needed to encourage such savings. This Commission would be 
required to complete its report by December 31, 1995, and then would 
terminate. This bill is a companion measure to H.R. 199, which was 
introduced by Congressman Hughes and which is cosponsored by 
Congresswoman Nancy Johnson of Connecticut.
  It is critical, Mr. President, that we as a nation review our plan 
for ensuring that our citizens have a financially secure retirement. 
This is an especially pressing concern as the ``baby-boom'' generation 
reaches retirement age. For example, while there are currently 3.1 
workers for every retiree, by the year 2030, we could be as low as 2.1 
workers for every retiree. We also know, however, that coverage under 
private qualified pension plans dropped during the 1980's.
  There can be no doubt what this growth in retirees means in terms of 
our Federal budget. One in three Federal dollars is already spent on 
programs for retirees. But we will not be able simply to slash these 
payments without evaluating the impact on retirees and on people's 
retirement plans. We need to get a much better handle on how we can 
address this problem of ensuring adequate retirement security for all 
Americans.
  Private financial advisers always tell you that you need to plan far 
ahead in order to be able to ensure yourself of a financially secure 
retirement. We need to begin this national planning process now, before 
it is too late. The longer we wait, the more costly our options will 
become.
  Mr. President, this bill passed the Congress in 1992 as a very small 
part of H.R. 15. Because H.R. 15 was vetoed for reasons unrelated to 
this Commission, it did not become law. I urge my colleagues to pass 
this legislation once again.
  I ask unanimous consent that a copy of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2308

       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 ``Commission on Retirement 
     Income Policy Act of 1994''.

     SEC. 2. ESTABLISHMENT.

       There is established a commission to be known as the 
     Commission on Retirement Income Policy (in this Act referred 
     to as the ``Commission'').

     SEC. 3. DUTIES.

       (a) In General.--The Commission shall conduct a full and 
     complete review and study of--
       (1) trends in retirement savings in the United States;
       (2) existing Federal incentives and programs that are 
     established to encourage and protect such savings; and
       (3) new Federal incentives and programs that are needed to 
     encourage and protect such savings.
       (b) Specific Issues.--In fulfilling the duty described in 
     subsection (a), the Commission shall address--
       (1) the amount and sources of Federal and private funds, 
     including tax expenditures (as defined in section 3 of the 
     Congressional Budget Act of 1974 (2 U.S.C. 622)), needed to 
     finance the incentives and programs referred to in subsection 
     (a)(2) and any new Federal incentive or program that the 
     Commission recommends be established;
       (2) the most efficient and effective manner, considering 
     the needs of retirement plan sponsors for simplicity, 
     reasonable cost, and appropriate incentives, of ensuring that 
     individuals in the United States will have adequate 
     retirement savings;
       (3) the amounts of retirement income that future retirees 
     will need to replace various levels of preretirement income, 
     including amounts necessary to pay for medical and long-term 
     care;
       (4) the workforce and demographic trends that affect the 
     pensions of future retirees;
       (5) the role of retirement savings in the economy of the 
     United States;
       (6) sources of retirement income other than private 
     pensions that are available to individuals in the United 
     States; and
       (7) the shift away from insured and qualified pension 
     benefits in the United States.
       (c) Recommendations.--
       (1) In general.--The Commission shall formulate 
     recommendations based on the review and study conducted under 
     subsection (a). The recommendations shall include measures 
     that address the needs of future retirees for--
       (A) appropriate pension plan coverage and other mechanisms 
     for saving for retirement;
       (B) an adequate retirement income;
       (C) preservation of benefits they accumulate by 
     participating in pension plans;
       (D) information concerning pension plan benefits; and
       (E) procedures to resolve disputes involving such benefits.
       (2) Effect on federal budget deficit.--A recommendation of 
     the Commission for a new Federal incentive or program that 
     would result in an increase in the Federal budget deficit 
     shall not appear in the report required under section 7 
     unless it is accompanied by a recommendation for offsetting 
     the increase.

     SEC. 4. MEMBERSHIP.

       (a) Number and Appointment.--
       (1) In general.--The Commission shall be composed of 18 
     members appointed not later than 90 days after the date of 
     the enactment of this Act. The Commission shall consist of 
     the following members:
       (A) 4 individuals appointed by the President.
       (B) 7 individuals appointed by the Speaker of the House of 
     Representatives.
       (C) 7 individuals appointed by the President pro tempore of 
     the Senate.
       (2) Consultation with minority leaders.--three of the 
     appointments made under paragraph (1)(B) shall be made in 
     consultation with the minority leader of the House of 
     Representatives. Three of the appointments made under 
     paragraph (1)(C) shall be made in consultation with the 
     minority leader of the Senate.
       (3) Qualifications.--The individuals referred to in 
     paragraph (1) shall be Members of the Congress, leaders of 
     business or labor, distinguished academics, or other 
     individuals with distinctive qualifications or experience.
       (b) Terms.--Each member shall be appointed for the life of 
     the Commission.
       (c) Vacancies.--A vacancy in the Commission shall be filled 
     not later than 90 days after the date of the creation of the 
     vacancy in the manner in which the original appointment was 
     made.
       (d) Compensation.--
       (1) Rates of pay.--Except as provided in paragraph (2), 
     members of the Commission shall serve without pay.
       (2) Travel expenses.--Each member of the Commission shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (e) Quorum.--10 members of the Commission shall constitute 
     a quorum, but 6 members may hold hearings, take testimony, or 
     receive evidence.
       (f) Chairperson.--The chairperson of the Commission shall 
     be elected by a majority vote of the members of the 
     Commission.
       (g) Meetings.--The Commission shall meet at the call of the 
     chairperson of the Commission.
       (h) Decisions.--Decisions of the Commission shall be made 
     according to the vote of not less than a majority of the 
     members who are present and voting at a meeting called 
     pursuant to subsection (g).

     SEC. 5. STAFF AND SUPPORT SERVICES.

       (a) Executive Director.--The Commission shall have an 
     executive director appointed by the Commission. The 
     Commission shall fix the pay of the executive director.
       (b) Staff.--The Commission may appoint and fix the pay of 
     additional personnel as it considers appropriate.
       (c) Applicability of Certain Civil Service Laws.--The 
     executive director and staff of the Commission may be 
     appointed without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service, and may be paid without regard to the provisions of 
     chapter 51 and subchapter III of chapter 53 of that title 
     relating to classification and General Schedule pay rates.
       (d) Experts and Consultants.--The Commission may procure 
     temporary and intermittent services under section 3109(b) of 
     title 5, United States Code, at rates the Commission 
     determines to be appropriate.
       (e) Staff of Federal Agencies.--Upon request of the 
     Commission, the head of any Federal agency may detail, on a 
     reimbursable basis, any of the personnel of the agency to the 
     Commission to assist it in carrying out its duties under this 
     Act.
       (f) Administrative Support Services.--Upon the request of 
     the Commission, the Administrator of General Services shall 
     provide to the Commission, on a reimbursable basis, the 
     administrative support services necessary for the Commission 
     to carry out its responsibilities under this Act.

     SEC. 6. POWERS.

       (a) Hearings and Sessions.--
       (1) In general.--The Commission may, for the purpose of 
     carrying out this Act, hold hearings, sit and act at times 
     and places, take testimony, and receive evidence as the 
     Commission considers appropriate. The Commission may 
     administer oaths or affirmations to witnesses appearing 
     before it.
       (2) Public hearings.--The Commission may hold public 
     hearings to receive the views of a broad spectrum of the 
     public on the status of the private retirement system of the 
     United States.
       (b) Delegation of Authority.--Any member, committee, or 
     agent of the Commission may, if authorized by the Commission, 
     take any action which the Commission is authorized to take by 
     this section.
       (c) Information.--
       (1) Information from federal agencies.--
       (A) In general.--The Commission may secure directly from 
     any Federal agency information necessary to enable it to 
     carry out this Act. Upon request of the Commission, the head 
     of the Federal agency shall furnish the information to the 
     Commission.
       (B) Exception.--Subparagraph (A) shall not apply to any 
     information that the Commission is prohibited to secure or 
     request by another law.
       (2) Public surveys.--The Commission may conduct the public 
     surveys necessary to enable it to carry out this Act. In 
     conducting such surveys, the Commission shall not be 
     considered an agency for purposes of chapter 35 of title 44, 
     United States Code.
       (d) Mails.--The Commission may use the United States mails 
     in the same manner and under the same conditions as other 
     Federal agencies.
       (e) Contract and Procurement Authority.--The Commission may 
     make purchases, and may contract with and compensate 
     government and private agencies or persons for property or 
     services, without regard to--
       (1) section 3709 of the Revised Statutes (41 U.S.C. 5); and
       (2) title III of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 251 et seq.).
       (f) Gifts.--The Commission may accept, use, and dispose of 
     gifts of services or property, both real and personal, for 
     the purpose of assisting the work of the Commission. Gifts of 
     money and proceeds from sales of property received as gifts 
     shall be deposited in the Treasury and shall be available for 
     disbursement upon order of the Commission. For purposes of 
     Federal income, estate, and gift taxes, property accepted 
     under this subsection shall be considered as a gift to the 
     United States.
       (g) Volunteer Services.--Notwithstanding section 1342 of 
     title 31, United States Code, the Commission may accept and 
     use voluntary and uncompensated services as the Commission 
     determines necessary.

     SEC. 7. REPORT.

       Not later than December 31, 1995, the Commission shall 
     submit a report to the President, the majority and minority 
     leaders of the Senate, and the majority and minority leaders 
     of the House of Representatives. The report shall review the 
     matters that the Commission is required to study under 
     section 3 and shall set forth the recommendations of the 
     Commission.

     SEC. 8. TERMINATION.

       The Commission shall terminate not later than the 
     expiration of the 90-day period beginning on the date on 
     which the Commission submits its report under section 
     7.
                                 ______

      By Mr. ROCKEFELLER:
  S. 2309. An original bill to amend title 38, United States Code, to 
provide for reform of the health care benefits furnished by the 
Department of Veterans Affairs and the administration of health care 
benefits by the Department, and for other purposes; from the Committee 
on Veterans Affairs; placed on the calendar.


                  the veterans health care reform act

  Mr. ROCKEFELLER. Mr. President, I am enormously proud today to report 
S. 2309, the proposed Veterans Health Care Reform Act, which is a 
original bill ordered reported by the Committee on Veterans' Affairs on 
July 14, 1994. This measure would vastly strengthen VA's ability to 
improve access to quality health care for all of our Nation's veterans 
and would enable VA to continue to function as an independent health 
care system. Veterans deciding about their health care in a reformed 
health care environment would have all the options that other Americans 
would have under national health care reform. Veterans would also have 
the option of joining a VA health care plan.
  Mr. President, in addition to the proposed Veterans Health Care 
Reform Act, during our July 14 meeting the committee approved three 
other items: A slightly modified version of the proposed Veterans 
Health Care Reform Act with brackets identifying cross references which 
will have to be modified as we learn the final shape of the overall 
health care reform legislation; a list of areas in the non-VA sections 
of a larger health care reform bill where veterans' needs must be 
addressed; and a list of proposals that may be necessary if a general 
health care reform bill does not include the economic mechanisms 
necessary to support major reform of the VA medical system.
  Mr. President, due to financial constraints, it has not been possible 
for the Department of Veterans Affairs to provide medical services for 
all the veterans who need and deserve those services. Indeed, there are 
millions of veterans who are not currently eligible for health care 
services at VA facilities and do not have access to adequate health 
care at other facilities. This situation is simply unacceptable.
  The proposed Veterans Health Care Reform Act would provide all 
veterans with access to health care, either through a VA health plan or 
through a non-VA plan, depending on which option they choose. Veterans 
who choose a VA plan would remain eligible for extra services that 
other Americans would not have in their standard benefit package, such 
as custom prosthetics and better access to long-term care. Furthermore, 
VA health care services would not be limited to VA facilities--access 
would be expanded by having outpatients services located more 
conveniently in the communities where veterans live.
  The proposed Veterans Health Care Reform Act would be able to improve 
medical care for veterans by increasing the financial resources 
available to VA medical facilities. For the first time, Medicare would 
pay VA to provide services to higher income, nonservice-connected 
veterans who are eligible for Medicare but decide to enroll in a VA 
health plan instead. In addition, employers who contribute to the cost 
of employees' health care would also contribute to the cost of health 
care provided to veteran employees through VA plans.
  These additional resources would be used to improve the quality of 
all medical care, and especially prevention services and outpatient 
care. VA medical care would be more conveniently located, because VA 
would pay for services provided at selected non-VA medical centers and 
doctors' offices. In addition, dependents of veterans are likely to be 
eligible for care under their local VA health plan.
  Another feature of the proposed Veterans Health Care Reform Act is 
the health care investment fund. This $3.525 billion fund is enormously 
important because it would enable VA medical centers to expand 
services, improve facilities, and enhance the quality of care provided 
to veterans.
  I truly believe that health care reform provides a great opportunity 
to expand veterans' access to medical care. However, there is still 
much to be done. If Congress does not pass a health care reform bill, 
then meaningful reform of the VA health care system will be very 
difficult, if not impossible. And if we don't make health care reform a 
reality, we will have squandered the best opportunity we have to make 
these desperately needed changes.
  The VA system desperately needs to simplify eligibility criteria for 
medical care, to make the system more cost effective and more generous 
at the same time. It desperately needs to move away from a system of 
care that focuses on hospitals, to one that makes a wide range of 
services available in the communities where veterans live. It needs to 
become more oriented to providing care for veterans, rather than 
deciding which veterans deserve care.
  Mr. President, I will now summarize the provisions of the bill.


                         summary of provisions

                            va participation

  The Veterans Health Care Reform Act provides for the Department of 
Veterans Affairs to maintain an independent VA health care system and 
for that system to be a full participant in national health care 
reform.
  The bill would add to title 38, United States Code, a new chapter 18 
for the operation of VA programs in the context of a new national 
system. Under chapter 18, VA would establish VA health plans as an 
enrollment choice for all veterans, and the Secretary would prescribe 
regulations establishing standards for the operation of facilities 
under VA health plans.


                               Enrollment

  All veterans would be eligible to select a VA health plan for 
guaranteed, comprehensive coverage. CHAMPVA beneficiaries--certain 
dependents of veterans who have service-connected disabilities rated 
totally and permanently disabling, and survivors of those who died 
either while so disabled or as a result of service-connected 
disabilities--would also be eligible to enroll in VA. Also, the 
Secretary would be authorized to enroll family members of veterans and 
of CHAMPVA beneficiaries who choose to enroll in the VA.


                                benefits

  VA will provide to all veterans who choose a VA health plan all 
services included in the comprehensive benefit package. This will 
ensure that all veterans receive a full continuum of inpatient and 
outpatient care that is not available to many veterans under current 
law.
  In addition, veterans will retain the VA eligibility that they have 
under current law for benefits not included in the comprehensive 
benefit package--for example, long-term mental health care, nursing 
home care, and eyeglasses in certain cases. VA will also be able to 
offer, in exchange for premium payments, supplemental benefits not 
included in the comprehensive package.


                               free care

  All compensable, service-connected, disabled veterans, low income 
veterans, veterans who are ex-POW's, and veterans who have been exposed 
to Agent Orange, radiation, or unknown toxins in the Persian Gulf, who 
choose a VA health plan will receive the comprehensive benefits package 
totally free; they will not pay premiums, copayments, or deductibles.
  Other enrollees, including family members, would be required to pay 
cost shares, including any balance of premiums, copayments, and 
deductibles.


                             fiscal matters

  VA will continue to receive appropriations to its medical care 
account. In addition, VA will retain payments from third parties and be 
able to use those funds to provide health care. VA will receive a 
premium payment for each veteran and dependent who chooses to enroll in 
a VA plan. In the case of a self-employed, service-connected veteran, 
VA would provide for a reduction in any premium payment if he or she 
enrolls in a VA plan. To the extent that VA appropriations actually 
cover the costs of care for a veteran for whom VA has received a 
premium, VA would remit the excess premium to the U.S. Treasury.

  VA will also retain the premiums, copayments, and deductibles it 
receives from higher income, nonservice-connected veterans and 
dependents, the premiums VA collects from the sale of supplemental 
benefits, and the payments it receives from other plans for the 
furnishing of care to other plans' patients.
  VA would also retain Medicare reimbursement for care furnished to 
higher income, Medicare-eligible veterans who have no service-connected 
disabilities, and dependents. VA health plans would be considered to be 
Medicare HMO's.
  All collections and reimbursements would be credited into a revolving 
fund. The Secretary would establish a separate account for each 
facility of the Department that is operating as or within a VA health 
plan.
  VA health plans would also be eligible, on the same basis as other 
plans and providers, to apply for grants from programs conducted by the 
Department of Health and Human Services.
  In addition, the proposed Veterans Health Care Reform Act authorizes 
a $3,525 billion investment fund--$1.225 billion in fiscal year 1995, 
$0.6 billion in fiscal year 1996; and $1.7 billion in fiscal year 
1997--which would be authorized to help fund VA health plans.


                         administrative matters

  VA health plans would have expanded authorities to enter into 
contracts and sharing agreements for the furnishing of services to 
enrollees. Also, certain statutory restrictions on VA administrative 
reorganizations and contracting for services at VA facilities would be 
made inapplicable to VA health plans.
  VA would have the authority to appoint, promote, and advance 
personnel to positions in facilities operating as or within a health 
plan.
  VA health plans would have expanded authority to expend funds 
available to the facility. The exception to this budget autonomy would 
be for the programs funded on a regional basis, such as spinal cord 
injury services, PTSD, blind rehab, and other congressionally 
designated programs that are offered through a specific VAMC to an 
entire region.
  VA will also have express authority to carry out promotional, 
advertising, and marketing activities.
  VA facilities not operating as part of a VA health plan would 
continue to furnish health care services under current law--that is, 
chapter 17 of title 38.


        amendments to non-va sections of health care reform bill

  Mr. President, I will now discuss the outline of issues relating to 
VA which will have to be included elsewhere in the final health care 
reform bill.
  Grant moneys and loans--VA should have the option of competing for 
grant moneys and loans from a revolving fund for grants and loans for 
certain entities to develop community health groups and expand delivery 
sites, or for other projects. VA should be added to the list of those 
eligible for loans and grants.
  Graduate medical education--VA should be considered in the allocation 
of residency positions and in all sections of a reform bill pertaining 
to medical education. VA should also receive the payment from any 
medical school fund for its current pro bono role in student teaching.
  Research--VA should be eligible to receive a premium surcharge for 
veterans enrolled in a VA plan from any research trust fund provision.
  Representation on various boards-advisory councils--VA should be 
represented on any national boards and other advisory councils-
commissions for which VA participation is necessary.
  Revenue provisions--VA should be exempt from any requirement to 
contribute to a guarantee fund or to maintain reserve funds, and from 
the requirement to purchase reinsurance, although VA should have the 
flexibility to purchase such insurance. Companies that self-insure 
their employees should be required to pay VA for employees enrolling in 
VA health plans, at the same annual rate they would pay for their own 
enrollees.


                  description of alternative proposals

  Mr. President, I now would like to describe alternative proposals 
which might have to be considered, if health care reform legislation 
does not provide for comprehensive health care for all Americans, 
mandated employer contributions, and/or mandatory alliances. These 
additions will enable VA to provide quality health care under health 
care reform.
  VA participation--VA health plans must be offered as an enrollment 
choice to veterans and their dependents, whether through a health 
insurance purchasing cooperative, voluntary mandatory alliances, the 
Federal Employees' Health Benefit Plan, or directly to the individual. 
VA plans must be listed as an option, or purchasing groups would be 
required to provide information on VA plans to consumers.
  States which implement their own version of health care reform should 
be required to offer VA health plans. If States legislate some type of 
purchasing groups, VA would have to be included as a choice to veterans 
through the group.
  VA should be authorized to participate in State-enacted reforms.
  VA should be authorized to participate as a provider in States which 
have enacted payor reform plans. VA would be authorized to offer a 
comprehensive benefits package to veterans and their dependents, and to 
receive the same type of reimbursement as other providers.
  Revenue provisions--VA should receive any Federal risk-adjusted 
payments for all enrollees who qualify. Low income individuals and 
disabled individuals usually require more costly health care services 
compared to other individuals. As a result, several health care reform 
bills would provide federally funded subsidies to providers who serve 
individuals who receive AFDC or SSI, or have other risk factors. If 
risk-adjusted payments are available as part of health care reform, VA 
should be eligible for AFDC and SSI risk-adjusted payments for veterans 
and their dependents who enroll in a VA health plan and any other such 
payments.
  Most health care reform bills recognize that low income individuals 
cannot afford to pay the entire cost of a health plan. If premium and 
cost-sharing subsidies are available for low income individuals 
enrolling in qualifying health plans, VA should receive these for 
veterans and dependents who enroll in VA health plans if those 
individuals satisfy the income criteria.
  If the health care reform legislation enables individuals who are 
enrolled in one health plan to use other providers under certain 
circumstances, VA should be eligible to collect payments for medical 
care provided to veterans who are enrolled with other health plans but 
also choose VA facilities for some of their medical care.
  Also, if there are no employer mandates, or if employer contributions 
are less than 80 percent of the premium, VA should be authorized to 
collect and retain collections from Medicare and other health plans for 
nonservice-connected medical services that are provided to core 
veterans.
  Eligibility reform--If there are no employer mandates, or if employer 
contributions are below 80 percent, the eligibility reform envisioned 
in the Veterans Health Security Act may have to be revised due to 
inadequate financial resources.


                               conclusion

  The proposed Veterans Health Care Reform Act is intended to be only 
the VA section of a larger health care reform bill. The committee 
anticipates that conforming amendments will be made during Senate 
debate in order for the committee bill to integrate with whatever bill 
passes the Senate. Because we do not know the details of a final 
national health care reform bill, various other parts of the overall 
bill will have to be amended later to assure VA participation and to 
conform with changes in overall policy.
  The committee's goal is to be flexible, while meeting our 
responsibility to our Nation's veterans. That seems to be the best we 
can do; we should do no less.
  In closing, Mr. President, I thank all the committee members who 
voted unanimously to approve these bills and the two proposals. In 
doing so, the committee has assured veterans that not only will the VA 
health care system be included in a final health care reform bill, but 
that the VA will make the improvements necessary to provide 
comprehensive health care to all veterans, men and women.
  I ask unanimous consent that the text of the bill and additional 
material be inserted in the Record. I will be providing a Congressional 
Budget Office cost estimate on this bill as soon as it becomes 
available.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2309

       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 ``Veterans Health Care Reform 
     Act of 1994''.

     SEC. 2. BENEFITS AND ELIGIBILITY THROUGH DEPARTMENT OF 
                   VETERANS AFFAIRS MEDICAL SYSTEM.

       (a) Department of Veterans Affairs As a Participant in 
     Health Care Reform.--
       (1) In general.--Title 38, United States Code, is amended 
     by inserting after chapter 17 the following new chapter:

    ``CHAPTER 18--ELIGIBILITY AND BENEFITS UNDER HEALTH SECURITY ACT

                        ``SUBCHAPTER I--GENERAL

``1801. Definitions.

                      ``SUBCHAPTER II--ENROLLMENT

``1811. Enrollment: veterans.
``1812. Enrollment: CHAMPVA eligibles.
``1813. Enrollment: family members.

                       ``SUBCHAPTER III--BENEFITS

``1821. Benefits for VA enrollees.
``1822. Chapter 17 benefits.
``1823. Supplemental benefits packages and policies.
``1824. Limitation regarding veterans enrolled with health plans 
              outside Department.

                   ``SUBCHAPTER IV--FINANCIAL MATTERS

``1831. Premiums, copayments, and other charges.
``1832. Medicare coverage and reimbursement.
``1833. Recovery of cost of certain care and services.
``1834. Health Plan Fund.

                        ``SUBCHAPTER I--GENERAL

     ``Sec. 1801. Definitions

       ``For purposes of this chapter:
       ``(1) The term `health plan' means an entity that has been 
     certified under the Health Security Act as a health plan.
       ``(2) The term `VA health plan' means a health plan that is 
     operated by the Secretary under section 7341 of this title.
       ``(3) The term `VA enrollee' means an individual enrolled 
     under the Health Security Act in a VA health plan.
       ``(4) The term `comprehensive benefit package' means the 
     package of benefits required to be provided by a health plan 
     under the Health Security Act.

                      ``SUBCHAPTER II--ENROLLMENT

     ``Sec. 1811. Enrollment: veterans

       ``Each veteran who is an eligible individual within the 
     meaning of section 1001 of the Health Security Act (including 
     a veteran who is a medicare-eligible individual as defined in 
     section 1902 of that Act) may enroll with a VA health plan. A 
     veteran who wants to receive the comprehensive benefit 
     package through the Department shall enroll with a VA health 
     plan.

     ``Sec. 1812. Enrollment: CHAMPVA eligibles

       ``An individual who is eligible for benefits under section 
     1713 of this title and who is eligible to enroll in a health 
     plan pursuant to section 1001 of the Health Security Act may 
     enroll under that Act with a VA health plan in the same 
     manner as a veteran.

     ``Sec. 1813. Enrollment: family members

       ``(a) The Secretary may authorize a VA health plan to 
     enroll members of the family of an enrollee under section 
     1811 or 1812 of this title, subject to payment of premiums, 
     deductibles, copayments, and coinsurance as required under 
     the Health Security Act.
       ``(b) For purposes of subsection (a), an enrollee's family 
     is those individuals (other than the enrollee) included 
     within the term `family' as defined in section 1011(b) of the 
     Health Security Act.

                       ``SUBCHAPTER III--BENEFITS

     ``Sec. 1821. Benefits for VA enrollees

       ``The Secretary shall ensure that each VA health plan 
     provides to each individual enrolled with it the items and 
     services in the comprehensive benefit package under the 
     Health Security Act.

     ``Sec. 1822. Chapter 17 benefits

       ``The Secretary shall provide to a veteran the care and 
     services not included in the comprehensive benefits package 
     that are authorized to be provided under chapter 17 of this 
     title in accordance with the terms and conditions applicable 
     to that veteran and that care under such chapter.

     ``Sec. 1823. Supplemental benefits packages and policies

       ``(a) As part of a VA health plan, the Secretary may offer 
     to veterans--
       ``(1) supplemental health benefits policies for the care 
     and services described in subsection (b); and
       ``(2) cost-sharing policies consistent with the 
     requirements of part 2 of subtitle E of title I of the Health 
     Security Act.
       ``(b) The care and services referred to in subsection (a) 
     are care and services that--
       ``(1) are not available under the comprehensive benefit 
     package; and
       ``(2) can be provided by the Secretary at reasonable cost.

     ``Sec. 1824. Limitation regarding veterans enrolled with 
       health plans outside Department

       ``A veteran who is residing in a regional alliance area in 
     which the Department operates a health plan and who is 
     enrolled in a health plan that is not operated by the 
     Department may be provided the items and services in the 
     comprehensive benefit package by a VA health plan only if the 
     plan is reimbursed for the care provided.

                   ``SUBCHAPTER IV--FINANCIAL MATTERS

     ``Sec. 1831. Premiums, copayments, and other charges

       ``(a)(1) Except as provided in paragraph (2), the Secretary 
     may not impose on or collect from a veteran described in 
     subsection (b) who is a VA enrollee a cost-share charge of 
     any kind (whether a premium, copayment, deductible, 
     coinsurance charge, or other charge) for items and services 
     in the comprehensive benefit package that a VA health plan 
     provides. The Secretary shall make such arrangements as 
     necessary with health alliances in order to carry out this 
     subsection.
       ``(2) The Secretary shall collect from a veteran referred 
     to in paragraph (1) an appropriate cost-share charge for any 
     items and services that are available to the veteran through 
     the VA health plan but which the veteran obtains from a 
     health care provider other than a VA health plan network 
     provider.
       ``(b) The veterans referred to in subsection (a) are the 
     following:
       ``(1) Any veteran with a compensable service-connected 
     disability.
       ``(2) Any veteran whose discharge or release from the 
     active military, naval or air service was for a disability 
     incurred or aggravated in the line of duty.
       ``(3) Any veteran who is in receipt of, or who, but for a 
     suspension pursuant to section 1151 of this title (or both 
     such a suspension and the receipt of retired pay), would be 
     entitled to disability compensation, but only to the extent 
     that such a veteran's continuing eligibility for such care is 
     provided for in the judgment or settlement provided for in 
     such section.
       ``(4) Any veteran who is a former prisoner of war.
       ``(5) Any veteran of the Mexican border period or World War 
     I.
       ``(6) Any veteran who is unable to defray the expenses of 
     necessary care as determined under section 1722(a) of this 
     title.
       ``(7) Any veteran referred to in subparagraph (A), (B), or 
     (C) of section 1710(e) of this title.
       ``(c)(1) Except as provided in paragraph (2), in the case 
     of a VA enrollee who is not described in subsection (b), the 
     Secretary shall charge premiums and establish copayments, 
     deductibles, and coinsurance amounts for care and services 
     provided under this chapter. The premium rate, and the rates 
     for deductibles and copayments, for each VA health plan shall 
     be established by that health plan based on rules established 
     by the health alliance under which it is operating.
       ``(2) The Secretary may not charge a veteran referred to in 
     paragraph (1) a premium for any care or service that the 
     Secretary provides the veteran under a supplemental benefits 
     policy offered under section 1823 of this title if the 
     Secretary is required to provide such care or service under 
     chapter 17 of this title.
       ``(d) In the case of a veteran with a compensable service-
     connected disability who is enrolled in a VA health plan and 
     who has net earnings from self-employment, the Secretary 
     shall, under regulations prescribed by the Secretary, provide 
     for a reduction in any premium payment (or alliance credit 
     repayment) owed by the veteran under section 6126 or 6111 of 
     the Health Security Act by virtue of the veteran's net 
     earnings from self-employment.

     ``Sec. 1832. Medicare coverage and reimbursement

       ``(a) For purposes of any program administered by the 
     Secretary of Health and Human Services under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.), a 
     Department facility shall be deemed to be a Medicare 
     provider.
       ``(b)(1) A VA health plan shall be considered to be a 
     Medicare HMO.
       ``(2) For purposes of this section, the term `Medicare HMO' 
     means an eligible organization under section 1876 of the 
     Social Security Act.
       ``(c) In the case of care provided under this chapter to a 
     veteran (other than a veteran described in section 1831(b) of 
     this title), or to a family member of a veteran, who is 
     eligible for benefits under the Medicare program under title 
     XVIII of the Social Security Act, the Secretary of Health and 
     Human Services shall reimburse a VA health plan or Department 
     health-care facility providing services as a Medicare 
     provider or Medicare HMO in the same amounts and under the 
     same terms and conditions as that Secretary reimburses other 
     Medicare providers or Medicare HMOs, respectively. The 
     Secretary of Health and Human Services shall include with 
     each such reimbursement a Medicare explanation of benefits.
       ``(d) When the Secretary provides care to a veteran, or a 
     family member of a veteran, for which the Secretary receives 
     reimbursement under this section, the Secretary shall require 
     the veteran to pay to the Department any applicable 
     deductible or copayment that is not covered by Medicare.

     ``Sec. 1833. Recovery of cost of certain care and services

       ``(a) In the case of an individual provided care or 
     services through a VA health plan who has coverage under a 
     supplemental health insurance policy pursuant to part 2 of 
     subtitle E of title I of the Health Security Act, a Medicare 
     supplemental health insurance plan (as defined in the Health 
     Security Act), or any other provision of law, the Secretary 
     has the right to recover or collect charges for care or 
     services (as determined by the Secretary, but not including 
     care or services for a service-connected disability) from the 
     party providing that coverage to the extent that the 
     individual (or the provider of the care or services) would be 
     eligible to receive payment for such care or services from 
     such party if the care or services had not been furnished by 
     a department or agency of the United States.
       ``(b) In the case of a veteran referred to in section 
     1831(b) of this title who is enrolled in a health plan other 
     than a VA health plan and who is provided care or services 
     for a service-connected disability by a VA health plan, the 
     Secretary has the right to recover or collect charges for 
     such care and services from the party operating the health 
     plan to the extent that the veteran (or the provider of the 
     care or services) would be eligible to receive payment for 
     such care or services from such party if the care or services 
     had not been furnished by a department or agency of the 
     United States.
       ``(c) The provisions of subsections (b) through (f) of 
     section 1729 of this title shall apply with respect to claims 
     by the United States under subsection (a) or (b) in the same 
     manner as they apply to claims under subsection (a) of that 
     section.

     ``Sec. 1834. Health Plan Fund

       ``(a) There is hereby established in the Treasury a 
     revolving fund to be known as the `Department of Veterans 
     Affairs Health Plan Fund'.
       ``(b)(1) Subject to paragraphs (2) and (3), amounts 
     collected or recovered by the Department under this 
     subchapter by reason of the furnishing of care and services 
     to an individual by a VA health plan or the enrollment of an 
     individual with a VA health plan (including amounts received 
     as premiums, premium discount payments, copayments or 
     coinsurance, and deductibles, amounts received as third-party 
     reimbursements, and amounts received as reimbursements from 
     another health plan for care furnished to one of its 
     enrollees) shall be credited to the revolving fund.
       ``(2) Premiums collected by the Department under this 
     subchapter during fiscal year 1996 or 1997 by reason of the 
     furnishing of care and services under a VA health plan to a 
     veteran referred to in section 1831(b) of this title shall be 
     credited to the revolving fund established under subsection 
     (a) only if the amount of funds appropriated to the Veterans 
     Health Care Investment Fund established under subsection 
     (a)(1) of section 7346 of this title for the fiscal year 
     concerned is less than the amount specified to be credited to 
     that fund for that fiscal year under subsection (c) of such 
     section 7346.
       ``(3) Premiums received by the Department under this 
     subchapter in any fiscal year after fiscal year 1997 by 
     reason of the furnishing of care and services under a VA 
     health plan to a veteran referred to in paragraph (2) shall 
     be credited to the revolving fund established under 
     subsection (a) only if the cost of providing such care and 
     services is not covered by appropriations. The amount so 
     credited shall be the amount of such premiums received that 
     is necessary to cover the difference between the cost of such 
     care and services and such appropriations.
       ``(c) The Secretary shall establish in the revolving fund a 
     separate account for each VA health plan. The Secretary shall 
     credit any amount received under subsection (b) by reason of 
     the furnishing of care and services in or through a VA health 
     plan or the enrollment of an individual with a VA health 
     plan.
       ``(d) Amounts credited to the account of the revolving fund 
     for a VA health plan under subsection (b) are hereby made 
     available to the VA health plan for the expenses of the 
     delivery by the VA health plan of the items and services in 
     the comprehensive benefit package and any supplemental 
     benefits package or policy offered by the VA health plan.''.
       (2) The table of chapters at the beginning of title 38, 
     United States Code, and at the beginning of part II of such 
     title, is amended by inserting after the item relating to 
     chapter 17 the following new item:

``18. Benefits and Eligibility Under Health Security Act...1801.''.....

         (b) Preservation of Existing Benefits for Facilities Not 
     Operating as Health Plans.--(1) Chapter 17 of title 38, 
     United States Code, is amended by inserting after section 
     1704 the following new section:

     ``Sec. 1705. Facilities not operating within health plans; 
       veterans not eligible to enroll in health plans

       ``The provisions of this chapter shall apply with respect 
     to the furnishing of care and services--
       ``(1) by any facility of the Department when it is not 
     operating as or within a health plan certified as a health 
     plan under the Health Security Act; and
       ``(2) by any facility of the Department (whether or not 
     operating as or within a health plan certified as a health 
     plan under the Health Security Act) in the case of a veteran 
     who is not an eligible individual with the meaning of section 
     1001 of the Health Security Act.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by inserting after the item relating to section 
     1704 the following new item:

``1705. Facilities not operating within health plans; veterans not 
              eligible to enroll in health plans.''.

 SEC. 3. ORGANIZATION OF DEPARTMENT OF VETERANS AFFAIRS FACILITIES AS 
                             HEALTH PLANS.

       (a) In General.--Chapter 73 of title 38, United States 
     Code, is amended--
       (1) by redesignating subchapter IV as subchapter V; and
       (2) by inserting after subchapter III the following new 
     subchapter IV:

 ``SUBCHAPTER IV--PARTICIPATION AS PART OF NATIONAL HEALTH CARE REFORM

     ``Sec. 7341. Organization of health care facilities as health 
       plans

       ``(a)(1) The Secretary shall organize health plans and 
     operate Department facilities as or within health plans under 
     the Health Security Act.
       ``(2)(A) The Secretary shall prescribe regulations 
     establishing standards for the operation of Department health 
     care facilities as or within health plans under that Act. In 
     prescribing such standards, the Secretary shall ensure that 
     they conform, to the maximum extent practicable, to the 
     requirements for health plans generally set forth in part 1 
     of subtitle E of title I of the Health Security Act.
       ``(B) Not later than 30 days after prescribing such 
     standards, the Secretary shall submit to the Committees on 
     Veterans' Affairs of the Senate and the House of 
     Representatives a report describing the differences, if any, 
     between such standards and the requirements for health plans 
     generally referred to in subparagraph (A).
       ``(b) Health care facilities of the Department located 
     within an area or region may be organized to operate as a 
     single health plan encompassing all Department facilities 
     within that area or region or may be organized to operate as 
     several health plans.
       ``(c) In carrying out responsibilities under the Health 
     Security Act, a State (or a State-established entity)--
       ``(1) may not impose any standard or requirement on a VA 
     health plan that is inconsistent with this chapter or any 
     regulation prescribed under this chapter or other Federal 
     laws regarding the operation of this chapter; and
       ``(2) may not deny certification of a VA health plan under 
     the Health Security Act on the basis of a conflict between a 
     rule of a State or health alliance and this chapter or 
     regulations prescribed under this chapter or other Federal 
     laws regarding the operation of this chapter.

     ``Sec. 7342. Contract authority for facilities operating as 
       or within health plans

       ``(a) The Secretary shall designate a health plan director 
     for each VA health plan organized and operated under this 
     subchapter.
       ``(b) The health plan director of a VA health plan may 
     enter into contracts and agreements for the provision of care 
     and services to be provided under the VA health plan and 
     contracts and agreements for other services (including 
     procurement of equipment, maintenance and repair services, 
     and other services related to the provision of health care 
     services) that are necessary for the provision of care and 
     services under the VA health plan.
       ``(b) Contracts and agreements (including leases) under 
     subsection (a) shall not be subject to the following 
     provisions of law:
       ``(1) Section 8110(c) of this title, relating to the 
     contracting of services at Department health-care facilities.
       ``(2) Section 8122(a)(1) of this title, relating to the 
     lease of Department property.
       ``(3) Section 8125 of this title, relating to local 
     contracts for the procurement of health-care items.
       ``(4) Section 702 of title 5, relating to the right of 
     review of agency wrongs by courts of the United States.
       ``(5) Sections 1346(a)(2) and 1491 of title 28, relating to 
     the jurisdiction of the district courts of the United States 
     and the United States Court of Federal Claims, respectively, 
     for the actions enumerated in such sections.
       ``(6) Subchapter V of chapter 35 of title 31, relating to 
     adjudication of protests of violations of procurement 
     statutes and regulations.
       ``(7) Sections 3526 and 3702 of such title, relating to the 
     settlement of accounts and claims, respectively, of the 
     United States.
       ``(8) Subsections (b)(7), (e), (f), (g), and (h) of section 
     8 of the Small Business Act (15 U.S.C. 637(b)(7), (e), (f), 
     (g), and (h)), relating to requirements with respect to small 
     businesses for contracts for property and services.
       ``(9) The provisions of law assembled for purposes of 
     codification of the United States Code as section 471 through 
     544 of title 40 that relate to the authority of the 
     Administrator of General Services over the lease and disposal 
     of Federal Government property.
       ``(10) The provisions of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 401 et seq.), relating to the 
     procurement of property and services by the Federal 
     Government.
       ``(11) Chapter 3 of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 251 et seq.), relating to the 
     procurement of property and services by the Federal 
     Government.
       ``(12) Office of Management and Budget Circular A-76.
       ``(c)(1) Contracts and agreements for the provision of care 
     and services under subsection (a) may include any contract or 
     other agreement that the health plan director of a VA health 
     plan determines appropriate in order to provide care and 
     services under the VA health plan.
       ``(2) Contracts and agreements under this subsection may be 
     entered into without prior review by the Central Office of 
     the Department.
       ``(d)(1) The entry into a contract or agreement under this 
     section for services other than the services referred to in 
     subsection (c) (including contracts and agreements for 
     procurement of equipment, maintenance and repair services, 
     and other services related to the provision of health care 
     services) shall not be subject to prior review by the Central 
     Office if the amount of the contract or agreement is less 
     than $250,000.
       ``(2)(A) The Central Office may conduct a prior review of a 
     contract or agreement referred to in paragraph (1) if the 
     amount of the contract or agreement is $250,000 or greater.
       ``(B) If the Central Office fails to approve or reject a 
     contract or agreement referred to under subparagraph (A) 
     within 30 days of its submittal to the Central Office, such 
     contract or agreement shall be deemed approved by the Central 
     Office.

     ``Sec. 7343. Resource sharing authority

       ``(a) The Secretary may enter into agreements under section 
     8153 of this title with other health care plans, with health 
     care providers, and with other health industry organizations, 
     and with individuals, for the sharing of resources of the 
     Department under a VA health plan.
       ``(b) The Secretary may enter into agreements with other 
     departments and agencies of the Federal Government for the 
     sharing of resources of the Department and such departments 
     and agencies in order to provide care and services under a VA 
     health plan.

     ``Sec. 7344. Administrative and personnel flexibility

       ``(a) Notwithstanding any other provision of law, the 
     Secretary may--
       ``(1) appoint health care personnel to positions in any 
     facility of the Department operating as or within a VA health 
     plan in accordance with such qualifications for such 
     positions as the Secretary may establish; and
       ``(2) promote and advance personnel serving in such 
     positions in accordance with such qualifications as the 
     Secretary may establish.
       ``(b) Subject to the provisions of section 1404 of the 
     Health Security Act, the Secretary may carry out appropriate 
     promotional, advertising, and marketing activities to inform 
     individuals of the availability of VA health plans.

     ``Sec. 7345. Expenditure authority

       ``(a)(1) Except as provided in subsection (b) and 
     notwithstanding any other provision of law, the director of a 
     VA health plan may expend funds available to a VA health plan 
     (including funds available under section 1834(c) of this 
     title, funds available under section 7346(d)(2)(B) of this 
     title, and funds otherwise made available to the VA health 
     plan by the Secretary) for any purpose, and in any amount, 
     that the director determines appropriate in order to ensure 
     that the VA health plan meets the requirements and the 
     requirements of furnishing care and services to veterans 
     under chapter 17 of this title.
       ``(2) Funds may be expended under this subsection in order 
     to cover the following costs:
       ``(A) The costs of marketing and advertising under a VA 
     health plan.
       ``(B) The costs of legal services provided to a VA health 
     plan by the General Counsel of the Department.
       ``(C) The costs of acquisition (including acquisition of 
     land), construction, repair, or renovation of facilities.
       ``(3) The exercise by a health plan director of the 
     authority provided in paragraph (1) shall not be subject to 
     prior review by the Central Office of the Department.
       ``(b) Subsection (a) shall not apply to expenditures of 
     funds provided to a facility by the Central Office of the 
     Department exclusively for the purpose of the provision of 
     the following services:
       ``(1) Services relating to post-traumatic stress disorder.
       ``(2) Services relating to spinal-cord injuries.
       ``(3) Services relating to substance abuse.
       ``(4) Services relating to the rehabilitation of blind 
     veterans.

     ``Sec. 7346. Veterans Health Care Investment Fund

       ``(a)(1) There is hereby established in the Treasury of the 
     United States a fund to be known as the Veterans Health Care 
     Investment Fund (in this section referred to as the `Fund').
       ``(2) The Fund shall be added to the list of accounts that 
     are considered mandatory for the purposes of scoring 
     appropriations bills.
       ``(b) There is hereby authorized to be appropriated to the 
     Department, in addition to amounts otherwise authorized to be 
     appropriated to the Department for VA health plans, such 
     amounts as are necessary for the Secretary of the Treasury to 
     fulfill the requirement of subsection (c).
       ``(c) For each of fiscal years 1995, 1996, and 1997, the 
     Secretary of the Treasury shall, subject to the availability 
     of appropriated funds, credit to the Fund an amount in that 
     fiscal year as follows:
       ``(1) For fiscal year 1995, $1,225,000,000.
       ``(2) For fiscal year 1996, $600,000,000.
       ``(3) For fiscal year 1997, $1,700,000,000.
       ``(d)(1) Subject to paragraph (2), amounts in the Fund 
     shall be available to the Secretary only for the VA health 
     plans organized and operated under this subchapter.
       ``(2)(A) For each of fiscal years 1996 and 1997, the 
     Secretary shall estimate the total amount to be collected or 
     recovered under sections 1831, 1832, and 1833 of this title 
     by reason of the provision of care and services through VA 
     health plans under chapter 18 of this title or the enrollment 
     of individuals in such plans under that chapter. The 
     Secretary shall estimate the amount to be so collected or 
     recovered with respect to each VA health plan and with 
     respect to all VA health plans.
       ``(B) For each such fiscal year, the Secretary shall make 
     available to each VA health plan an amount that bears the 
     same relationship to the total amount available in the Fund 
     for the fiscal year as the amount estimated to be collected 
     or recovered by the VA health plan during the fiscal year 
     bears to the total amount estimated to be collected or 
     recovered by all VA health plans during that fiscal year.
       ``(e) Not later than March 1, 1997, the Secretary shall 
     submit to Congress a report concerning the operation of the 
     Department of Veterans Affairs health care system in 
     preparing for, and operating under, national health care 
     reform under the Health Security Act during fiscal years 1995 
     and 1996. The report shall include a discussion of--
       ``(1) the adequacy of amounts in the Fund for the operation 
     of VA health plans;
       ``(2) the quality of care provided by such plans;
       ``(3) the ability of such plans to attract patients; and
       ``(4) the need (if any) for additional funds for the Fund 
     in fiscal years after fiscal year 1997.

     ``Sec. 7347. Funding provisions: grants and other sources of 
       assistance

       ``The Secretary may apply for and accept, if awarded, any 
     grant or other source of funding that is intended to meet the 
     needs of special populations and that but for this section is 
     unavailable to facilities of the Department or to health 
     plans operated by the Government if funds obtained through 
     the grant or other source of funding will be used through a 
     facility of the Department operating as or within a health 
     plan.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 73 is amended by striking out the item 
     relating to the heading for subchapter IV and inserting in 
     lieu thereof the following:

 ``Subchapter IV--Participation as Part of National Health Care Reform

``7341. Organization of health care facilities as health plans.
``7342. Contract authority for facilities operating as or within health 
              plans.
``7343. Resource sharing authority.
``7344. Administrative and personnel flexibility.
``7345. Expenditure authority.
``7346. Veterans Health Care Investment Fund.
``7347. Funding provisions: grants and other sources of assistance.

                ``Subchapter V--Research Corporations''.

                                  ____


 Committee on Veterans' Affairs Description of Chairman's Alternative 
                               Proposals

       In the event that the health care reform legislation does 
     not provide for comprehensive health care for all Americans, 
     mandated employer contributions, and mandatory alliances, the 
     chairman proposes that the following additions be considered, 
     in order to enable VA to provide quality health care under 
     health care reform:


                          I. va participation

       A. VA health plans must be offered as an enrollment choice 
     to veterans and their dependents, whether through a Health 
     Insurance Purchasing Cooperative, voluntary/mandatory 
     alliances, the Federal Employees' Health Benefit Plan, or 
     directly to the individual. VA plans must be listed as an 
     option, or purchasing groups would be required to provide 
     information on VA plans to consumers.
       B. States which implement their own version of health care 
     reform should be required to offer VA health plans. If States 
     legislate some type of purchasing groups, VA would have to be 
     included as a choice to veterans through the group.
       C. VA should be authorized to participate in State-enacted 
     reforms.
       D. VA should be authorized to participate as a provider in 
     States which have enacted single payor reform plans. VA would 
     be authorized to offer a comprehensive benefits package to 
     veterans and their dependents, and to receive the same type 
     of reimbursement as other providers.


                         II. revenue provisions

                      Additional Federal payments

       A. Risk-adjusted payments. Low income individuals and 
     disabled individuals usually require more costly health care 
     services compared to other individuals. As a result, several 
     health care reform bills would provide federally funded 
     subsidies to providers who serve individuals who receive AFDC 
     or SSI, or have other risk factors. If risk-adjusted payments 
     are available as part of health care reform, VA should be 
     eligible for AFDC and SSI risk-adjusted payments for veterans 
     and their dependents who enroll in a VA health plan. VA 
     should receive any other risk-adjusted payments for all 
     enrollees who qualify.
       B. Subsidies for low income individuals. Most health care 
     reform bills recognize that low income individuals cannot 
     afford to pay the entire cost of a health plan. If premium 
     and cost-sharing subsidies are available for low income 
     individuals enrolling in qualifying health plans, VA should 
     receive these for veterans and dependents who enroll in VA 
     health plans if those individuals satisfy the income 
     criteria.

              Other sources of revenue for VA health plans

       A. Payments for veterans enrolled in other health plans. If 
     the health care reform legislation enables individuals who 
     are enrolled in one health plan to use other providers under 
     certain circumstances, VA should be eligible to collect 
     payments for medical care provided to veterans who are 
     enrolled with other health plans but who choose VA facilities 
     for some of their medical care.
       B. Payments for veterans enrolled in VA health plans. If 
     there are no employer mandates, or if employer contributions 
     are less than 80% of the premium, VA should be authorized to 
     collect and retain collections from Medicare and other health 
     plans for nonservice-connected medical services that are 
     provided to core veterans.


                        iii. eligibility reform

       If there are no employer mandates, or if employer 
     contributions are below 80%, the eligibility reform 
     envisioned in the Chairman's mark may have to be revised due 
     to inadequate financial resources.
                                  ____


Committee on Veterans' Affairs Amendments to Non-VA Sections of Health 
                            Care Reform Bill


                       i. grant moneys and loans

       VA should have the option of competing for grant moneys and 
     loans from a revolving fund for grants and loans for certain 
     entities to develop community health groups and expand 
     delivery sites, or for other projects. VA should be added to 
     the list of those eligible for loans and grants.


                     ii. graduate medical education

       A. VA should be considered in the allocation of residency 
     positions and in all sections of a reform bill pertaining to 
     medical education.
       B. VA should receive the payment from any medical school 
     fund for its current pro bono role in student teaching.


                             iii. research

       VA should be eligible to receive a premium surcharge for 
     veterans enrolled in a VA plan from any research trust fund 
     provision.


         iv. representation on various boards/advisory councils

       VA should be represented in any national boards and other 
     advisory councils/commissions for which VA participation is 
     necessary.


                         v. revenue provisions

       A. VA should be exempt from any requirement to contribute 
     to a Guarantee Fund or to maintain reserve funds.
       B. VA should be exempt from the requirement to purchase 
     reinsurance; VA should have the flexibility to purchase such 
     insurance.
       C. Companies that self-insure their employees should be 
     required to pay VA for employees enrolling in VA health 
     plans, at the same annual rate they would pay for their own 
     enrollees.
                                 ______

      By Mr. CONRAD (for himself and Mr. Inouye):
  S. 2310. A bill to direct the Secretary of Health and Human Services 
to revise existing regulations concerning the conditions of payment 
under part B of the medicare program relating to anesthesia services 
furnished by certified registered nurse anesthetists, and for other 
purposes; to the Committee on Finance.


             nurse anesthetists fair treatment act of 1994

  Mr. CONRAD. Mr. President, today I rise to introduce a bill to 
resolve three major problems facing certified registered nurse 
anesthetists [CRNA's] who serve Medicare patients.
  The 26,000 CRNA's in our country administer two-thirds of the 26 
million anesthetics given to patients each year. They are the sole 
anesthesia providers in 85 percent of rural hospitals, and make an 
invaluable contribution to the health care system in North Dakota and 
around the Nation.
  But despite their qualifications and State laws enabling them to 
practice, CRNA's face barriers to practice because of Medicare 
regulations that were intended to serve other purposes. My proposal 
seeks to remedy three of the most basic problems facing CRNA's today.
  The first section of my bill calls on Medicare to defer to State laws 
relating to supervision requirements. It eliminates Medicare's hospital 
and ambulatory surgical center rules that CRNA's be supervised by a 
physician and defers instead to State law. Put simply, the bill states 
that payment may be made for anesthesia services furnished in a 
hospital or ambulatory surgical center by a CRNA who is permitted to 
administer anesthesia under the law of the State in which the service 
is furnished. These decisions should be made at the State, not the 
Federal level.
  The second section requires the Health Care Financing Administration 
to review the medical direction rules that were put in place due to 
enactment of the Tax Equity and Fiscal Responsibility Act of 1982. 
Those rules, which delineate the conditions of payment for medical 
direction by anesthesiologists, were intended to be used for payment 
purposes rather than as quality of care criteria. Unfortunately, they 
have had the unintended consequence of preventing CRNA's in many 
situations from practicing within the full scope of their training.
  The rules also increase costs. In order for an anesthesiologist to be 
paid for medical direction, he or she must personally participate in 
the most demanding procedures in the anesthesia plan, including 
induction and emergence--the processes by which patients are put to 
sleep and awakened. The requirement that the anesthesiologist 
personally participate in the induction and emergence often disrupts 
the flow of cases through a surgery schedule, requiring the entire 
surgical team to wait for the availability of an anesthesiologist to 
start or end a case. Such delays cost money, and make little sense when 
a CRNA is perfectly capable of performing the same procedures.
  The third major provision of my proposal involves the situation where 
Medicare reimburses CRNA's and anesthesiologists jointly involved in a 
single case. Current Medicare policy treats CRNA's unfairly by placing 
them at risk of nonpayment if, after the fact, the Medicare carrier 
determines the participation of both providers was not medically 
necessary. If the Medicare carrier makes a finding of no medical 
necessity, only the anesthesiologist is paid. This policy is unjust and 
should be changed.
  My proposal provides that when a CRNA and an anesthesiologist jointly 
provide a service to a patient, instead of the anesthesiologist 
receiving 100 percent of the payment and the CRNA nothing, each 
provider would receive a percentage of the payment based on his or her 
contribution to the case. The percentage of the fee schedule amount 
paid to the anesthesiologist combined with the percentage of the fee 
schedule amount paid to the CRNA would not exceed the 100 percent 
payment amount that an anesthesiologist would have received for 
performing the anesthesia service alone.
  Mr. President, I believe these proposals are fair and reasonable. At 
the same time, I am open to suggestions on how they might be improved. 
As we look toward reforming our health care system, we should do our 
best to change policies that inhibit trained health professionals from 
practicing within the full scope of their training, particularly when 
those policies increase health care costs. These are policies that I 
believe fall squarely within that category, and I hope my colleagues 
will look favorably on this legislation.

                          ____________________