[Congressional Record Volume 141, Number 49 (Thursday, March 16, 1995)]
[Senate]
[Pages S4094-S4111]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. COATS (for himself, Mr. Grams, Mr. Craig, Mr. Lott, Mr.
Brown, Mr. McCain, Mr. Kyl, Mr. Inhofe, Mr. Gramm, and Mrs.
Hutchison):
S. 568. A bill to provide a tax credit for families, to provide
certain tax incentives to encourage investment and increase savings,
and to place limitations on the growth of spending; to the Committee on
Finance.
THE FAMILY INVESTMENT RETIREMENT SAVINGS AND TAX FAIRNESS ACT
Mr. COATS. Mr. President, this morning we rise to introduce
legislation to put the American family first. Mr. President, I send to
the desk legislation which will do just that and will explain its
content.
The PRESIDING OFFICER. The bill will be received and appropriately
referred.
Mr. COATS. Thank you, Mr. President.
Our colleagues on the other side of the Capitol already have begun to
take action on many of the reforms that I have laid out in this
legislation. But now it is time for the Senate to deliver on a promise
and give family tax relief to hard-working, overtaxed middle Americans.
Over that past few years Americans have heard a lot of talk about tax
relief
[[Page S4095]] but they have yet to see Washington act on their
promises. Today, Mr. President, we signal our intent to not just talk
about, but to act upon tax relief for our citizens, especially our
families.
This legislation is a blueprint that shows that deficit reduction and
tax relief can go hand-in-hand. These goals are not mutually exclusive
if Congress is willing to make the hard choices necessary to put our
fiscal house in order. We clearly need to restore fiscal integrity and
economic soundness to the budget process. We need the kind of change
that will force Congress to act differently by rewriting the ground
rules of the game. For too long we have chosen to take the easy road by
putting off or ignoring the frugal spending path that over and over we
have laid out but failed to adhere to.
This legislation we introduce today includes a real sequester
provision so that if Congress once again cannot make the hard spending
choices they will be made anyway. The Family, Investment, Retirement,
Savings and Tax Fairness Act--families first--charts a different course
and reorders our spending priorities.
Last year's election proves that the American people are fed up with
the status quo--they want action. Action taken to eliminate the deficit
and the ever growing debt that we are burdening our children with and
action to relieve them of the taxes that are stifling their quality of
life and leaving them with less and less in every pay check.
Families first recognizes three central principles.
First, American families are overtaxed. High taxes rob families of
the resources needed to care for children.
Second, the private sector, not government creates jobs. We must
reduce the cost of capital and encourage productive investment by
reducing the tax on growth. We will find new jobs in a growing economy,
not in a growing government.
Third, the American people want deficit reduction upfront--obviously
the President did not hear that message. His fiscal year 1996 budget
just keeps reinventing the same spending cuts that will take place some
time in the future. Is this any kind of leadership when the Nation's
debt now stands at over $4.7 trillion? That is over $18,500 for every
man, woman, and child in this Nation. This is a carefully planned,
meticulously documented theft from our children.
Specifically, the families first bill does the following:
First, it provides relief to American families with children through
a tax credit of $500 per child;
Second, it provides incentives for businesses to create jobs,
including a reduced capital gains tax rate, a neutral cost recovery
plan for capital investments, and expanded IRA's;
Third, it repeals the retirement earnings test on older Americans;
Fourth, it places a 2 percent cap on the growth of Federal spending;
Fifth, it creates a commission, modeled after the Base Closure
Commission, to identify the legislative changes needed to meet the cap.
If Congress fails to approve the commission's plan by a date certain,
the cap would be enforced by sequester, holding Social Security
harmless.
The bill is not only entirely paid for by the spending cap--our plan
cuts the deficit by half in 5-years, eliminating it altogether in less
than 10 years.
I would like to take a moment to discuss the family tax credit
component of this plan which addresses an inequity that has been
developing for decades.
Families are finding it more and more difficult to bear the financial
costs of raising children. According to Family Economics Review, the
average American family it faces costs of between $4,000 and $5,000 per
year, per child.
This is because, over the last several decades, tax burdens have been
radically redistributed, not from poor to rich or rich to poor, but
directly on families with children.
The facts are these. Adjusting for inflation, single people and
married couples with no children pay about the same percentage of their
income in taxes as they did at the end of World War II. In 1948, the
typical family of four paid just 3 percent of its income to the Federal
Government in direct taxes. In 1992, the equivalent family paid nearly
24.5 percent of its income to the Federal Government. This is an
increase of over 717 percent. It is time to restore fairness in the Tax
Code.
The reason is simple. The personal exemption--the way the Tax Code
adjusts for family size--has been eroded by inflation and neglect. The
exemption that once protected families with children has fallen
significantly in the last six decades. Currently, the personal
exemption is $2,450 if this had kept pace with inflation the personal
exemption would be over $7,000.
Many households now have two working parents who spend greater
amounts of time away from their children out of simple necessity.
Rising healthcare and education costs in particular place the family
under great financial pressure.
This tax burden translates into less time that families can spend
together. Families have 40 percent less time to spend together today
than they did 25 years ago. Families are clearly working harder,
longer, for less.
A $500-per-child tax credit would give a family of four over $80 a
month extra for groceries, school clothes for the kids, or savings for
education, et cetera. Our bill will reduce the tax burden, allowing
families to keep more of their hard earned dollars. It will empower
families to make their own choices and rely less on government; 50
million children are eligible for this credit. In my own State of
Indiana, 1.1 million children are eligible, enabling Hoosier families
to keep $555 million of their hard earned money each year.
Advocating family tax relief, President Clinton said, ``$400, people
say it's not very much money. I think it is a lot of money. It is
enough for a mortgage payment. It is enough for clothes for the kids,
and enough to have a big, short-term impact on the economy.''
No change is more urgent for average families than tax reform.
Increased taxation on families with children is a tool of the bully,
picking on the weak. For larger families it has meant a recession in
both good times and bad, a recession that
never seems to end. But for decades families have suffered quietly.
There are many programs like the earned income tax credit designed
specifically to help impoverished families--as there should be. This
commitment is constant and important. But we must not forget that it is
middle income families who have not only been forgotten, but given
extra financial burdens. It is time to target this group for relief--as
we have done in the past for others. Over 85 percent of the family tax
relief provided by this credit goes to Americans with family incomes of
less than $75,000. This relief is not a handout. It is a matter of
simple justice. It is a return to tax fairness.
This plan tackles the two great threats to the American family--the
budget deficit and the ever growing tax burden. In addition, it
recognizes that only a growing economy will provide jobs. It recognizes
that high taxes bleed an economy of its productive power. They strip
individuals of incentive and devalue their work.
For too long we have dismissed their needs to answer the calls of
other interests. I hope my colleagues will join us in this fight for
the American family. We must give them the tax relief they deserve.
key facts on tax credit
Fifty million children eligible for the credit.
It eliminates the total tax burden for families making less than
$23,000.
Some 4.7 million families would have their tax liability eliminated.
Mr. President, over the past few years Americans have heard a lot of
campaign promises and a lot of talk about tax relief, but they have yet
to see Washington act on these promises.
Today, Mr. President, in sending this legislation to the desk for
consideration, we signal our intent to not just talk about tax relief
but to act upon it for our citizens, and especially for our families.
I am pleased that this morning my new Senate colleague, Senator Grams
from Minnesota, who joined with me in the last Congress as a Member of
the House of Representatives in sponsoring this legislation, has joined
us and will be joining me in advancing this legislation before this
body.
Already our colleagues on the other side of the Capitol have begun to
take
[[Page S4096]] action on many of the reforms that are laid out in this
legislation. Now it is time for the Senate to deliver on a promise made
by so many to give family tax relief to the hard-working, overtaxed,
middle-income Americans.
This legislation is a blueprint that shows that deficit reduction,
which surely we must engage in, and tax relief can go hand in hand.
These goals are not mutually exclusive, if we are willing to make the
hard choices necessary to put our fiscal house in order but in doing so
recognizing the impact on the average American family today and their
need for substantive relief and deal with the burdens and expenses of
raising children in today's society.
Our efforts are incorporated in legislation with the acronym FIRST.
FIRST stands for family, investment, retirement savings, and tax
fairness. It combines efforts to address a glaring deficiency in our
Tax Code, a deficiency that robs middle-income Americans of hard-earned
dollars to spend as they see fit and as they see the need to raise
their children, to pay the mortgage, to rent the apartment, to make the
car payments, to buy the clothes, to save for the education, to meet
the needs, the ever-growing needs, of their ever-growing children.
It combines that relief with real, meaningful incentives for the
business enterprises of America, to expand, to accumulate capital and
to create the jobs which those children will be seeking as soon as they
finish their education. And it adds to that relief for our senior
citizens who are able and want to keep working beyond retirement age
but whose income is severely eroded by the offsets that are required
under the current law. We lift the earnings requirement so that those
seniors that are willing and are able to continue working beyond
retirement can do so without penalty.
There are incentives for contributions to an IRA, an IRA designed to
help with those burdens and those expenses of providing for education
and providing for the purchase of a home and other needs.
It does so with the recognition that we have to pay real attention to
the ever-growing debt burden which is saddling this generation, and
particularly future generations, with a debt and an interest cost that
they may be unable to pay and that will surely limit their
opportunities in the future.
Deficit reduction is a serious effort that must be undertaken by this
Congress and not future Congresses. So we are trying to reconcile two
very important goals, and we think we have done that in this first
legislation, because combined with these incentives for family relief
and for business growth and for help for our seniors, combined with
this is an effort to rein in the costs--excessive costs--of the
spending of this Congress and of this Government, by placing a cap on
the overall rate of growth.
I want to stress that phrase ``rate of growth.'' Those who say that
we need to drastically slash this and that, and take money away from
this program or that program, are not recognizing the reality that if
we simply limit the rate of growth of Government spending, we can free
up money to provide significant deficit reduction, put us on a path to
a balanced budget and, at the same time, reorder our priorities and
direct funds into areas where they are needed the most.
Our job as elected representatives is to wisely, efficiently, and
effectively spend the taxpayers' hard-earned dollars and make sure that
those dollars spent at the Federal level are spent in a way that gives
us the best results. We have been pointing to a whole number of
programs that are marginal at best and, clearly, as we look at limiting
the rate of growth of the Federal Government, we will need to look at
our priorities.
There are some programs that probably are not performing the service
that was intended and they ought to be flat out eliminated. They no
longer are needed or are not doing the job. Other programs have
marginal benefit but do not rank high in the priority list. I suggest
that those programs need to be reduced in the amount of expenditures
and amount of budget they are given each year. Some may be 1 or 2
years, some may be 5, 10, some 30--who knows. We need to look at the
effectiveness of those programs and reduce that spending. Others ought
to be frozen. They are providing an effective service, but we cannot
afford to continue increasing them at the past rate, so let us freeze
at the current level.
Yes, Mr. President, there are probably some programs that ought to be
increased because they are meeting necessary needs for Americans. They
go to important programs and they deserve an increase. With the first
bill, we are saying let us put an overall cap on the rate of growth at
about 2 percent, and in doing so let us back it up with a spending
commission that will recommend cuts and provide the mechanism, as we
have done in base closing, to ensure that Congress lives up to its
promise. If we do that, as I said, we can balance the budget over a
number of outyears--roughly 8 years--we can balance the budget. We can
also reprioritize our spending in the areas that I have talked about--
family relief, investment in new jobs, help for our seniors, and some
other important programs.
The core of this program is the family relief. Families today are
struggling to meet ever-rising tax demands. American families are
overtaxed, and they rob our families of the resources needed to care
for children.
In 1948, a typical family of four paid just 3 percent of its income
to the Federal Government in direct taxes. In 1992, the equivalent
family paid nearly 24\1/2\ percent of its income to the Federal
Government--an increase of over 717 percent. At times, special-interest
deductions have been granted to all types of special interests in our
country under our Tax Code. But the most special of all special
interests--the family--has been shorted. These other deductions have
been at the families' expense. They are struggling to keep up.
Personal exemption has not kept pace. Today, it is $2,450 per
dependent. If it had kept pace with inflation, it would be well over
$7,000. Today, families have 40 percent less time to spend with their
children, partly because they are out working trying to make ends meet.
They are clearly working harder, longer, for less.
The $500 per child tax credit for children under 18 will provide real
relief for families struggling to meet the needs of their family and to
pay the bills. It is the central part of the package that we are
introducing. Over 85 percent of this family tax relief provided by this
credit will go to American families with incomes of less than $75,000.
The relief is not a handout. It is a matter of simple fairness and
simple justice. It is a return to tax fairness under the code.
Surely, Mr. President, as we look at how we spend the taxpayers'
dollars, as we look at how we reprioritize our spending--and that is
the exercise we are going through here in this Congress--surely there
will be room, or there should be room, for families. Surely, we can
find a way to direct our expenditure of Federal dollars to help
struggling families. And we are not giving them the money back. We are
saying we are going to allow you to keep more of your hard-earned
dollars; you are going to be able to send less of your paycheck to
Washington, and you are going to be able to make the decisions which
are in the best interests of your children and your family. Surely, in
all of our debate as to where we spend the taxpayers' dollars and how
we spend the taxpayers' dollars, we can make room for the family.
Mr. President, I am pleased that Senator Grams and I are joined by a
number of our colleagues as original cosponsors. I ask unanimous
consent that Senators Grams, Craig, Lott, Brown, McCain, Kyl, and
Inhofe be added as original cosponsors.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COATS. I also note, Mr. President, that last year, as part of the
Republican alternative budget, every Republican Senator voted for that
Republican alternative budget which, unfortunately, failed. We did not
have enough votes to gain a majority. But the core of that alternative
Republican budget was this first bill and the family tax relief, which
is the heart of that.
So I anticipate that most of our colleagues, if not all, will join
Senator Grams and I. I am so pleased to have him join us in the U.S.
Senate. He will
[[Page S4097]] be carrying the ball with all of us, advancing what I
think is an extraordinarily important concept and idea.
We have terrific support in the House of Representatives. Just 2 days
ago, the Ways and Means Committee reported out a bill with many of
these features, the central part of that bill. So it is now time for
the Senate, Mr. President, to act on its promises, to fulfill its
commitment, and to put families at the centerpiece of the actions that
we take this year.
With that, Mr. President, I yield my time and yield whatever time the
Senator from Minnesota wishes to consume.
How much time remains?
The PRESIDING OFFICER. We have 20 minutes remaining.
Mr. COATS. I yield to the Senator from Minnesota.
Mr. GRAMS. Mr. President, I am pleased to join the distinguished
Senators from Indiana and Idaho this morning, and a number of the other
Senators who will be joining us later this morning, to talk about this
very important issue--tax cuts--and to help continue the leadership on
this most important issue.
I am proud to be a coauthor of this very important legislation,
families first.
Mr. President, today we begin a debate that has been too long in
coming. The American people are in desperate need of relief from their
own Government, a Government that thinks it can spend our money better
than we can spend our money. It has spent the last four decades just
trying to prove that point.
In 1947, Americans paid just 22 percent of their personal income in
the form of taxes--all taxes--to Federal, State, and local governments,
including property taxes and the like.
Today, 40 years and hundreds of tax increases later, nearly 50 cents
of every dollar earned by middle-class Americans goes to the Government
to feed Government priorities. ``We will solve all of our problems,''
says Washington, ``if you will just send us more of your money.'' So we
do, year after year. We have reached the point now where most families
pay more tax dollars to the Federal Government than they spend for
food, clothing, transportation, insurance, and recreation combined.
The 1993 Clinton tax bill did not help, either. As the largest tax
increase in American history, it hit middle-class Americans right where
it hurts the most--in their wallets.
Mr. President, the bottom line is taxes are just too high. The tax
burden falls too heavily on the middle class. And, Mr. President, the
result is that more and more Americans are being forced out of the
working class and being forced into the welfare class.
But with their ballots last November, Americans called for tax
relief. With the change in leadership in Washington, Congress is now
finally in a position to deliver on that request.
Mr. President, we are taking the first step today with the
introduction of the families first act--legislation calling for a $500
per child tax credit.
The $500 per child tax credit is relief for middle-class America.
And I would just like to show one of the few charts that we have out
here this morning and talk about what this means.
In my home State of Minnesota, families first, if enacted, would
provide nearly $500 million every year in tax relief to families across
the State of Minnesota--$500 million into the pockets of families and
individuals who will decide best on how to spend on those important
needs such as food, clothing, shelter, education, or health care. They
will make those decisions rather than some bureaucrat 1,100 miles away
from Minnesota in Washington.
If you look at the home State of Senator Dan Coats in Indiana and
what this would mean, it would mean for Indiana residents over $550
million a year in tax relief--$550 million every year. You add this
total, and for all States it would be a $25 billion-a-year tax cut that
would go into the pockets of families to decide how to spend. It would
take that decisionmaking process out of Washington and put it down
where it really belongs, and that is with the individuals who know best
how to handle the problems that their families are facing.
As this chart clearly shows, our plan would return, as I said, $25
billion every year to families nationwide. And that includes from $418
million in Alabama every year to $61 million for the State of Wyoming
residents. Again, $500 million a year would be dedicated to families in
my home State of Minnesota.
Fully more than 90 percent of the tax relief would go to working
Americans making annual salaries of $60,000 or less. So this is a plan
that is targeted. More than 90 percent of the tax relief goes right to
the individuals that have felt the burden the most over the last 30
years, and that is families making $60,000 or less.
Most importantly, our $500 per child tax credit would let 53 million
working families keep more of their own hard-earned tax dollars. And
$500 per child adds up to a lot more than just some pocket change.
I think, if you pick up the phone and ask many of the constituents in
your districts if $500 or $1,000 for two children or $1,500 for three
children would not make a big difference in their finances every year,
for middle-income taxpayers, it may mean health insurance for their
families where there was not any before, or maybe a better education
for their children when before there were no other options. To lower
income Americans, it may mean not having to pay any taxes at all.
Mr. President, there is widespread support also for the $500 per
child tax credit among Americans in every income range, in every age
bracket, among those with children and those without. These are the
people who feel the pain every April 15 when they pay their taxes and
who think it is time for the Government to feel a little bit of that
pain instead.
But how can a government grappling with a $4.8 trillion national debt
afford tax relief of any kind?
Well, the families first bill, which became the centerpiece of the
budget plans offered last year by both Senate and House Republicans,
pays for the tax credit by cutting Government spending. Every single
dollar in tax relief is offset by another dollar in spending cuts.
I just want to refer again to the charts for the support that we have
nationwide for a tax cut proposal. If you look at this one chart and
you look at the different age groups, 18 to 25, 76 percent would
approve of a tax cut. In the age group 26 to 40, 77 percent said, yes,
let us have a tax cut. From 41 to 55, over 56 percent, and so on; 62
percent for 55 to 65; and, 65 and older, 58 percent said, yes, they
would favor tax relief.
And if you look at income levels, people below $20,000, said, yes,
they would like to have some more tax relief. And in all income groups
it is either in the 60 or 70 percent range that say yes. So this is
overwhelming support nationwide by every age group, every income group
that really believes we are being taxed too much.
And by putting the Federal Government on a strict diet by capping the
growth of Federal spending at 2 percent, we can balance the budget by
the year 2002, including the tax cuts. Our bill proves that we can
afford tax relief at the same time that we begin to restore some fiscal
sanity to Washington.
During the debate ahead, we will hear calls to water down the $500
per child tax credit. We will be asked to means test it or to even
lower the dollar amount. Some will want to limit the ages of the
children eligible, or duck out on real relief by substituting an
increase in the personal deduction. Some may oppose tax relief
completely.
But that is not what the Americans were promised last year, or what
the voters mandated in November. If we backtrack now, we will have to
face an American public that is tired of being led on by politicians
who promise one thing and then never deliver.
We have to hold firm on behalf of every American taxpayer and deliver
the tax relief that we promised.
I want to commend our colleagues on the House Ways and Means
Committee, who this week kept the covenant they made with the voters in
the Contract With America and passed the $500 per-child tax credit.
This was a victory for the taxpayers and a clear signal to the American
people that they have not been forgotten by this Congress.
Mr. President, I am proud that Senator Coats and our Senate
colleagues--
[[Page S4098]] what we call the 500 club--will be following up on the
House's good work and fighting for the promises made in November: the
promises of lower taxes, smaller government, stronger families.
Those are the principles embodied by the $500 tax credit--the
principles that will once again put families first.
I would like to now yield some time to my good friend and colleague
from Arizona.
Mr. KYL. I thank the Senator from Minnesota.
The PRESIDING OFFICER. The Senator from Arizona is recognized.
Mr. KYL. Mr. President, I am pleased to be an original cosponsor of
the families first legislation that our colleague, Senator Rod Grams,
is introducing today. This important legislation would provide badly
needed tax relief for American families. It would repeal the Social
Security earnings limitation. It would cut capital gains taxes and
provide other pro-growth economic incentives, while still putting the
budget on track to balance by the year 2002. It does so by cutting
spending.
Balancing the budget does not mean that taxes have to be increased.
Nor does it preclude consideration of tax cuts. The problem is not that
the Federal Government is collecting too little in tax revenue. The
Government is simply spending too much.
As a result of the tax increase Congress approved in 1990, Americans
paid over $20 billion in new taxes. They paid another $35 billion as a
result of President Clinton's tax increase in 1993. Taxes increased,
but so did Federal spending. It climbed from $1.2 trillion in 1990 to
about $1.5 trillion this year, and it will rise to $1.6 trillion next
year. That is a 33 percent increase in spending in just 6 years.
Taxes--which are already too high--will never be high enough to satisfy
Congress' appetite for spending.
Since 1948, the average American family with children has seen its
Federal tax bill rise from about 3 percent of income to about 24.5
percent today. Combined with State and local taxes, that burden rises
to a staggering 37.6 percent.
Senior citizens have been hit hard by tax increases as well. The
earnings limitation is bad enough, but combined with the 1993 Clinton
tax increase on Social Security benefits, the marginal rate now
experienced by some seniors amounts to 88 percent, twice the rate paid
by millionaires. That is not taxation. It is confiscation.
Mr. President, the American people know what it means to balance a
budget--to struggle to make ends meet--and they know better than the
Government how to provide for themselves and their children. Parents
just want a chance to keep more of what they earn to put food on the
table, a roof over their heads, and their kids through school. The $500
per child tax credit in the families first bill is no panacea, but it
is an important step in the right direction.
In fact, about 35 million families across the nation would be
eligible for the bill's $500 per child tax credit. Among those who
would benefit the most are 4.7 million low-income families who would
see their entire Federal tax burden eliminated--4.7 million families.
As pointed out in a Heritage Foundation report last year, ``a $500
per child tax credit would give a family of four earning $18,000 per
year a 33-percent tax cut, and a family earning $40,000 per year a 10-
percent tax cut, while giving a family earning $200,000 per year a cut
of only 1.5 percent.''
So the families first credit is fair. It targets relief to those who
need it most--low- and middle-income families across the Nation. The
bill also repeals the Social Security earnings limitation which is
inherently unfair to people who need and deserve their full Social
Security benefits and who also want to work. Not only should the
earnings test be repealed, the Clinton tax increase on Social Security
should be repealed as well.
I know there are those who will say that deficit reduction is more
important than tax relief, and they may oppose the bill. I disagree. I
have never understood how taking more money out of the pockets of the
American people can make them better off. Taxing people too much makes
them worse off, and it slows down the economy. If the goal is to
maximize tax revenues, as opposed to tax rates, then tax relief is not
inconsistent with the goal of deficit reduction. It is integral to the
goal of reducing the deficit.
As my colleagues have heard me point out on a number of occasions,
revenues to the Treasury have fluctuated around a relatively narrow
band of 18 to 20 percent of gross national product for the last 40
years. That is despite tax increases and tax cuts, recessions and
expansions, and economic policies pursued by Presidents of both
parties.
Since revenue as a share of the gross domestic product is virtually
constant, the only way to raise revenue is to enact policies that
foster economic growth and opportunity. In other words, 18 to 20
percent of a larger GDP represents more revenue to the Treasury than 18
to 20 percent of a smaller GDP.
That is the basis for these Federal spending limits that I proposed
in other legislation. It is the reason the tax cuts in the families
first bill make good economic sense. Empower American families and they
can do more for themselves and depend less on Government. Cut taxes and
stimulate the economy and more people can go to work. There will
actually be more economic activity to tax, more revenue to the
Treasury, despite the lower tax rates.
Last fall, the American people sent a loud and clear message to
Congress: It is time to end business as usual. They want less
Government, not more. They want tax relief and lower Government
spending. Let Congress help President Clinton keep the promise he made
in putting people first, to grant additional tax relief to families and
children. Let Congress pass the families first bill.
Mr. COATS. Mr. President, may I inquire how much time remains?
The PRESIDING OFFICER. There are 6 minutes remaining.
Mr. COATS. I yield 5 minutes to the Senator from Texas and reserve
the last minute for the Senator from Minnesota.
Mrs. HUTCHISON. Thank you, Mr. President. I want to thank my
colleague, Senator Coats, who sponsored this bill last year. I was a
willing and hopefully helpful cosponsor. Now we have Senator Grams, a
new freshman, who did sponsor it on the House side last year and has
come in to cosponsor it this year.
This is a very important step that we must take. In 1930, we saw the
beginning of the change in course in our country, the beginning of more
Government, bigger Government, more spending, which also brought more
encroachment on everyone's lives.
I think in 1994, the people of America said, ``No, stop. Stop the big
Government growth. Stop the encroachment on our lives. Stop the
arrogance in Washington, DC. Enough is enough.'' They said, ``We want
to go back to self-help and self-reliance. We want to go back to the
basics, and we want the American family to be the strength that it has
been, the fabric of society that it has been, that has brought us to
this strong and great America that we have.''
We have dissipated so much of the strength of our family through the
dependence of Government. I remember the story of a woman who was in
the grocery store line who said, ``I saw someone using food stamps,
buying items of food that I had passed up because I was trying to save
to buy something for my children, that I had to do as a little bit of
an extra.''
It was that frustration that I think people felt when they went to
the polls in 1994 and said, ``We do not think that's right.'' The
people who are pulling the wagon, the people who are saying, ``We are
saving our money to raise our families, and we are having a hard time
doing it,'' wanted a change.
The families first legislation will bring about that change, and I
have to say that I do admire the Ways and Means Committee and the
chairman, Bill Archer, who did report a bill out that has many of the
things in the families first bill that we are introducing today.
Perhaps they will pass those in the House first.
I will be proud, then, to come in and take some of those items from
our families first legislation that we are reintroducing today. The
$500 per child tax credit is something that will help those families
make ends meet, the ones who are having a hard time. After
[[Page S4099]] all, it is their money. It is their money that they have
worked so hard to earn. Why should they not be able to keep it? Why
should they not decide what is best for them, rather than having
someone from Big Brother Government deciding what is best for them.
I think if the American people believe that they can manage their own
resources better than the Federal Government, that we should humor them
and let them keep their money. That is what the families first
legislation will do.
I have been a proponent of increasing IRA's, because I think if we
help people retire with security that that will be good for our
country. It is self-help. It is allowing people to have that security
in their old-age years by encouraging savings, which encourages
investments, which encourages new jobs in this country, too.
I have introduced a bill to give homemakers IRA's, and if we can get
this families first bill to the floor, I know that Senator Coats and
Senator Grams are going to support my amendment to have homemakers
added to IRA's because that is a very important issue. It is important
to say that the work done inside the home is every bit as important, if
not more important, than the work done outside the home, because that
is what keeps this country strong--the families, where the families are
together. If the homemaker is staying home and raising children, I
think we should reward her efforts, just as much as anyone who is
working outside the home.
I have seen my colleague, Senator Coverdell, come in, and I want to
make sure everyone has a chance to weigh in on this legislation. I will
just say, Mr. President, that this is families first.
It is time to go back to basics, to appreciate how important the
family unit is, that balancing the budget is for the future of our
children and grandchildren. That is a commitment that I have, and all
who are cosponsoring this legislation will work to try to make sure
that we give to our children and grandchildren the same kind of strong
America that we were able to grow up in and love. Thank you.
Mr. COATS. Mr. President, I ask unanimous consent to add Senator
Hutchison as an original cosponsor of this legislation.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COATS. Mr. President, I yield the remaining time to Senator
Grams.
Mr. GRAMS. Mr. President, I ask unanimous consent to have printed in
the Record copies of the tables we have presented here.
There being no objection, the tables were ordered to be printed in
the Record.
[Chart 1]
$500 PER-CHILD TAX CREDIT RETURNS MONEY TO THE TAXPAYER
------------------------------------------------------------------------
Number of Amount State
State children could receive
eligible annually
------------------------------------------------------------------------
Alabama..................................... 836,486 $418,243,000
Alaska...................................... 134,962 67,481,000
Arizona..................................... 744,524 372,262,000
Arkansas.................................... 524,241 262,120,500
California.................................. 6,625,012 3,312,506,000
Colorado.................................... 737,544 368,772,000
Connecticut................................. 723,674 361,837,000
Delaware.................................... 172,017 86,008,500
District of Columbia........................ 81,195 40,597,500
Florida..................................... 2,233,271 1,116,635,000
Georgia..................................... 1,226,073 613,036,500
Hawaii...................................... 295,346 147,673,000
Idaho....................................... 263,945 131,972,500
Illinois.................................... 2,501,462 1,250,731,000
Indiana..................................... 1,110,887 555,443,500
Iowa........................................ 641,094 320,547,000
Kansas...................................... 651,174 325,587,000
Kentucky.................................... 648,121 324,060,500
Louisiana................................... 868,702 434,351,000
Maine....................................... 223,255 111,627,500
Maryland.................................... 1,038,365 519,182,500
Massachusetts............................... 1,110,453 555,226,500
Michigan.................................... 1,866,891 933,445,500
Minnesota................................... 946,639 473,319,500
Mississippi................................. 540,359 270,179,500
Missouri.................................... 981,008 490,504,000
Montana..................................... 197,938 98,969,000
Nebraska.................................... 427,724 213,862,000
Nevada...................................... 247,958 123,979,000
New Hampshire............................... 246,361 123,180,500
New Jersey.................................. 1,522,756 761,378,000
New Mexico.................................. 321,854 160,927,000
New York.................................... 3,575,251 1,787,625,500
North Carolina.............................. 1,359,138 679,569,000
North Dakota................................ 146,786 73,393,000
Ohio........................................ 2,392,172 1,196,086,000
Oklahoma.................................... 644,733 322,366,500
Oregon...................................... 607,615 303,807,500
Pennsylvania................................ 2,507,260 1,253,630,000
Rhode Island................................ 159,461 79,730,500
South Carolina.............................. 777,909 388,954,500
South Dakota................................ 158,309 79,154,500
Tennessee................................... 829,778 414,889,000
Texas....................................... 3,628,180 1,814,090,000
Utah........................................ 473,448 236,724,000
Vermont..................................... 116,058 58,029,000
Virginia.................................... 1,286,275 643,137,500
Washington.................................. 1,141,341 570,670,500
West Virginia............................... 346,642 173,321,000
Wisconsin................................... 1,175,695 587,847,500
Wyoming..................................... 122,668 61,334,000
------------------------------------------------------------------------
DOLLARS RETURNED TO EACH STATE BY A $500 PER-CHILD TAX CREDIT
[Source: US Census, 1992 Current Population Survey]
------------------------------------------------------------------------
Number of Number of Amount each
Number of families children State could
families with eligible receive
State in each children for a annually from
State in each $500 tax $500 per-child
State credit tax credit
------------------------------------------------------------------------
Alabama................ 984,846 607,775 836,486 $418,243,000
Alaska................. 131,801 83,770 134,962 67,481,000
Arizona................ 901,059 472,805 744,524 372,262,000
Arkansas............... 572,309 366,520 524,241 262,120,500
California............. 6,864,996 4,444,459 6,625,012 3,312,506,000
Colorado............... 832,055 493,148 737,544 368,772,000
Connecticut............ 835,801 466,951 723,674 361,837,000
Delaware............... 181,252 105,034 172,017 86,008,500
District of Columbia... 101,346 63,940 81,195 40,597,500
Florida................ 3,410,974 1,698,710 2,233,271 1,116,635,500
Georgia................ 1,555,254 909,966 1,226,073 613,036,500
Hawaii................. 293,296 167,417 295,346 147,673,000
Idaho.................. 251,430 151,431 263,945 131,972,500
Illinois............... 2,873,440 1,622,908 2,501,462 1,250,731,000
Indiana................ 1,454,936 851,840 1,110,887 555,443,500
Iowa................... 683,268 383,031 641,094 320,547,000
Kansas................. 637,247 393,479 651,174 325,587,000
Kentucky............... 901,634 536,468 648,121 324,060,500
Louisiana.............. 996,911 646,684 868,702 434,351,000
Maine.................. 298,512 156,799 223,255 111,627,500
Maryland............... 1,194,734 675,067 1,038,365 519,182,500
Massachusetts.......... 1,437,080 750,685 1,110,453 555,226,500
Michigan............... 2,254,735 1,273,610 1,866,891 933,445,500
Minnesota.............. 1,043,603 570,424 946,639 473,319,500
Mississippi............ 572,963 425,312 540,359 270,179,500
Missouri............... 1,256,963 697,847 981,008 490,504,000
Montana................ 205,770 124,551 197,938 98,969,000
Nebraska............... 414,899 237,460 427,724 213,862,000
Nevada................. 313,332 168,220 247,958 123,979,000
New Hampshire.......... 307,359 158,319 246,361 123,180,500
New Jersey............. 1,893,615 1,006,496 1,522,756 761,378,000
New Mexico............. 365,776 239,867 321,854 160,927,000
New York............... 4,138,706 2,494,133 3,575,251 1,787,625,500
North Carolina......... 1,663,710 940,231 1,359,138 679,569,000
North Dakota........... 146,146 87,390 146,786 73,393,000
Ohio................... 2,650,194 1,577,405 2,392,172 1,196,086,000
Oklahoma............... 782,007 456,751 644,733 322,366,500
Oregon................. 745,406 422,519 607,615 303,807,500
Pennsylvania........... 3,057,172 1,568,632 2,507,260 1,253,630,000
Rhode Island........... 240,767 111,470 159,461 79,730,500
South Carolina......... 891,157 569,749 777,909 388,954,500
South Dakota........... 173,385 96,221 158,309 79,154,500
Tennessee.............. 1,242,636 637,780 829,778 414,889,000
Texas.................. 3,964,267 2,582,258 3,626,180 1,814,090,000
Utah................... 390,211 249,945 473,448 236,724,000
Vermont................ 142,093 81,163 116,058 58,029,000
Virginia............... 1,528,524 859,620 1,286,275 643,137,500
Washington............. 1,252,277 737,136 1,141,341 570,670,500
West Virginia.......... 452,953 266,844 346,642 173,321,000
Wisconsin.............. 1,252,892 722,639 1,175,695 587,847,500
Wyoming................ 117,117 69,514 122,668 61,334,000
------------------------------------------------------------------------
Mr. GRAMS. Mr. President, these charts show strong support from every
age and income group across the country, their support for a tax cut,
and also for some information, how much it would mean to each.
I say to the good Senator from Texas who just spoke, for families in
Texas alone, it would be over $1.8 billion a year in tax relief.
Mr. President, I am pleased to join the distinguished Senators from
Indiana and Idaho, who I thank for their early and continued leadership
on this most important issue.
I thank my distinguished colleague from Indiana, and I am proud to be
a coauthor of this important legislation to put families first.
Mr. President, today we begin a debate that has been too long in
coming.
The American people are in desperate need of relief from their own
Government--a Government that thinks it can spend our money better than
we can, and has spent the last four decades trying to prove it.
In 1947, Americans paid just 22 percent of their personal income in
the form of taxes.
Today, 40 years and hundreds of tax increases later, nearly 50 cents
of every dollar earned by middle-class Americans goes to the
Government, to feed the Government's priorities.
``We'll solve all your problems,'' says Washington, ``if you'll just
send us more money.''
So we do; year after year.
We've now reached the point where most families pay more tax dollars
to the Federal Government than they spend for food, clothing,
transportation, insurance, and recreation combined.
The 1993 Clinton tax bill didn't help, either. As the largest tax
increase in American history, it hit middle-class Americans right where
it hurt the most--their wallets.
Mr. President, taxes are too high.
The tax burden falls too heavily on the middle class.
And, Mr. President, the result is that more and more Americans are
being forced out of the working class and into the welfare class.
But with their ballots in November, Americans called for tax relief.
With
[[Page S4100]] the change in leadership in Washington, Congress is
finally in a position to deliver.
Mr. President, we are taking the first step today with the
introduction of the families first act--legislation calling for a $500
per-child tax credit.
The $500 per-child tax credit is relief for middle-class America.
As this chart clearly shows, our plan would return $25 billion every
year to families nationwide, from $418 million in Alabama to $61
million in Wyoming.
$500 million would be dedicated to families in my home State of
Minnesota.
Fully 90 percent of the tax relief goes to working Americans making
annual salaries of $60,000 or less.
Most importantly, our $500 per-child tax credit would let 53 million
working families keep more of their own hard-earned tax dollars. And
$500 per child adds up to a lot more than just pocket change.
For middle-income taxpayers, it may mean health insurance for their
families, where there wasn't any before, or a better education for
their children, when before there were no options.
For lower income Americans, it may mean not having to pay any taxes
at all.
Mr. President, there is widespread support for the $500 per-child tax
credit among Americans in every income range and every age bracket--
among those with children and those without.
These are the people who feel the pain every April 15 when they pay
their taxes and who think it's time for the government to feel a little
of the pain instead.
But how can a government grappling with a $4.8 trillion national debt
afford tax relief of any kind?
The families first bill, which became the centerpiece of the budget
plans offered last year by both Senate and House Republicans, pays for
the tax credit by cutting government spending.
Every single dollar in tax relief is offset by another dollar in
spending cuts.
And by putting the Federal Government on a strict diet by capping the
growth of Federal spending at 2 percent, we'll balance the budget by
the year 2002.
Our bill proves that we can afford tax relief at the same time we're
restoring fiscal sanity in Washington.
During the debate ahead, we'll hear calls to water down the $500 per-
child tax credit.
We'll be asked to means test it or lower the dollar amount.
Some will want to limit the ages of the children eligible or duck out
on real relief by substituting an increase in the personal deduction.
Some may oppose tax relief completely.
That's not what Americans were promised last year, or what the voters
mandated in November.
If we backtrack now, we'll have to face an American public that is
tired of being led on by politicians who promise one thing and never
deliver.
We have to hold firm on behalf of every American taxpayer and deliver
the tax relief we promised.
I want to commend our colleagues on the House Ways and Means
Committee, who this week kept the covenant they made with the voters in
the Contract With America and passed the $500 per-child tax credit.
This was a victory for the taxpayers and a clear signal to the
American people that they have not been forgotten by this Congress.
Mr. President, I'm proud that Senator Coats and our Senate
colleagues--what we call the 500 Club--will be following up on the
House's good work and fighting for the promises made in November: the
promises of lower taxes, smaller government, stronger families.
Those are the principles embodied by the $500 tax credit, the
principles that will once again put families first.
I would like to close by saying how important I feel about tax cuts
for Americans, and American families specifically. We promised, we
campaigned, we talked about tax relief for American families across the
country during the 1994 elections, and the Americans spoke loud and
clear at the polls in November that they agreed, because they know how
hard it hits them in the wallet every year.
My good friend from Wisconsin, the Senator from Wisconsin, is among
those leading the charge on the Senate floor every day, talking about
how we do not need tax cuts, how Government in Washington should
continue to expect to receive these tax dollars, and that these
Chambers can better make the decision on how to spend your money than
you can spend it yourself.
In Wisconsin, that means about $590 million a year in tax relief,
something the Senator from Wisconsin does not think is important to the
residents of Wisconsin. I ask him to call some of his residents to see
how important they feel any form of tax relief would be in 1995 for
them.
I just wanted to wrap up again by thanking the Senator from Indiana
and the other Senators who have spoken this morning on behalf of
American taxpayers. I hope that we can rely on their support and the
public support in making their calls and rallying behind this very,
very, important issue of tax cuts and tax relief.
We are to a point now where we assume that every dollar that
Americans make belongs to Government in some form and that we will
decide through tax cuts or tax credits or tax breaks how much they are
going to keep and how much Washington is going to get. I think, as the
Senator from Indiana pointed out very succinctly, it is their money and
this will allow them to keep more of their hard-earned tax money in
their pockets.
So I wanted to thank the other Senators for helping this morning. I
yield back my time.
______
By Mr. HARKIN:
S. 569. A bill to amend the Balanced Budget and Emergency Deficit
Control Act of 1985 to combat waste, fraud, and abuse in the Medicare
Program, and for other purposes; to the Committee on the Budget and the
Committee on Governmental Affairs, jointly, pursuant to the order of
August 4, 1977, with instructions that if one committee reports, the
other committee have 30 days to report or be discharged.
the medicare protection act of 1995
Mr. HARKIN. Mr. President, today I am introducing legislation,
the Medicare Protection Act of 1995, which would save taxpayers and
senior citizens over $16 billion by the end of the decade by curbing
waste, fraud, and abuse in the Medicare Program. I hope that the Senate
will consider this important legislation as we work to reduce the
Federal budget deficit and to improve Medicare.
For 6 years, as chairman and now ranking Democrat of the
Appropriations Subcommittee on Labor, Health and Human Services and
Education, I have targeted fraud, waste, and abuse in the programs
under our jurisdiction. I have given particular attention to exposing
and eliminating waste and abuse in Medicare. In hearing after hearing,
our subcommittee has uncovered examples of lost Medicare funds due to
fraud and poor program oversight. While some of the problems we have
uncovered are due to weaknesses in Medicare law, billions of dollars
are lost every year due to inadequate audits and other program
safeguard activities. At least $2 billion of unallowable and sometimes
fraudulent medical charges will be improperly paid by Medicare this
year alone.
The General Accounting Office [GAO], Office of Inspector General of
the Department of Health and Human Services [HHSIG], and the Health
Care Financing Administration [HCFA] have each documented the savings
to the Medicare Program achieved through investments in program
safeguard activities. They have testified that for every dollar spent
on program safeguards, $13 to $16 are saved by stopping inappropriate
Medicare payments. This is not some pie-in-the-sky-hoped-for return on
investment, it is documented, and proven that this saves us significant
sums. For the coming fiscal year, the administration estimates that the
projected program safeguard investment will result in $6.16 billion in
Medicare savings, a return on investment of 16 to 1.
Yet funding for these cost saving activities is inadequate. While
Medicare is an uncapped entitlement program, the funds to effectively
administer Medicare are funded through discretionary outlays. They must
compete with other important programs like Head Start, job training,
childhood immunizations, and college loans. Because we have a cap on
overall discretionary spending, at a time when the number and size of
Medicare claims is
[[Page S4101]] growing steadily, funding for audits and claims review
have not kept up. This despite the fact that we know that for every
dollar invested, Medicare saves from $13 to $16.
For several years now I have been working to correct this
shortsighted budget policy. Based on recommendations by the GAO, I have
pushed legislation like that I am introducing today. The Medicare
Protection Act would allow us to adequately fund critical Medicare
antifraud and abuse activities without cutting other critical programs.
This legislation allows for a 10-percent increase in support for these
activities annually through fiscal year 2000 without violating the
discretionary spending ceilings. The 10-percent increase is pegged to
the rate of growth in Medicare claims in recent years.
Mr. President, even assuming the most conservative estimates of
savings--a 13-to-1 return on investment--the Medicare Protection Act
would save taxpayers and Medicare beneficiaries $2 billion this year
and over $16 billion through the end of the decade. At a time when some
in Congress are proposing major reductions in Medicare that could
directly impact senior citizens and critical health providers, this
legislation is just common sense. I am certain that my colleagues would
agree that we need to cut the fat before the bone. Let's make war on
waste, not our senior citizens.
Mr. President, I will work with my colleagues on both sides of the
aisle to try to gain approval of this common sense deficit reducing
proposal. It is one change that we should be able--for which we should
be able to achieve strong bipartisan support. So I commend this bill to
my colleagues and urge that it be included in any package we consider
to further reduce the Federal deficit.
Mr. President, I ask unanimous consent that a copy of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 569
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Protection Act of
1995''.
SEC. 2. ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.
(a) Adjustments.--Section 251(b)(2) of the Balanced Budget
and Emergency Deficit Control Act of 1985 (2 U.S.C.
901(b)(2)) is amended--
(1) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively; and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Medicare administrative costs.--To the extent that
appropriations are enacted that provide additional new budget
authority (as compared with a base level of $1,609,671,000
for new budget authority) for the administration of the
medicare program by sections 1816 and 1842(a) of title XVIII
of the Social Security Act, the adjustment for that year
shall be that amount, but shall not exceed--
``(i) for fiscal year 1995, $161,000,000 in new budget
authority and $161,000,000 in outlays;
``(ii) for fiscal year 1996, $177,000,000 in new budget
authority and $177,000,000 in outlays;
``(iii) for fiscal year 1997, $195,000,000 in new budget
authority and $195,000,000 in outlays;
``(iv) for fiscal year 1998, $214,000,000 in new budget
authority and $214,000,000 in outlays;
``(v) for fiscal year 1999, $236,000,000 in new budget
authority and $236,000,000 in outlays;
``(vi) for fiscal year 2000, $259,000,000 in new budget
authority and $259,000,000 in outlays; and
the prior-year outlays resulting from these appropriations of
budget authority and additional adjustments equal to the sum
of the maximum adjustments that could have been made in
preceding fiscal years under this subparagraph.''.
(b) Conforming Amendments.--
(1) Section 603(a) of the Congressional Budget Act of 1974
(2 U.S.C. 655b(a)) is amended by striking ``section
251(b)(2)(E)(i)'' and inserting ``section 251(b)(2)(F)(i)''.
(2) Section 606(d) of the Congressional Budget Act of 1974
(2 U.S.C. 665e(d)) is amended--
(A) in paragraph (1)(A) by striking ``section
251(b)(2)(E)(i)'' and inserting ``section 251(b)(2)(F)(i)'';
and
(B) in paragraph (2), by inserting ``251(b)(2)(E),'' after
``251(b)(2)(D),''.
______
By Mr. GORTON:
S. 570. A bill to authorize the Secretary of Energy to enter into
privatization arrangements for activities carried out in connection
with defense nuclear facilities, and for other purposes; to the
Committee on Armed Services.
the department of energy privatization act of 1995
Mr. GORTON. Mr. President, today I am introducing a bill that
dramatically changes how we clean nuclear waste sites across the
Nation. Clearly we have a window to address these profound national
problems. My bill does just that.
Mr. President, this legislation is designed to change how DOE manages
the cleanup of its defense nuclear sites. This bill applies to all DOE
nuclear defense sites, because the cleanup problems we are addressing
are national concerns--not parochial.
The bill's strengths rest in addressing how DOE compensates
performance. Today we are cornered into agreements based on cost plus
scenarios. The taxpayer reimburses the contractor for all costs related
to overhead, salaries and other out-of-pocket expenses. On top of that
sum comes a bonus which is a percentage of those direct costs. That
means that higher overheads mean bigger bonuses. My bill dictates the
opposite: You don't do the job, you don't get paid. Period.
Mr. President, this bill makes good sense. I know that the American
people are anxious for cleanup to happen at our nuclear defense sites.
The people of Washington State are anxious too. This bill takes the DOE
out of the managerial role and puts it into the role of client and
consumer. It puts the burden of capital risk on investors eager to join
the cleanup process, yet does not hold them responsible for a mess that
is not theirs.
Under this bill, the Secretary of Energy will have the authority to
enter into long-term contracting arrangements--30 years plus two 10-
year renewals--for the treatment, management and disposition of nuclear
waste and nuclear waste by-products.
The contractor's facility must be within a 25-mile radius of the DOE
site. Community development and site-worker preference are key to this
bill. The Secretary is instructed to give preference to those
contractors who intend to reinvest in the communities where their work
is conducted. The Secretary must also give preference to contractors
whose bids include employment for local workers, or workers with
previous site experience.
Indemnification and other legal protection is included to inoculate
contractors from preexisting conditions that were not caused by the
contractor. This bill places strict limits on contractor liability
during cleanup, except in cases of negligence. This ensures that a
contractor is not responsible for waste not created on their watch.
Through commercialization, the bill will encourage innovation in
cleanup. By permitting the contractor to use technologies developed at
the site for commercial use and resale even while cleanup is taking
place, the legislation rewards
success instead of stifling it. In the past, DOE has frowned on
similar allowances, primarily because of the Government's desire to
keep new technology ``in house.'' Instead, the bill grants contractors
immediate patent rights to new technologies developed in the cleanup
process.
Another important provision protects the contractor from subsequent
rule changes by the Department of Energy or Congress that directly
affect cleanup efforts. Language states that if the Department of
Energy mandates new environmental regulations or laws which will
adversely affect the cleanup schedule and performance, the contractor
is entitled to renegotiate the contract without penalty. Likewise, if
regulations are eased, the contractor is given the option of abiding by
the rules in place, or opening discussions again to adjust for the less
stringent requirements.
This legislation also allows the Secretary to lease federally owned
land to contractors at a negotiable rate. By leasing the land, the
Government permits the contractor to undertake non-DOE site related
activities. For example, a contractor may retain a non-DOE client who
wants to vitrify waste at the DOE site. With this legislation the
contractor could open its facility to such an endeavor.
I urge that all of my colleagues, particularly those with similar
interests in their States, support this bill and join as cosponsors.
Mr.President, I ask unanimous consent that the text of the bill be
printed in the Record.
[[Page S4102]] There being no objection, the bill was ordered to be
printed in the Record as follows:
S. 570
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PRIVATIZATION OF WASTE CLEANUP AND MODERNIZATION
ACTIVITIES OF DEFENSE NUCLEAR FACILITIES.
(a) Contract Authority.--Notwithstanding any other law, the
Secretary of Energy may enter into 1 or more long-term
contracts for the procurement, from a facility located within
25 miles of a current or former Department of Energy defense
nuclear facility, of products and services that are
determined by the Secretary to be necessary to support waste
cleanup and modernization activities at such facilities,
including the following services and related products:
(1) Waste remediation and environmental restoration,
including treatment, storage, and disposal.
(2) Technical services.
(3) Energy production.
(4) Utility services.
(5) Effluent treatment.
(6) General storage.
(7) Fabrication and maintenance.
(8) Research and testing.
(b) Contract Provisions.--A contract under subsection
(a)--
(1) shall be for a term of not more than 30 years;
(2) shall include options for 2 10-year extensions of the
contract;
(3) when nuclear or hazardous material is involved, shall
include an agreement to--
(A) provide indemnification pursuant to section 170d. of
the Atomic Energy Act of 1954 (42 U.S.C. 2210(d));
(B) indemnify, protect, and hold harmless the contractor
from and against all liability, including liability for legal
costs, relating to any preexisting conditions at any part of
the defense nuclear facility managed under the contract;
(C) indemnify, protect, and hold harmless the contractor
from and against all liability to third parties, including
liability for legal costs, relating to claims for personal
injury, illness, property damage, and consequential damages;
and
(D) provide for indemnification of subcontractors as
described in subparagraphs (A), (B), and (C);
(4) shall permit the contractor (in accordance with Federal
law) to obtain a patent for and use for commercial purposes a
technology developed by the contractor in the performance of
the contract;
(5) shall not provide for payment to the contractor of cost
plus a percentage of cost or cost plus a fixed fee; and
(6) shall include such other terms and conditions as the
Secretary of Energy considers appropriate to protect the
interests of the United States.
(c) Preference for Local Residents.--In entering into
contracts under subsection (a), the Secretary of Energy shall
give preference, consistent with Federal, State, and local
law, to entities that plan to hire, to the maximum extent
practicable, residents of the vicinity of the Department of
Energy defense nuclear facility concerned and to persons who
have previously been employed by the Department of Energy or
its private contractor at the facility.
(d) Subsequently Enacted Requirements.--
(1) Definition.--In this subsection, the term ``applicable
requirement'' means a requirement in an Act of Congress or
regulation that applies specifically to activities described
in subsection (a).
(2) Increased costs.--
(A) In general.--A contractor under a contract under
subsection (a) shall be exempt from an applicable requirement
that would increase the cost of performing the contract that
is--
(i) imposed by regulation by a Federal, State, or local
governmental agency after the date on which the contract is
entered into unless the regulation is issued under an Act of
Congress described in the exception stated in clause (ii); or
(ii) imposed by an Act of Congress enacted after the date
of enactment of this Act, except an Act of Congress that
refers to this paragraph and explicitly states that it is the
intent of Congress to subject such a contractor to the
requirement.
(B) Amendment of contract.--In the case of enactment of an
Act of Congress described in the exception stated in
subparagraph (A)(ii), the Secretary of Energy and the
contractor shall negotiate an amendment to a contract under
subsection (a) providing full compensation to the contractor
for the increased cost incurred in order to comply with any
additional requirement of law.
(3) Reduced costs.--
(A) In general.--A contractor under a contract under
subsection (a) may elect to be governed by a change in a
requirement that would reduce the cost of performing the
contract that is--
(i) adopted by regulation by a Federal, State, or local
governmental agency after the date on which the contract is
entered into, unless the change is made pursuant to an Act of
Congress that refers to this paragraph and explicitly states
that it is the intent of Congress to continue to subject such
a contractor to that requirement, as in effect prior to the
date of enactment of that Act of Congress; or
(ii) enacted by an Act of Congress enacted after the date
of enactment of this Act, except an Act of Congress that
refers to this paragraph and explicitly states that it is the
intent of Congress to continue to subject such a contractor
to that requirement, as in effect prior to the date of
enactment of that Act of Congress.
(B) Amendment of contract.--In the case of a change in a
requirement that is to be applied to a contractor that will
reduce the cost of performing the contract, the Secretary of
Energy and the contractor shall negotiate an amendment to a
contract under subsection (a) providing for a reduction in
the amount of compensation to be paid to the contractor
commensurate with the amount of any reduction in costs
resulting from the change.
(e) Payment of Balance of Unamortized Costs.--
(1) Definition.--In this subsection, the term ``special
facility'' means land, a depreciable building, structure, or
utility, or depreciable machinery, equipment, or material
that is not supplied to a contractor by the Department of
Energy.
(2) Contract term.--A contract under subsection (a) may
provide that if the contract is terminated for the
convenience of the Government, the Secretary of Energy shall
pay the unamortized balance of the cost of any special
facility acquired or constructed by the contractor for
performance of the contract.
(3) Source of funds.--The Secretary of Energy may make a
payment under a contract term described in paragraph (2) and
pay any other costs assumed by the Secretary as a result of
the termination out of any appropriations that are available
to the Department of Energy for operating expenses for the
fiscal year in which the termination occurs or for any
subsequent fiscal year.
(f) Lease of Federally Owned Land.--
(1) In general.--Notwithstanding any other provision of
law, the Secretary of Energy may lease federally owned land
at a current or former Department of Energy defense nuclear
facility to a contractor in order to provide for or to
facilitate the construction of a facility in connection with
a contract under subsection (a).
(2) Term.--The term of a lease under this paragraph shall
be the lesser of--
(A) the expected useful life of the facility to be
constructed; or
(B) the term of the contract.
(3) Terms and conditions.--A lease under paragraph (1)
shall--
(A) require the contractor to pay rent in amounts that the
Secretary of Energy considers to be appropriate; and
(B) include such other terms and conditions as the
Secretary of Energy considers to be appropriate.
(g) Nuclear Standards.--The Secretary of Energy shall,
whenever practicable, consider applying commercial nuclear
standards to a facility used in the performance of a contract
under subsection (a).
(h) Limitation On Liability.--
(1) Definitions.--In this subsection, the terms ``hazardous
substance'', ``pollutant or contaminant'', ``release'', and
``response'' have the meanings stated in section 101 of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601).
(2) In general.--A contractor under a contract under
subsection (a) or a subcontractor of the contractor shall not
be liable under Federal, State, or local law for any injury,
cost, damage, expense, or other relief on a claim by any
person for death, personal injury, illness, loss of or damage
to property, or economic loss caused by a release or
threatened release of a hazardous substance or pollutant or
contaminant during performance of the contract unless the
release or threatened release is caused by conduct of the
contractor or subcontractor that is negligent or that
constitutes intentional misconduct.
(3) Repose.--No action (including an action for
contribution or indemnity) to recover for damage to real or
personal property, economic loss, personal injury, illness,
death, or other expense or cost arising out of the
performance under this section of a response action under a
contract under subsection (a) may be brought against the
contractor (or subcontractor of the contractor) under
Federal, State, or local law after the date that is 6 years
after the date of substantial completion of the response
action.
SEC. 2. PREFERENCE AND ECONOMIC DIVERSIFICATION FOR
COMMUNITIES AND LOCAL RESIDENTS.
(a) Definition.--In this section, the term ``qualifying
Department of Energy site'' means a site that contains at
least 1 current or former Department of Energy defense
nuclear facility for which the Secretary of Energy is
required by section 3161 of the National Defense
Authorization Act for Fiscal Year 1993 (42 U.S.C. 7274h) to
develop a plan for restructuring the work force.
(b) Preference.--In entering into a contract with a private
entity for products to be acquired or services to be
performed at a qualifying Department of Energy site, the
Secretary of Energy and contractors under the Secretary's
supervision shall, to the maximum extent practicable, give
preference to an entity that is otherwise qualified and
within the competitive range (as determined under section
15.609 of title 48, Code of Federal Regulations, or a
successor regulation,
[[Page S4103]] as in effect on the date of the determination)
that plans to--
(1) provide products and services originating from
communities within 25 miles of the site;
(2) hire residents living in the vicinity of the site,
especially dislocated site workers, to perform the contract;
and
(3) invest in value-added activities in the vicinity of the
site to mitigate adverse economic development impacts
resulting from closure or restructuring of the site.
(c) Applicability.--Preference shall be given under
subsection (b) only with respect to a contract for an
environmental management and restoration activity that is
entered into after the date of enactment of this Act.
(d) Termination.--This section shall expire on September
30, 1999.
______
By Mrs. BOXER (for herself, Mr. Pryor, Mr. Grassley, Mr. Kohl,
Mr. Bradley, Mr. Dorgan, Mr. Akaka, Mr. Hollings, Mr. Roth, Mr.
Harkin, Mr. Reid, Mr. Lieberman, Mr. Baucus, Mr. Abraham, Mr.
Simon, and Mr. Robb):
S. 571. A bill to amend title 10, United States Code, to terminate
entitlement of pay and allowances for members of the Armed Forces who
are sentenced to confinement and a punitive discharge or dismissal, and
for other purposes; to the Committee on Armed Services.
violent criminals legislation
Mrs. BOXER. Mr. President, today I am introducing legislation that
will put an end to an outrageous waste of tax dollars and immediately
stop a taxpayer-funded cash reward for violent criminals.
Believe it or not, each month, the Pentagon pays the salaries of
military personnel convicted of the most heinous crimes while their
cases are appealed through the military court system--a process than
often takes years. During that time, these violent criminals sit back
in prison, read the Wall Street Journal, invest the money they get from
the military, and watch their taxpayer-funded nest eggs grow.
According to data provided by the Defense Finance Accounting Service
and first published in the Dayton Daily News, the Department of Defense
spent more than $1 million on the salaries of 680 convicts in the month
of June 1994, alone. In that month, the Pentagon paid the salaries of
58 rapists, 164 child molesters, and 7 murderers, among others.
Just this morning, the Pentagon confirmed to me that at least 633
military convicts remained on the payroll in December 1994, costing the
Government more than $900,000.
I can't think of a more reprehensible way to spend taxpayer dollars.
No explanation could ever make me understand how the military could
reward rapists, murderers, and child molesters--the lowest of the low--
with the hard earned tax dollars of law-abiding citizens. This policy
thumbs its nose at taxpayers, slaps the faces of crime victims, and is
one of the worst examples of Government waste I have seen in my 20
years of public service.
Congress must act now to end this practice.
The individual stories of military criminals receiving full pay are
shocking. In California, a marine lance corporal who beat his 13-month-
old daughter to death almost 2 years ago still receives $1,105 each
month--about $25,000 since his conviction. He spends his days in the
brig at Camp Pendleton and does not pay a dime of child support. This
criminal has been paid $25,000 since his conviction.
I spoke with the murdered child's grandmother who now has custody of
a surviving 4-year-old grandson. She is a resident of northern
California. She was outraged to learn that the murderer of her
grandchild still receives full pay. She was understandably outraged to
learn that the murderer of her daughter still receives a Government
paycheck.
Another Air Force sergeant who tried to kill his wife with a kitchen
knife continues to receive full pay while serving time at Fort
Leavenworth. He told the Dayton Daily News, ``I follow the stock market
* * * I buy Double E bonds.''
And believe it or not, Francisco Duran, who was arrested last October
after firing 27 shots at the White House was paid by the military while
in prison. According to DOD records, Duran was paid $17,537 after his
conviction for deliberately driving his car into a crowd of people
outside a Hawaii bowling alley in 1990. Some of that money may well
have paid for the weapon he used to shoot at the White House.
Since I began working on this issue, I have received letters of
support from concerned citizens around the country. Recently, a woman
from North Carolina wrote me. This woman's sister was murdered by her
husband, a Navy chief stationed in South Carolina. He is now serving a
24-year sentence at Fort Leavenworth. He receives full pay.
This courageous woman is now raising her sisters' three children. The
children's father, who murdered this woman's sister, agreed to send
back his paychecks for child support, but he kept threatening to stop.
Desperate, she asked the staff at Fort Leavenworth how she could ensure
that his paychecks would continue to be sent to her. Finally, when she
asked the staff of the Fort Leavenworth military prison for guidance,
she was told that the only way she could receive guaranteed child
support payments was to, ``kiss his butt'' and hope for the best.
Imagine that. The only way to ensure that she will have the means to
support her murdered sister's children is to ``kiss the butt'' of her
murderer.
This policy is crazy, and it has got to stop.
In January, I introduced legislation, S. 205, which would terminate
pay to members of the Armed Forces under confinement pending
dishonorable discharge. This bill generated significant bipartisan
support and was cosponsored by 10 Senators.
Following the introduction of S. 205, several Senators, the DOD's
Office of Legal Counsel, and the Undersecretary for Personnel and
Readiness, offered suggestions for improvements. Many of these
suggestions have been incorporated into the bill I am introducing
today.
I am very proud that this bill has 15 cosponsors. It has the support
of Democrats and Republicans; liberals and conservatives. This is truly
an issue that transcends political and ideological boundaries.
In summary, this bill would terminate pay to any member of the Armed
Forces sentenced by a court martial to confinement and dishonorable
discharge, bad-conduct discharge, or dismissal. Pay would terminate
immediately upon sentencing. If at any point in the appeals process the
conviction were reversed or the sentence were otherwise set aside, full
back pay would be awarded.
This bill also authorizes the Secretary of Defense to establish a
program to pay transitional compensation to the spouses and dependents
of military personnel who lose their pay as a result of this pay
termination. This compensation could be paid for a maximum of 1 year at
a level not to exceed the amount that the member of the Armed Forces
would have received had he been in pay status.
The Department of Defense strongly supports changing the current
policy. Shortly after I first wrote Secretary Perry about this issue
late last year, a working group was established to study the issue and
report to the Secretary no later than February 28. That date has
passed, but we have still received no word from the Department.
It has now been nearly 3 months since I first brought this issue to
light. I believe strongly that we must act immediately to fix this
problem. Each month that goes by, about $1 million is wasted. That
money could be used to improve the quality of life for our military
personnel. It could be used to enhance the readiness of our forces. It
could even be used to reduce the budget deficit. But instead, the
Pentagon is paying $1 million each month to vile, violent criminals.
We do not have a moment to waste. Let us pass this important
legislation quickly.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 571
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PAY AND ALLOWANCES OF MEMBERS SENTENCED BY A
COURT-MARTIAL TO CONFINEMENT AND PUNITIVE
DISCHARGE OR DISMISSAL.
(a) Termination of Entitlement.--(1) Chapter 47 of title
10, United States Code
[[Page S4104]] (the Uniform Code of Military Justice), is
amended by adding at the end of subchapter VIII the following
new section:
``Sec. 858b. Art. 58b. Sentences to confinement and punitive
discharge or dismissal: termination of pay and allowances
``(a) Termination of Entitlement.--A member of the armed
forces sentenced by a court-martial to confinement and to a
punishment named in subsection (c) is not entitled to pay and
allowances for any period after the sentence is adjudged by
the court-martial.
``(b) Restoration of Entitlement.--If, in the case of a
member sentenced as described in subsection (a), none of the
punishments named in subsection (c) are included in the
sentence as finally approved, or the sentence to such a
punishment is set aside or disapproved, then, effective upon
such final approval or upon the setting aside or disapproval
of such punishment, as the case may be, the termination of
entitlement of the member to pay and allowances under
subsection (a) by reason of the sentence adjudged in such
case ceases to apply to the member and the member is entitled
to the pay and allowances that, under subsection (a), were
not paid to the member by reason of that termination of
entitlement.
``(c) Covered Punishments.--The punishments referred to in
subsections (a) and (b) are as follows:
``(A) Dishonorable discharge.
``(B) Bad-conduct discharge.
``(C) Dismissal.''.
(2) The table of sections at the beginning of subchapter
VIII of chapter 47 of such title is amended by inserting
after the item relating to section 858a (article 58a) the
following:
``858b. 58b. Sentences to confinement and punitive discharge or
dismissal: termination of pay and allowances.''.
(b) Conforming Amendments.--(1) Section 857 of title 10,
United States Code (article 57 of the Uniform Code of
Military Justice), is amended by striking out ``(a) No'' and
inserting in lieu thereof ``(a) Except as provided in section
858b of this title (article 58b), no''.
(2)(A) Section 804 of title 37, United States Code, is
repealed.
(B) The table of sections at the beginning of chapter 15 of
such title is amended by striking out the item relating to
section 804.
SEC. 2. TRANSITIONAL COMPENSATION FOR SPOUSES, DEPENDENT
CHILDREN, AND FORMER SPOUSES OF MEMBERS
SENTENCED TO CONFINEMENT AND PUNITIVE DISCHARGE
OR DISMISSAL.
(a) Authority To Pay Compensation.--Chapter 53 of title 10,
United States Code, is amended by inserting after section
1059 the following new section:
``Sec. 1059a. Members sentenced to confinement and punitive
discharge or dismissal: transitional compensation for
spouses, dependent children, and former spouses
``(a) Authority To Pay Compensation.--The Secretary of the
executive department concerned may establish a program to pay
transitional compensation in accordance with this section to
any spouse, dependent child, or former spouse of a member of
the armed forces during any period in which the member's
entitlement to pay and allowances is terminated under section
858b of this title (article 58b of the Uniform Code of
Military Justice).
``(b) Need Required.--(1) A person may be paid transitional
compensation under this section only if the person
demonstrates a need to receive such compensation, as
determined under regulations prescribed pursuant to
subsection (f).
``(2) Section 1059(g)(1) of this title shall apply to
eligibility for transitional compensation under this section.
``(c) Amount of Compensation.--(1) The amount of the
transitional compensation payable to a person under a program
established pursuant to this section shall be determined
under regulations prescribed pursuant to subsection (f).
``(2) The total amount of the transitional compensation
paid under this section in the case of a member may not
exceed the total amount of the pay and allowances which,
except for section 858b of this title (article 58b of the
Uniform Code of Military Justice), such member would be
entitled to receive during the one-year period beginning on
the date of the termination of such member's entitlement to
pay and allowances under such section.
``(d) Recipients of Payments.--Transitional compensation
payable to a person under this section shall be paid directly
to that person or to the legal guardian of the person, if
any.
``(e) Coordination of Benefits.--Transitional compensation
in the case of a member of the armed forces may not be paid
under this section to a person who is entitled to
transitional compensation under section 1059 or 1408(h) of
this title by reason of being a spouse, dependent child, or
former spouse of such member.
``(f) Emergency Transitional Assistance.--Under a program
established pursuant to this section, the Secretary of the
executive department concerned may pay emergency transitional
assistance to a person referred to in subsection (a) for not
more than 45 days while the person's application for
transitional assistance under the program is pending
approval. Subsections (b) and (d) do not apply to payment of
emergency transitional assistance.
``(g) Regulations.--The Secretary of the executive
department concerned shall prescribe regulations for carrying
out any program established by the Secretary under this
section.
``(h) Definitions.--In this section:
``(1) The term `Secretary of the executive department
concerned' means--
``(A) the Secretary of Defense, with respect to the armed
forces, other than the Coast Guard when it is not operating
as a service in the Navy; and
``(B) the Secretary of Transportation, with respect to the
Coast Guard when it is not operating as a service in the
Navy.
``(2) The term `dependent child' has the meaning given that
term in section 1059(l) of this title.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 53 of title 10, United States Code, is
amended by inserting after the item relating to section 1059
the following:
``1059a. Members sentenced to confinement and punitive discharge or
dismissal: transitional compensation for spouses,
dependent children, and former spouses.''.
SEC. 3. EFFECTIVE DATE AND APPLICABILITY.
(a) Prospective Applicability.--Subject to subsection (b),
the amendments made by this Act shall take effect on the date
of the enactment of this Act and shall apply with respect to
pay and allowances for periods after such date.
(b) Savings Provision.--(1) If it is held unconstitutional
to apply section 858b of title 10, United States Code
(article 58b of the Uniform Code of Military Justice), as
added by section 1(a), with respect to an act punishable
under the Uniform Code of Military Justice that was committed
before the date of the enactment of this Act, then--
(A) with respect to acts punishable under the Uniform Code
of Military Justice that were committed before that date, the
amendments made by this Act shall be deemed not to have been
made; and
(B) the amendments made by this Act shall apply with
respect to acts punishable under the Uniform Code of Military
Justice that are committed on or after the date of the
enactment of this Act.
(2) For purposes of paragraph (1), the term ``Uniform Code
of Military Justice'' means the provisions of chapter 47 of
title 10, United States Code.
Mr. BRADLEY. Mr. President, I am pleased to be an original
cosponsor of this bill to take violent criminals off the Pentagon's
payroll. I was an original cosponsor of S. 205, the first bill to
address this problem. I congratulate Senator Boxer on introducing this
improved version that introduces an element of compassion for the
families of those taken off the payroll.
I was shocked to learn that our Government spends more than $1
million per month on salaries and benefits for military personnel who
have been convicted of violent crimes. This is morally wrong. This is
an insult to the brave men and women of our Armed Forces. And this is
bad fiscal policy.
Mr. President, it is morally wrong to pay salaries to murderers,
rapists, child molesters, and other violent criminals. Imagine, the
families of victims and, indeed, even victims themselves pay tax
dollars that end up in the pockets and savings accounts of the very
people who victimized them. In some cases, these violent criminals even
continue to receive pay after they are released from prison.
This situation is also an insult to the brave men and women who serve
in our Armed Forces. They work hard and make many sacrifices to give us
the best military in the world. Their efforts are degraded when we pay
the same salaries to convicted felons that we pay to them.
Finally, it is bad fiscal policy to waste taxpayer money in this way.
How can we justify paying $1 million a month to convicted criminals
when we are at the same time cutting back on payments to needy
children? We just spent 5 weeks trying to one-up each other on our
commitment to balance the Federal budget. How can we ever hope to do so
if we squander millions of dollars not on incarcerating criminals, but
rewarding them?
As the Dallas Morning News stated in a February 5, 1995, editorial,
``this change is a no-brainer. Congress should act quickly to end this
travesty.'' I could not agree more.
______
By Mr. COATS:
S. 572. A bill to expand the authority for the export of devices, and
for other purposes; to the Committee on Labor and Human Resources.
the medical device exportation act of 1995
Mr. COATS. Mr. President, today I am introducing the Medical
Device Exportation Act of 1995. This bill will allow American companies
to export
[[Page S4105]] approved medical devices without forcing those companies
to endure costly and unnecessary delays in the FDA approval process.
Under current law, a company that seeks to export its drug overseas
to Japan or Europe where that drug is already approved for marketing,
must get the approval of the FDA before it may be exported. Approval is
granted only after the FDA determines that exportation would not
jeopardize public health and safety and that the country has approved
the drug.
Unfortunately, the FDA takes several weeks or even months to approve
the exportation of devices that Japan or other advanced nations in
Europe have already approved for marketing.
This delay in approving the exportation of a device that is already
approved for marketing by some of the most sophisticated device-
approval systems in the world can cost Americans millions in lost
revenue and thousands of jobs. A recent survey of device company CEO's
confirms the cost of this unnecessary delay. Forty percent of CEO's
said that their companies had reduced the size of their work force as a
result of regulatory delays. Twenty-two percent had already moved jobs
offshore due to the delays.
This bill is narrowly targeted to the problem. It simply eliminates
one bureaucratic step that serves no public health function in light of
other extensive controls. This bill changes the current law that
requires the FDA to make an independent determination of safety and
approval and simply directs that the FDA rely on approval by the
sophisticated device approval systems in Japan or the European
Community.
Of course, any device that is banned in the United States would
remain prohibited for export. And any country that would prohibit
importation of the device retains that sovereign right.
I am confident that this legislation is not controversial. In the
House, Congressman Kim has introduced a virtually identical measure,
H.R. 485, with 17 cosponsors. Moreover, the Department of Commerce has
proposed a similar administrative fix.
I urge all my colleagues to cosponsor this important legislation that
will help keep America competitive, retain American jobs and revenues,
and serve the public health needs of nations worldwide.
______
By Mr. PRYOR:
S. 573. A bill to reduce spending in fiscal year 1996, and for other
purposes; to the Committee on the Budget and the Committee on
Governmental Affairs, jointly, pursuant to the order of August 4, 1977,
with instructions, that if one Committee reports the other Committee
have 30 days to report or be discharged.
THE SPENDING REDUCTIONS ACT OF 1995
MR. PRYOR. Mr. President, I wish to address the Senate on the
question of where to cut Government spending and to offer some
suggestions, if I might, on where we might cut spending due to the very
intensive debate we have had over the last several weeks in this body.
This issue has risen again and again during the debate over the
balanced budget amendment. As we argue now over how to reach the
desired goal of reducing the deficit to zero, I thought it might be a
good time to come forward with a specific list, not major, but a
specific list of spending cuts that I hope all of my colleagues will
support and consider. In fact, if the speeches that have been made in
the Chamber of the Senate are any indication or to be believed, then I
think these proposals should receive widespread support. These spending
reductions are contained in the Spending Reductions Act of 1995. This
bill which I am introducing at this time will contain five sections
that consist of areas I think can either be reduced or eliminated to
provide the taxpayers with some long overdue relief. Mr. President,
$5.6 billion in total savings would result from this bill for 1 year
alone. If we continued basically down this track, we could save
approximately $30 billion over the next 5 years.
The first section of my bill involves a very modest reduction in
Government spending for private contractors who do the work for the
Federal Government. We have seen since 1980 alone the cost of
Government contractors rise from $47.6 billion to 1994's high of $105
billion.
Today, I am not proposing to address all of the problems involved in
the Federal Government's extensive reliance on outside workers. I
simply want to address the concern expressed by the taxpayers and the
voters in both the 1992 and 1994 elections giving us the mandate to
shrink the size of Government.
Congress has already partially responded to this mandate by voting to
cut the number of civil servants by nearly 12 percent. However, the
Congress has failed to order a corresponding reduction in the Federal
Government's exploding contractor work force. If we cut civil servants
and do nothing about the tremendous rise in the cost of outside
contractors that the Government then employs, we are going to see
basically no savings whatsoever.
Mr. President, my proposal is so simple I am almost embarrassed to
introduce it. It would reduce by $5 billion the 1996 budget the amount
spent to hire Federal contractors. It is simple, it is clean, it is $5
billion in savings.
This modest reduction will still permit agencies to get their work
done, but it will also reduce some of the waste that results when too
much money is spent without adequate oversight.
At my request, the Inspector General at the Pentagon has been looking
at some of these contracts awarded by the Star Wars program. Listen to
the problems that the IG said existed.
First, cost overruns on the contracts totaled several million
dollars.
Second, the contractor awarded prohibited subcontracts worth several
million dollars. These are contracts awarded to subcontractors in
violation of Federal regulations but still cost millions of dollars of
taxpayers' money. The contractor charged the Government for 588 hours
of work that it actually did not perform. Again, this is from the
report of the Inspector General at DOD to me.
I hope a reduction in the spending on service contracts will force
agencies to spend their money more wisely, and to eliminate some of the
waste which has resulted.
The second section of my bill will reduce the spending on federally
funded research and development centers. These are called FFRDC's at
the Department of Defense. That is pretty bureaucratic sounding. But
these FFRDC's like Mitre, Rand, the Center for Naval Analysis, are
actually private contractors who work solely for the Federal
Government. They receive all of their contracts on a sole-source basis.
There is no bidding procedure. The contractor simply states what they
will charge to perform a particular service and then they find
themselves being written a check. There is no competition whatsoever.
These entities may provide a valuable service to the Federal
Government, but again, in this time of concern over reducing the budget
deficit, I think it is appropriate to question every item of spending.
Since I am proposing a reduction in spending on outside workers, I say
that we should also cut back a reasonable amount on these in-house
consulting companies which have no competition for the taxpayers'
dollars.
Our taxpayers should not continue being billed at the very high
salaries and overhead being charged by these Government-run consulting
firms. For example, the head of Aerospace Corp., a FFRDC, or federally
funded research and development center--was paid in 1991 $230,000 in
salaries and who knows what else in expenses. We paid him, in 1992,
$265,000 as a salary and no one knows how much for expenses. And, in
both of these years this person, who is president of the Aerospace
Corp., funded by the American taxpayer, made more money than the
President of the United States.
My proposal would reduce the spending on FFRDC's by $250 million in
1996. This would leave over $10 billion to be spent on these
organizations and I think that would be more than sufficient.
The third item where I would cut spending is an issue I have worked
on for a number of years with many of my colleagues. This is the
exporting of arms to countries all over the world. I am not very proud
of the fact that the United States is the leading exporter of arms in
the world today. However, this proposal is not targeted, once again, at
reforming this arms trade. That is a battle for another day. My
proposal is
[[Page S4106]] simply aimed at reducing the budget deficit. We are
spending, today, $3.2 billion on financing arms sales to foreign
governments. I think, as we contemplate reduction in Medicare and
school lunches, we should also look at this area as well. I propose we
reduce this spending by $200 million in 1996. It is a modest cut. It is
a cut that makes common sense.
I have a fourth proposal. That fourth proposal to cut spending would
cut the United States funding to the International Development
Association and the International Finance Corporation, two of the
institutions which make up the World Bank Group, by approximately 15
percent in cuts. This would save the American taxpayer some $200
million. As my colleagues know, the World Bank has come under serious
Congressional scrutiny in the past few years, due to administrative
waste and flawed development policies.
For example, salaries at the World Bank average today $123,000 -- all
tax free. In recent years the Bank has spent approximately $30 million
on first-class travel for its executives. As for the operational record
of the World Bank, internal audits have estimated that nearly 40
percent of the bank's loans and projects are failures.
Unfortunately, although the World Bank admits to these problems,
reform has been slow or nonexistent. In 1993 I called for the
establishment of an inspector general function at the World Bank.
Despite receiving support from both the Clinton administration and our
colleagues in the Senate, the World Bank has, today, failed to
establish an adequate internal oversight function.
It is time once again for the Senate to address the issue of World
Bank mismanagement. The funding cut which I propose is, once again,
modest. But I think it will send a signal to the executives of the
World Bank while at the same time saving taxpayers' dollars from
further misuse.
The final cut I am proposing, while it may be the smallest, in many
ways provides the clearest example of our overall spending problem. In
1995 we gave the Department of Defense $65 million for humanitarian
assistance programs. That sounds reasonable enough until one stops to
question the rationale of the Department of Defense's having a
humanitarian assistance budget in the first place.
Humanitarian programs are not the primary part of DOD's mission. The
United States already has an agency solely dedicated to humanitarian
and development programs, the Agency for International Development. In
addition, we appropriate millions of dollars to multilateral
institutions for humanitarian purposes.
I believe the Department of Defense neither wants nor needs a growing
humanitarian mission. I base this statement on the careless way in
which humanitarian programs are run by the Department of Defense. In
1993, the General Accounting Office took a close look at DOD's
humanitarian and civic assistance projects, and GAO concluded that
these projects--and I quote from the GAO report--``. . . were not
designed to contribute to U.S. foreign policy objectives, did not
appear to enhance U.S. military training, and either lacked the support
of the host country or were not being used.''
Let me highlight one example provided by the General Accounting
Office on this program. A few years ago, some very well-meaning U.S.
National Guard soldiers were asked to build a school in Honduras.
Unfortunately, once completed this three-building complex was never
used. That is because the Honduran Government had already built and was
operating a school of this nature only a few hundred yards away.
Unfortunately, it is probable that poorly coordinated projects like
the Honduran school are continuing today. In a recent meeting with our
staff, GAO analysts reported that the Department of Defense had done
little or nothing to address the defects in its humanitarian programs.
By cutting this program by 50 percent, saving $25 million in 1996, the
Congress will force the agency to define its mission and concentrate
where the military can play a useful role in overseas humanitarian
programs.
Mr. President, in conclusion, I hope my colleagues will join me in
supporting these very reasonable, very modest cuts that will save us
$5.6 billion this year. Each spending reduction is designed to promote
economy and efficiency in the operation of the Federal Government, and
will save an enormous amount in dollars.
I believe that this is what the American people certainly want, and
that my constituents and our constituents are not as concerned with the
Contract With America as they are concerned with our priorities. With
or without a balanced budget amendment, Senators on both sides of the
aisle were sent here with the mandate to make tough decisions. It is
with that mandate in mind that I bring this legislation before the
Senate today.
Mr. President, I yield the floor.
______
By Mr. MOYNIHAN (for himself, Mr. Cochran, and Mr. Simpson):
S. 574. A bill to require the Secretary of the Treasury to mint coins
in commemoration of the 150th anniversary of the founding of the
Smithsonian Institution; to the Committee on Banking, Housing, and
Urban Affairs.
THE SMITHSONIAN INSTITUTION COMMEMORATIVE COIN ACT
Mr. MOYNIHAN. Mr. President, I introduce the Smithsonian
Institution Commemorative Coin Act of 1996. I introduce this
legislation on behalf of my distinguished colleagues, Senators Cochran
and Simpson, with whom I have the privilege to serve on the Smithsonian
Institution's Board of Regents.
August 10, 1996, will mark the 150th anniversary of the founding of
the Smithsonian Institution, one of the Nation's finest examples of
successful public-private partnership. This legislation provides for
the minting of coins to commemorate this momentous occasion.
Created as a Federal trusteeship by Congress in 1846, the Smithsonian
Institution is today the largest research and museum complex on Earth.
Its various museums were visited more than 26 million times last year,
and unlike so many other museums, the Smithsonian remains free of
charge to the public. In addition, thousands of Americans and foreign
scholars have used the Institution's vast repository of knowledge and
artifacts to assist in a variety of research activities.
The Smithsonian's sesquicentennial commemoration provides us the
opportunity to celebrate both the Institution's great accomplishments
and its future role and mission. The central goal of the commemoration,
however, will be to increase the sense of ownership of, and
participation in, the Smithsonian by the American people.
Throughout its 150th year, the Smithsonian will undertake a series of
programs and stage a number of events to commemorate its founding and
to explore new ways in which it can serve the public. These activities,
while extensions of the existing framework of Smithsonian programs,
will require significant financial resources.
In light of the existing budget constraints under which the Federal
Government must operate, the Smithsonian's Board of Regents concluded
it would not seek any additional appropriated funds to support
sesquicentennial programming. Rather, the Smithsonian will concentrate
its efforts to raise support for the anniversary programming from non-
Federal sources. The commemorative coins would be one such effort.
The coins would be issued on August 10, 1996, exactly 150 years from
the actual date of the act of Congress which established the
Smithsonian Institution. The issuance of Smithsonian sesquicentennial
commemorative coins will provide an opportunity for the American public
to obtain a valued memento and support the Institution's mandate to
preserve our Nation's cultural and historical heritage. In addition,
the fund derived from the sale of these commemorative coins will not
only enable the Smithsonian to showcase its 150-year service to the
Nation, but will also transfer the financial responsibility for the
sesquicentennial activities from the American taxpayer to voluntary
contributions.
Further, the legislation provides that 15 percent of the total
proceeds remitted to the Institution would be designated to support the
numismatic collection at the National Museum of American History. This
component of the legislation is strongly supported by the numismatic
community and in a very tangible way demonstrates our appreciation for
their support of all
[[Page S4107]] congressionally authorized commemorative coin programs.
Without exception, every Senator has constituents who visit,
communicate with, and otherwise benefit from the Smithsonian. From
eager first-graders to learned scholars and researchers, the public is
consistently served by the vast resources and expertise of the
Smithsonian and its staff. Enactment of this legislation will give the
American people the opportunity to celebrate the Smithsonian's unique
contributions to American culture and learning over the last 150 years.
Mr. President, I urge all my colleagues to join me in sponsoring this
bill to celebrate and honor the 150th anniversary of the Smithsonian
Institution.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 574
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Smithsonian Institution
Sesquicentennial Commemorative Coin Act''.
SEC. 2. COIN SPECIFICATIONS.
(a) Denominations.--The Secretary of the Treasury
(hereafter in this Act referred to as the ``Secretary'')
shall mint and issue the following coins:
(1) $5 gold coins.--Not more than 100,000 $5 coins, which
shall--
(A) weigh 8.359 grams;
(B) have a diameter of 0.850 inches; and
(C) contain 90 percent gold and 10 percent alloy.
(2) $1 silver coins.--Not more than 800,000 $1 coins, which
shall--
(A) weigh 26.73 grams;
(B) have a diameter of 1.500 inches; and
(C) contain 90 percent silver and 10 percent copper.
(b) Legal Tender.--The coins minted under this Act shall be
legal tender, as provided in section 5103 of title 31, United
States Code.
(c) Numismatic Items.--For purposes of section 5134 of
title 31, United States Code, all coins minted under this Act
shall be considered to be numismatic items.
SEC. 3. SOURCES OF BULLION.
(a) Gold.--The Secretary shall obtain gold for minting
coins under this Act pursuant to the authority of the
Secretary under other provisions of law.
(b) Silver.--The Secretary shall obtain silver for minting
coins under this Act only from stockpiles established under
the Strategic and Critical Materials Stock Piling Act.
SEC. 4. DESIGN OF COINS.
(a) Design Requirements.--
(1) In general.--The design of the coins minted under this
Act shall be emblematic of the scientific, educational, and
cultural significance and importance of the Smithsonian
Institution and shall include the following words from the
original bequest of James Smithson: ``for the increase and
diffusion of knowledge''.
(2) Designation and inscriptions.--On each coin minted
under this Act there shall be--
(A) a designation of the value of the coin;
(B) an inscription of the year ``1996''; and
(C) inscriptions of the words ``Liberty'', ``In God We
Trust'', ``United States of America'', and ``E Pluribus
Unum''.
(b) Selection.--The design for the coins minted under this
Act shall be--
(1) selected by the Secretary after consultation with the
Smithsonian Institution and the Commission of Fine Arts; and
(2) reviewed by the Citizens Commemorative Coin Advisory
Committee.
SEC. 5. ISSUANCE OF COINS.
(a) Quality of Coins.--Coins minted under this Act shall be
issued in uncirculated and proof qualities.
(b) Mint Facility.--Only 1 facility of the United States
Mint may be used to strike any particular combination of
denomination and quality of the coins minted under this Act.
(c) Period for Issuance.--The Secretary may issue coins
minted under this Act only during the period beginning on
August 10, 1996, and ending on August 9, 1997.
SEC. 6. SALE OF COINS.
(a) Sale Price.--The coins issued under this Act shall be
sold by the Secretary at a price equal to the sum of--
(1) the face value of the coins;
(2) the surcharge provided in subsection (d) with respect
to such coins; and
(3) the cost of designing and issuing the coins (including
labor, materials, dies, use of machinery, overhead expenses,
marketing, and shipping).
(b) Bulk Sales.--The Secretary shall make bulk sales of the
coins issued under this Act at a reasonable discount.
(c) Prepaid Orders.--
(1) In general.--The Secretary shall accept prepaid orders
for the coins minted under this Act before the issuance of
such coins.
(2) Discount.--Sale prices with respect to prepaid orders
under paragraph (1) shall be at a reasonable discount.
(d) Surcharges.--All sales shall include a surcharge of--
(1) $35 per coin for the $5 coin; and
(2) $10 per coin for the $1 coin.
SEC. 7. GENERAL WAIVER OF PROCUREMENT REGULATIONS.
(a) In General.--Except as provided in subsection (b), no
provision of law governing procurement or public contracts
shall be applicable to the procurement of goods and services
necessary for carrying out the provisions of this Act.
(b) Equal Employment Opportunity.--Subsection (a) shall not
relieve any person entering into a contract under the
authority of this Act from complying with any law relating to
equal employment opportunity.
SEC. 8. DISTRIBUTION OF SURCHARGES.
(a) In General.--Except as provided in subsection (b), all
surcharges received by the Secretary from the sale of coins
issued under this Act shall be promptly paid by the Secretary
to the Smithsonian Institution for the purpose of supporting
programming related to the 150th anniversary and general
activities of the Smithsonian Institution.
(b) National Numismatic Collection.--Not less than 15
percent of the total amount paid to the Smithsonian
Institution under subsection (a) shall be dedicated to
supporting the operation and activities of the National
Numismatic Collection at the National Museum of American
History.
(c) Audits.--The Comptroller General of the United States
shall have the right to examine such books, records,
documents, and other data of the Smithsonian Institution as
may be related to the expenditures of amounts paid under
subsection (a).
SEC. 9. FINANCIAL ASSURANCES.
(a) No Net Cost to the Government.--The Secretary shall
take such actions as may be necessary to ensure that minting
and issuing coins under this Act will not result in any net
cost to the United States Government.
(b) Payment for Coins.--A coin shall not be issued under
this Act unless the Secretary has received--
(1) full payment for the coin;
(2) security satisfactory to the Secretary to indemnify the
United States for full payment; or
(3) a guarantee of full payment satisfactory to the
Secretary from a depository institution whose deposits are
insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration Board.
______
By Mr. STEVENS (for himself, Mr. Murkowski, Mr. Johnston, and Mr.
Breaux):
S. 575. A bill to provide Outer Continental Shelf Impact Assistance
to State and local governments, and for other purposes; to the
Committee on Energy and Natural Resources.
ocs impact assistance to state and local governments
Mr. STEVENS. Mr. President, Senator Murkowski and I are introducing a
bill today which we believe to be of importance to the Nation's
domestic energy supply and our precious coastal resources. We are
pleased to have Senators Johnston and Breaux as cosponsors.
The Outer Continental Shelf [OCS] impact assistance legislation is
similar to legislation we introduced in the 102d Congress and have
worked on for the past two decades. It is intended to stimulate oil and
gas exploration on the Outer Continental Shelf and provide funds from
revenues generated by oil and gas production on the OCS to coastal
States and communities which share the burdens of exploration and
production off their coastlines.
OCS impact assistance is an avenue for States and communities to be
in full partnership with the Federal Government in the development of
OCS energy by investing a small portion of new OCS revenue back into
the coastal States.
This legislation establishes a fund for impact assistance from leased
tracts for distribution to coastal States within 200 miles of such
tracts. The funds will benefit States and local governments directly
and indirectly impacted by OCS leasing activities. The bill would
allocate 27 percent of new revenues generated from oil and natural gas
development into the trust. These funds would be shared on a 50-50
basis among States and the eligible counties and coastal jurisdictions.
The impact assistance provided under this legislation will be
distributed to counties, and in Alaska, borough governments, located no
more than 60 miles from a State's coastline. The premise of sharing
revenues derived from the development of resources in a specific locale
with those that are primarily affected is a wise objective.
[[Page S4108]] The funds would be used to assist coastal regions in
projects and activities that OCS activities may impact, such as air and
water quality, fish and wildlife, wetlands, or other coastal resources.
In addition, the receiving governments could use their funds for much-
needed public health and safety services, infrastructure construction,
cultural activities, and other government services.
The Commerce Department recently reported that our national security
is at risk because we now import more than 50 percent of our domestic
petroleum requirements. OCS development has played an important role in
offsetting even greater dependence on foreign energy. The OCS accounts
for 23 percent of our Nation's natural gas production and 14 percent of
its oil production. We need to ensure that the OCS plays an important
role in meeting our future domestic energy needs.
The States and communities that bear the responsibilities should now
share the benefits of the program.
The Senate in the past has passed my legislation to provide OCS
impact assistance but we have not been successful in getting this
enacted into law. I hope the administration will support this bill,
which shows a State and Federal cooperation and partnership consistent
with some past programs that exist in mineral, grazing, and forest
resource revenue sharing. I look forward to working with my colleagues
to provide our coastal States and communities the funds they need and
deserve.
I want to thank Mike Poling and Greg Renkes of the Energy and Natural
Resources Committee, who were invaluable in drafting this legislation.
And I am also grateful to my assistant, Anne McInerney, for her work on
this legislation.
I state again that the revenue sharing will be only from new
production under this bill.
I also want to express my gratitude to my colleague from Alaska,
Senator Murkowski, for his leadership as chairman of the Energy and
Natural Resources Committee and for his personal efforts on this
legislation.
I ask unanimous consent that the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 575
Be it enacted by the Senate and House of Representatives of
the United States in Congress assembled,
SECTION 1. DEFINITIONS.
For purposes of this Act only, the term--
(1) ``coastline'' has the same meaning that it has in the
Submerged Lands Act (43 U.S.C. 1301 et seq.);
(2) ``county'' means a unit of general government
constituting the local jurisdiction immediately below the
level of State government. This term includes, but is not
limited to, counties, parishes, villages and tribal
governments which function in lieu of and are not within a
county, and in Alaska, borough governments. If State law
recognizes an entity of general government that functions in
lieu of and is not within a county, the Secretary may
recognize such other entities of general government as
counties;
(3) ``coastal State'' means any State of the United States
bordering on the Atlantic Ocean, the Pacific Ocean, the
Arctic Ocean, the Bering Sea or the Gulf of Mexico;
(4) ``distance'' means minimum great circle distance,
measured in statute miles;
(5) ``leased tract'' means a tract, leased under section 8
of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) for
the purpose of drilling for, developing and producing oil or
natural gas resources, which is a unit consisting of either a
block, a portion of a block, a combination of blocks and/or
portions of blocks, as specified in the lease, and as
depicted in an Outer Continental Shelf Official Protraction
Diagram;
(6) ``new revenues'' means monies received by the United
States as royalties (including payments for royalty taken in
kind and sold pursuant to section 27 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1353)), net profit share payments,
and related late-payment interest from natural gas and oil
leases issued pursuant to the Outer Continental Shelf Lands
Act, but only from leased tracts from which such revenues are
first received by the United States after the date of
enactment of this Act;
(7) ``Outer Continental Shelf'' means all submerged lands
lying seaward and outside of an area of ``lands beneath
navigable waters'' as defined in section 2(a) of the
Submerged Lands Act (43 U.S.C. 1301(a)), and of which the
subsoil and
seabed appertain to the United States and are subject to its
jurisdiction and control; and
(8) ``Secretary means the Secretary of the Interior or the
Secretary's designee.
SEC. 2. IMPACT ASSISTANCE FORMULA AND PAYMENTS.
(a) There is established a fund in the Treasury of the
United States, which shall be known as the ``Outer
Continental Shelf Impact Assistance Fund'' (hereinafter
referred to in this Act as ``the Fund''). Allocable new
revenues determined under subsection (c) shall be deposited
in the Fund.
(b) The Secretary of the Treasury shall invest excess
monies in the Fund, at the written request of the Secretary,
in public debt securities with maturities suitable to the
needs of the Fund, as determined by the Secretary, and
bearing interest at rates determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States of
comparable maturity.
(c) Notwithstanding section 9 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1338), amounts in the Fund,
together with interest earned from investment thereof, shall
be paid at the direction of the Secretary as follows:
(1) The Secretary shall determine the new revenues from any
leased tract or portion of a leased tract lying seaward of
the zone defined and governed by section 8(g) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(g)), or lying
within such zone but to which section 8(g) does not apply,
the geographic center of which lies within a distance of 200
miles from any part of the coastline of any coastal State
(hereinafter referred to as an ``eligible coastal State'').
(2) The Secretary shall determine the allocable share of
new revenues determined under paragraph (1) by multiplying
such revenues by 27 percent.
(3) The Secretary shall determine the portion of the
allocable share of new revenues attributable to each eligible
coastal State (hereinafter referred to as the ``eligible
coastal State's attributable share'') based on a fraction
which is inversely proportional to the distance between the
nearest point on the coastline of the eligible coastal State
and the geographic center of the leased tract or portion of
the leased tract (to the nearest whole mile). Further, the
ratio of an eligible State's attributable share to any other
eligible State's attributable share shall be equal to the
inverse of the ratio of the distances between the geographic
center of the leased tract or portion of the leased tract and
the coastlines of the respective eligible coastal States. The
sum of the eligible coastal States' attributable shares shall
be equal to the allocable share of new revenues determined
under paragraph (2).
(4) The Secretary shall pay from the Fund 50 percent of
each eligible coastal State's attributable share, together
with the portion of interest earned from investment of the
funds which corresponds to that amount, to that State.
(5) Within 60 days of enactment of this Act, the governor
of each eligible coastal State shall provide the Secretary
with a list of all counties, as defined herein, that are to
be considered for eligibility to receive impact assistance
payments. This list must include all counties with borders
along the State's coastline and may also include counties
which are at the closest point no more than 60 miles from the
State's coastline and which are certified by the Governor to
have significant impacts from Outer Continental Shelf-related
activities. For any such county that does not have a border
along the coastline, the Governor shall designate the
coastline of the nearest county that does have a border along
the coastline to serve as the former county's coastline for
the purposes of this section. The governor of any eligible
coastal State may modify this list whenever significant
changes in Outer Continental Shelf activities require a
change, but no more frequently than once each year.
(6) The Secretary shall determine, for each county within
the eligible coastal State identified by the Governor
according to paragraph (5) for which any part of the county's
coastline lies within a distance of 200 miles of the
geographic center of the leased tract or portion of the
leased tract (hereinafter referred to as in ``eligible
county'') 50 percent of the eligible coastal State's
attributable share which is attributable to such county
(hereinafter referred to as the ``eligible county's
attributable share'') based on a fraction which is inversely
proportional to the distance between the nearest point on the
coastline of the eligible county and the geographic center of
the leased tract or portion of the leased tract (to the
nearest whole mile). Further, the ratio of any eligible
county's attributable share to any other eligible county's
attributable share shall be equal to the inverse of the ratio
of the distance between the geographic center of the leased
tract or portion of the leased tract and the coastlines of
the respective eligible counties. The sum of the eligible
counties' attributable shares for all eligible counties
within each State shall be equal to 50 percent of the
eligible coastal State's attributable share determined under
paragraph (3).
(7) The Secretary shall pay from the Fund the eligible
county's attributable share, together with the portion of
interest earned from investment of the Fund which corresponds
to that mount, to that county.
(8) Payments to eligible coastal States and eligible
counties under this section shall be made not later than
December 31 of each year from new revenues received and
interest earned thereon during the immediately preceding
fiscal year, but not earlier than one year following the date
of enactment of this Act.
(9) The remainder of new revenues and interest earned in
the Fund not paid to an eligible State or an eligible county
under this
[[Page S4109]] section shall be disposed of according to
the law otherwise applicable to receipts from leases on the
Outer Continental Shelf.
SEC. 3. USES OF FUNDS.
Funds receive pursuant to this Act shall be used by the
eligible coastal States and eligible counties for--
(a) projects and activities related to all impacts of Outer
Continental Shelf-related activities including but not
limited to--
(1) air quality, water quality, fish and wildlife,
wetlands, or other coastal resources;
(2) other activities of such State or county, authorized by
the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et
seq.), the provisions of subtitle B of title IV of the Oil
Pollution Act of 1990 (104 Stat. 523), or the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.); and
(3) administrative costs of complying with the provisions
of this subtitle.
SEC. 4. OBLIGATIONS OF ELIGIBLE COUNTIES AND STATES.
(a) Project Submission.--Prior to the receipt of funds
pursuant to this Act for any fiscal year, an eligible county
must submit to the Governor of the State in which it is
located a plan setting forth the projects and activities for
which the eligible county proposes to expend such funds. Such
plan shall state the amounts proposed to be expended for each
project or activity during the upcoming fiscal year.
(b) Project Approval.--Prior to the payment of funds
pursuant to this Act to any eligible county for any fiscal
year, the Governor must approve the plan submitted by the
eligible county pursuant to subsection (a) and notify the
Secretary of such approval. State approval of any such plan
shall be consistent with all applicable State and federal
law. In the event the Governor disapproves any such plan, the
funds that would otherwise be paid to the eligible county
shall be placed in escrow by the Secretary pending
modification and approval of such plan, at which time such
funds together with interest thereon shall be paid to the
eligible county.
(c) Certification.--No later than 60 days after the end of
the fiscal year, any eligible county receiving funds under
this Act must certify to the Governor: (1) the amount of such
funds expended by the county during the previous fiscal year;
(2) the amounts expended on each project or activity; and (3)
the status of each project or activity.
SEC. 5. ANNUAL REPORT, REFUNDS.
(a) On June 15 of each fiscal year, the Governor of each
State receiving monies from the Fund shall account for all
monies so received for the previous fiscal year in a written
report to Congress.
(b) In those instances where through judicial decision,
administrative review, arbitration or other means there are
royalty refunds owed to entities generating new revenues
under this Act, repayment of such refunds in the same
proportion as monies were received under section 2 shall be
the responsibility of the governmental entities receiving
distributions under the Fund.
Mr. MURKOWSKI. Mr. President, I rise today to co-sponsor legislation
to provide Outer Continental Shelf [OCS] impact assistance to State and
local governments. I am pleased to be joining my colleague from Alaska,
Senator Stevens, the ranking minority member of the Energy and Natural
Resources Committee, Senator Johnston, and Senator Breaux in the
introduction of this important legislation.
Mr. President, there are two important aspects of the legislation we
offer today. First, it is intended to stimulate oil and gas exploration
and production on the Outer Continental Shelf, create jobs, protect our
national energy security, and reduce our trade deficit. Second, it is
intended to provide funds from revenues generated by oil and gas
production on the OCS to States and eligible counties who shoulder the
responsibility for energy development activity off their coastlines.
A recent report by the Commerce Department suggests that our national
security is at risk because we now import more than 50 percent of our
domestic petroleum requirements. The Clinton administration's response
to that report seems to be to not respond. I am aware of no specific
proposals offered by the Clinton Administration to increase domestic
production and reduce foreign imports of crude oil. As chairman of the
Committee on Energy and Natural Resources and a member of the Finance
Committee, I intend to hold hearings on this legislation and other
measures to stimulate oil and gas production, create jobs in the energy
and support industries, and generate badly needed revenues. Over the
last 10 years there have been 500,000 jobs lost in the oil and gas
industry, and billions of dollars in investment capital are fleeing the
country because domestic energy companies are not being given access to
public lands to drill for new oil and gas reserves, are being
frustrated by government rules and regulations, and are being hounded
by activists who do not want the public lands utilized for natural
resource development.
I don't think that is right, and I intend to do something about it.
The bill we are introducing today is a small step, but a step in the
right direction. Over the coming months I will hold hearings and
introduce legislation to provide additional stimulus to our energy
industry and our economy.
On the matter of impact assistance, Mr. President, our bill
recognizes that there are burdens associated with offshore oil and gas
activities--from environmental planning and analysis, to public safety
and health considerations, to new infrastructure requirements. This
legislation would, for the first time, share the
benefits of economic revenues generated by OCS oil and gas activities
with those governmental entities who assume those burdens.
Under this legislation, Mr. President, counties, parishes and
boroughs--the local governmental entities most directly affected--and
State governments will share in revenues derived from OCS oil and gas
production. A total of 27 percent of all new revenues resulting from
production royalties from leases lying seaward of the so-called 8(g)
zone, the area 3 to 6 miles offshore and extending out to 200 miles,
would be shared on a 50-50 basis by States and counties. In other
words, States would get half of the 27 percent share and the coastal
counties would get the other half.
The impact assistance provided under this legislation would be
distributed to counties located no more than 60 miles from a State's
coastline, based on a fraction that is inversely proportional to the
distance between the nearest point on the eligible county's coastline
and the geographic center of a leased tract. The legislation provides a
formula for sharing with affected States as well.
Recognizing that local governmental entities differ from State to
State, the legislation defines county as including parishes, villages,
and, in Alaska, borough governments.
Impact assistance payments must be used for mitigation of effects
relating to OCS-related activities, such as air and water quality, fish
and wildlife, wetlands, or other coastal resources. In addition, such
funds could be used for public safety and health activities, zoning,
infrastructure construction, or other similar measures. To ensure that
impact assistance monies are properly used, the bill requires counties
to submit a description of the purposes for which such funds will be
disbursed, and governors to submit an annual report accounting for the
use of impact monies during the prior year.
To ensure that the funds are used for the purposes intended by this
legislation, coastal counties are required to submit a list of proposed
projects for approval of the Governor of the State in which the county
is located. Counties must certify each year the amount of funds spent
on particular projects or activities and the status of each. The bill
also requires the Governor of each State receiving funds to account for
monies received each year in a report to Congress.
Finally, Mr. President, the legislation allows for refunds where,
because of litigation, an arbitration award, or administrative review,
there has been an overpayment. In such cases, the responsible State and
county governments would be required to refund monies overpaid in
direct proportion to the amount that they shared such funds.
Mr. President, this legislation is long overdue. It has been passed
twice on previous occasions only to be opposed by the Executive Branch.
This legislation is needed to ensure that State and local governments
have the funds necessary to address onshore activities and effects
relating to production occurring off their shorelines, activities which
generate jobs and taxes, as well as the very funds from which OCS
impact assistance will be paid.
Historically, oil and gas leasing on the Outer Continental Shelf has
generated more than $100 billion in Federal revenues. The OCS accounts
for 23 percent of our Nation's natural gas and 14 percent of the
country's oil production. We need to assure that the OCS continues to
play an important role in contributing to our domestic energy needs,
and to take steps to facilitate exploration and production activities
[[Page S4110]] on the OCS. It also is time to spread the benefits of
the program among those who share the burdens. I urge my colleagues to
move swiftly in enacting this legislation.
______
By Mr. FEINGOLD:
S. 576. A bill to prohibit the provision of certain trade assistance
to United States subsidiaries of foreign corporations that lack
effective prohibitions on bribery.
antibribery legislation
Mr. FEINGOLD. Mr. President, as we in Congress continue to
define our role in helping promote United States exports in this
fiercely competitive international environment, I rise today to
introduce two measures dealing with a more surreptitious aspect of
foreign trade which is hurting U.S. companies: bribery and corruption
by our foreign competitors.
This is a subject I became interested in last session when I learned
of a rather outrageous practice in the world of offsets which involved
a kickback from one U.S. company to another to facilitate the purchase
of foreign goods. In that case, a U.S. defense corporation offered an
American civilian contractor a sizable amount of money if that company
would choose a foreign bidder over an American bidder so that the
defense contractor could earn credit against its offset agreement for a
weapons sale a few years earlier. After researching the law on this, I
learned that cash payments between domestic concerns--or what many
called outright bribes--were not outlawed in offset deals. I authored
legislation, which was enacted in Public Law 103-236, to close the
loophole in the law, and to outlaw kickback payments in the conduct of
offsets.
My legislation today picks up on the same theme. As we seek to expand
and develop markets for U.S. exports; as we work to protect every
opportunity for fair competition for our companies; as we try to
strengthen our small and medium-sized companies, we must address the
rampant, global problem of corruption and bribery--both as a good
governance issue in our development strategies, and as a competitive
issue with industrialized nations who permit bribery of foreign
officials.
As a member of the Senate Foreign Relations Committee, I expect to
work on this problem as we look at foreign aid reform and our trade
export promotion programs. As ranking member of the Subcommittee on
African Affairs, I want to work with our African partners to begin to
clean up corruption, and remove this barrier to sound development. In
the State of Wisconsin, I have already raised the issue with a State
trade promotion commission, the Lucey Commission, as a barrier to free
and fair trade for our companies. The commission released its report in
January 1995. Indeed, this is an unfair trading practice that must be
addressed as U.S.
companies gear up for more fervent international export activity.
Bribery and corruption in the international arena are subjects which
we have not focused on recently, but they have seriously skewed
international markets and destabilized the trading environment
throughout the world. It is a multifaceted problem, found at many
layers of government, throughout the international corporate hierarchy,
and in many components of an international business transaction. It
infects and distorts the global business environment by inflating costs
which must factor in payoffs, and offers prices which, in reflecting
the bribe, are in excess of value. It also undermines structural
development in transitioning countries, and when it comes to foreign
assistance, it can diminish the amount of actual aid delivered as
bribes are siphoned off from aid packages.
Bribery allows the dishonest to prosper, while the honest pay the
price. What's more, it only feeds on itself because a bribed person
never stays bribed; he or she will always sell themself to the highest
bidder. Most importantly, though, it is an inappropriate way to do
business--not only because it is unethical and morally unacceptable,
but also because it is inefficient.
This was in large part why Congress passed the Foreign Corrupt
Practices Act of 1977, which, I am proud to say, was sponsored by one
of Wisconsin's most respected elected officials, Senator William
Proxmire. The FCPA was introduced when policymakers became concerned by
discoveries that some American businesses maintained secret slush funds
for making questionable or illegal payments to foreign government
officials for enhanced business opportunities that would adversely
affect U.S. foreign policy, harm the image of American democracy
abroad, and undermine public confidence in the integrity of U.S.
businesses.
By establishing extensive bookkeeping requirements to ensure
transparency, and by criminalizing the bribery of foreign officials to
obtain or retain business, the FCPA has succeeded at curbing corporate
bribery by U.S. firms. These two very important principles do not
simply define an American sense of morality in business. They also
strengthen America's trade policy, foster faith in American democracy,
and protect our interests in requiring an open environment for U.S.
investment.
Certainly, these are principles and guidelines in everyone's best
interest, and as such, are worth promoting worldwide.
Though at the time of passage, there was some criticism of the FCPA,
it is generally welcomed by the business community today for exactly
those reasons. The biggest objection to it is that in some instances it
does disadvantage our businesses. Our trade competitors, the other
industrialized countries, are allowed--and are usually willing--to pay
bribes, and thus have been able to gain an unfair and harmful edge over
U.S. businesses. In some countries, like Germany, a bribe in a foreign
country is even eligible for a tax write-off. As the international
trade market continues to expand, it is time to get this problem under
control.
Although some talk of amending or repealing the FCPA to help American
business in their competitive race, it makes far better business sense
to raise the international standards against bribery, and work for
universal acceptance of the principles of the FCPA. This would help
level the playing field for U.S. businesses and exports, and it is a
sound economic move.
One of the most effective ways to do that is to work with other
governments to implement the same strict regulations and penalties
against bribery in international business by which U.S. entities have
to live.
The Clinton administration has done a laudable job in advancing this
agenda as part of its aggressive export strategy. They have
consistently raised this issue with other governments, both in public
and private. They have pursued it in places such as the Organization on
Economic Cooperation and Development, and President Clinton raised it
at the Summit of the Americas in Miami last year. I know the Ambassador
to India, Ambassador Frank Wisner, has identified it as a major issue,
and, as India develops its codes for international investment, he has
pledged to help ensure a level playing field for United States
companies. The administration has also dedicated itself to promoting
anticorruption as a basic principle of ``good governance'' within our
assistance programs.
We took a good first step when the Organization on Economic
Cooperation and Development passed a strong resolution in May 1994
recommending that member countries, which includes most of Europe,
Australia, Canada, Japan, and New Zealand, ``take effective measures to
deter, prevent, and combat bribery of foreign public officials.'' This
was a very helpful measure in that all the OECD countries recognized
bribery as a destabilizing factor in international trade, and pledged
to cooperate on revisions of domestic laws and creation of
international agreements. This recommendation has served as a launching
pad for international efforts against bribery, and has inspired some
other successes in the first year since it was passed.
For example, in Ecuador, where the Government has tendered a contract
for a $170 million refinery project, bidders are required to sign a no-
bribery pledge, and agreed that all third-party commissions would be
disclosed in the final contract. In Ukraine, top officials in the
Ministry of International Economic Affairs are going to trial for
accepting bribes from foreign and Ukranian corporations in exchange for
assistance in export licenses.
[[Page S4111]] Domestically, several Governments have been rocked by
corruption scandals in recent months that have put the issue of bribery
on the front pages in France, Italy, and the United Kingdom. NATO is
investigating its Secretary General for possibly accepting a kickback
payment on a helicopter sale when he was Belgium's Economics Minister.
In Taiwan, there is an elaborate investigation into a murder of a
military officer who may have known of payoff in an arms deal. Even
China recently passed a law to restrict undue influence on judges,
prosecutors, and police.
Bribery and corruption are finally emerging as a topic for public
discussion, and, I
believe, that as more sunshine is cast on such practices, governments
will be under domestic pressure to pass anti-corruption legislation and
reform. I am also confident that these movements will lead to scrutiny
of how business is conducted overseas. In the meantime, we need to do
all we can to ensure that American companies are playing on a level
field.
Today many small and medium-sized companies depend upon the
assistance of our trade promotion agencies. These agencies offer
different kinds of financing, but all serve to promote American
products for export, and balance out government subsidized programs
offered by our trade competitors for their companies.
The legislation I am introducing today would guarantee that U.S.
export financing would benefit only those companies which do not have
the unfair advantage of bribery by prohibiting the Trade and
Development Agency, Overseas Private Investment Corporation, Export-
Import Bank, and the Agency for International Development from
providing support for U.S. subsidiaries of foreign corporations which
have not adopted and enforced an anti-bribery code.
While U.S. subsidiaries are subject to the FCPA, their foreign parent
companies are not, which may offer them an unfair advantage over wholly
U.S.-owned firms. I do not think that U.S. taxpayer funds should be
used to support further a corporation which may have the benefit of
bribery--particularly if it hurts a wholly-owned American company. My
legislation is also intended to give a further incentive to foreign
corporations to adopt, on their own, restrictions against bribery. My
bill is intended to support the work of both U.S. exporters and U.S.
trade promotion agencies in combating this terrible inequity.
I am also introducing a resolution that would express the sense of
the Senate that bribery is indeed a morally unacceptable business
practice, and has destabilizing consequences for the international
trade environment. It commends the Clinton administration for their
solid efforts; encourages the administration to work toward universal
acceptance of the principles set forth in the FCPA; and says the U.S.
Government should enter into negotiations in order to establish
regulations for international financial institutions and international
organizations that prohibit bribery of foreign public officials and
impose sanctions for such bribery.
By no means can we resolve this issue in 1 year, or simply with a
couple of laws. Rather, we need to promote meaningful change in the
business culture worldwide, and we need to do that on a multilateral,
if not global, basis. Large companies can afford to wait as the problem
begins to improve, but our small and medium-sized businesses--the
backbone of the U.S. economy--are, in some cases, being fatally wounded
now by competitors' bribery.
Bribery is nobody's preferred way to do business, yet it is standard
play in many parts of the world. We need to begin to address it
seriously as a global problem. As recent events have shown, citizens of
many other countries--in both the industrialized and developing
worlds--feel the same way. I hope my proposals will contribute to the
debate.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 576
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION. 1. PROHIBITION ON TRADE ASSISTANCE.
(a) Prohibition.--Notwithstanding any other provision of
law, an agency referred to in subsection (b) may not provide
economic support (including export assistance, subsidization,
financing, financial assistance, or trade advocacy) to or for
any foreign corporation or any United States subsidiary of a
foreign corporation unless the head of such agency certifies
to Congress that the foreign corporation has adopted and
enforces a corporate-wide policy that prohibits the bribery
of foreign public officials in connection with international
business transactions of the corporations and its
subsidiaries.
(b) Covered Agencies.--Subsection (a) applies to assistance
provided by the following agencies:
(1) The Trade and Development Agency.
(2) The Overseas Private Investment Corporation.
(3) The Export-Import Bank.
(4) The Agency for International Development.
(c) Definitions.--In this section:
(1) The term ``bribery'', in the case of a corporation,
means the direct or indirect offer or provision by the
corporation of any undue pecuniary or other advantage to or
for an individual in order to procure business and business
contracts for the corporation or its subsidiaries.
(2) The term ``foreign corporation'' means any corporation
created or organized under the laws of a foreign country.
(3) The term ``United States subsidiary'' means any
subsidiary of a foreign corporation which subsidiary has its
principal place of business in the United States or which is
organized under the laws of a State.
____________________