[Congressional Record Volume 140, Number 108 (Monday, August 8, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
                  RELATED AGENCIES APPROPRIATIONS ACT

  The PRESIDING OFFICER. Under the previous order, the Senator from 
Minnesota is recognized for 15 minutes.
  Mr. WELLSTONE. I thank the Chair.
  Mr. HARKIN. Mr. President, I wonder if the Senator from Minnesota 
would just yield for a second. I know he has unanimous consent that he 
has time.
  Will the Senator from Minnesota yield?
  Mr. WELLSTONE. I yield.
  Mr. HARKIN. I have just about four excepted committee amendments that 
we would like to adopt. It should not take us more than 60 seconds.
  I ask unanimous consent that the full amount of time that the Senator 
requested be allotted to him upon the disposition of our excepted 
committee amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.


Excepted Committee Amendments on Page 78, Line 16 Through Line 23; Page 
 78, Line 24 Through Page 79, Line 15; Page 80, Line 1 Through Line 5; 
                Page 80, Line 6 Through Page 81, Line 8

  Mr. HARKIN. Mr. President, I urge adoption of the excepted committee 
amendments on page 78, line 16 through line 23; page 78, line 24 
through page 79, line 15; page 80, line 1 through line 5; page 80, line 
6 through page 81, line 8. I ask unanimous consent that those excepted 
committee amendments be adopted.
  The PRESIDING OFFICER. Is there objection to the adoption of the 
committee amendments en bloc?
  Without objection, it is so ordered.
  So the excepted committee amendments on page 78, line 16 through line 
23; page 78, line 24 through page 79, line 15; page 80, line 1 through 
line 5; page 80, line 6 through page 81, line 8 were agreed to.


Excepted Committee Amendment on Page 63, Line 5 through Page 64, Line 4

  Mr. HARKIN. Mr. President, that leaves one excepted committee 
amendment on page 63, line 5 through page 64, line 4, on which the 
Helms amendment is now pending.
  Mr. President, that really concludes all of the business on H.R. 4606 
but for the two amendments, the Gramm amendment and the Helms 
amendment. They are seeking now unanimous consent on some time limits 
on debate on those amendments.


            funding for partnerships in character education

  Mr. DOMENICI. Mr. President, on behalf of myself and Senators Dodd, 
Mikulski, Pell, and Dorgan, I want to take just a moment to thank the 
chairman and ranking member of the subcommittee, Senators Harkin and 
Specter, for accepting our amendment to provide funding for a program 
that the Senate recently authorized in the Elementary and Secondary 
Education Act.
  In the past few months, a number of us have worked very hard to help 
schools and local communities develop character education programs. I 
am very pleased that the Senate adopted an amendment I offered to the 
ESEA bill, cosponsored by Senators Dodd, Mikulski, Pell, and Dorgan, to 
create a pilot program to award grants to partnerships of State and 
local educational agencies for the development and implementation of 
character education programs.
  This program is very modest in scope and in cost. Up to 10 
partnerships can be developed, not to exceed $1 million for any one 
partnership. The startup cost of this program is authorized at $6 
million, then such sums as necessary in subsequent years. However 
modest this program might be, due to the timing of the passage of the 
ESEA and the Labor-HHS-Education appropriations bill, I was concerned 
that this program would not be implemented in fiscal year 1995.
  Working with the subcommittee chairman and ranking member, I have 
been assured that there is funding available for $1 million for fiscal 
year 1995. While my amendment caps the amount any partnership may 
receive at $1 million, it is my hope that this money can be used to 
fund more than one state and local partnership.
  I very much appreciate the willingness of the committee to 
accommodate us on this amendment. I believe this is a critical issue, 
and this appropriation is a good indicator that the Congress takes this 
matter seriously./


                  A 1-YEAR WAIVER FROM THE 85/15 RULE

  Mr. PELL. Mr. President, our colleagues in the House recently voted 
to delay for 1 year implementation of the 85/15 rule. I strongly oppose 
any such delay, and I was pleased to join with Senators Nunn, 
Kassebaum, and Roth in a letter to the managers of this bill urging 
that they not include in the Senate bill language to delay 
implementation of this rule. I want to take this opportunity to thank 
them both for bringing to the Senate floor a bill that is free of any 
restriction on the Department of Education's ability to enforce this 
critical program integrity provision.
  Mr. President, many of my colleagues may have heard only recently of 
the 85/15 rule, which was enacted as part of the Higher Education 
Amendments of 1992. This rule stipulates that no proprietary school may 
receive more than 85 percent of its funds from Federal student aid. I 
supported, and the Senate agreed in conference, to accept this 
amendment to the Higher Education Act, which was included in the House 
bill by a floor amendment. This provision of law took effect upon 
enactment--July 23, 1992--more than 2 years ago. Contrary to other 
assertions, the effective date of the regulation is July 1, 1994. No 
institution will have to pay back any Federal student aid funds it 
received prior to that date.
  Put simply, a school must receive at least 15 percent of its revenues 
from a source other than our title IV student aid programs to remain 
eligible to participate in such programs. Those nontitle IV revenues 
may include State funds, corporate and other private funds, and a 
number of other Federal program funds. Many proprietary institutions 
derive nontitle IV Federal revenues through the Job Training 
Partnership Act [JTPA], Vocational Rehabilitation, Veterans' 
Educational Benefits, and Bureau of Indian Affairs [BIA] program funds. 
In other words, a for-profit school may receive more than 85 percent of 
its revenues from a combination of Federal programs and still be in 
compliance with the 85/15 rule.
  It is important to know that three separate court challenges have 
been made against the Department of Education's final regulation 
implementing the 85/15 rule. In recent weeks, two of those courts, 
including the U.S. District Court for the District of Columbia, ruled 
in favor of the Department. In his decision, Judge Thomas F. Hogan, of 
the District of Columbia, concluded ``This Court and the United States 
District Court for the District Court of Puerto Rico have found the 
Secretary's actions rationally related to Congress' intent in passing 
the 1992 HEA amendments.
  I have long been a staunch advocate of proprietary education. These 
schools often offer education and training not available at more 
traditional institutions of higher education. I firmly believe that 
many proprietary schools make extremely important contributions to our 
economy and to our work force. I am afraid, however, that I do not 
believe that it is sound business practice to rely so heavily upon one 
source of Federal funds. Many of the best proprietary schools--those
 that do a good job of preparing students to take their place in the 
work force--attract revenues from a number of other public and private 
sources. Those schools that cannot attract at least minimal financial 
support from sources other than Federal student aid programs should be 
of concern to us all, especially if they have high default rates and 
low rates of completion and job placement.

  Mr. President, our student aid programs are intended to provide 
access to quality educational opportunities for deserving students. As 
the chairman of the Subcommittee on Education, Arts, and Humanities, I 
believe our student aid policy should be guided by our concern for 
quality in higher education and for the students who must borrow in 
order to finance the education and training they need to become 
gainfully employed. Those who fail to secure gainful employment and 
default on their student loans are left in debt, their credit ratings 
ruined, and no longer eligible for Federal student aid. This, Mr. 
President, is a tragedy not only for those students, but for us all. It 
is particularly troublesome if their situation is the result of an 
experience with a less than solid institution of higher education.
  Proponents of a 1-year delay in the 85/15 rule have suggested that a 
delay is necessary to protect good schools from losing Federal student 
aid funds which, in turn, may force them to close their doors. I would 
suggest, therefore, that we consider an alternative course of action, 
one that would ensure that good schools do not lose title IV funds due 
to the 85/15 rule. This alternative would permit the Secretary of 
Education to waive the rule for schools that can meet several key 
criteria. To be eligible for a waiver, a school would have to meet 
several conditions: program completion and placement rates of 70 
percent, a cohort default rate of less than 25 percent in each of 
fiscal years 1991 and 1992, and the school could not have lost 
eligibility under the Supplemental Loans for Students Program or have 
had its eligibility to participate in title IV programs limited, 
suspended, or terminated. Mr. President, this is an eminently 
reasonable compromise and I am pleased to note that the Secretary of 
Education, Secretary Richard Riley, agrees.
  I would like my colleagues to know that the 85/15 rule was the 
subject of considerable debate during the reauthorization of the Higher 
Education Act. I continue to believe, as I did 2 years ago, that it is 
reasonable to expect institutions with quality programs to generate at 
least 15 percent of their revenues from private, State, or Federal 
program sources other than the title IV student aid programs. As the 
Department of Education's inspector general, James B. Thomas, Jr., 
states in his letter of June 24, the 85/15 rule ``* * * is an important 
anti-fraud, waste and abuse provision that should not be delayed.''
  In its editorial of June 21, the New York Times aptly characterized a 
1-year delay of the 85/15 rules as ``* * * worse than a step backward. 
It would undermine Congress's own efforts to protect its student aid 
investment. Trade schools with quality programs have nothing to fear 
from the new rule.''
  Mr. President, we must make certain that the schools who participate 
in Federal aid are on the up-and-up and provide a quality education. I 
would urge my colleagues who serve on the conference committee to give 
serious consideration to the approach that Senators Nunn, Kassebaum, 
and I have developed as an alternative to a 1-year delay in the 
implementation of the 85/15 rule.
  Mr. President, I ask unanimous consent that the Secretary of 
Education's letter of August 4, in support of the alternative proposal 
developed by Senators Nunn, Kassebaum, and myself, be included in the 
Record at this point. I also ask unanimous consent that the following 
additional documents be printed in the Record: a June 24 letter I 
received from the Department of Education's inspector general; 
Secretary Riley's letter of July 28 to Representative Washington; a 
July 27 letter I received from the American Association of State 
Colleges and Universities [AASCU]; letters to Representative Obey from 
the Consumer's Union and the National Association of Consumer Agency 
Administrators [NACCA] dated June 20 and June 16, respectively; a 
letter to Representative Fazio from Kenneth W. Babcock with the 
Volunteer Legal Services Project in Los Angeles, CA; and a June 19 
article and a June 21 editorial from the New York Times.
  There being no objection, the materials was ordered to be printed in 
the Record, as follows:

                                      Department of Education,

                                   Washington, DC, August 4, 1994.
     Hon. Claiborne Pell,
     U.S. Senate,
     Washington, DC.
       Dear Senator Pell: Thank you for providing me with a copy 
     of the amendment you and Senator Nunn intend to offer to the 
     Senate version of H.R. 4606, the Labor-HHS-Education 
     appropriations bill, that would authorize the Secretary of 
     Education to waive the so-called ``85-15 rule'' for 
     proprietary institutions that meet certain conditions.
       As you know, the Higher Education Amendments of 1992 (P.L. 
     102-325) added a sixth eligibility criterion to the 
     definition of the term ``proprietary institution of higher 
     education'' in section 481(b) of the Higher Education of 1965 
     (HEA). The 85-15 rule requires that a proprietary institution 
     must derive at least 15 percent of its revenues from sources 
     other than Title IV, HEA funds.
       While I firmly believe that our regulations implementing 
     the 85-15 rule are fully consistent with the statutory 
     requirements, I recognize that the 85-15 rule may adversely 
     affect some worthwhile institutions.
       The amendment that you and Senator Nunn intend to offer 
     would allow the Secretary to waive the 85-15 rule if an 
     institution is otherwise in full compliance with all Title 
     IV, HEA requirements, has verified completion and placement 
     rates of 70 percent each, has a cohort default rate less than 
     25 percent for each of the two preceding fiscal years for 
     which the rates are available, has not been disqualified from 
     participating in the Supplemental Loans for Students program 
     because of its cohort default rate, and has not had its 
     participation in the Federal Family Education Loan program 
     limited, suspended, or terminated.
       Your amendment takes a reasonable and balanced approach 
     that should allow proprietary institutions that do serve 
     their students well to continue to be eligible for the Title 
     IV, HEA programs, and, at the same time, preserves the fiscal 
     integrity of these programs by now allowing Federal funds to 
     flow to institutions with high default rates and low 
     placement and completion rates. My staff has provided 
     technical drafting assistance on this issue, and will be 
     happy to assist you further if you require additional 
     assistance.
       The Omnibus Budget Reconciliation Act requires that all 
     revenue and direct spending legislation meet a pay-as-you-go 
     (PAYGO) requirement. That is, no such legislation should 
     result in an increase in the deficit, and if it does, it 
     will trigger a sequester if not fully offset. 
     Implementation of this amendment may increase mandatory 
     spending by virtue of continuing eligibility for some 
     number of institutions that otherwise would have lost 
     eligibility due to the application of the current 85-15 
     rule. However, the Department does not have sufficient 
     data at this time to determine what this effect would be 
     and therefore cannot estimate the costs for this 
     amendment. Since the change would be contained in an 
     appropriations Act, the costs would be scored as 
     discretionary.
       The Office of Management and Budget has advised that there 
     is no objection to the submission of this report from the 
     standpoint of the Administration's program.
           Yours sincerely,
                                                 Richard W. Riley,
                                                        Secretary.
                                  ____

                                          Department of Education,


                                   Office of Inspector General

                                    Washington, DC, June 24, 1994.
     Hon. Claiborne Pell,
     Chairman, Subcommittee on Education and Humanities, Committee 
         on Labor and Human Resources, U.S. Senate, Washington, 
         DC.
       Dear Senator Pell I am writing to express my concern about 
     H.R. 4606, a bill approved this week by the House 
     Appropriations Committee, which would delay the effective 
     date of the ``85/15'' rule. That rule was enacted as part of 
     the Higher Education Amendments of 1992, 20 U.S.C. Sec. 1088, 
     and became law on July 23, 1992. It requires that proprietary 
     trade schools derive at least 15 percent of their revenues 
     from non-Title IV sources. In my view, this is an important 
     anti-fraud, waste and abuse provision that should not be 
     delayed.
       The Office of Inspector General has done extensive work on 
     the student financial assistance programs under Title IV of 
     the Higher Education Act for many years, and we have 
     identified the proprietary trade school sector as a major 
     contributor to the fraud, waste and abuse in the programs. 
     One such abuse is that such schools set tuition prices that 
     bear little or no relation to the quality of the training, 
     the prospect for employment in the field of the training and 
     the prospect for a salary that will allow students to pay 
     their federally insured loans and support themselves. 
     Instead, our observations reflect that the tuition price is 
     often set based upon the maximum federal student financial 
     assistance that is available, leading in many cases to 
     inflated prices that the federal taxpayer and student are 
     being asked to bear. Our studies have documented instances 
     where community colleges and other public institutions offer 
     training in the same field sufficient to allow students to 
     gain entry-level jobs for a fraction of the price charged by 
     proprietary trade schools.
       Before the 85/15 rule there was no provision of law to 
     ensure that tuition prices were reasonable. On the contrary, 
     the availability of Title IV money actually interfered with 
     free market forces that would otherwise control prices, 
     because no one was required to pay his own money for the 
     training or find non-Title IV sources (i.g., private, state 
     or other federal program sources). By ensuring that a modest 
     amount of such schools' revenue come from non-Title IV 
     sources, the 85/15 rule will re-introduce a measure of 
     free market control and force prices to reasonable levels 
     relative to the value of the training offered, without 
     direct federal price controls.
       Because I believe this very valuable purpose is served by 
     the 85/15 rule, I am not convinced that it should be delayed 
     based on arguments by the proprietary trade schools that some 
     percentage of such schools will close if the rule takes 
     effect on schedule. First, as I have previously testified 
     before the Senate Appropriations Committee, the acronym ``SFA 
     Programs'' stands for ``Student'' Financial Assistance 
     Programs and not ``School'' Financial Assistance Programs. We 
     must be concerned first and foremost about the students who 
     are victimized by inflated tuition prices for training for 
     generally low-wage jobs, and end up defaulting on their 
     student loans. Second, we have not seen data supporting the 
     statistics for potential school closures cited by the 
     proprietary trade schools. Third, we do not know whether 
     schools that maintain they cannot comply with the 85/15 rule 
     have made any serious efforts to do so in the two years since 
     the law became effective. Finally, based upon this office's 
     extensive experience auditing and investigating proprietary 
     trade schools in the Title IV programs, we believe it is 
     likely that most schools that cannot meet the 15-percent rule 
     have other serious programmatic problems such as high default 
     rates, late refunds and administrative capability problems. I 
     do not believe that ``good'' schools--those providing 
     valuable training for reasonable prices--will fall victim to 
     the 85/15 rule.
       I urge you to reject any attempt to delay or otherwise 
     weaken the 85/15 rule.
           Sincerely,
                                              James B. Thomas, Jr.
                                  ____

                                          Department of Education,
                                    Washington, DC, July 28, 1994.
     Hon. Craig A. Washington,
     House of Representatives,
     Washington, DC.
       Dear Mr. Washington: Thank you for your letter requesting 
     that the Department of Education consider delaying 
     implementation of the 85 percent rule until July 1, 1995.
       The Higher Education Amendments of 1992, (P.L. 102-325) was 
     enacted on July 23, 1992, and amended section 481(b)(6) of 
     the Higher Education Act of 1965 (HEA) by adding a new sixth 
     eligibility criterion to the definition to the term 
     ``proprietary institution of higher education. As you know, a 
     for-profit institution must qualify as an eligible 
     proprietary institution of higher education in order for its 
     students to receive assistance under the student financial 
     assistance programs authorized by Title IV of the HEA (Title 
     IV, HEA programs).
       The new sixth criterion requires that an institution that 
     satisfies the first five conditions must also derive at least 
     15 percent of its revenues from non-Title IV. HEA program 
     funds. Put another way, the section prohibits a proprietary 
     institution of higher education from deriving more than 85 
     percent of its revenues from Title IV, HEA program funds (the 
     85 percent rule). Furthermore, by statute, the Secretary was 
     required to issue regulations interpreting the term 
     ``revenue'' for purposes of implementing the rule. On April 
     29, 1994, the Department published final regulations in the 
     Federal Register implementing this provision. These 
     regulations took effect on July 1, 1994.
       As you know, an issue raised by proprietary schools is that 
     basing an initial determination of an institution's 
     compliance under the new regulations on its past fiscal-year 
     revenue is unfair because it makes the rule retroactive. As a 
     result, they want the effective date delayed for a year to 
     allow them time to comply. However, the statutory provision 
     upon which the regulations are based has been in effect since 
     July 23, 1992, the date of enactment of the Higher Education 
     Amendments of 1992. Thus, these institutions have been aware 
     for almost two years that they would need to take appropriate 
     steps to comply with the 85 percent rule.
       Furthermore, these institutions and their representatives 
     have been intimately involved in the development of these 
     regulations since enactment of the law. They participated in 
     the regional meetings and negotiation sessions that were held 
     under the requirement for negotiated rulemaking. They have 
     had access to drafts of proposed regulations, have had the 
     benefit of discussions with Department staff, and have had 
     the opportunity to comment on the proposed regulations. 
     The final regulations do not significantly depart from the 
     position adopted as a result of negotiations on the 
     proposed regulations.
       Therefore, these institutions have known for nearly two 
     years the direction in which implementation of the 85 percent 
     rule was moving. We regard that period as ample time for 
     proprietary institutions to have made the appropriate 
     adjustments to ensure that they derive a minimum of 15 
     percent of their revenues from sources other than Title IV, 
     HEA program funds. In addition, as explained below, the 
     regulations do not cover any period of time prior to the 
     effective date of the 1992 Amendments.
       This regulatory approach has recently been upheld as a 
     reasonable and appropriate manner of implementing section 
     481(b)(6) of the HEA by the United States District Court for 
     the District of Puerto Rico in the case of Ponce Paramedical 
     College, Inc., et al. vs. the Department of Education, and by 
     the United States District Court for the District of Columbia 
     in the case of Career Colleges Association vs. Riley.
       Effective on July 1, 1994, each proprietary institution 
     must determine whether it qualifies as an eligible 
     proprietary institution for the 1994-95 award year under the 
     85 percent rule. The following rules have been developed for 
     this initial determination.
       If an institution's latest complete fiscal year ended 
     during the period of October 1, 1993 through June 30, 1994, 
     the institution shall use information based on that fiscal 
     year to determine whether the institution satisfies the 85 
     percent rule.
       If an institution's latest complete fiscal year ended 
     before October 1, 1993, the institution shall use the fiscal 
     year that ends between July 1, 1994 and September 30, 1994 to 
     determine whether the institution satisfies the 85 percent 
     rule.
       Therefore, the earliest possible fiscal year that would be 
     used to determine whether the institution satisfies the 85 
     percent rule would be a fiscal year beginning October 2, 1992 
     and ending October 1, 1993.
       Moreover, most institutions participating in the Title IV, 
     HEA programs have fiscal years that coincide with the 
     calendar year or the award year. Thus, for those institutions 
     whose fiscal year parallels the calendar year, their latest 
     complete fiscal year began January 1, 1993, more than five 
     months after the enactment of section 481(b)(6) and ended 
     December 31, 1993, more than 17 months after enactment. With 
     regard to those institutions whose fiscal year parallels the 
     award year, their latest complete fiscal year began July 1, 
     1993, more than 11 months after the enactment of section 
     481(b)(6) and ended June 30, 1994, more than 23 months after 
     enactment.
       We believe the regulations accurately reflect the intent of 
     current law, and are aware of the recent House action to 
     delay the effective date of the 85 percent rule for one year. 
     The Department will, of course, take appropriate action to 
     comply with any changes in the law.
       I hope this information will be helpful in addressing your 
     concerns. If I can be of further assistance, please let me 
     know.
           Yours sincerely,
                                                 Richard W. Riley.
                                  ____

                                           American Association of


                              State Colleges and Universities,

                                    Washington, DC, July 27, 1994.
     Hon. Claiborne Pell,
      U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Pell: On behalf of the 370 campus members and 
     the 30 higher education system members of the American 
     Association of State Colleges and Universities (AASCU) I urge 
     you to vote against any provision to the Senate Labor, HHS 
     and Education FY 1995 appropriations bill that would change 
     or delay the implementation of the 85-15 rule. The 85-15 
     rule, a provision of the Higher Education Act, requires for-
     profit institutions participating in Title IV student loan 
     programs to derive at least 15 percent of their revenues from 
     non-title IV sources. This provision has been in effect since 
     July 23, 1992, and was scheduled to be implemented on July 1, 
     1994. The House of Representatives passed an amendment to the 
     Labor, HHS and Education FY 1995 appropriations bill that 
     would delay implementation of the 85-15 rule until next year.
       The 85-15 rule is a reasonable and much-needed provision 
     that will help combat waste, fraud and abuse in the Title IV 
     student financial aid programs. I understand that you are 
     hearing from many institutions in the for-profit sector about 
     this issue. Before you finalize your position, it may be 
     prudent to ascertain the loan cohort default rate for the 
     institution's cited by the 85-15 advocates. The U.S. 
     Department of Education can provide you with this 
     information. The enclosed packet will provide you additional 
     background information on the 85-15 rule, included is: (a). a 
     document that was prepared by the National Consumer Law 
     Center that provides answers for the most common arguments 
     against the 85/15 Rule (b). articles from the New York Times 
     and Washington Post (c). Dear Colleague letter from 
     Congresswoman Maxine Waters (d). Department of Education 
     Inspector General letter and, (e). several letters from 
     consumer advocacy groups.
       Again, AASCU urges you to vote against any provision that 
     would delay implementation of the 85-15 rule to the Higher 
     Education Act.
           Sincerely,

                                          Edward M. Elmendorf,

         Vice President, Division of Governmental Relations and 
           Policy Analysis.
                                  ____



                                              Consumers Union,

                                    Washington, DC, June 20, 1994.
     Re prompt implementation of the ``81-15 rule'' for 
         proprietary trade schools.

     Hon. David Obey,
     Chairman, House Appropriations Committee, Washington, DC.
       Dear Congressman Obey: I write on behalf of Consumers 
     Union, the nonprofit publisher of Consumer Reports magazine, 
     to urge you to oppose any amendment to delay implementation 
     of the 85-15 Rule, a vital mechanism for reducing fraud and 
     abuse in federal student aid programs. We understand such an 
     amendment will be offered to the appropriations bill to be 
     marked up by your committee on Tuesday, June 21.
       The 85-15 Rule, also known as the Maxine Waters amendment 
     to the Higher Education Act, makes ineligible for Title IV 
     student aid funds any proprietary trade school that does not 
     earn at least 15 percent of its revenue from sources other 
     than Title IV funds. The Rule is intended to eliminate 
     participation by for-profit schools that have been set up 
     primarily to exploit these taxpayer-financed programs. As we 
     reported in the May 1992 issue of Consumer Reports (copy 
     attached), proprietary schools that depend almost exclusively 
     on federal student aid dollars are the very schools engaged 
     in most of the abuses that have plagued the student aid 
     programs in recent years. These schools typically prey on 
     disadvantaged, low-income, and minority populations, 
     diverting them from legitimate public and private educational 
     institutions.
       The 85-15 Rule is based upon a rule enacted to protect the 
     GI Bill from the same type of exploitation over 40 years ago. 
     At that time, Congress determined to protect veterans' 
     educational benefits by excluding schools that could not 
     attract at lest 15% non-veteran students. Similarly, in 1992 
     Congress determined that schools that cannot attract at least 
     15 percent of their revenue from sources outside Title IV 
     programs (e.g. cash from students or their families, other 
     state, local or federal funds, or other private sources) were 
     particularly vulnerable to fraud and were more likely to 
     offer worthless training. Many schools that derive virtually 
     all of their income from Title IV programs have left hundreds 
     of thousands of young people saddled with huge student loan 
     debts, damaged credit, and no prospect of obtaining skilled 
     employment.
       Other methods to halt fraud and abuse in federal financial 
     aid programs have been severely hampered. Some are too costly 
     to be meaningful or are inadequately funded; others have been 
     stymied by legal challenges. Most attack the problem too 
     late, weeding out fraud and corruption only after the school 
     has reaped millions of dollars of student aid funds 
     unlawfully, after a multitude of students have been harmed, 
     and when the school is on the verge of closing with no assets 
     to compensate defrauded victims or the federal government. 
     Even if regulators learn of a school's problems at an early 
     stage, removing the school's eligibility for participation in 
     the aid programs is a lengthy process. The 85-15 Rule, on the 
     other hand, is virtually self-enforcing.
       Since the statute containing the 85-15 requirement became 
     effective nearly two years ago, prudent schools have taken 
     steps to insure that they meet the requirement. To delay the 
     implementing regulation would penalize the responsible 
     schools and favor the schools which have continued their 
     business as usual--that is, the business of collecting as 
     much student aid as possible and pegging their tuition to the 
     maximum Title IV aid available.
       Through the back door of the appropriations process, the 
     for-profit trade school industry is seeking to accomplish by 
     delay what it has been unable to achieve substantively over 
     the past two years through the respective education 
     committees in the House and Senate. We strongly urge you to 
     oppose any effort to weaken or delay the 85-15 Rule, an 
     important reform measure.
           Sincerely,
                                                  Mark Silbergeld,
                                                         Director.
                                  ____

                                           National Association of


                               Consumer Agency Administrators,

                                    Washington, DC, June 16, 1994.
     Hon. David Obey,
     Chair, House Appropriations Committee, Washington, DC.
       Dear Congressman Obey: We understand that an amendment to 
     delay implementation of the 85-15 Rule, also known as the 
     Waters amendment to the Higher Education Act (HEA), will be 
     offered to the appropriations bill your committee is 
     scheduled to mark up on Tuesday, June 21. I am writing on 
     behalf of the National Association of Consumer Agency 
     Administrators (NACAA) to urge you to oppose any effort to 
     delay the effective date of the 85-15 Rule, a key program 
     integrity measure enacted as one of the 1992 amendments to 
     the HEA.
       NACAA is a membership organization of over 150 consumer 
     protection agencies at all levels of city, county, state and 
     federal government. Our members operate ``where the rubber 
     meets the road,'' mediating individual consumer complaint, 
     enforcing consumer laws, conducting consumer education 
     programs, and advocating for strong consumer protections. 
     Their agencies deal with consumer problems directly on a 
     daily basis, including complaints regarding vocational or 
     proprietary school abuses.
       The proliferation of shoddy vocational programs set up 
     solely to garner federal aid, which the 85-15 Rule is meant 
     to address, is not new. Within five years after the enactment 
     of the G.I. Bill to support training and education for 
     veterans of World War II the number of proprietary trade 
     schools in the United States has mushroomed from 1,878 to 
     5,635. A House Committee investigating the trade schools 
     receiving GI funds found that, ``[t]he vast majority of these 
     schools has exclusive enrollments of veteran students, had no 
     nonveterans at any time and no previous experience in 
     training nonveterans.'' Report of the Select Committee to 
     Investigate Educational Training and Loan Guaranty Programs 
     under GI Bill, U.S. House of Representatives, 82nd Congress, 
     2nd Session, February 14, 1952, p. 12.
       The House Committee also found that many of the schools 
     offered training of dubious quality and determined that 
     ``hundreds of millions of dollars have been frittered away on 
     worthless training'' and that ``a new group of veterans 
     should not be exposed to the exploitation which has plagued 
     the World War II program.'' Id. at 11. Among the reforms 
     enacted to curb the abuses--and still in place--is the 
     requirement that to be eligible for veterans' benefits a 
     school must not have more than 15 percent of its students 
     receiving GI Bill benefits.
       Apparently concerned about the proprietary school problems 
     that had plagued GI Bill recipients, Congress originally 
     excluded proprietary schools when the Higher Education Act 
     was enacted in 1965. Over time, however, the lessons of the 
     past seem to have been forgotten, and for-profit trade 
     schools made their way into wider and wider participation in 
     HEA programs. Between 1980 and 1987 the number of Pell Grants 
     for students at proprietary schools rose by 159 percent. 
     while the number decreased by 13 percent for college 
     students. ``Proprietary Schools and Federal Student Aid, a 
     Report of the American Federation of Teachers Advisory 
     Commission on Higher Education,'' April 1990, p. 8.
       For fiscal year 1989, proprietary schools accounted for 71 
     percent of the total federal dollars spent to pay off 
     defaulted student loans. U.S. House of Representatives, 
     Committee on Budget, ``Management Reform: A Top Priority for 
     the Federal Executive Branch,'' Nov. 1991, p. 55. The result 
     has been similar to that in the veterans' program: numerous 
     government studies and audits showing grievous abuses by 
     proprietary schools that derive nearly all of their revenue 
     from Title IV funds; tremendous costs to the federal 
     government in loan defaults; and great human suffering by the 
     predominantly low-income, minority student victims of 
     unscrupulous schools. According to a recent Congressional 
     report on proprietary schools and the student loan program, 
     ``Rather than allowing these young people to improve 
     themselves, these schools actually leave [them] in a worse 
     position than when they started.'' ``Abuses in Federal 
     Student Aid Programs,'' Report of the Committee on 
     Governmental Affairs, Permanent Subcommittee on 
     Investigations, U.S. Senate, Report 102-58, May 17, 1991, p. 
     10. These students have been left demoralized, without 
     meaningful training, and with student loan debts that they 
     may never be able to repay.
       The 85-15 Rule requiring that proprietary schools that wish 
     to participate in Title IV programs have a minimal 15 percent 
     of their revenue from non-Title IV sources is a rational and 
     cost-effective means of ensuring that trade schools do not 
     simply prey on the poor and function as Title IV mills. The 
     Rules serves a critical gatekeeping role, keeping 
     questionable schools out of HEA funding rather than waiting 
     several years for overburdened state and/or federal agencies 
     to amass evidence on which to begin an investigation.
       There has been opposition by the trade school industry over 
     the past several months concerning the potential effect of 
     implementation of the 85-15 Rule. Contrary to what the trade 
     school industry is saying, the Department of Education's 
     regulation does not apply retroactively. Instead, its initial 
     application is for the award year beginning July 1, 1994, 
     measuring school revenues from after the effective date of 
     the 85-15 statute in 1992.
       The Department of Education has written a timely 
     regulation, the prompt implementation of which would, in our 
     opinion, be in the best interests of low-income students and 
     the student aid system. We strongly urge you to oppose any 
     amendment that would delay or modify the Rule. If you have 
     any questions in this regard, please call Susan Grant, 
     Executive Director of NACAA, at 202-347-7395, fax 202-347-
     2563. Thank you for considering our views on this important 
     consumer protection issue.
           Sincerely,
                                              Lawrence A. Breeden,
                                                        President.
                                  ____

                                                   Volunteer Legal


                                             Services Project,

                                   Los Angeles, CA, June 20, 1994.
     Hon. Vic Fazio,
     U.S. House of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Representative Fazio: I am writing to strongly urge 
     you to oppose any efforts to delay implementation of the 85/
     15 Rule--one of the most important anti-fraud provisions of 
     the Higher Education Amendments of 1992. Poor, mostly 
     minority, urban young people have historically been subjected 
     to outrageous abuses by for profit trade schools set up to 
     operate as Title IV mills. As the enclosed article from 
     yesterday's New York Times indicates, the 85/15 Rule, 
     patterned after a similar rule concerning veterans programs 
     designed to eliminate fraudulent practices, requires that an 
     institution be of sufficient quality to attract a small 
     percentage of outside, non-Title IV funding to survive. 
     Without this rule, for profit trade schools will be allowed 
     to continue victimizing low income students seeking short 
     term job training by inducing such students to enroll in 
     overpriced, under-quality training programs.
       The Department has developed a rule which is fair to 
     legitimate schools, yet at the same time provides the 
     protection Congress sought to establish when it enacted the 
     85/15 Rule. Contrary to the false claims of the trade school 
     industry, the Department's rule does not operate 
     retroactively. Instead, it only applies to revenues from well 
     after the July 23, 1992 enactment of the 85/15 statute. To 
     delay the rule now would send a message to the Department and 
     to institutions that Congress is not concerned about stopping 
     fraud and abuse in Title IV programs. Given the enormity of 
     losses suffered by the Federal Government due to Title IV 
     abuses by for profit trade schools, this would be exactly the 
     wrong message to send. No doubt it would lead the trade 
     school industry to lead Congress down a slippery slope as the 
     industry would attempt to unwind other protections built into 
     the 1992 Amendments. The Department's 85/15 Rule should be 
     given effect as planned on July 1 to put an end to the trade 
     school fraud and abuse which has cost the taxpayers billions 
     and shattered the hopes, dreams and aspirations of a 
     generation of the poor.
       We strongly urge the House Appropriations Committee not to 
     delay implementation of the 85/15 Rule.
           Very truly yours,
                                               Kenneth W. Babcock,
                                               Directing Attorney.
                                  ____


                [From the New York Times, June 19, 1994]

                House Panel Is Facing Vote on School Aid

                          (By Michael Winerip)

       In the last decade, several efforts to tighten fiscal 
     control of Federal student aid programs, which lose $3 
     billion to $4 billion a year to defaults and fraud, have been 
     delayed or defeated by higher education lobbyists and their 
     Congressional allies. With a crucial July 1 deadline 
     approaching, it may be happening again.
       On Tuesday, the House Appropriations Committee is expected 
     to vote on whether to postpose a new law intended to crack 
     down on trade schools run for profit, which account for most 
     student aid defaults and frauds.
       The law, which was passed by Congress in 1992 and is 
     scheduled to take effect on July 1, mandates that a school 
     can receive no more than 85 percent of its revenue from these 
     Federal student aid-programs. At least 13 percent must come 
     from other sources, like paying students.
       The intent was to put an end to the fly-by-night trade 
     schools in poor urban areas that have high rates of default 
     on student loans. Testimony at Congressional hearings has 
     described schools that will sign up anyone for Federal loans, 
     then provide courses of such poor quality that graduates 
     cannot find jobs and cannot repay their Government loans.


                         76 percent of defaults

       About 5 percent of the nation's 15 million students in 
     higher education attend trade schools. These schools receive 
     25 percent of Federal student loan revenue, but account for 
     76 percent of the loan defaults.
       The 85-15 provision was sponsored by Representative Maxine 
     Waters, a Democrat whose district includes the poor, black 
     core of Los Angeles. The provision has strong support from 
     Senator Claiborne Pell, the Rhode Island Democrat who was the 
     architect of student aid programs; Senator Sam Nunn, the 
     Georgia Democrat who has held hearings on financial aid 
     fraud, and major consumer groups, including the National 
     Consumer Law Center and the National Association of Consumer 
     Agency Administrators.

                           *   *   *   *   *

       But for months, the Career College Association, which 
     represents 1,300 trade schools, has lobbied to delay and 
     ultimately defeat the provision. It supports an amendment 
     before the House Appropriations Committee that would postpone 
     the start of the requirement a year, until July 1, 1995. A 
     bipartisan group of 82 House members has signed a letter in 
     favor of the one-year delay.


                       300,000 reported involved

       If the current provision goes into effect, Tony Calandro, 
     vice president of government affairs for the trade school 
     group, said 30 percent of the for-profit trade schools could 
     be forced to close, affecting 300,000 students.
       Mr. Calandro said these institutions had such a high 
     student loan default rate because they were willing to take a 
     chance on high-risk inner-city students. The 85-15 provision, 
     he said, is `` a meat cleaver approach that does not 
     distinguish between good and bad schools.''
       ``All our people are up on the Hill right now, lobbying,'' 
     Mr. Calandro said recently. The trade school association 
     spent $1.9 million in a similar lobbying effort two years 
     ago, according to its latest available tax return. It has had 
     several successes modifying financial aid provisions in the 
     1992 Higher Education Act.
       Among those in the House persuaded by the lobbyists in the 
     last few weeks is the 18-member Hispanic Caucus. The caucus, 
     in a letter on June 9, supported the delay, emphasizing the 
     impact the law would have on poor Hispanic students and on 
     125 trade schools in Puerto Rico.


                       citing ``rip-off schools''

       Representative Waters disagrees with advocates of a delay, 
     saying that the meets students in housing projects in her 
     district whose lives are at a dead end because they have 
     defaulted on loans and will not get a second chance at 
     education.
       ``These rip-off schools are preying on low-income and 
     minority communities throughout America,'' she wrote in a 
     letter to Representative Neal Smith, the Iowa Democrat who 
     heads the Appropriations Committee. ``The 85-15 rule is a 
     modest way of checking the abuses of the worst schools.''
       After World War II, a series of trade school scandals 
     prompted Congress to pass a provision similar to 85-15 to 
     protect veterans using the G.I. education bill.
       Usually the Career College Association's biggest ally in 
     Congress is Representative William D. Ford, the Michigan 
     Democrat who heads the House education committee and a 
     graduate of a trade school. But on this issue, he has sent a 
     mixed signal. Last winter he said he supported 85-15. Then 
     last week, in a letter to Representative Smith, he wrote that 
     delay ``may be warranted.''
       An aide to Mr. Smith said the appropriations chairman had 
     not yet taken a position.
                                  ____


                [From the New York Times, June 19, 1994]

                    Crack Down on Student Aid Abuse

       The U.S. Government spends about $20 billion a year on 
     student aid--and loses as much as 20 percent of it to fraud 
     and abuse. In 1992 Congress got tougher on waste in student 
     aid programs, but it could undermine its own actions in a 
     House Appropriations Committee vote today.
       An amendment of the Higher Education Act eliminates schools 
     from participation in student aid programs if more than 85 
     percent of their revenues come from student aid. The 
     amendment, sponsored by Representative Maxine Waters of 
     California, is aimed at for-profit schools that account for 
     many abuses in student loan and grant programs.
       Many of these schools enroll marginal students who do not 
     finish. The schools collect the aid, but students who drop 
     out often have trouble finding jobs and they default on 
     loans. The students and the Government are shortchanged.
       Requiring schools to obtain at least 15 percent of their 
     revenues from other sources, like cash payments from students 
     or other government funds, aims to discourage schools that 
     set up shop only to pull in Federal aid. A similar 85-15 rule 
     was enacted in the 1950's to curb abuses of the G.I. bill.
       The Department of Education, which administers the Higher 
     Education Act, has written regulations to institute the 85-15 
     rule that take effect on July 1. But trade schools, which 
     lost this battle two years ago, are still lobbying hard 
     against it. They now seek relief from the House 
     Appropriations Committee, in the form of an amendment that 
     would delay application of the rule for a year.
       That would be worse that a step backward. It would 
     undermine Congress's own efforts to protect its student aid 
     investment. Trade schools with quality programs have nothing 
     to fear from the new rule.


                             the 85/15 rule

  Mrs. KASSEBAUM. Mr. President, I rise today to express my 
appreciation and support for the members of the appropriations 
committee for leaving intact the original provisions of the 1992 Higher 
Education Act Amendments concerning the 85/15 rule. While the House 
bill watered down the 85/15 rule, I am pleased that the Senate bill 
does not.
  The 85/15 rule requires that for-profit trade schools must generate 
at least 15 percent of their revenues from non-Federal student aid 
sources. The 85/15 rule has been used for 40 years to stop abuse of 
veterans under the GI bill. It is intended to help ensure that 
proprietary schools are sound enough to attract students who are 
willing to spend their own funds to attend.
  The purpose of the 85/15 rule is to put an end to low-quality 
programs at schools set up primarily to receive Federal title IV aid. 
The inspector general of the Department of Education has indicated 
that, as long as these schools rely on Federal funding, they will raise 
the tuition fees up to the maximum amount of Federal aid a student can 
receive and taxpayers will foot the bill for training that does not 
lead to a job. It will also shield students from the consequences of 
loan default, which generally follows inadequate education or training.
  I have heard from many proprietary school owners who believe that the 
regulations implementing this provision are retroactive. I am familiar 
with the Department of Education's regulations on the 85/15 rule, and 
they are not retroactive. This provision was supposed to have taken 
effect immediately upon enactment of the Higher Education Act 
Amendments in July 1992. However, it took 2 years for the U.S. 
Department of Education to release the regulations. Since the 
regulations provide for the elimination of schools from title IV 
eligibility only in the future, they clearly are not retroactive. If 
the regulations were retroactive, the department would be asking for 
reimbursement of all title IV aid received since July 1992 by the 
schools not meeting the 85/15 requirement.
  It is perfectly permissible and consistent with congressional intent 
that the Department use revenue data from the last full fiscal year 
that ended after October 1993 to determine school eligibility for the 
title IV program under the 85/15 rule since the provision was meant to 
apply upon enactment in 1992. Actually, schools received 2 more years 
of participation in the student aid program than Congress intended.
  As for the definition that is used in the regulations for 
``revenue'', it was developed in a negotiated rulemaking procedure in 
which representatives from the higher education community participated, 
including representatives of proprietary schools.
  I believe that the 85/15 provision, along with others in the Higher 
Education Act Amendments, is necessary to protect students and to 
maintain the fiscal integrity of the student aid programs. I hope that 
the Senate conferees are able to strike from the final bill the House 
amendment to delay implementation of this important provision. Its 
implementation is already 2 years overdue.


                        for-profit trade schools

  Mr. NUNN. Mr. President, I rise to join in this discussion concerning 
the integrity of the Federal student aid programs--programs which have 
been wracked by blatant fraud and abuse. After working diligently to 
expose the fraud and abuse, and after working with the Labor and Human 
Resources Committee to get strong integrity provisions included in the 
1992 reauthorization of the Higher Education Act, I am disappointed to 
have to appear here today to challenge efforts which would undermine a 
key provision contained in the 1992 reforms. At issue is a new 
requirement which for-profit trade schools must comply with: a 
requirement that at least 15 percent of a school's revenue come from 
somewhere other than the Federal Pell grant or guaranteed student loan 
programs. I am disappointed that the House, in its version of this 
legislation, voted to delay implementation of the so-called 85/15 rule, 
but I am pleased that the Senate Appropriations Committee struck that 
delay in this bill. I am hopeful that the Senate will send a clear 
message to the House and to our conferees: Do not delay 85/15. Clean up 
the abuses in Federal student aid programs.
  I hope to bring to the Senate some facts and thoughts about this 
provision. Quite frankly, we have been besieged by the for-profit trade 
school lobby, and they have done an effective job in mustering their 
membership on this issue. But we have not heard from the students who 
have been harmed--used as fodder--by those school owners who abuse the 
Federal student aid programs. They line their pockets with student loan 
and Pell grant proceeds, leaving needy students without an education 
and in debt. These students would have been better off if they had 
stayed at home.
  This provision is intended to strengthen and improve Federal student 
financial aid programs, as governed by title IV of the Higher Education 
Act. It addresses a provision of that act, enacted in 1992, which 
requires that for-profit schools certify that at least 15 percent of 
their revenues are derived from sources other than title IV Federal 
student aid programs, in order to participate in those programs. In 
short, to maintain eligibility, a school must now demonstrate that it 
is capable of attracting at least 15 percent of revenues, a fairly 
small amount, from other sources.
  This new requirement was enacted in 1992 because investigators and 
regulators alike had found largescale abuse of Federal financial aid 
programs in some trade schools which, for all practical purposes, 
existed only because of Federal funding. A good portion of that 
investigative work was done by the Senate Permanent Subcommittee on 
investigations which, under my chairmanship, conducted an in-depth 
examination of waste, fraud, and abuse in title IV programs in 1990.
  Every school which the subcommittee investigated for fraud and abuse 
had, it turned out, relied very heavily on Federal student aid programs 
as the main source of revenue. In fact, were it not for student aid 
programs, the schools we investigated would probably not have existed. 
Our investigation confirmed that some for-profit trade schools 
establish their tuition charges based not on what the cost of education 
is, but rather on the amount of student aid available to the students. 
When the Pell grant and loan limits were raised, we found that many of 
these schools raised their tuition.
  The subcommittee, as well as the regulators, found that many students 
made no financial contribution to their own education and were drawn to 
these schools, not due to the quality of the promised education, but 
because of aggressive advertising campaigns by the schools and the 
offer of Federal funding. Investigators found that, with high 
enrollment nearly guaranteed by the draw of Federal dollars, there was 
little or no incentive to provide quality education to title IV 
students. When they discovered that many of these educational programs 
were nearly worthless, Pell grant recipients merely walked away from 
the school. An absolute waste of limited program funds. Students 
defaulted on the Federal loans, leaving themselves and the Federal 
Government with a huge financial burden. In the meantime, many school 
owners were reaping huge profits at the expense of Federal taxpayers as 
well as our neediest and most deserving students.
  In effect, we found that what we have created is not a Federal 
subsidy for students, but a cash cow for many businesses that, because 
of the Federal programs, do not have to operate in the free market. We 
have created hundreds, if not thousands, of Government-sponsored 
enterprises which are operated for the benefit of private individuals 
and to the detriment of the students we aim to assist. We need to 
constantly remind ourselves that these are student aid programs, not 
school aid programs.
  The statistics lend credibility to our findings. According to the 
Congressional Research Service, students attending proprietary trade 
schools account for $5 billion each year in guaranteed Federal student 
loans and Pell grants. As of the end of fiscal year 1992, for loans 
entering repayment in 1991, they accounted for 63 percent of the $1.9 
billion in federally guaranteed Stafford loans that defaulted. Of 
those, 450,234--or 74.9 percent--were proprietary school students.
  In response to the investigative findings, Congress enacted the 15-
percent requirement in 1992. By requiring that at least 15 percent of 
revenues come from other sources, Congress hoped to ensure that the 
Federal taxpayer would pay only for an educational product that was 
good enough to attract buyers in a free market. The requirement was 
intended to give school owners some incentive to offer quality 
education, where no such incentive had existed before.
  I might add that the law does not say that the 15 percent has to be 
in the form of cash paid by students. In fact, many schools can and do 
qualify because that 15 percent may include other Federal program 
funds, such as JTPA funds, as well as State student financial 
assistance. In reality, schools can and do continue to be eligible even 
if no student pays his or her way. In those cases, the quality of the 
education is at least also subject to the scrutiny of agencies beyond 
merely the Department of Education, which historically has provided 
little effective program oversight.

  The 15-percent requirement has generated considerable controversy and 
opposition within the trade school industry. Although many of the trade 
schools say that they don't mind the requirement itself, they have 
complained loudly about the way that the Department of Education has 
implemented the law this year. Under the Department's current plans, 
the requirement, which was passed in 1992, is effective July 1, 1994. 
Many of the schools have argued that the Department should delay 
another year before implementing the law. Why? I suspect that they will 
continue to work against the law and, at the same time, get other 
sources of funding for their revenue mix. Given the extensive and 
blatant abuse that we found in these programs and the huge cost which 
we are paying for that abuse in terms of dollars and lost educational 
opportunities for young Americans, I am against this kind of delay.
  I recognize that many proprietary trade schools do not abuse the 
Federal programs; there are many good schools in the industry that in 
fact play a significant role in educating many deserving young 
Americans. Some of those schools fear that the 15-percent requirement 
unfairly impacts their business, since they argue that they enroll 
mostly needy, poor students who necessarily depend on Federal student 
aid. The Career College Association, the trade association and lobbying 
arm for some 1,200 for-profit trade schools, has suggested that the 
Secretary of Education's implementing regulations will inadvertently 
cause good schools to close their doors to the detriment of the 
students and the school owners.
  The House version of this bill contains language which, if enacted, 
will prohibit the Secretary of Education from expending funds to 
enforce the 15-percent requirement in any case and despite even a 
proven record of program abuse. I hope that the Senate conferees do not 
concur with the House, and once again, tie the hands the administration 
in its efforts to rid the $20 billion student aid programs of the type 
of largescale abuse that has historically plagued these programs.
  The real, underlying questions in the debate are:
  Should the Federal taxpayer be funding substandard educational 
programs that attract only because the Federal subsidy?
  If not, how do we provide incentives for quality education to schools 
who operate, and reap substantial profits, largely, if not exclusively, 
due to Federal funding?
  The 15-percent requirement is the Government's best hope for 
injecting some concrete and workable incentives for quality in 
education into these programs.
  Mr. President, a blanket delay on this provision makes a mockery of 
the law and of the very noble purpose which underlies these programs. 
The 15-percent requirement is there to address a very serious problem 
that has been proven time and again. Let us not ignore the facts and 
delay its implementation indiscriminately for 1 year. We need to do 
everything in our power to protect the programs' integrity, the 
taxpayers and the students.


                   REGARDING CHILDHOOD IMMUNIZATIONS

  Mr. INOUYE. Mr. President, my Appropriations Committee colleague, 
Senator Dale Bumpers, has long recognized the importance of immunizing 
our Nation's children and has been instrumental in ensuring that 
children receive the vaccines they need to combat crippling and life-
threatening infectious diseases. Senator Bumpers has continued his 
leadership by carefully scrutinizing the administration's plans for 
delivering free vaccines to needy children and has had the foresight to 
ask for a GAO examination of this vaccine delivery plan to ensure that 
vaccines are delivered in a safe, timely and cost-effective manner.
  The GAO report found that a number of obstacles remain for the 
administration to overcome before the program can be fully operational. 
As a result of that GAO report, the Senate Appropriations Committee 
bill for the Department of Health and Human Services includes a 
provision authorized by Senator Bumpers which would prohibit the 
Secretary from moving forward with the Vaccines for Children Program 
until she certifies, and the Appropriations Committees of both Houses 
concur, that the Government distribution of Government-purchased 
vaccine can be done safely and cheaper than by the private sector.
  I agree with Senator Bumpers that we should not move forward with any 
program that will endanger the vaccine supply of our country. I am also 
concerned, however, that we not unduly delay the start of a program 
that will begin to increase immediately the opportunities available to 
have children immunized. Our ultimate goal is to immunize our children 
with safe, reliable, and effective vaccines as soon as possible. We 
must examine closely whether it is not worth more to protect all of our 
children at the earliest possible opportunity even if there is an 
additional small marginal cost.


                       native hawaiian loan fund

  Mr. INOUYE. Mr. President, I rise to commend the distinguished 
chairman of the Appropriations Subcommittee on the Departments of 
Labor, Health and Human Services, and Education, and Related Agencies 
for his leadership in framing budgets for fiscal year 1995 within 
difficult constraints and for ensuring, within those constraints, that 
needs of American Indians and other native Americans were not 
neglected.
  I rise, too, to seek clarification related to one program that has 
been consistently supported by the chairman in the appropriation for 
the Administration for Native Americans.
  Mr. HARKIN. I thank the chairman of the Indian Affairs Committee for 
his kind comments. What is the program?
  Mr. INOUYE. The program is the Native Hawaiian Revolving Loan Fund. 
Since its inception, the loan fund has supported the creation or 
expansion of 160 native Hawaiian-owned businesses and created perhaps 
450 jobs, virtually all of which are full time. The success stories 
that have characterized the new enterprises have produced a scrapbook 
of news clippings.
  The loan fund is a standout among economic development programs 
fostered by the Administration for Native Americans, so much so that 
the administration has informed me that it would like to continue 
providing federal dollars from its appropriation to sustain this 
important economic development effort.
  Mr. President, although continued Federal support is needed, the loan 
fund is not simply a Federal undertaking. From the beginning, the 
Office of Hawaiian Affairs of the State of Hawaii has provided full 
costs of administering the fund. Furthermore, the State has provided 
appropriations for technical assistance to loan beneficiaries. These 
contributions have totaled over $500,000 annually.
  In addition, for each of the past 3 years, the Office of Hawaiian 
Affairs has matched the Federal grant of $1 million with a like amount.
  The problem that leads me to speak on this subject is that loan 
requests continue to far exceed the ability of the fund to make loans. 
Over $1 million in loan requests are received each month. More than $9 
million in loans have been approved, representing the entire Federal 
and State contributions, and even with loan repayments, the ability of 
the loan fund to be responsive to requests for new loans is severely 
limited.
  Mr. President, the condition of the economy in Hawaii remains 
sluggish, and Native Hawaiians are among those most hurt by such 
conditions.
  May I ask the chairman whether funds are available in the 
appropriation for the Administration for Native Americans for fiscal 
year 1995 for an additional grant to the native Hawaiian revolving loan 
fund? And, if the administration concludes that such a grant should be 
made, would the chairman object to such a grant?
  Mr. HARKIN. The appropriation for fiscal year 1995 for the 
Administration for native Americans is essentially level with the 
appropriation for the current year, an appropriation that included 
funding for the loan fund. If, in the judgment of the administration 
for native Americans, continuation funding is warranted upon the basis 
of the fund's performance in advancing economic conditions among native 
Hawaiians, I would have no objection to such continuation funding.
  Mr. INOUYE. I thank the Chairman.


                    plant relocation data collection

  Mr. LEVIN. Mr. President, I wish to engage in a colloquy with the 
manager of the Labor, Health and Human Service appropriations bill 
regarding the Department of Labor's data collection on plant 
relocation. It is my understanding that the Labor Department will 
reinstate its mass layoff statistics [MLS] program that was disbanded 
under the previous administration. It is good news that the Clinton 
administration will reinstate and revamp this program by adding 
additional and expanded information to the survey to make it a more 
useful survey. I understand the Labor Department expects this program 
to be up and running by January 1995, to be continued in program year 
1995 using EDWAA title III funds contained in this fiscal year 1995 
appropriations bill.
  Mr. HARKIN. That is also my understanding.
  Mr. LEVIN. Mr. President, with the passage of NAFTA and the upcoming 
Congressional consideration of the Uruguay round of the General 
Agreement on Tariffs and Trade [GATT] it is increasingly important that 
we have the data necessary to track how various sectors of our economy 
are doing. This includes being able to track plant relocation, either 
to other locations around the country or overseas.
  Many members of Congress wanted this type of information in order to 
assess the possible impact of NAFTA and it was unavailable. For 
example, we did not know how many United States companies had relocated 
to Mexico. It's time this important information on plant relocation 
trends becomes available so that it can be used to make educated 
decisions. The reinstatement of the Labor Department's mass layoff 
statistics survey, if implemented properly, offers us the best 
potential tool to understanding these trends.
  Mr. President, in order for this survey to be useful, however, the 
MLS should provide the following:
  It should provide the domestic relocation site for establishments 
that have laid off workers because of a domestic relocation.
  It should provide the overseas relocation site for establishments 
that have laid off workers because of an overseas relocation.
  Finally, if information on specific plant closings is available from 
publicly available sources the Department of Labor should make this 
information available in its MLS reports.
  Mr. HARKIN. I agree it would be useful to be able to track plant 
relocation, whether it be overseas or to other parts of the United 
States. This information will enable Members of Congress and other 
interested parties to assess the job movement and plant relocation 
trends by industry sector. I fully support the recommendations made by 
the Senator from Michigan, Senator Levin and believe they will make the 
MLS program a more useful program.


                    older workers retirement income

  Mr. METZENBAUM. There are only a few months left in my term in the 
Senate. Before I leave this body, I would like to know that we are 
doing more to assist older workers secure their retirement income and 
obtain the pension benefits promised to them by their employers. For 
the past year, the Administration on Aging has been funding pension 
rights information and counseling programs which provide valuable 
assistance to retirees in securing their rights and their pensions. The 
Administration on Aging has committed to continue supporting these 
programs. I ask unanimous consent to have this letter from Assistant 
Secretary Fernando Torres-Gil inserted in the Record at the conclusion 
of our remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. METZENBAUM. I also understand that the appropriation for the 
Pension and Welfare Benefits Administration in the Department of Labor 
will include an additional $3 million to improve enforcement. PWBA is 
the primary agency responsible for protecting the security of pensions 
for participants which it is supposed to do through its direct 
assistance efforts as well as by its enforcement efforts.
  I want to express my appreciation to the Chairman for his efforts in 
including these amounts. I wonder if the chairman could provide me with 
assurances that a significant portion of the increase will be used 
directly to provide participant assistance and that he will do his best 
to protect these amounts in conference.
  Mr. HARKIN. Yes, I can assure the Senator that preserving these 
amounts will be a high priority for the conference.
  I understand that the Department is already making extra efforts in 
this area. We expect about $1 million of these funds to be used to 
assist the Department with further improvements in its participant 
assistance program, particularly providing participants with 
information on their benefits, assistance in obtaining plan information 
and assisting participants in protecting their legal rights to 
benefits.
  Mr. METZENBAUM. I thank the Senator. I will do whatever I can to 
assist.

                               Exhibit 1

         Department of Health and Human Services, Office of the 
           Secretary, Administration on Aging,
                                   Washington, DC, August 4, 1994.
     Hon. Howard M. Metzenbaum,
     U.S. Senate, Washington, DC.
       Dear Senator Metzenbaum: I appreciated receiving your 
     letter which emphasized the value of the six pension rights 
     demonstration projects the Administration on Aging funded on 
     September 30, 1994.
       I also strongly agree with your estimation of the 
     importance of these projects. The demonstrations not only 
     provide a vital service to those who directly benefit from 
     them, but also will generate information relevant to the 
     development of a more effective pension policy in the future. 
     Furthermore, public policy development in this crucial area 
     is in keeping with the Administration on Aging's 
     ``Blueprint'' for an effective response to issues facing 
     retirees in the future. As a result, we will continue to use 
     discretionary Title IV funds to improve our ability to better 
     inform older Americans about their pension rights and 
     benefits.
       I assure you that I intend to include in a discretionary 
     grant announcement this fall another call for grant 
     applications from agencies who wish to implement pension 
     information counseling and advocacy programs, and will 
     dedicate Title IV resources for this purpose from the 
     Administration on Aging's FY '95 appropriation.
           Sincerely,
                                           Fernando M. Torres-Gil,
                                    Assistant Secretary for Aging.


                        EXTRAMURAL CONSTRUCTION

  Mr. MACK. Mr. President, let me first commend Senator Harkin for his 
leadership on this important legislation. As a member of the 
Subcommittee on Labor, Health and Human Services, Education and Related 
Agencies, I have enjoyed working with the Senator and his staff and 
appreciate the courtesy he has shown to me and my staff.
  I am pleased the legislation recognizes the need to respond to the 
growing unmet need for extramural biomedical research facilities and 
has provided a $20 million proposal to address some of the most 
pressing and promising needs which exist. I would like to bring to the 
attention of the Senate and the Department of Health and Human Services 
a project of great significance and success known as the Miami Project 
to Cure Paralysis. I have visited the project and have worked closely 
with Nick Buonoconti for several years. I believe this project is one 
of the most outstanding efforts in the nation dedicated to neuroscience 
research and rehabilitation research.
  Mr. HARKIN. I am familiar with the Miami Project and share the 
Senator's admiration.
  Mr. MACK. Accordingly, I would like to have this project considered 
by the Department as having been referenced in the committee report 
along with the other worthy programs cited and recommended. The Miami 
Project to Cure Paralysis is deeply involved in finding new approaches 
to improve recovery after spinal cord injury and seeks funds for 
essential laboratory facilities and equipment that will enhance their 
work in developing methods to utilize cellular implants and supporting 
devices to foster repair of injured nervous systems.
  The facility would include equipment for large-scale growth of cells 
and tissue culture including human cells for the development of model 
systems for the study of spinal cord injury and regeneration, including 
analysis of motor and sensory function. The project would also enhance 
their work in progress on the development of computer-aided devices to 
facilitate movement in partially impaired patients with spinal cord 
injury. I hope to ensure that this Project is given every consideration 
and recognition, and hope you will join me in recommending that the 
Department give every consideration to this project.
  Mr. HARKIN. I do find this project meritorious, and would assure the 
Senator that I do join him in recommending this project to the 
Department for their consideration. I agree that this project should be 
considered as if referenced in the language of the committee report.
  Mr. MACK. I thank the Senator from Iowa. Again, I would like to thank 
the Senator staff, and the committee for the outstanding work they have 
done on this legislation. They have gone out of their way to recognize 
and assist a number of important initiatives and critical needs in 
Florida in both the health and education areas. I appreciate the strong 
bipartisan approach the chairman has always taken on his subcommittee, 
and I look forward to serving with him in the years to come.


                        OLYMPIC STUDENT ATHLETES

  Mr. RIEGLE. Mr. President, I wish to engage in a colloquy with my 
distinguished colleague from Iowa, the manager of the bill. I am 
offering my support for a scholarship program that has received $1 
million in funding in the House bill. The 1992 Higher Education 
Reauthorization Act provides grants to Olympic student athletes 
training at a U.S. Olympic Training Center or Education Center and 
studying at an accredited college or university.
  The $1 million included in the House appropriations bill would go 
directly to students for tuition, room, and board. Athletes from across 
the Nation go through rigorous training, often at great personal 
sacrifice, to represent our country at the Olympics. Many of them have 
great difficulty in obtaining financial assistance that will allow them 
to balance their athletic training and their academic careers. This 
program is not intended to take the place of other scholarships or 
grants but in some instances may be in addition to other programs that 
do not fully address the needs of these young men and women. One 
program I highlight is the resident boxing program in Michigan. 
Currently this program has 19 athletes and most have inner-city 
backgrounds. This scholarship, if funded, will allow more young 
athletes the opportunity to elude the inner-city poverty that can be so 
difficult to escape from. Over 100 boxers apply annually to the school 
for only 3 to 5 openings. This is just one example. Of all the U.S. 
athletes that participated in the 1992 Winter Olympics, 189 passed 
through the program at Northern Michigan University facility. All these 
athletes deserve Federal support to make sure that they have the 
opportunity to obtain an education, while dedicating themselves to 
representing this Nation in the Olympics.
  Mr. HARKIN. Mr. President, I understand the concern the senior 
Senator from Michigan has for these young students and for the 
scholarship program. I want to assure him that I will review this 
program when it is brought up in the conference between the Senate and 
House.


                     dislocated workers assistance

  Mr. SIMON. I would like to engage the chairman in colloquy on a 
matter related to the dislocated workers assistance account. The 
Appropriations Committee report estimates that 750,000 participants are 
expected to be served with increased funding for this program. 
Displaced homemakers are defined as dislocated workers under the EDWAA 
Program. Yet most States do not provide any services to displaced 
homemakers with title III services. I have been deeply concerned about 
the lack of appropriate services for displaced homemakers and sponsored 
the Displaced Homemakers Self-Sufficiency Assistance Act so that 
displaced homemakers could receive the employment and training services 
needed to move into the paid work force. Is it correct that with the 
committee's recommended increase in appropriations for the dislocated 
worker program that the Department of Labor should allocate funding for 
displaced homemakers based on the services described in the Displaced 
Homemakers Self-Sufficiency Assistance Act?
  Mr. HARKIN. Yes the committee intends that the Department provide 
services to displaced homemakers as part of the dislocated worker 
program. The committee appreciates the work you have done on behalf of 
displaced homemakers and bringing the importance of this issue to the 
attention of the Senate.
  Mr. SPECTER. I also want to reiterate the committee's support for 
funding services to displaced homemakers. The New Choices programs in 
my State do an outstanding job in assisting homemakers prepare for the 
paid work force. But like displaced homemaker programs across the 
country, there are more women who need these services than the New 
Choices programs can serve. The committee expects the Department to 
allocate funding for displaced homemakers under the dislocated worker 
program.


           transfer of programs, u.s. department of education

  Mr. HARKIN. I would like to enter into a colloquy with my 
distinguished colleague, Senator Specter, ranking member of the 
Subcommittee on Labor, Health and Human Services, and Education to 
provide a clarification of our intent in developing the committee 
report language concerning the Office of Educational Research and 
Innovation [OERI].
  Mr. SPECTER. It would be a pleasure to enter into a colloquy with the 
distinguished Senator from Iowa, chair of the Subcommittee on Labor, 
Health and Human Services, and Education.
  Mr. HARKIN. As the Senator knows, I also serve as the chair of the 
Subcommittee on Disability Policy of the Committee on Labor and Human 
Resources and I was the chief sponsor of the bills reauthorizing the 
Individuals With Disabilities Education Act [IDEA] and the 
Rehabilitation Act of 1973. These two pieces of legislation include 
provisions for research, demonstration, and evaluation.
  I understand questions have been raised regarding OERI and the 
program operating components within the Office of Special Education and 
Rehabilitative Services [OSERS] in administering research, 
demonstration, and evaluation authorities under IDEA and the 
Rehabilitation Act.
  In accordance with Section 603 of IDEA, the Office of Special 
Education Programs [OSEP] within OSERS is authorized to administer all 
programs under IDEA, including research, evaluation, and demonstration 
programs. In accordance with section 3 of the Rehabilitation Act of 
1973, the Rehabilitation Services Administration [RSA] is authorized as 
the administering agency for rehabilitation programs, including 
research and demonstration programs. In accordance with section 202 of 
the Rehabilitation Act of 1973, the National Institute of Disability 
Rehabilitation Research [NIDRR] is authorized to promote, coordinate 
and provide research, demonstration, and related activities with 
respect to individuals with disabilities.
  I would like to direct the Senator's attention to the specific 
language contained in the committee report which accompanies the 
appropriations bill, H.R. 4606, for fiscal 1995 for the Departments of 
Labor, HHS, and Education which has been the subject of uncertainty. 
Permit me to quote the following from page 226 of the report: 
``Finally, the committee directs the Department to transfer the funding 
and management of research, evaluation, and demonstration activities 
throughout the Department to OERI in the fiscal year 1996 budget 
request.''
  I would like to make the following clarification of our intent 
regarding authorities under IDEA and the Rehabilitation Act. The 
language in the report quoted above is not intended to include the 
transfer of funding and management of those research, evaluation, and 
demonstration activities directed to be carried out by OSEP, RSA, and 
NIDRR under the IDEA and the Rehabilitation Act of 1973. And it is my 
expectation that all such activities continue to be funded and 
administered through the appropriate entity within OSERS within the 
Department of Education.
  Mr. SPECTER. I agree with the Senator's understanding. The language 
included in the committee report does not authorize such a transfer. As 
stated in the committee report on p. 225, the committee simply requests 
that the Secretary submit no later than January 25, 1995, a 
comprehensive list of all education research, evaluation, or 
demonstration activities throughout the Department, with a 
justification for each activity's organizational location, if not 
within OERI.
  The authorities under the IDEA should continue to be administered by 
OSERS, and more specifically, the Office of Special Education Programs 
(OSEP) within OSERS and activities authorized under the Rehabilitation 
Act be administered by RSA and NIDRR as authorized by such legislation.
  Mr. HARKIN. It was, and remains, the clear intent of Congress that 
the programs under IDEA and the Rehabilitation Act of 1973 be highly 
interactive in improving services for children and adults with 
disabilities, and that this interaction is greatly enhanced through the 
administration of all programs within OSERS. The intent of Congress in 
this regard is also reflected in the legislation which created the U.S. 
Department of Education.
  Mr. SPECTER. I agree.
  Mr. HARKIN. I want to thank the distinguished Senator from 
Pennsylvania for his assistance in providing these clarifications in 
the intent of our report language.
  Mr. SPECTER. I thank the Senator for his clear statement and ongoing 
leadership in the development of policy and programs on behalf of 
individuals with disabilities.


                     consumer price index revision

  Mr. SPECTER. Mr. President, the committee has included the 
administration's request for $5.1 million for the Bureau of Labor 
Statistics to revise the Consumer Price Index [CPI]. Changes in the CPI 
have a major impact as the CPI is used to calculate COLA's, index 
Federal tax brackets and standard deductions and calculate increases in 
many private contracts. Studies have shown that older Americans face 
costs that are different than those faced by younger Americans. Most 
older Americans are required to spend a greater proportion of their 
income on health care, the cost of which has been rising much faster 
than other goods and services. The current CPI does not fully reflect 
these differences. Therefore, in constructing any changes to how the 
CPI is calculated, the BLS should consider this to the greatest extent 
possible. Would the Senator agree.
  Mr. HARKIN. I thank the Senator for that observation. Certainly any 
recalculation of the CPI is much more than a technical exercise. It has 
significant consequences for millions of Americans. I would expect that 
the BLS would fully consider the fact that older Americans have to 
spend more of their incomes on health care and other essential items 
when considering any changes to the way the CPI is calculated.


                  clinical laboratory cost containment

  Mr. SPECTER. Mr. President, I rise to engage the distinguished 
committee chairman in a colloquy pertaining to cost containment in the 
clinical laboratory industry.
  Mr. HARKIN. I would be pleased to engaged my good friend and 
colleague from Pennsylvania.
  Mr. SPECTER. Mr. President, as the chairman knows, the committee has 
wisely included language in its report regarding clinical laboratory 
cost containment. It is my understanding that the Medicare Program is 
designed to reimburse providers for the cost of their services, and 
avoid being overcharged for services. In fact, several years ago this 
body passed the Medicare and Medicaid Patient and Program Protection 
Act of 1987 to ensure that providers were not overcharging the Medicare 
Program. That law gives the Secretary of the Department of Health and 
Human Services [HHS] the authority to exclude from Medicare 
participation any provider who charges Medicare in excess of their 
usual charges or costs.
  It has come to the attention of the committee that some companies may 
still be contracting with commercial insurers at a rate far below the 
Medicare fee schedule, while collecting higher reimbursements from 
Medicare, in violation of the 1987 statute. These practices were 
discussed in a GAO report of June 1991, and it is a form of cost 
shifting. The cost shifting allows labs to gains market share at the 
expense of the Medicare Program--and ultimately increase costs for the 
elderly and other Medicare beneficiaries. If widespread, the practice 
could cost the Medicare Program and elderly beneficiaries billions of 
dollars by shifting the true costs of laboratory testing onto the 
Medicare Program. Is this the understanding of the distinguished 
chairman?
  Mr. HARKIN. We have indications that the practice of providing 
discounts to commercial insurers while not providing the same discounts 
to Medicare may still exist. Furthermore, this body is currently 
working on an issue of great importance--health care reform. As we look 
for ways to contain costs and finance necessary reforms of the health 
system, it is extremely important and urgent that the Department of 
Health and Human Services do everything in its power to seek out and 
find situations where the Government is being overcharged. It is 
therefore very appropriate for the HHS inspector general to examine 
laboratories in order to determine the extent and nature of this 
practice, and to evaluate whether there are savings for the Medicare 
Program--and Medicare beneficiaries--in terminating this kind of 
practice.


          Funding of the Department of Labor's Women's Bureau

  Mrs. MURRAY. Mr. President, I would like to thank Chairman Harkin and 
the rest of the Appropriations Committee on their hard work and 
diligence in fashioning this bill. In particular, I would like to point 
out my support for the funding of the Department of Labor's Women's 
Bureau at $8,592,000. I understand that included this sum is an 
additional increase of $600,000 to fund the Family and Medical Leave 
Act Commission on Leave. I hope that the conferees to the bill will 
agree to the Senate's position on this issue.
  Let me point out that 99 percent of all women will work for pay at 
some point in their lives, so the important work of the Women's Bureau 
really helps all women most families. The Women's Bureau is currently 
conducting a national survey and project, which is called Working Women 
Count, to find out more about the treatment of women in the workplace. 
This October the Women's Bureau plans to present a ``Report to the 
Nation'' setting out the issues that women want addressed.
  The Women's Bureau is also actively soliciting input for the 
September 1995, Fourth World Conference on Women. I was proud to have 
women in my State host Women's Bureau director Karen Nussbaum at the 
first of 10 U.S. regional preparatory meetings on April 22, 1994, in 
Tacoma, WA for the world conference. Hundreds of women from all walks 
of life from throughout the Pacific Northwest attended the event. The 
Woman's Bureau is organizing these meetings on behalf of the U.S. 
Department of Labor and the State Department to communicate with non-
governmental organizations prior to the Fourth World Conference of 
Women.
  Thank you again for allowing me to speak in support of this important 
Federal program.


                          Amendment No. 2465:

  Mr. DOMENICI. Mr. President, I am pleased to cosponsor this amendment 
proposed by my friend from Arizona, Senator McCain.
  Back in 1976, when the original PILT amendment was adopted in the 
Senate, I remember the difficult conference that eventually resulted in 
a system that began to compensate counties for the lost tax revenues on 
Federal land holdings.
  Eighteen years later, we now find ourselves in a similar situation, 
in that the Senate has seen fit to pass, by a vote of 78 to 20, 
legislation that updates the formula that has remained unchanged since 
1976.
  Much of the revenue used for running counties in this country comes 
from property taxes, and many counties in States like New Mexico are 
dominated by Federal lands on which they can impose no taxes.
  These local governments are finding it increasingly difficult to make 
ends meet, due in a large way to compensation for Federal lands lagging 
way behind inflation.
  Additionally, there is a continuing shift to nonproductive uses of 
these Federal lands, placing an additional burden on the county 
coffers.
  The Senate-passed legislation is far overdue, and will benefit units 
of local government in 49 States and the District of Columbia.
  Governors of the States recognize the need for updating these 
payments, as did the former Governor of Arkansas in 1991, Bill Clinton.
  This amendment expresses the sense of the Senate, that an updated 
system should be enacted into law, and that the President should fund 
this program in the fiscal year 1996 budget.
  This legislation is important to the survival of local government in 
the provision of public services.
  The concept of PILT is as valid today as it was when it was enacted.
  When the Federal Government holds what would ordinarily be private 
lands, it should act responsibly, and provide its fair share to the 
local infrastructure.
  I urge my colleagues to support this amendment.


                     vaccines for children program

  Mrs. BOXER. Mr. President, I rise today in strong support of the 
Vaccines for Children Program and for its implementation as mandated on 
October 1, 1994. This program is vital to raising America's 
immunization rate for preschool children by providing States with 
federally purchased vaccines for uninsured, Medicaid-eligible, and 
native-American children.
  Under this program California will receive free vaccines for 61 
percent of its children, and will incur significant savings as the 
State will no longer have to contribute to the purchase of vaccines for 
Medicaid-eligible children. In anticipation of this, California has 
amended its budget to reinvest these savings into the provision of 
direct immunization services for children, including improved public 
clinic services, registry, and reminder systems.
  An amendment offered by Senator Bumpers in the Appropriations 
Committee to the fiscal year 1995 Labor, Health and Human Services, 
Education appropriations bill could delay implementation of the 
Vaccines for Children Program and would have profound effects in 
California. I ask unanimous consent that a letter from S. Kimberly 
Belshe, director of the California Department of Health Services, 
discussing this issue, be included in the Record.
  I urge my colleagues to join me in supporting prompt implementation 
of the Vaccines for Children Program so that States, like California, 
can move forward and meet the goal of immunizing all of our children 
against vaccine preventable diseases.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                Department of Health Services,

                                   Sacramento, CA, August 3, 1994.
     Hon. Barbara Boxer,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Boxer: This letter is to request your support 
     for an extremely important program to protect children 
     against vaccine-preventable diseases.
       As part of the Omnibus Budget Reconciliation Act of 1993, 
     Congress passed, and the President signed, legislation to 
     create the Vaccines For Children (VFC) program. Under this 
     program, the Federal Government will purchase in bulk, at 
     substantially discounted prices, the standard childhood 
     vaccines for adminsitration to children who do not have 
     private health insurance coverage of vaccine costs--an 
     estimated 60 percent of the nation's children. State health 
     departments are charged, in concert with the Federal 
     Government, with developing and operating a system to obtain 
     VFC vaccine orders from public and private medical offices 
     and clinics and to distribute the vaccines to these 
     providers.
       Benefits of the VFC program will include (1) the 
     elimination of the cost of vaccine as a barrier to timely 
     immunization of children and (2) the creation of substantial 
     savings to the State in public sector vaccine costs. These 
     savings will be reinvested to strengthen our existing 
     immunization programs, expand availability of immunization 
     services, and to bring more children into medical offices and 
     clinics for immunization. Along with the Department of Health 
     and Human Services, the Centers for Disease Control and 
     Prevention (CDC), and other state health departments, the 
     California Department of Health Services (DHS) is well along 
     in preparations to implement the VFC program on its 
     congressionally mandated startup date of October 1, 1994.
       Recently, Senator Dale Bumpers requested the Government 
     Accounting Office (GAO) to review federal and state 
     preparations to implement the VFC program. Partly on the 
     basis of the GAO's report, Senator Bumpers has introduced an 
     amendment to the Senate Labor and Health and Human Services 
     appropriations bill regarding vaccine distribution and 
     administration fees charged by physicians under the VFC 
     program. This amendment is currently on the floor of the 
     Senate. The effect of these amendments will almost certainly 
     be to dely implementation of the program. While sharing 
     Senator Bumpers' concerns that this program be as effective 
     as possible, DHS strongly urges that the Bumpers amendment be 
     modified to allow the VFC program to begin on schedule on an 
     interim basis while investigation of his concerns continues. 
     Our reasons for this position follow:
       First, Senator Bumpers questions whether or not the use of 
     a national vaccine warehouse operated by the General Services 
     Administration (GSA) to distribute VFC vaccines to public and 
     private immunization providers is the most economical and 
     safe way of accomplishing this. We are impressed with the 
     CDC-GSA collaboration and progress in setting up the vaccine 
     storage, packaging in advance of the startup date. Further, 
     in California we have already made major budgetary decisions 
     and extensive VFC program implementation preparations based 
     on the presumption that national vaccine warehouse will be in 
     operation on October 1, 1994.
       Second, Senator Bumpers and GAO question whether the 
     maximum fees which physicians and clinics will be allowed to 
     charge private-paying patients may be too high and, thus, 
     constitute a deterrent to families with young children. 
     However, the limits set by the Federal Government represents 
     just that--the maximum rates which physicians may charge 
     those most able to pay and not what more physicians will, in 
     reality, likely charge most of their patients. Moreover, 
     these limits are based on the only available solid data, 
     administration charges actually used by physicians as 
     reported by the American Academy of Pediatrics, and reflect a 
     balance between patient and medical care provider 
     perspectives on cost issues.
       In conclusion, to delay start up of the VFC program would 
     cause harmful disruption in the extensive preparations 
     California and other states have made, waste part of the 
     fiscal investment we have made, and damage the credibility of 
     both federal and state governments. Such a delay and the 
     negative impacts listed are not necessary. We urge that the 
     Bumpers Amendment be modified to allow the VFC program to 
     start on October 1 and have the Federal Government fully 
     investigate and report to the Congress on Senator Bumpers' 
     concerns. Then, if need be, modifications can be made in 
     operation of this program without delaying its much needed 
     benefits.
       If you have any questions regarding the VFC program and its 
     implementation in California, please call George W. 
     Rutherford, M.D., Deputy Director, Prevention Services, at 
     (916) 657-1493.
           Sincerely,
                                               S. Kimberly Belshe,
     Director.

                          ____________________