Congressional Record, Volume 141 Issue 71 (Tuesday, May 2, 1995)

[Congressional Record Volume 141, Number 71 (Tuesday, May 2, 1995)]
[Senate]
[Pages S5976-S5992]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MEDICARE AND TAX CUTS FOR THE RICH

Mr. DORGAN. I did not come to speak about trade, but I wanted to say
something about what I saw this weekend--the Speaker of the House, the
majority leader of the Senate, and now today I see the chairman of the
Ways and Means Committee of the other body, all talking about Medicare.
It was interesting to me. I was thinking about these old movies I
used to see when I was a kid, when all these cowboys would whistle when
they go into a box canyon and then when the trouble would start, they
would start jumping off their horses, trying to find a place to hide.
This is kind of a box canyon we have created in the last couple of
months, just riding in, whistling all the way, with the Contract With
America, saying: Do you know what we can do? We can balance the Federal
budget easily. We can do it before lunch. We will not even break a
sweat. We will just change the U.S. Constitution and use $1.3 trillion
in the Social Security trust funds to offset against other revenues. We
will balance the budget.
Plus we will do more than that. We will promise you American people
we will not only balance the budget, we will give you a tax cut. In
fact, we will call it a middle-class tax cut. We will do all of that,
and we will tame this Medicare and Medicaid problem. We will cut money
out of Medicare and Medicaid and we will solve that problem.
Then what happened? I think this weekend somehow these folks that
rode into this box canyon understood the trouble they were in because,
all of a sudden, the three dismounted and are scurrying in every
direction.
I noticed today the Ways and Means Committee in the House was asking
the administration to give them advice on how to solve the Medicare and
Medicaid problem. They were not asking for any advice when they talked
about the tax cut bill or the welfare reform bill that they moved
through there quickly. They did not need any advice then. But all of a
sudden they find out their promises are coming home to pinch. What they
are worried about is that the American people might see what has been
created--a promise of tax cuts for the middle class that looks like
this:
This is the middle-class tax cut for those middle-class folks who
live on Rodeo Drive. At least it must be Rodeo Drive because how else
could you explain this chart? Who benefits from the tax bill? If you
earn $30,000 or below, as an average family, you get an enormous tax
cut, $134 a year. If your income is $200,000 or above as an American
family, you get a check back for your tax bill, a tax cut of $11,266.
I was on a radio talk show with a conservative host, somebody who
believes in all of this, who said, ``Well, Senator Dorgan, what do you
think about this middle-income tax cut?'' I said, ``What middle-income
tax cut? What on Earth are you talking about?'' He said, ``The one just
passed by the House of Representatives which benefits the middle-income
folks.'' I said, ``Really? Do you understand it? Have you really seen
the results of it?'' I said, ``If you are over $200,000, you get a
$11,200 tax break; $30,000 or under, you get $134. That is middle
income?'' Not in my hometown, it is not middle income.
But you know what has happened here. You know what the box canyon
is--people are going to look and say, ``Gee. Now if we have a big
deficit and we have economic troubles in our country and we are trying
to reduce the budget deficit and give a $11,200 tax cut to families
over $200,000 a year, and then the same folks who want to do it come
along and say, ``Do you know how we can pay for all of this? We can
take a $300 billion or $400 billion out of Medicare and Medicaid. That
is how we can pay for this.''
All of a sudden I think a light bulb went on in the minds of some of
these architects who said maybe we will get blamed for taking money
away from people who are elderly or poor for their health care and
using it to give a tax cut to those who are wealthy. Will not that be
unfair for those of us who know the facts to stand up and talk about
those folks? So all of a sudden we have seen in the last 48 hours, 72
hours, folks scurrying around town here saying, ``Wait a second. Do not
be so quick on Medicare and Medicaid. That is not really what we meant.
That is not what we said.''
We do not really know what they mean because those same folks who
were out here in an enormous hurry to change the U.S. Constitution were
not in a very big hurry on April 1 when the law said they were required
to bring a budget to the floor of the Senate.
You see, you cannot change the Constitution and alter the deficit. If
you change the Constitution with a constitutional amendment to require
a balanced budget, you will not change the deficit by one nickel. What
changes the budget deficit is when we bring a budget to the floor and
make decisions.
They were in a big hurry to change the Constitution, but somehow this
enormous need to move quickly has left them. Now they simply cannot
seem to get over here. The law says April 1 they should be here with
their budget. Then it says by April 15 we should have a conference
report. Well, April 1 came and went. April 15 is here and gone. May 1
is here and gone. No budget. But we have tax cuts for the big folks.
If you make half a million dollars sitting there clipping coupons,
using that channel changer to search to see what entertainment is on
tonight for you, boy, you can look at this Congress, and, say, ``What a
Congress. What a bunch of folks those folks are. $11,000 I have to
spend. I can buy some more radio equipment. In fact, I can probably
lease a Rolls Royce for 6 or 8 months, or lease a Mercedes Benz.''
Could you not with $11,000 lease a Mercedes Benz for a year? Then you
say to the person that is making $20,000 or
[[Page S5977]] $25,000 a year, maybe a hubcap. Maybe you will not be
able to afford the hubcap. Maybe a radiator cap, but certainly not the
Mercedes Benz we are going to give to the big folks.
Here we are. No budget; got a tax cut, not middle-class tax cut, a
tax cut that gives the bulk of the benefits to the wealthiest. It is
the old cake and crumbs theory. Give the cake to the big shots. Leave a
few crumbs to the rest and say everybody got something.
It is like somebody going to Camden Yards and saying, ``You know
something. I am going to give away $100 million in Camden Yards over at
the baseball stadium in Baltimore.'' So everybody files in with great
expectations because it is going to be divided up among them. The
person goes around to every seat and gives everybody a dollar. But the
person sitting behind home plate, seat A, row one, that person gets
$99,999,000--essentially the bulk of the tax cut, the bulk of the
giveaway. That is what is happening here, and people understand that.
So we are in a situation now where those of us who look at this
contract and the strategy wonder what is real. They say, ``I want a
balanced budget. I want a balanced budget. I am willing to weigh in and
lift for a balanced budget. I am going to propose a container of
spending cuts that is real and substantial.''
But as I said a couple of months ago, you know, I tuned in once to a
television program and saw weight lifting and body building. They had
the body building contest where the folks come out and pose. I had
never seen this before. They oil themselves up and they come out and
flex their muscles. And the announcer said, ``In the sport of body
building there is a big difference between lifting and posing.''
I thought to myself. Gee. That sort of spells the difference in
politics. There are a lot of folks who are terrific in posing. They
come out here and flex around, get all oiled up, and look pretty and
impress everybody. The question then on April 1 is what can you lift?
The answer is apparently nothing. This is all posing.
I think all of us here need to understand what the dimensions of the
problem are for this country. We have serious dimensions in the problem
of Medicare and Medicaid, and we have to resolve it. We have to reform
the system. We ought to redress the rate of growth to the extent we
can. We ought to do that in a bipartisan way. But nobody that I know of
on this side of the aisle believes we ought to provide $11,000 tax cuts
for the people with a couple hundred thousand dollars in income, and
then say to the seniors in this country, ``We are sorry. We don't have
enough money to provide health care for you.''
Those are the issues. Is it fair to juxtapose them? It is darned
right it is fair. We intend to do that because I think we ought to pass
a budget that moves us toward a balanced budget and get rid of these
deficits. I think we ought to reform the welfare system. We ought to
reduce the rate of growth in Medicare and Medicaid. We should reform
the welfare system as well. We ought to reduce the rate of growth in
health-care programs.
But we ought not under any circumstance play this kind of a game
where we can construct one more bit of evidence of reaching out to the
wealthiest in our country and saying, ``By the way, let us give you an
extra bonus, a little extra appreciation for what you do for America.''
There is nothing wrong with being wealthy. I think everybody would like
to be wealthy. But there are a whole lot of folks in this country who
are not wealthy who work and try very hard and also need some help.
I think the help we can give them in this country as a whole is to
reduce this crushing budget deficit, do it in an honest way, address
the wrenching issues of health care in an omnibus way, but especially
with respect to Medicare and Medicaid. If we do that, then I think
finally these kinds of things will be believable.
I came today to discuss this only because I have seen the scurrying
or the flurry of activity in the last couple of days by our majority
leader, and by the Speaker, and by so many others who now say, ``Well,
it is true we were thinking of several hundred billion dollars in cuts
in Medicare and Medicaid but now we want to talk about it in a
different context.'' Why the change? All of us know why the change.
Because they understand that even those of us who went to the smallest
schools can add and subtract, and when things do not add up, you have
to live with the consequences.
This kind of a chart does not add up against the backdrop of those
who want to go after Medicare and Medicaid. It does not add up either
that those who are most anxious to change the Constitution now somehow
seem not anxious at all to bring the budget resolution to the floor of
the Senate.
My hope is that in the very near future all of us who care about this
can work together and solve these problems together.
You know, I supported, in 1993, a budget resolution that passed this
Chamber by one vote, and I have never apologized and never intend to
apologize to anybody for voting to do it. I am glad I did. It was the
right vote.
The easiest vote and the political vote would have been to vote no,
because what we did was we cut some spending, we increased some taxes,
and we reduced the deficit.
Nearly half of our Chamber said, ``Count me out. I just want to talk
about deficit reduction, but when it comes to voting for it, I ain't
going to vote for it in a minute, not an hour, not a year.'' So we did
not even get one Republican vote to pass the budget resolution.
So I do not want people in this Chamber wondering whether the Senator
from South Carolina or others are willing to balance the budget. We
have been willing to cast the difficult votes and live with the
consequences. And I am perfectly satisfied with that.
But there is much, much more to do. The next step, and I hope the
final step, in getting toward a balanced budget amendment requires, I
think, sober, serious budget cuts. It requires us to jettison these
kinds of approaches that are called middle-class tax cuts, that really
once again reduce the revenues and increase the deficit in order to
give tax cuts to the wealthy.
Madam President, I see the Senator from South Carolina is on his
feet. Those are the points I wanted to make today about wondering why
the budget is not before us, No. 1; and, No. 2, trying to understand a
bit, why so much activity in the last 72 hours by leaders of the other
party on the Medicare and Medicaid reform issue? I think I understand
it. I think they understand it. We will see in the coming days what
results from it.
I yield the floor.
Mr. HOLLINGS addressed the Chair.
The PRESIDING OFFICER (Mr. Inhofe). The Senator from South Carolina.
Mr. HOLLINGS. Mr. President, I want to join in the comments of our
distinguished colleague from North Dakota along the line of the
difficulty with respect to the budget, and then let me also address
Medicare and some of the comments made recently.
I ask unanimous consent that a document released last January on the
realities of truth in budgeting be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Hollings Releases Realities on Truth in Budgeting

Reality No. 1: $1.2 trillion in spending cuts is necessary.
Reality No. 2: There aren't enough savings in entitlements.
Have welfare reform, but a jobs program will cost; savings
are questionable. Health reform can and should save some, but
slowing growth from 10 to 5 percent doesn't offer enough
savings. Social Security won't be cut and will be off-budget
again.
Reality No. 3: We should hold the line on the budget on
Defense; that would be no savings.
Reality No. 4: Savings must come from freezes and cuts in
domestic discretionary spending but that's not enough to stop
hemorrhaging interest costs.
Reality No. 5: Taxes are necessary to stop hemorrhage in
interest costs.

[[Page S5978]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Deficit CBO Jan. 1995 (using trust
funds)................................. 207 224 225 253 284 297 322
===============================================================================================================
Freeze discretionary outlays after 1998. 0 0 0 -19 -38 -58 -78
Spending cuts........................... -37 -74 -111 -128 -146 -163 -180
Interest savings........................ -1 -5 -11 -20 -32 -46 -64
---------------------------------------------------------------------------------------------------------------
Total savings ($1.2 trillion)....... -38 -79 -122 -167 -216 -267 -322
===============================================================================================================
Remaining deficit using trust funds..... 169 145 103 86 68 30 0
Remaining deficit excluding trust funds. 287 264 222 202 185 149 121
5 percent VAT........................... 96 155 172 184 190 196 200
Net deficit excluding trust funds....... 187 97 27 (17) (54) (111) (159)
Gross debt.............................. 5,142 5,257 5,300 5,305 5,272 5,200 5,091
Average interest rate on debt (percent). 7.0 7.1 6.9 6.8 6.7 6.7 6.7
Interest cost on the debt............... 367 370 368 368 366 360 354
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Figures are in billions. Figures don't include the billions necessary for a middle-class tax cut.

------------------------------------------------------------------------
Nondefense discretionary spending cuts 1996 1997
------------------------------------------------------------------------
Space station........................................... 2.1 2.1
Eliminate CDBG.......................................... 2.0 2.0
Eliminate low-income home energy assistance............. 1.4 1.5
Eliminate arts funding.................................. 1.0 1.0
Eliminate funding for campus based aid.................. 1.4 1.4
Eliminate funding for impact aid........................ 1.0 1.0
Reduce law enforcement funding to control drugs......... 1.5 1.8
Eliminate Federal wastewater grants..................... 0.8 1.6
Eliminate SBA loans..................................... 0.21 0.282
Reduce Federal aid for mass transit..................... 0.5 0.1
Eliminate EDA........................................... 0.02 0.1
Reduce Federal rent subsidies........................... 0.1 0.2
Reduce overhead for university research................. 0.2 0.3
Repeal Davis-Bacon...................................... 0.2 0.5
Reduce State Dept. funding and end misc. activities..... 0.1 0.2
End P.L. 480 title I and III sales...................... 0.4 0.6
Eliminate overseas broadcasting......................... 0.458 0.570
Eliminate the Bureau of Mines........................... 0.1 0.2
Eliminate expansion of rural housing assistance......... 0.1 0.2
Eliminate USTTA......................................... 0.012 0.16
Eliminate ATP........................................... 0.1 0.2
Eliminate airport grant in aids......................... 0.3 1.0
Eliminate Federal highway demonstration projects........ 0.1 0.3
Eliminate Amtrak subsidies.............................. 0.4 0.4
Eliminate RDA loan guarantees........................... 0.0 0.1
Eliminate Appalachian Regional Commission............... 0.0 0.1
Eliminate untargeted funds for math and science......... 0.1 0.2
Cut Federal salaries by 4 percent....................... 4.0 4.0
Charge Federal employees commercial rates for parking... 0.1 0.1
Reduce agricultural research extension activities....... 0.2 0.2
Cancel advanced solid rocket motor...................... 0.3 0.4
Eliminate legal services................................ 0.4 0.4
Reduce Federal travel by 30 percent..................... 0.4 0.4
Reduce energy funding for Energy Technology Develop..... 0.2 0.5
Reduce Superfund cleanup costs.......................... 0.2 0.4
Reduce REA subsidies.................................... 0.1 0.1
Eliminate postal subsidies for nonprofits............... 0.1 0.1
Reduce NIH funding...................................... 0.5 1.1
Eliminate Federal Crop Insurance Program................ 0.3 0.3
Reduce Justice State-local assistance grants............ 0.1 0.2
Reduce export-import direct loans....................... 0.1 0.2
Eliminate library programs.............................. 0.1 0.1
Modify Service Contract Act............................. 0.2 0.2
Eliminate HUD special purpose grants.................... 0.2 0.3
Reduce housing programs................................. 0.4 1.0
Eliminate Community Investment Program.................. 0.1 0.4
Reduce Strategic Petroleum Program...................... 0.1 0.1
Eliminate Senior Community Service Program.............. 0.1 0.4
Reduce USDA spending for export marketing............... 0.02 0.02
Reduce maternal and child health grants................. 0.2 0.4
Close veterans hospitals................................ 0.1 0.2
Reduce number of political employees.................... 0.1 0.1
Reduce management costs for VA health care.............. 0.2 0.4
Reduce PMA subsidy...................................... 0.0 1.2
Reduce below cost timber sales.......................... 0.0 0.1
Reduce the legislative branch 15 percent................ 0.3 0.3
Eliminate Small Business Development Centers............ 0.056 0.074
Eliminate minority assistance--Score, Small Business
Institute and other technical assistance programs,
women's business assistance, international trade
assistance, empowerment zones.......................... 0.033 0.046
Eliminate new State Department construction projects.... 0.010 0.023
Eliminate Int'l Boundaries and Water Commission......... 0.013 0.02
Eliminate Asia Foundation............................... 0.013 0.015
Eliminate International Fisheries Commission............ 0.015 0.015
Eliminate Arms Control Disarmament Agency............... 0.041 0.054
Eliminate NED........................................... 0.014 0.034
Eliminate Fulbright and other international exchanges... 0.119 0.207
Eliminate North-South Center............................ 0.002 0.004
Eliminate U.S. contribution to WHO, OAS and other
international organizations including the United
Nations................................................ 0.873 0.873
Eliminate participation in U.N. peacekeeping............ 0.533 0.533
Eliminate Byrne grant................................... 0.112 0.306
Eliminate Community Policing Program.................... 0.286 0.780
Moratorium on new Federal prison construction........... 0.028 0.140
Reduce coast guard 10 percent........................... 0.208 0.260
Eliminate Manufacturing Extension Program............... 0.03 0.06
Eliminate coastal zone management....................... 0.03 0.06
Eliminate national marine sanctuaries................... 0.007 0.012
Eliminate climate and global change research............ 0.047 0.078
Eliminate national sea grant............................ 0.032 0.054
Eliminate State weather modification grant.............. 0.002 0.003
Cut weather service operations 10 percent............... 0.031 0.051
Eliminate regional climate centers...................... 0.002 0.003
Eliminate Minority Business Development Agency.......... 0.022 0.044
Eliminate Public Telecommunications Facilities Program
grant.................................................. 0.003 0.016
Eliminate children's educational television............. 0.0 0.002
Eliminate national information infrastructure grant..... 0.001 0.032
Cut Pell grants 20 percent.............................. 0.250 1.24
Eliminate education research............................ 0.042 0.283
Cut Head Start 50 percent............................... 0.840 1.8
Eliminate meals and services for the elderly............ 0.335 0.473
Eliminate title II social service block grant........... 2.7 2.8
Eliminate community services block grant................ 0.317 0.470
Eliminate rehabilitation services....................... 1.85 2.30
Eliminate vocational education.......................... 0.176 1.2
Reduce chapter 1 20 percent............................. 0.173 1.16
Reduce special education 20 percent..................... 0.072 0.480
Eliminate bilingual education........................... 0.029 0.196
Eliminate JTPA.......................................... 0.250 4.5
Eliminate child welfare services........................ 0.240 0.289
Eliminate CDC Breast Cancer Program..................... 0.048 0.089
Eliminate CDC AIDS Control Program...................... 0.283 0.525
Eliminate Ryan White AIDS Program....................... 0.228 0.468
Eliminate maternal and child health..................... 0.246 0.506
Eliminate Family Planning Program....................... 0.069 0.143
Eliminate CDC Immunization Program...................... 0.168 0.345
Eliminate Tuberculosis Program.......................... 0.042 0.087
Eliminate agricultural research service................. 0.546 0.656
Reduce WIC 50 percent................................... 1.579 1.735
Eliminate TEFAP:
Administrative...................................... 0.024 0.040
Commodities......................................... 0.025 0.025
Reduce cooperative State research service 20 percent.... 0.044 0.070
Reduce animal plant health inspection service 10 percent 0.036 0.044
Reduce food safety inspection service 10 percent........ 0.047 0.052
---------------
Total............................................... 36.941 58.402
------------------------------------------------------------------------

____
Amendment Intended To Be Proposed by Mr. Hollings

At the appropriate place insert the following:

SEC. . SENSE OF THE SENATE CONCERNING CONGRESSIONAL
ENFORCEMENT OF A BALANCED BUDGET.

It is the Sense of the Senate
(A) that the Congress should move to eliminate the biggest
unfunded mandate--interest on the national debt, which drives
the increasing federal burden on state and local governments;
and
(B) that prior to adopting in the first session of the
104th Congress a joint resolution proposing an amendment to
the Constitution requiring a balanced budget--
(1) the Congress set forth specific outlay and revenue
changes to achieve a balanced federal budget by the year
2002; and
(2) enforce through the Congressional budget process the
requirement to achieve a balanced federal budget by the year
2002.

Mr. HOLLINGS. Mr. President, in this particular document, I went as
seriously in purpose as I possibly could to try my dead-level best to
do what the contract said.
As you well know, Mr. President, I have voted for and supported a
balanced budget. I voted for one in 1968 and 1969. As chairman of the
Budget Committee, we cut the deficit materially. I opposed the tax cuts
of President Reagan and favored the spending cuts, which was very
costly to me politically. But I knew we had to do it. I knew what the
problem was.
I, thereupon, recommended a freeze when our friend, Senator Howard
Baker, was the majority leader, and we worked on that. I later worked,
of course, with Senator Gramm and Senator Rudman on Gramm-Rudman-
Hollings, where we sequestered, cut right straight across the board,
reduced the deficit for awhile, and fought like a tiger at 12:41 a.m.,
October 19, 1990, when they repealed Gramm-Rudman-Hollings on that
point of order, with Senator Gramm voting to repeal it. And I have been
disillusioned by that.
But I had tried the freeze; I tried the cuts. And then, under
President Bush, talking with his OMB Director, Dick Darman, I said to
Dick, ``If you can get President Bush to go along now, we will have to
have not only the spending cuts, the spending freezes, the elimination
of tax loopholes, but we need revenues to get on top of this.''
Because I will show in later debate where President Reagan got us the
first $100 billion deficit and the first $200 billion. President Bush
got us the first $300 billion deficit and the first $400 billion
deficit. And I will show that by actual record.
As I have said, we have to get on top of this monster. I testified
before the Finance Committee for a value-added tax. So I put this
particular item that I have referred to in the Record just once again
to justify my capacity and sincerity to talk on this particular point.
Because I listed the very, very difficult task that was confronting
us whereby, in a line, you are not going to save that much in
entitlements and welfare reform and health reform or Social Security or
defense, but rather you are going to have to look for domestic
discretionary spending. And to put us on a glidepath that first year,
you had to cut $37 billion in domestic discretionary spending and even
then, you would not accomplish it because interest costs grows this
year by $43 billion.
So like ``Alice in Wonderland,'' in order to stay where you are, you
have to run as fast as you can; in order to get ahead, you have to run
even faster. So it is a far, far more serious problem.
And the talk about tax cuts, that is out of the whole cloth.
Everybody likes tax cuts. I joined with Senator Feingold from Wisconsin
earlier this year in saying forget about cutting the revenues. The
problem is you need revenues, because we have spending on automatic
pilot.
I can tell you here and now, irrespective of what they are saying, as
we talk this particular day, May 2, 1995, we have spent another $1
billion. And tomorrow, we will spend another $1 billion; Thursday,
another $1 billion; and Friday another $1 billion; and Saturday,
another $1 billion; and Sunday, another $1 billion, just in interest
costs, on automatic pilot.
How do you get on top of this monster? Well, you have to do all the
above
[[Page S5979]] and, yes, it is going to take bipartisanship and not
going to take politics.
I want to make reference now to the statement just made by the
Senator from North Dakota about Medicare, because we hear a lot of
whooping and wailing about Medicare and, above all, about the President
of the United States.
Now, heavens above, if there is one thing--and I think President
William Jefferson Clinton has been blamed for everything up here--but
if there is one thing that President Clinton cannot be blamed for, that
is any deficit in Medicare-Medicaid. He was back home in Little Rock,
AR, when we were up here creating these deficits. So let us not blame
the President.
Moreover, let us not blame him since he has come to town. He put this
as the No. 1 issue. They are talking about AWOL now. I am going to get
to this point. Here is the gentleman they talk about being AWOL. He
came to town with health care reform as his No. 1 interest and issue.
Along with that, he submitted a cut of $125 billion. And the then-
chairman of our Finance Committee was the distinguished Senator from
New York, Senator Moynihan. He described that as fantasy. And Senator
Packwood, the ranking member, joined in with him--a $125 billion cut
was fantasy. It just could not be done.
But we worked on it. And we worked on spending cuts. We worked on
controlling entitlements, and we worked on tax increases. And, yes, we
came up, finally, with a plan that year with all three of them, without
a single, single, single Republican vote in either the Senate or the U.
S. House of Representatives.
We reduced the deficit some $500 billion. We eliminated over 100,000
Government jobs. We increased taxes on gasoline, liquor, and
cigarettes. We increased taxes even on Social Security. And, finally,
we did get an agreement, after hard work, of a $56 billion cut in
Medicare.
Now, remember, in the last 24 hours, we have heard AWOL: The
President is AWOL; took a walk; waved the flag of surrender; AWOL.
Here was a President who led and got his Vice President over and all
to get the necessary votes so we could get those cuts in Medicare.
Thereupon, the President came last year with another $80 billion in
cuts, along with health care reform, and what did they do? They
rebuffed him and beat up on him and ridiculed the First Lady. But she
worked, and, agree or disagree, you could not say that Hillary Rodham
Clinton was AWOL or that William Jefferson Clinton was AWOL.
Now what they want to do, Mr. President--and this is the interesting
thing and I am going to include this in the Record--they wanted the
President of the United States to do all the dirty work, all the cuts.
I want to show you the Dole-Domenici alternative entitled ``Because
Government, Not People, Should Be the First to Sacrifice.'' Mr.
President, I ask unanimous consent that the Dole-Domenici alternative
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Dole/Domenici Alternative: Because government, not people, should
be the first to sacrifice

Billions\1\
Drop all proposed spending add-ons................................-$124
Drop investment
Drop stimulus
Permit new spending if paid for by added spending cuts
Eliminate proposed taxes...........................................-295
Drop all individual income taxes
Drop President Clinton's proposed new energy tax
Drop all business income taxes
Eliminate Social Security tax increase
Eliminate all proposed user fees....................................-18
Accept all proposed mandatory and discretionary cuts...............-241
Accept all mandatory savings
Accept all discretionary savings (Defense and non-Defense)
Restore $20 billion in Defense budget...............................+20
Specific details await President's budget submission
Freeze domestic discretionary baseline..............................-92
Freeze fiscal year 1994 domestic discretionary BA except for
increased funding for child immunization and WIC programs ($500
million in 1994)
Extend domestic discretionary sequester to enforce freeze and savings
Revenues:
Pay for R&E and other investment tax incentives:
Cap non-Social Security mandatory spending........................-93.1
Total non-Social Security mandatory savings: $177 billion over 5
years
Cap on Medicare and Medicaid spending (CPI+population+4%)
Debt savings........................................................-38
__________

Real deficit reduction\2\..................................-444.2
Sasser assumptions on debt management..............................16.1
__________

Total deficit reduction....................................-460.4
==========
_______________________________________________________________________

\1\Numbers are based on CBO capped baseline.
\2\Deficit in 1998 would drop to $168.4 billion and continue falling
into the next century.
Process reform proposals:
Establish discretionary spending caps for defense and non-
defense domestic programs.
Create fixed deficit targets with enforcement through
across the board cuts if targets breached.
Assumes zero-based budgeting to control future spending.
Mr. HOLLINGS. Mr. President, this is the Dole-Domenici alternative
budget they put up in March 1993. The language is: ``Accept all
proposed mandatory and discretionary cuts, $241 billion.'' They not
only accepted the President's cuts but on top of that they capped non-
Social Security mandatory spending--a cap on Medicare and Medicaid. So
they could go to the 1994 election and say, ``Look at what they have
done. The President wants to cut your Medicare.''
And in 1994, here is what they had. This one is entitled ``GOP
Alternative Deficit Reduction and Tax Relief, Slashing the Deficit,
Cutting Middle-Class Taxes.'' Mr. President, I ask unanimous consent to
print the GOP alternative in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

GOP Alternative: Deficit Reduction and Tax Relief

slashing the deficit, cutting middle class taxes

The Republican Alternative Budget will reduce the deficit
$318 billion over the next five years--$287 billion in policy
savings and $31 billion from interest savings. This is $322
billion more in deficit reduction than the President proposes
and $303 billion more in deficit reduction than the House-
passed resolution contains.
Moreover, the GOP alternative budget helps President
Clinton achieve two of his most important campaign promises--
to cut the deficit in half in four years and provide a
middle-class tax cut. The GOP plan:
Reduces the deficit to $99 billion in 1999. This is $106
billion less than the 1999 deficit projected under the
Clinton budget.
Even under this budget Federal spending will continue to
grow.
Total spending would increase from $1.48 trillion in FY
1995 to more than $1.7 trillion in FY 1999.
Medicare would grow by 7.8-percent a year rather than the
projected 10.6-percent. Medicaid's growth would slow to 8.1-
percent annually rather than the projected 12-percent a year
growth.
It increases funding for President Clinton's defense
request by the $20 billion shortfall acknowledged by the
Pentagon.
Provides promised tax relief to American families and small
business:
Provides tax relief to middle-class families by providing a
$500 tax credit for each child in the household. The
provision grants needed tax relief to the families of 52
million American children. The tax credit provides a typical
family of four $80 every month for family expenses and
savings.
Restores deductibility for interest on student loans--
321,000 for 25,000.
Indexes capital gains for inflation and allows for capital
loss on principal residence.
Creates new incentives for family savings and investments
through new IRA proposals that would allow penalty free
withdrawals for first time homebuyers, educational and
medical expenses.
Establishes new Individual Retirement Account for
homemakers.
Extends R&E tax credit for one-year and provides for a one-
year exclusion of employer provided educational assistance.
Adjusts depreciation schedules for inflation (neutral cost
recovery).
Tax provisions result in total tax cut of $88 billion over
five years.
Fully funds the Senate Crime Bill Trust Fund, providing $22
billion for anti-crime measures over the next five years. The
Clinton budget does not. The House-passed budget does not.
The Chairman's mark does not.
Accepts the President's proposed $113 billion level in
nondefense discretionary spending reductions and then secures
additional savings by freezing aggregate nondefense sending
for five years.
[[Page S5980]] Accepts the President's proposed reductions
in the Medicare program and indexes the current $100 annual
Part ``B'' deductible for inflation. Total Medicare savings
would reach $80 billion over the next five years.
Achieves $64 billion in Medicaid savings over the next five
years, by capping Medicaid payments, reducing and freezing
Disproportionate Share Hospital payments at their 1994 level.
Achieves additional savings through reform of our welfare
system totaling $33 billion over the next five years.
Repeals Davis-Bacon, reduces the number of political
appointees, reduces overhead expenditures for university
research, and achieves savings from a cap on civilian FTE's.

Mr. HOLLINGS. Mr. President, now we have in March of last year:
``Accept the President's proposed reduction in the Medicare program,
and index the Part B deductible. Total Medicare savings would reach $80
billion over the next 5 years.''
So there is a conscious awareness in the distinguished majority
leader when he talks of the President being AWOL on Medicare. Rather
than being AWOL, he has been wounded in the front lines while these
others have been all back in the barracks and not even attending the
battle. In fact, back in the barracks, the cattle call was what we
needed was portability so you can carry your coverage from job to job--
a little bit of this, that and the other, just some minor adjustments--
why is there all this problem, there is no real problem in medical
coverage in America.
Now it is a crisis. When? In 2002. I am trying to get by tomorrow. I
am trying to stop spending a billion dollars a day today, tomorrow, and
the next day. If I can stop doing that, I can get on top of the
problems in the year 2002. But to come forward at this particular time
and run all over the national TV talking about taking a walk and going
AWOL when the poor fellow has been ground into the ground, he has been
totally rebuffed. He has tried and fought the good fight. So now they
come with all of this ``Let's have bipartisanship.'' They would not
give us a single vote, and now they want to get bipartisan, now they
want to get commissions, now we are AWOL because we are ready to try to
put the truth to their so-called contract.
The rubber is now meeting the road, and if you look at that contract,
Mr. President, talking about Medicare and AWOL, who shoots the troops
out there on the front line, the Medicare troops? The contract does,
for the simple reason that we in raising Social Security taxes--and
this Senator voted to raise Social Security taxes--we raised 25 billion
bucks and allocated it to Medicare.
And what does the contract call for? Abolish that tax and not give
the $25 billion, rather let us shoot the Medicare troops and add to the
Medicare deficit.
Do not come with your contract and tell me how serious you are about
this deficit and all the costs of Medicare. Then you say, oh, by the
way, that problem that the President said for 2 years was the principal
cause of the deficit and you shot him down, the President is AWOL. You
know it. It was adopted momentarily by the distinguished majority
leader, because one of these alternatives says ``the GOP alternative,''
and I take it the majority of the GOP certainly was for it in March of
last year. It is in the Record. Read it. And now you say that the
President is AWOL, he does not even know the problem and he will not
come front and center. He has used good common sense, as they call it,
commonsense budgets, or whatever is supposed to be common sense around
here. He used common sense on this one.
He has tried and fought the good fight. But to be accused, of all
things, of being AWOL when they come with a contract trying to increase
the Medicare deficit some 25 billion bucks and saying those who have
led the fight since they have been in office and never caused any of it
are AWOL. The President has been in the front lines leading the battle
and fighting the fight.
My suggestion is they get out of the barracks and get out there on
the line themselves and put out the full meaning of their so-called
deficit reduction package.
On that score, I have been the chairman of the Budget Committee, and
I have been the ranking member of the Budget Committee. I have worked
on it since 1974, the only remaining Member of either the House or the
Senate who has been on it all that time. And I can tell you here and
now, in trying to get prompt consideration so the authorizing
committees would know what to do and how to do it, we finally put into
law that you had the budget out of the committee by April 1 and passed
the Senate and passed both Houses by April 15 the concurrent
resolution.
As of this minute, we have not met to discuss--we had some cursory
hearings the first of the year--but we have not met in 2 months on this
budget. They do not even call a meeting. They do not call a discussion.
And yet they have the audacity to run around here as leaders and talk
about people being AWOL on Medicare and Medicaid.
We have done our best, and we will continue to do our best. But if
they want to get any kind of following, they are not going to get any
following out of this Senator as long as they continue these political
shenanigans. They know it and everybody else knows it. I hope the press
will report it, because that is all they do now. They treat it like a
spectator sport up here and just avoid dealing with the real issue.
I have pointed out the virtual impossibility of attaining--what
Chairman Kasich says on the other side--a balanced budget by the year
2002 without taxes. They can be put on notice, now that I am speaking,
that I will join with them on any plan they have so long as it includes
revenue.
The reason I say that is because I have tried it every other way--and
I am not dumb enough now, having struggled with this thing for 20 years
on the Budget Committee with half a haircut. I do not want a little bit
here in cuts and a little bit here and a halfway going there and
saying, oh, we are going to save $170 billion in interest costs by 2002
and give $170 billion over to the Finance Committee so they can give a
middle class tax cut, and beginning to play politics that way. We do
not have the money. We are borrowing every day to keep this Government
going. They put a bunch of numbers down on paper, then they all wink at
each other and say, ``Well, who is going to be here in 2002?''
We can project it just as economists have projected it. We can put it
down in black and white when we all know differently. If you are going
for a real budget deficit reduction, by having the Government operating
in the black by the year 2002, you have my vote. We will give, and
take, all the way around because I am committed to the spending cuts
and what have you, but not overall, unless you are going to agree to
have the revenues. I put in a 5 percent value added tax because it is
needed. But you have to have substantial revenues and not tax cuts for
middle class and capital gains and family cuts and all these other
kinds of things that they have in, just to buy the 1996 election. No
half a haircut for me. If you want to have truth in budgeting, then you
have my cooperation and vote. But if you are going to have a half
truth, which is worse than any at all, a half a haircut, keep it
yourself and get it passed by yourself.
Now, Mr. President, I have quite a bit to say with respect to
punitive damages, because there have been more than enough articles
written on this particular score. Let me ask at this point that we have
printed in the Record an article by Thomas Lambert with respect to
punitive damages, outlining, if you please, the various cases that are
brought about safety in America. It is an article of some years ago. I
ask unanimous consent that it be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:

Suing For Safety

(By Thomas F. Lambert, Jr.)

It has been well and truly said, ``If you would plant for a
year, plant grain; for a decade, plant trees; but if you
would plant for eternity, educate a man.'' For nearly four
generations, ATLA has been teaching its men and women, and
they have been demonstrating to one another, that you can sue
for safety. Indeed, one of the most practical measures for
cutting down accidents and injuries in the field of product
failure is a successful lawsuit against the supplier of the
flawed product. Here, as well as elsewhere in Tort Law,
immunity breeds irresponsibility
[[Page S5981]] while liability induces the taking of
preventive vigilance. The best way to make a merchant
responsible is to make him accountable for harms caused by
his defective products. The responsible merchant is the
answerable merchant.
Harm is the tort signature. The primary aim of Tort Law, of
the civil liability system, is compensation for harm. Tort
Law also has a secondary, auxiliary and supportive function--
the accident prevention function or prophylactic purpose of
tort law--sometimes called the deterrent or admonitory
function. Accident prevention, of course, is even better than
accident compensation, an insight leading to ATLA's
longstanding credo: ``A Fence at the Top of the Cliff Is
Better Than an Ambulance in the Valley Below.''
As trial lawyers say, however, ``If you would fortify,
specify.'' The proposition that you can sue for safety is
readily demonstrable because it is laced and leavened with
specificities. They swarm as easily to mind as leaves to the
trees.

accident prevention through successful suits in the products liability
field
(1) Case of the Charcoal Briquets Causing Death from Carbon
Monoxide. Liability was imposed on the manufacturer of
charcoal briquets for the carbon monoxide death and injury of
young men who used the briquets indoors to heat an unvented
mountain cabin. The 10-pound bags read, ``Quick to Give Off
Heat'' and ``Ideal for Cooking in or Out of Doors.'' The
manufacturer was guilty of failure to warn of a lethal latent
danger. Any misuse of the product was foreseeable because it
was virtually invited. Next time you stop in at the local
supermarket or hardware store, glance at the label on the
bags of charcoal briquets. In large capital letters you will
find the following: ``WARNING. DO NOT USE FOR INDOOR HEATING
OR COOKING UNLESS VENTILATION IS PROVIDED FOR EXHAUSTING
FUMES TO OUTSIDE. TOXIC FUMES MAY ACCUMULATE AND CAUSE
DEATH.'' Liability here inspired and exacted a harder, more
emphatic warning, once again reducing the level of excessive
preventable danger.
(2) Case of the Exploding Cans of Drano. When granular
Drano is combined with water, its caustic soda interacts with
aluminum, another ingredient in its formula and produces
intensive heat, converting any water into steam at a rapid
rate. If the mixture is confined, the pressure builds up
until an explosion results. The manufacturer's use of a
screw-on top in the teeth of such well known hazard was a
design for tragedy. The expectable came to pass (as is the
fashion with expectability). In Moore v. Jewel Tea Co., a 48-
year-old housewife suffered total blindness from the
explosion of a Drano can with a screw-on top, eventuating in
a $900,000 compensatory and $10,000 punitive award to the
wife and a $20,000 award to her husband for loss of conjugal
fellowship.
A high school chemistry student could see that what was
needed was a ``flip top'' or ``snap cap'' designed to come
off at a pressure of, say, 15-20 pounds per square inch.
After a series of adverse judgments, the manufacturer
substituted the safer flip top. Of course, even the Drano
flip top will be marked for failure if not accompanied by
adequate testing and quality control. Capers involved a suit
for irreversible blindness suffered by 10-year-old Joe Capers
when the redesigned flip top of a can of Drano failed to snap
off when the can fell into the bathtub and the caustic
contents spurted 8\1/2\ feet high impacting Joe in the face
and eyes with resulting total blindness. The shortcomings in
testing the can with the reformulated design cost the company
an award of $805,000. As a great Torts scholar has said,
``Defective products should be scrapped in the factory, not
dodged in the home.''
Drayton v. Jiffee Chemical Corp., is a grim and striking
companion case to the Drano decisions mentioned above, and it
underscores the same engineering verities of those cases: the
place to design out dangers is on the drawing boards or when
prescribing the chemical formula. a one-year-old black girl
suffered horrendous facial injuries, ``saponification'' or
fusion of her facial features, when an uncapped container of
Liquid-Plumr was inadvertently tipped over. At the time of
the accident, this excessively and unnecessarily caustic
drain cleaner was composed of 26 percent sodium hydroxide,
i.e., lye. No antidote existed because, as the manufacturer
knew. Liquid-Plumr would dissolve human tissue in a fraction
of a second. To a child (or any human being) a chemical bath
of the drain cleaner could be as disfiguring as falling into
a pool of piranha fish. Liquid-Plumr, mind you was a
household product, which means that its expectable
environment of use must contemplate the ``patter of little
feet'' as the children's hour in the American home
encompasses 24 hours of the day.
At the time of marketing this highly caustic drain cleaner,
having made no tests as to its effect on human tissue within
the existing state of the art, the defendant could have
reformulated the design to use 5 percent potassium bydroxide
which would have been less expensive, just as effective and
much safer. After some 59 other Liquid-Plumr injuries were
reported to defendant, it finally reformulated its design to
produce a safer product. In Drayton the defendant was allowed
to argue in defense and mitigation that its management was
new, that it had learned from its prior claims and litigation
experience and that it had purged the enterprise of its prior
egregious misconduct.
To open the courtroom door is often to open a school door
for predatory producers.
(3) Case of the Tip-Over Steam Vaporizer. A tip-over steam
vaporizer true to that ominous description was upset by a
little girl who tripped over the unit's electric outlet cord
on the way to the bathroom in the middle of the night. The
sudden spillage of scalding water in the vaporizer's glass
jar severely burned the 3-year old child. The worst injuries
in the world are burn injuries. The cause of the catastrophe
was a loose-lidded top which could have been eliminated by
adopting any one of several accessible, safe, practical,
available, desirable and feasible design alternatives, such
as a screw-on or child guard top. The truth is that the
manufacturer, Hankscraft, had experienced a dozen prior
similar disasters. In the instant case, the little girl
recovered a $150,000 judgment against the heedless
manufacturer, impeaching the vaporizer's design because of
lack of screw-on or child-guard top. When the manufacturer,
with icy indifference to the serious risks to infant users of
its household product, refused to take its liability
carrier's advice to recall and redesign its loose-lidded
vaporizer, persisting in its stubborn refusal when over 100
claims had been filed against it, the carrier finally balked
and refused to continue coverage unless the company would
recall and redesign. Then and
only then did Hankscraft stir itself to redeem and correct
the faulty design of its product, thereafter proudly
proclaiming (and I quote), ``Cover-lock top protects
against sudden spillage if accidentally tipped.'' Once
again Tort Law had to play professor and policeman and
teach another manufacturer that safety does not cost: It
pays. Under what might be called the Cost-Cost formula,
the manufacturer will add safety features when it comes to
understand that the cost of accidents is greater than the
cost of their prevention. The Tip-Over Steam Vaporizer
case is the most graphic example known to us showing that
corporate management can be recalled to its social
responsibilities by threat of stringent liability,
enhanced by deserved civil punishment via punitive
damages, and that belief in such a proposition is more
than an ivory tower illusion.
A good companion case to the Tip-Over-Steam-Vaporizer case,
serving the same Tort Touchstone of Deterrence, is the
supremely instructive Case of the Remington Mohawk 600 Rifle.
While a 14-year-old boy was seeking to unload one of these
rifles, pushing the safety to the ``off'' position as
required for the purpose, the rifle discharged with the
bullet entering the boy's father's back, leaving him
paralyzed and near death for a long time. The agony of his
guilt, his feeling that he was to blame for his father's
devastating injuries, pressed down on the boy's brow like a
crown of thorns and almost unhinged his sanity. Assiduous
investigation by the family's lawyer unearthed expert
evidence of unsafe design and construction and lax quality
control of the safety selector and trigger assemblies of the
Mohawk 600.
The result of the exertions of the plaintiff's lawyer,
deeply and redoubtedly involved in challenging the safety
history of the rifle model, was a capitulation by Remington
and an agreement to settle the father's claim (he was a
seasoned and successful defense trial lawyer) for $6.8
million. Remington also wrote the son a letter, muting some
of his anguish by stating that the weapon was the whole
problem and that he was in no way responsible for his
father's injuries. Then, facing the threat of cancelled
coverage from its carriers for skyrocketing premiums in the
projection of other multimillion dollar awards, Remington
commendably served the public interest by announcing the
recall campaign in which we see another electrifying example
of Tort Law litigating another hazardous product feature from
the market.
Remington's nationwide recall program affected 200,000
firearms; notices in newspapers and magazines similar to this
one that appeared in the January 1979 issue of Field and
Stream cut back on the harvest of hurt and heartbreak:
``IMPORTANT MESSAGE TO OWNERS OF REMINGTON MODEL 600 and 660
RIFLES, MOHAWK 600 RIFLES, AND XP-100 PISTOLS. Under certain
unusual circumstances, the safety selector and trigger of
these firearms could be manipulated in a way that could
result in accidental discharge. The installation of a new
trigger assembly will remedy this situation. Remington is
therefore recalling all Model 600 rifles except those with a
serial number starting with an `A'. . . Remington recommends
that prior
to any further usage of guns included in the recall, they be
inspected and modified if necessary. [Directions are then
given for obtaining name and address of nearest Remington
Recommended Gunsmith who would perform the inspection and
modification service free of charge.].''
Tort Law forced Remington to look down the barrel and see
what it was up against. Once again Tort Law was the death
knell to excessive preventable danger.
For a wonderfully absorbing account of The Mohawk 600, see
Stuart M. Speiser's justly praised Lawsuit (Horizon Press,
New York, 1980) 348-55.
(4) Case of MER/29, the Anti-Cholesterol Drug Which Turned
out to Cause Cataracts. Many trial lawyers will recall the
prescription drug MER 29 marketed for its benign and
benevolent effect in lowering blood cholesterol levels and
treating hardening of the arteries but which turned out to
have an unpleasant and unbargained for effect on users,
[[Page S5982]] the risk of causing cataracts. As Peter
DeVries recently observed, ``There is nothing like a calamity
to help us fight our troubles.'' Blatant fraud and
suppression of evidence from animal experiments were proved
on the manufacturer's part in the marketing of this dangerous
drug. Who did more--the federal government or private trial
lawyers--in getting this dangerous drug off the market and
compensating the numerous victims left in its wake? The
question carries its own answer. The United States drug
industry has annual sales of 16 billion dollars per year,
while the Food and Drug Administration has an annual budget
of 65 million dollars to oversee all drug manufacture,
production and safety. How can the foothills keep the Alps
under surveillance? Worse, as shown by the MER/29 experience,
enforcement of the law in that situation, far from being
vigorous and vigilant, was lame, limp and lackluster. It was
only private suits advanced by trial lawyers that furnished
the real muscle of enforcement and sanction, compensation for
victims, deterrence of wrongdoing, and discouragement of
corporate attitudes toward the public recalling that
attributed to Commodore Vanderbilt.
As to the indispensible role and mission of the trial
lawyer in Suing for Safety, it should not be overlooked that
the current Administration has moved to sharply restrict the
regulation of product safety by the Consumer Product Safety
Commission. The 1982 Budget for the commission was reduced by
30 percent in the first round of Reagan Administration budget
cuts and is marked for further cuts in the future.
As the Thalidomide, MER/29, Dalkon Shield, Asbestos, DES,
Slip-into-Reverse Transmissions and Fuel Tank scandals have
been starkly revealed, we have crime in the suites as well as
crime in the streets. Corporate culpability calls for
corporate accountability, and our society has developed no
better instrument to encourage socially responsible corporate
behavior than the vehicle of adverse judgments beefed up by
punitive damages. In the MER/29 situation, for example, the
criminal fines levied on the corporate producer and its
executives were slap-on-the-wrist trivial when contrasted
with the deterrent impact of punitive damage awards in
current uncrashworthiness cases where flagrant corporate
indifference to public safety was established.
Our leading scholar in the field of punitive damages,
writing with verve and virtuosity on that subject, concluded
in 1976 that punitive damages awards should be permitted in
appropriate products liability cases. Writing in 1982 with
the same unbeatable authority, Professor David G. Owen traces
the ferment and developments of doctrine in the ensuing years
and then delivers a conclusion informed by exhaustive
research, seasoned reflection, and an obvious morality of
mind. ``I remain convinced of the need to retain this tool of
legal control over corporate abuses. . . .''
(5) Case of the Infant Who Died from Drinking Toxic
Furniture Polish Where Manufacturer Failed to Warn Mother to
Keep Toxic Product out of Reach of Children. This is the
celebrated case of Spruill v. Boyle-Midway, Inc., in which a
14-month old child reached over from his crib and pulled a
doily off a bureau, causing a bottle of Old English Red Oil
Furniture Polish, manufactured by the defendant, to fall into
the toddler's crib. During the few minutes his mother was out
of the room, the baby got the cap off the bottle and drank a
little bit of the polish. He was dead within two days of
resulting chemical pneumonia. The bottle had a separate
warning about combustibility in letters \1/8\ inch high, but
only in the midst of other text entitled ``Directions'' in
letters \1/32\ inch high did it say ``contains refined
petroleum distillates. May be harmful if swallowed,
especially by children.'' The mother testified that she saw
the warning about combustibility but did not read the
directions because she knew how to use furniture polish. In a
negligence action against the maker, the jury found that both
defendant and the baby's mother were negligent and awarded
wrongful death damages to the child's father and siblings but
not to the mother. The Fourth Circuit in keeping with the
grain of modern authority held that it was irrelevant that
the child's ingestion of the toxic polish was an unintended
use of the product. The jury could properly find that in the
absence of an adequate warning to the mother that she could
read and heed--to keep the polish out of the reach of
children--such misuse of the product was a foreseeable one.
The defect was to be tested not only by intended uses but by
foreseeable misuses.
The jury could find that the manufacturer's placement of
the warning was designed more to conceal than reveal,
especially in view of the greater prominence given the fire
warning \1/8\ of an inch compared to the Lilliputian print,
\1/32\ of an inch, as to the contents containing ``refined
petroleum distillates''. The poison warning could be found to
fall short of what was required to convey to the average
person the dangerous nature of this household product. The
label suggested that harm from drinking the polish was not
certain but merely possible, while experts on both sides
agreed that a single teaspoon would be lethal to children.
The warning in short could properly be found to be
inadequate--too soft, mispositioned and not sufficiently eye
arresting. Defendant admitted in answer to interrogatories
that it knew of 32 prior cases of poisoning from ingestion of
its ``Old English Red Polish.''
Did the imposition of liability in this seminal Spruill
case supra stimulate, goad or spur the manufacturer to take
safety measures against the foreseeable risk of ingestion by
innocent children? A trip to the local hardware store a
couple of days ago reveals that Old English Red Oil Polish
now sports the following on its label: ``DANGER HARMFUL OR
FATAL IF SWALLOWED. COMBUSTIBLE. KEEP OUT OF REACH OF
CHILDREN. SAFETY CAP.''
An error is not a mistake unless you refuse to correct it.
(6) Case Holding Manufacturer of PAM (Intended to Keep Food
from Sticking to Cooking Surfaces) Liable for Death of Teen-
Ager from Inhalation of PAM's Concentrated Vapors. Harless v.
Boyle Midway Div. of Amer. Home Products, involved an
increasing number of teenagers who were dying of a ``glue-
sniffing syndrome,'' inhaling the concentrated vapors of PAM,
a household product intended to keep food from sticking to
cooking surfaces. Originally, the manufacturer used only a
soft warning on the can's label: ``Avoid direct inhalation of
concentrated vapors. Keep out of the reach of children.''
However, to the knowledge of defendant, the children
continued sniffing and dying. Then the manufacturer, as an
increasing number of lawsuits were pressed upon it for the
preventable deaths of such children, changed the warning on
its label, shifting to a harder warning: ``CAUTION: Use only
as directed, intentional misuse by deliberately concentrating
and inhaling the contents can be fatal.'' This was, of
course, a much harder and more emphatic warning. The Fifth
Circuit held that it was reversible error to exclude
plaintiff's evidence (in an action for the wrongful death of
a PAM-sniffing 14-year-old) that no deaths had occurred from
PAM sniffing after the defendant had hardened its warning by
warning against the danger of death, the ultimate trauma.
On remand the jury brought in a verdict for the boy's
estate in the amount of $585,000 with an additional finding
by the jury that the lad's administrator was entitled to an
award of punitive damages. Prior to the punitive damages
suit, the case was settled for a total of $1.25 million. It
was uncontested that prior to the lad's death the
manufacturer knew of 45 inhalation deaths from foreseeable
misuse of its product, and upon remand admitted to an
additional 68 from the same expectable cause.
If you will examine the label on the can of PAM on your
shelf, as the writer has just done, you will find: ``WARNING
USE ONLY AS DIRECTED, INTENTIONAL MISUSE BY DELIBERATELY
CONCENTRATING AND INHALING THE CONTENTS CAN BE HARMFUL OR
FATAL.'' Once again the pressures of
liability, stimulated a producer to avoid excessive
preventable dangers in its product's use by strengthening
its warning label, thereby enhancing consumer protection.
(7) Case of the Poisonous Insecticide Holding That Warnings
Must Contain Appropriate Symbols, Such as Skull and
Crossbones, Where Manufacturer Knows That Product May Be Used
by Illiterate Workers (Spanish-Speaking Imported Puerto Rican
Laborers) Who Would Not Understand English. This is the
salutary holding in the celebrated case of Hubbard-Hall Chem.
Co. v. Silverman. The First Circuit upheld judgments entered
on jury verdicts for the wrongful death of two illiterate
migrant farm workers who were imported by a Massachusetts
tobacco farmer and killed by contact with a highly toxic
insecticide manufactured and distributed by defendant. Even
though the comprehensive and detailed danger warnings on the
sacks fully complied with label requirements of the
Department of Agriculture, the jury could properly find that
because of the lack of a skull or crossbones or other
comparable symbols the warning was inadequate. Use of the
admittedly dangerous product by persons who were of limited
education and reading ability was within the range of
apprehension of the manufacturer. While evidence of
compliance with governmental regulations was admissible, it
was not decisive. Governmental standards are ``minimums,'' a
floor not a ceiling, and so far as adequate precautions are
concerned, federal regulations do not oust the possibly
higher common-law standards of the Commonwealth of
Massachusetts.
The steady, unflagging pressures of litigation against the
inertia, complacency and moral obtuseness of manufacturers
have not only resulted in enhanced safety in the field of
conscious design choices (substituting child-guard screw-on
tops on tip-over steam vaporizers or over-the-axle fuel tanks
for those mispositioned more vulnerably in front of the axle
or adding rear-view mirrors to blind behemothic earth-moving
machines whose design obstructs the vision of a reversing
operator, etc.) but also in inducing product suppliers to
reduce marketing defects in the products they sell by
strengthening the adequacy of the instructions and warnings
that accompany their products set afloat in the stream of
commerce.
The net affect of such benign and beneficial litigation has
been to improve the adequacy and efficacy of the educational
information given to consumers by producers via improvements
in the conspicuousness of warnings given; making them more
prominent, eye-arresting, comprehensive, complete and
emphatic; placing the warnings in more effective locations;
avoiding ambiguous warnings; extending warnings to the safe
disposition of the product; and avoiding any dilution of the
warnings given. In short, the
[[Page S5983]] bottom line, as indicated in the cited
representative sampling of cases, is that successful lawsuits
operate as safety incentives to ``inspire'' product suppliers
to furnish instructions and warnings that are in ratio to the
risk and in proportion to the perils attending foreseeable
uses of the marketed products.
Here, too, we see the conspicuous usefulness of the lawsuit
as the weapon for ferreting out marketing defects, whether
ingenious or ingenuous, in selling dangerously defective
products.
(8) Case of Marketing Carbon Tetrochloride Using Warnings
Found to Be Inadequate Because Inconspicuous. Suppose a
defendant sells carbon tetrachloride and places on all four
sides of the can, in large letters, the words ``Safety
Kleen,'' and then uses small letters (Lilliputian print) to
warn of the serious risk of using the cleaning fluid in an
unventilated place for places the fine print warning only on
the bottom of the can). It requires no tongue of prophecy to
predict that this warning will be found inadequate because
too inconspicuous. It was so held in Maize v. Atlantic
Refining Co. Not only was the warning inadequate because not
conspicuous enough, but the representation of safety
(``Safety Kleen'') operated to dilute, weaken, and counteract
the warning. Moreover in Tampa Drug Co. v. Wait, the court
upheld a judgment for the wrongful death of a 38-year-old
husband who died from carbon tetrachloride poisoning after
using a jug of the product to clean the floors of his home.
While the label warned that the vapor from the liquid was
harmful and that prolonged breathing of it or repeated
contact with the skin should be avoided and that the product
should only be used in well ventilated areas, the court with
laser-beam accuracy ruled that the warning nonetheless could
be found inadequate because of its failure to warn with
qualitative sufficiency as to deadly effects or fatal
potentialities which might follow from exposure to its fumes.
Decisions such as Maize and Wait supra were the prologue
and predicate for the action taken by the FDA in 1970, under
the Federal Hazardous Substances Act, to ban and outlaw
carbon tetrachloride.
Torts archivists know that successful private lawsuits to
recover for harm from products simply too dangerous to be
sold at all, regardless of the completeness or urgency of the
warning given, frequently lead to a recall and reformulation
of the product's design or to a decision to ban the product
from the market. Life and limb are too important to trade off
against unmarketed inventory.
(9) Case of the 8-Year-Old Boy Who Choked to Death from
Strangling on a Quarter-Inch Rubber Rivet, Part of a Riviton
Toy Kit Given Him for Christmas. This case will indeed rivet
the attention (in the sense of attract, fasten and hold) of
concerned citizens who wish to understand how the threat of
liability operates as a spur to safety on the part of product
producers. The present example involves a toymaker whose work
is indeed ``child's play.''
Parker Brothers, a General Mills subsidary headquartered
some 18 miles north of Boston, had big plans for Riviton.
This was a toy kit consisting of plastic parts, rubber rivets
and a riveting tool with which overjoyed children could put
together anything from a windmill to an airplane. In the
first year on the market in 1977, the Riviton set seemed on
its way to becoming one of those classic toys that parents
will buy everlastingly. However, one of the 450,000 Riviton
sets bought in 1977 ended up under the Christmas tree of an
8-year-old boy in Menomonee Falls, Wis. He played with it
daily for three weeks. Then he put one of the quarter-inch
long rubber rivets into his mouth and choked to death. Ten
months later, with Riviton sales well on their way to an
expected $8.5 million for the year, a second child strangled
on a rivet.
What should the company do? Just shrug off the two fatal
child strangulations, ascribe the deaths to freakish
mischance, try to shift the blame to parental failure to
supervise and police their children at play, or assign
responsibility to the child's abnormal misuse or abuse of
their product? Could not the company cap its disavowal of
responsibility by a bormidic disclaimer that, ``After all,
peanuts are the greatest cause of strangulation among
children and nobody advocates the banning of the peanut.''?
However, as manufacturers, Parker Brothers well knew that
they would be held liable to an expert's skill and knowledge
in the particular business of toymaking and were bound to
keep reasonably abreast of scientific knowledge, discoveries
and hazards associated with toys in their expectable
environment of use by unsupervised children in the home. The
toymaker knew that the Riviton set must be so designed and
accompanied by proper instructions and warnings that its
parts would be reasonably safe for purposes for which it was
intended but also for other uses which, in the hands of the
inexperienced, impulsive and artless children, were
reasonably foreseeable. When you manufacture for children,
you produce for the improvident, the impetuous, the
irresponsible. As a seasoned judge put it: ``The concept of a
prudent child, God forbid, is a grotesque combination.'' Much
must be expected from children not to be anticipated when you
are dealing with adults, especially the propensity of
children to put dangerous or toxic or air-stopping objects
into their mouths. The motto of childhood seems to be: ``When
in doubt, eat it.'' Knowledge of such childish propensity is
imputed to all manufacturers who produce products, especially
toys, which are intended for the use of or exposure to
children. Cases abound to document this axiom.
Recently, Wham-O Manufacturing Co. of San Gabriel, Calif.,
voluntarily recalled its Water Wiggle, a garden hose
attachment that drowned a child when it jammed in its throat.
Still more recently, Mattel, Inc. of Hawthorne, Calif.,
initiated a recall of missiles fired by its Battlestar
Gallactica toys when a 4-year-old boy inhaled one and died.
The manufacturer of a ``Play Family'' set of toy figurines
would have been well advised to pull from the market and
redesign the small carved and molded figures in the toy set,
intended for children of the teething age. A 14-month-old
child swallowed one of the toy figures 1\3/4\" high and \7/
8\" in diameter, and before it could be extricated from his
throat at a hospital's emergency room, the child was reduced
to vegetable status as a result of irreversible brain damage
from the toy's windpipe blockage of air supply to the brain.
The manufacturer's dereliction of design and lack of product
testing were to cost it a $3.1 million jury verdict for the
child and his parents.
Against the marketing milieu and the legal setting sketched
above, what should be the proper response of Parker Brothers,
manufacturers of the Riviton toy set, when its executives
learned of the second child's death from strangulation on the
quarter-inch rubber rivet in the toy kit? Should they have
tried to tough it out or luck it out in the well known
lottery ``do nothing and wait and see''? The company was
sensitive not only to the constraints of the law (liability
follows the marketing of defective products), but also to the
imperatives of moral duty and social responsibility, and the
commercial value of an untarnished public image. Parker
Brothers decided to halt sales and recall the toy. As the
company president succinctly stated. ``Were we supposed to
sit back and wait for death No. 3?''
Business, the Frenchman observed, is a combination of war
and sport. Tort Law pressures business to realize how
profitless it may prove to war against children or to trifle
and jest with their safety. The commendable conduct of Parker
Brothers in this case is one of the most striking tributes we
know to the deterrent value and efficacy of Tort Law and the
example would make a splendid case study for the nation's
business schools.
(10) Case of the Recycling Washing Machine That Pulled out
a Boy's Arm. In Carcia v. Halsett. The plaintiff, an 11-year-
old boy, sued the owner of a coin-operated laundromat for
injuries inflicted while he was using one of the washing
machines in the launderette. He waited several minutes after
the machine had stopped its spin cycle before opening the
door to unload his clothing. As he was inserting his hand
into the machine a second time to remove a second handful of
clothes the machine suddenly recycled and started spinning,
entangling his arm in the clothing, causing him serious
resulting injuries. The evidence was clear that a common $2
micro switch--feasible, desirable, long available--would have
prevented the accident by automatically shutting off the
electricity in the machine when the door was opened. The
reviewing court held the launderette owner strictly liable
for defective design because the machine lacked a necessary
safety device, an available micro switch. Shortly thereafter
the defendant obtained 12 of these micro switches and
installed them himself on the machines. Once again, the
threat of tort liability serves to deter--the prophylactic
purpose of Tort Law at work. The deterrent function of Tort
Law is not just an idea in the air; it has landing gear, has
come down to earth and gone to work.

summary

The foregoing 10 cases and categories are merely random and
representative examples, not intended to be complete or
exhaustive, of the deterrent aim and effective of Tort Law in
the field of product failure or disappointment.
It needs to be emphasized that the preventive aim of Tort
Law is pervasive and runs like a red thread throughout the
entire corpus of Torts. For example, the private Tort
litigation system has served, continues to serve, as an
effective and useful therapeutic and prophylactic tool in
achieving better health care for our people by discouraging
and thereby reducing the incidence of medical mistakes,
mishaps and ``misadventures.'' An error does not become a
mistake unless you refuse to correct it. For example,
successful medical malpractice suits have induced hospitals
and doctors to introduce such safety procedures as sponge
counts, electrical grounding of anesthesia machines, the
padding of shoulder bars on operating tables, and the
avoidance of colorless sterilizing solutions in spinal
anesthesia agents. Remember, the fraudulent butchery
practiced on defenseless patients by the notorious Dr. John
Nork was not unearthed, pilloried or ended by the vigilant
action of hospital administrators, peer review groups, or
medical societies but by successful, energetically pressed
malpractice actions prosecuted by trial lawyers in behalf of
the victimized patients.
So we come full circle and end as we began: Accident
Prevention Is Better Than Accident Compensation: ``A Fence at
the Top of the Cliff Is Better Than an Ambulance in the
Valley Below.'' A successful lawsuit and the pressures of
stringent liability are one of the
[[Page S5984]] most effective means for cutting down on
excessive preventable dangers in our risk-beleaguered
society.
My hero in the foregoing chronicle of good lawyering has
been the hard-working trial lawyer with his care, commitment
and concern for public safety, the civil religion of us all.
He more than any other professional has proved that we can
indeed Sue for Safety. My tribute to him is in words Raymond
Chandler used to salute his hero: ``Down these mean streets a
man must go who is not himself mean, who is neither tarnished
nor afraid.''

Mr. HOLLINGS. Mr. President, I think the point of the article, Mr.
President, is that we really should be focusing on the issue of safety.
We have a magnificent record here in the United States of America with
respect to the safety of products, and one of the best articles I have
ever seen on this is the one just printed in the Record entitled
``Suing For Safety'' by Thomas F. Lambert. He goes down the various
cases up until that particular point some years ago. He says:

Tort law also has a secondary, auxiliary and supportive
function--

In addition to compensation for the injured party.

sometimes called the deterrent or admonitory function.

He cites then the various cases that come to mind. ``Accident
Prevention Through Successful Suits in the Products Liability Field.''

Case of the charcoal briquets causing death from carbon
monoxide. Liability was imposed on the manufacturer of
charcoal briquets for the carbon monoxide death and injury of
a young who used the briquets indoors . . .

They produce these in my backyard in South Carolina. The warning is:

Do not use for indoor heating or cooking unless ventilation
is provided for exhausting fumes to outside. Toxic fumes may
accumulate and cause death.

That is exactly what happened in that case.
So we have hundreds and hundreds, maybe thousands, of individuals
that have been saved from death by this one particular case.
Specifically, the Moore versus Jewel Tea Co., where ``a 48-year-old
housewife suffered total blindness from a Drano can * * *'' They had an
imperfect screw on top of the can and, of course, it came under
tremendous pressure and the Drano exploded and caused her blindness.
We also have the case of the Liquid-Plumber, where in almost the same
way injuries were reported to defendant. They reformulated its design
to produce a safer product. ``After some 59 Liquid-Plumber injuries
were reported to defendant, it finally reformulated its design to
produce a safer product.''
Then you have the Tip-over Steam Vaporizor.
A tip-over steam vaporizer scalded a young kid who was walking and
tripped and pulled the particular electrical cord, turning it over. The
insurance carrier finally balked after hundred claims, and went to the
manufacturer and said, ``Look, we are not going to continue coverage on
your company unless you have recall and redesign.'' thereafter, the
company proudly proclaimed

Cover-lock top protects against sudden spillage if
accidentally tipped.

Once again, the tort law had to play professor and policeman and
teach another manufacturer that safety does not cost, it pays. All this
about consumer cost, I am rather embarrassed to hear some of the
arguments. A companion case goes to the Remington Mohawk 600 Rifle
case, where when a young lad was trying to put the safety on to the off
position, it discharged and shot the boy's father in the back. After
pressure was brought Remington sent out this notice:

Important message to owners of Remington Model 600 and 660
rifles, Mohawk 600 rifles and XP-100 pistols. Under certain
unusual circumstances, the safety selector and trigger of
these firearms could be manipulated in a way that could
result in accidental discharge. The installation of a new
trigger assembly will remedy this situation. Remington is
therefore recalling all Model 600 rifles except those with
serial numbers starting with an ``A''. . . Remington
recommends that prior to any further usage of guns included
in the recall, they be inspected and modified if necessary.
[Directions are then given for obtaining name and address of
the nearest Remington recommended gunsmith . . .

Then of course, there was MER/29, the anti-cholesterol drug which
turned out to cause cataracts. It would cause a calamity, and blatant
fraud was proved on the manufacturer's part when they got into the
manufacturer's record. In that particular case, they were manufacturing
a dangerous drug. Who did more? Did the Federal Government or private
trial lawyers do more in getting this dangerous drug off the market?
The question carries its own answer.
The U.S. drug industry has annual sales of $16 billion per year,
while the Food and Drug Administration has an annual budget of $65
million to oversee drug manufacture safety. How can the foothills keep
the Alps under surveillance. Worse, as shown by the Mer/29 experience,
enforcement of the law in that situation, far from being vigorous and
vigilant, was lame, limp, and lackluster.
So it was the trial lawyers, product liability, all those who are
talking about consumers. We are talking about consumers, manufacturers,
and everybody else.
The Consumer Product Safety Commission came about at that particular
time. That is when we instituted it. The 1982 budget, of course, under
President Reagan, cut it some 30 percent. Talking about spending cuts
in the Government, in Government spending, in cut spending.
Now, looking at the Dalkon shield, asbestos, DES, slip into reverse
transmission, fuel tank scandals--all the way down the list--and we
find we have crime in the suites as well as crime in the streets.
We have the case of the infant who died drinking toxic furniture
polish, while the manufacturer failed to warn the mother to keep the
toxic product away and out of the reach of the children.
We have warning changes as to the foreseeable misuse: ``DANGER.
HARMFUL OR FATAL IF SWALLOWED. COMBUSTIBLE. KEEP OUT OF REACH OF
CHILDREN,'' and so forth. That was done.
Then we have the case holding the manufacturer of PAM liable for the
death of a teenager from inhalation of the PAM concentrated vapors, in
the Harless versus Boyle-Midway Division of American Home Products
case.

It was uncontested that prior to the lad's death the
manufacturer knew of 45 inhalation deaths from the
foreseeable misuse of its product, and upon remand admitted
to an additional 68 from the same expectable cause.

In examining the label on the can of PAM on the shelf, Mr. President,
we have: ``WARNING: USE ONLY AS DIRECTED. INTENTIONAL MISUSE BY
DELIBERATELY CONCENTRATING AND INHALING THE CONTENTS CAN BE HARMFUL OR
FATAL.''
We go even to the language difficulties--down in the distinguished
Presiding Officer's backyard, they speak Spanish fluently--the case of
the poisonous insecticide, holding that warning labels must contain
appropriate symbols. Where they cannot read the language, at least they
see the symbol. For wrongful death, in the case of Hubbard-Hall
Chemical Co. versus Silverman, Puerto Rican laborers that could not
understand English had to have, thereupon, the proper symbols.

The First Circuit upheld judgments entered on jury verdicts
for the wrongful death of two illiterate migrant farm workers
who were imported by a Massachusetts tobacco farmer and
killed by contact with a highly toxic insecticide
manufactured and distributed by defendant.

We see here, of course, the conspicuous usefulness of the lawsuit as
the weapon for ferreting out marketing defects, whether ingenious or
ingenuous, in selling dangerously defective products.
We have the case, Mr. President, of marketing carbon tetrachloride.
That was finally taken, of course, off the market by the FDA as a
result of this very disastrous case in Maize versus Atlantic Refining
Co. and Tampa Drug Co. versus Wait. The court found that life and limb
were too important to trade off against unmarketed inventory.
We have the case, Mr. President, of the 8-year-old boy who choked to
death in strangling on a quarter-inch rubber rivet, part of a Riviton
toy kit given him for Christmas. The toymaker knew that the Riviton set
must be so designed and accompanied by proper instructions and warnings
that its parts would be reasonably safe for purposes
[[Page S5985]] for which it was intended but also for other uses
which, in the hands of the inexperienced, impulsive and artless
children, were reasonably foreseeable.
So we had that decision. Parker Brothers decided to halt the sales
and recall the toy. The company president, Mr. President, succinctly
stated: ``Were we supposed to sit back and wait for death No. 3?''
So there is a responsible manufacturer responding to product
liability, saving thousands of others that are buying these toys and
games. The commendable conduct of Parker Brothers in this case is one
of the most striking tributes we know to the deterrent value and
efficacy of tort law. The example would make a splendid case study for
the Nation's business schools.
The case then, Mr. President, of the recycling washing machine that
pulled out a boy's arm. He had waited for the washing machine at the
laundromat for several minutes after the machine had stopped the spin
cycle before opening the door to unload the clothing. As he was
inserting his hand into the machine a second time to remove a second
handful of clothes, the machine suddenly recycled and started spinning
and tore his arm off.
The reviewing court held the launderette owner strictly liable for
defective design because the machine lacked the necessary safety
device, and of course thereafter they installed what they call a
microswitch, which gave safe operation.
I could pursue this on and on, and I should. All we have heard here
is a sham pose of how we are, on the floor of the U.S. Senate,
sponsoring this bill to save the consumer the cost, the cost of the
product, the thrust recognized with the Consumer Product Safety
Commission, which has done outstanding work, and that is why this came
about.
I could go into flammable pajamas, in the textile field, in my
particular backyard. I visited, Mr. President, at Penney's safety
laboratory on the 14th floor on Lexington Avenue in downtown New York.
I was amazed at what Penney was doing. This was years ago.
I went up on that floor and they had all kinds of safety tests for
all the toys and articles going into Penney stores around the country.
That is responsible, corporate leadership. That is what product
liability has brought about. The manufacturers and the retailers,
Penney knows, under joint and several liability, they could be held
liable. So they do not just take a product that appears good which they
can make a profit on without looking at it themselves.
So we have the large marketing operations like Penney's which have
instituted a safety laboratory. This has really saved money, and
consumers--I wish they could find for me the word consumer in the
Constitution. That is all I hear about with the sham trade policy they
have. We are supposed to be saving the manufacturers' backbone, the
jobs in the country.
We just referred a little while ago to manufacturing trade. Twenty-
five years ago, in 1970, 10 percent of the manufactured products
consumed in the United States of America was represented in imports--
just 10 percent.
Today, in 1995, 25 years later, over 50 percent of manufactured
products consumed in the United States is represented in imports. If we
were back to 1970, with 90 percent of manufactured products consumed in
the United States produced in the United States, we would automatically
have 10 million more manufacturing jobs.
That is middle class. Those running around here wanting to do
something for the middle class: We should build it, we should expand
upon it, we should employ them, let them be able to afford a home,
afford sending their kids to college.
We are going like the country of Great Britain, where they told them
years ago, ``Do not worry.'' Instead of a nation of brawn, we will be a
nation of brains; instead of producing products, we will provide
services, a service economy. Instead of creating wealth, we are going
to handle it and be a financial center.
England has gone to hell in an economic handbasket, with two classes
of society, in exactly the way we had it here in the United States of
America.
When we get to product liability, we have one of the finest
initiatives ever to come about in law. National problem--heavens above.
Manufacturers come from the world around and gladly respond to product
liability, bragging about their quality and safety, production.
That is what I have in my backyard. I see it. I talk to the Federal
judges there. Most of them have been appointed by President Bush,
President Reagan, President Nixon, President Ford --all of them.
They are good appointments. I am proud of them. I joined in them in
confirming. I know them intimately. They will say, about product
liability--they will laugh and they say they know it is a political
issue gotten up by Victor Schwartz, the National Association of
Manufacturers, the Business Round Table, and the conference board, and
they run around and ask candidates for the U.S. Senate, the U.S. House
of Representatives, to commit. They use the buzzword reform.
``Will you help us on product liability reform?''

I would say 95 percent of those asked as candidates have never tried
or were aware of a product liability case. The easy answer, running for
reelection or election, be that as it may, is to solve rather than
create problems. If you have large financially supportive groups like
the Conference Board, the Business Round Table, the Chamber of
Commerce, the National Association of Manufacturers asking you, your
immediate response is, ``Well, sure, yes, I am for reform.''
That is why we have been able to hold it up. Because the merit is on
our side. This is a solution looking for a problem. There is not a
national problem in product liability. Of all civil claims in the
United States of America, torts are 9 percent of all civil filings. Of
that 9 percent, only 4 percent of the 9,--36/100 of 1 percent--is in
product liability. The States, over the past 15 years, with this issue
raised, have all reformed--practically all--their product liability
laws.
Why change on punitive damages, now the law of 45 States, at the
national level? Why change that? Has anybody from the States come up
and asked? Not a soul. The nearest they could get--and I remember
politically when they changed it in the Governors Conference. I was
waiting for the Governors because I have been a Governor. You could not
find a Governor coming up and saying there is a terrible problem in my
State. Because you would have to say: Wait a minute, I am a Governor.
What did I propose? What did I try to do? So they sent up the executive
secretary, who just rattled off some nostrums about litigation. He did
not even know what he was talking about.
They brought up other witnesses. It was an embarrassment. In the
Alabama cases they talked of businesses suing businesses. It had
nothing to do with product liability. The hearings that we had before
the Commerce Committee were an embarrassment, the way they were trying
to get this thing on. And that is all it is and that is what is holding
us up.
On the budget, we have not spent any time on the budget--serious
national problems. Welfare reform--serious national problems. Crime, if
they want to go back into the crime bill, or terrorism--serious
national problems. Telecommunications--serious national problems.
But here they come with 36/100 of 1 percent of tort claims, which
habitually have been held, for over 200-and-something years under the
English rule, at the State level. They are preaching, if you please,
Jeffersonian government, ``That government nearest to the people is the
best government'' and that is why we have to get rid of this Washington
bureaucracy, what they call the ``corrupt, liberal welfare state.''
Take housing, block grants back; welfare, block grants back; crime, no
policemen on the beat, block grants back--everything back in block
grants, save this manufacturers bill. And by the way, as we enunciate
the rules and regulations and compliance to the users and so forth, for
the lawyers, let us not make them pertain or apply these to the
manufacturers themselves.
The unmitigated gall of presenting this in a serious fashion on the
floor of the U.S. Senate is an embarrassment to this Senator. I feel
very keenly about it. I know I have behind me the American Bar
Association. I know I
[[Page S5986]] have behind me the Association of State Legislatures. I
know I have behind me the States Attorneys General. I know I have
behind me the Association of State Supreme Court Justices. I know I
have a list of over 130 organizations that we put in there comprising,
amongst others, all the leading consumer organizations in the United
States. Yet they have the audacity to keep pleading here, we have to
save the cost to the consumer, the cost to the consumer.
I yield the floor.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Washington.

Order Of Procedure
Mr. GORTON. Mr. President, I simply would like to inform my
colleagues on the status of debate. We have two amendments to the Dole
amendment that have been placed before us. One, by the Senator from
Maine [Ms. Snowe] is identical to the amendment that was agreed to this
morning as an add-on to medical malpractice. I hope, and ask my
colleagues who are here present--I hope we can simply adopt that
amendment by a voice vote. We had a rollcall vote this morning on an
identical proposition. Then, after an opportunity for Members to come
to the floor and to debate the Dorgan amendment, I intend to move to
table the Dorgan amendment.
The majority leader has said there will be votes, at least one
additional vote and maybe more this evening.
All attempts during the afternoon have been made to secure a
unanimous-consent agreement under which we could complete the debate on
all amendments relating to punitive damages this evening and in a brief
time tomorrow morning and then have a series of votes on punitive
damages tomorrow morning, very much like those on medical malpractice
today. We have been unable to secure that unanimous-consent agreement.
In the absence of being able to secure it, the only way that any
progress can be made is by motions to table and record votes on the
amendments that are before us or are going to be in front of us.
So I intend at this point to yield so the Senator from Wisconsin may
speak, I assume on one of these subjects.
Immediately after he has completed speaking I will ask unanimous-
consent that we--I will ask we simply take a voice vote on the
amendment by the Senator from Maine, Senator Snowe. And then after the
Senator from North Dakota has an opportunity to speak on his amendment,
we will move to table it unless we can secure the unanimous-consent
agreement we have been looking for.
I plead with our colleagues to try to do this in an orderly fashion.
This is not the end of the bill. We are only attempting by tomorrow to
finish up dealing with the subject of punitive damages.
With that, Mr. President, I yield the floor. I think the Member who
has been waiting here the longest time to speak is the Senator from
Wisconsin.
Mr. DOLE addressed the Chair.
The PRESIDING OFFICER. The majority leader.
Mr. DOLE. Mr. President, I will just take a second. I wonder if the
Senator from Wisconsin can give us some idea how long he may wish to
speak, and then the Senator from North Dakota, I understand, wishes to
speak, too, on his amendment?
I would say before they respond, I share the views just expressed by
the Senator from Washington. We had thought we would have an agreement
where amendments would be offered this evening and then tomorrow
morning we would start voting on amendments in the order they were
offered. Apparently we cannot. Agreement has not been cleared on that
side of the aisle.
We are still prepared to negotiate that agreement. That would get us
finished with punitive damages on any and all second-degree amendments.
Failing that, I do not see any alternative than to stay here late
tonight and dispose of as many amendments as we can between now and 11
o'clock or midnight.
If I could just inquire of the Senator from Wisconsin how long he may
wish?
Mr. FEINGOLD. I advise the majority leader, about 15 minutes.
Mr. DOLE. How much time does the Senator from North Dakota require?
Mr. DORGAN. Mr. President, I had hoped we would have a lengthier
period of debate for my amendment. I offered my amendment prior to a
couple of presentations and debate recently on the floor. I had not
anticipated my amendment would be voted on tonight.
When I originally discussed this with the Senator from Washington, I
understand they were at that point working on a unanimous-consent
agreement. I do not know why that unanimous consent agreement has not
been agreed to at this point.
But I do know that there are others who wish to speak on my
amendment. I would hope that if, however, you dispose of the Snowe
amendment, that you would provide further opportunity for some
additional debate. It is certainly not my intention to stretch out this
process. But, by the same token, I think the Senator would admit that
when you offer an amendment, they come to the floor and suggest we have
a vote.
Mr. DOLE. Can we vote at 8 o'clock?
Mr. DORGAN. I have some other people who would like to speak on the
amendment. But the intention of the Senator from Kansas is to do what?
Mr. DOLE. My original intent was to try to get an agreement where we
could offer amendments tonight and vote on those tomorrow which I
thought the Senator from North Dakota was supporting and obviously is
supporting. For some reason we cannot reach that. The only other
alternative we have is to stay here and grind through the amendments
because we are now on the second week on this legislation. It seems to
me that there may be other things we want to do in the next couple of
weeks. But I would be prepared if we can reach an agreement. I
certainly am not going to shut off the Senator from North Dakota. But
if we could reach some reasonable agreement upon what time we could
move to table the amendment, because we are going to stay here late
tonight, late tomorrow night, and late the next night if we cannot
reach an agreement. We do not have any alternative. Would the Senator
have any indication of how much time he might need?
Mr. DORGAN. I might say to the majority leader, Mr. President, that I
would like to visit with some other Members who would like to speak on
my amendment. My understanding when I offered the amendment--I
discussed it with the Senator from Washington--was that we were going
to have a series of votes tomorrow morning. Apparently that has not
materialized, at least in an agreement, at this point. But that was my
understanding when I offered it.
My intention is that the proposal I have offered would eliminate the
punitive damages cap in the underlying legislation. There will be a
series of proposals on punitive damages, and there already have been
some. And there will be others. This is probably the only opportunity
the Senate will have on the issue of eliminating the cap on the
underlying bill. I would hate to see a discussion on that issue go by
in 15 or 20 minutes. I have spoken briefly. I know others would like to
speak on the same subject.
Mr. DOLE. I am trying to reach an agreement. You say 8 o'clock is not
enough time. Nine o'clock? Sooner or later we will move to table, if we
cannot reach an agreement. We do not have any other recourse. We are
the majority. We have to move legislation.
I think the Senator from Washington has a good suggestion. I think we
will proceed and let the Senator from Wisconsin proceed, and then I
will be recognized at that point either to make a tabling motion or
reach an agreement.
Mr. FEINGOLD addressed the Chair.
The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Wisconsin.
Mr. FEINGOLD. I thank the Chair, and I thank the majority leader.
Mr. President, I believe my remarks at this point are not only
relevant to the whole bill but in particular to the contents of the
Dole amendment and some of the contents of the further amendments of
the Senator from North Dakota.
I would like to take this opportunity to respond to statements made
during the debate last week by the senior Senator from Washington that
suggests
[[Page S5987]] that somehow or another the arguments that this bill
has seventh amendment implications is somehow a bizarre argument.
In effect, that statement was made by the distinguished Senator from
Washington on the opening day of this debate, on April 24, following
the opening remarks by the Senator from South Carolina. On April 26,
after my own remarks referencing the seventh amendment to the U.S.
Constitution, the Senator from Washington described references to the
seventh amendment in this context as both curious and bizarre.
I note that the Senator from Washington was very careful not to
assert that either the Senator from South Carolina or the Senator from
Wisconsin were making the argument that the pending legislation
literally violated the seventh amendment, but rather he stated that we
were ``somehow or another implicating the seventh amendment right of
trial by jury into this debate and thereby implied at least that the
bill before us somehow or another restricts that constitutional right
to trial by jury.'' That is the end of his statement.
Mr. President, I find the statements made by the Senator from
Washington to be somewhat curious for two reasons:
First, a number of State courts have already struck down State
statutes imposing limitations on amount of damages that juries can
award as violating State constitutional guarantees of a right to trial
by jury.
There is nothing strange or bizarre about suggesting that such
limitations on the ability to recover may violate fundamental right to
trial by jury since a number of State courts have already made
precisely that determination with respect to similar State laws, and
similar State constitutional provision.
For example, in Smith v. Department of Insurance, 507 So. 2d 1080
(Fla 1987) a $450,000 cap on noneconomic damager in tort actions was
found to violate a right of access to the courts and the right to a
trial by jury.
In Kansas Malpractice Victims Coalition v. Bell, 757 P 2d 251 (Kan
1988), a limit on noneconomic damages and on total damages was held to
violate the state guarantee of right to remedy and jury trial.
In Sophie v. Fibreboard Corporation, 771 P. 2d 711 (Wash, 1989) a cap
on noneconomic damages in tort actions was found to violate the State
constitutional right to a jury trial. The Court said in the Sophie case
that ``[the state of Washington] has consistently looked to the jury to
determine damages as a factual issue, especially in the area of
noneconomic damages. The jury function receives constitutional
protection [under the State constitution] which commands that the right
of trial by jury shall remain inviolate''.
There has thus been a series of State cases holding that statutory
limitations quite similar to those proposed in the pending legislation
violate State constitutional provisions guaranteeing a right to a trial
by jury.
As the Senator from Washington well knows, the seventh amendment has
not been held to apply to State court proceedings. Indeed, both the
Senator from South Carolina and I have been careful not to argue that
the legislation violates the seventh amendment as applied to State
court proceedings.
However, many State constitutions provide for constitutional
guarantees for trial by jury in State court proceedings that parallel
the seventh amendment, and, as I have cited, a number of courts have
held that limitations in State laws similar to those proposed in this
legislation which limit the ability of a jury to award damages violate
the right to a trial by jury under those State constitutional
provisions.
So, Mr. President, that is the first reason it is neither bizarre nor
inappropriate to argue about the right to trial by jury and the impact
this legislation may have on it. But there is a second reason, Mr.
President.
Second, it is clear that this legislation is an assault upon the
American jury system and that is precisely what the proponents intend--
an assault upon the American jury system.
Repeatedly, supporters of this legislation have asserted that it is
needed because of excessive jury awards in product liability and other
tort litigation.
They have repeatedly argued that the legislation is necessary to curb
American juries from making these excessive awards.
This debate has been full of so-called examples of excessive jury
awards, starting with the infamous McDonald coffee case.
In fact, this is a specious argument.
To the extent that jury verdicts have been excessive, courts have
routinely stepped in and reduced the awards, using their long-
established powers of remittitur.
The infamous McDonald coffee case is an excellent example. The court
there reduced the jury award from $2.7 million to $480,000.
I ask unanimous consent that a ``Dear Colleague'' I recently
circulated dealing with the myth of excessive jury awards be printed in
the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. FEINGOLD. Mr. President, this legislation would not only curtail
the power of juries to determine the amount of punitive damages to be
awarded; it would also prevent certain evidence relating to damages
from even being presented to the jury in the first place. That has
something to do with the right to trial by jury.
Section 107 provides that evidence relating to the punitive damages,
for example, evidence of willful misconduct, would be inadmissible
during the compensatory damages stage of the proceeding.
That section 107 also provides that evidence relating to a
defendant's wealth, which I think is clearly a relevant factor in
assessing what level of punitive damages should be assessed, could not
be presented to the jury, which, in my view, is another serious
derogation from the right to trial by jury.
Other proposals which may soon be added to this measure would do even
more of the same.
They would prevent juries from making punitive damages awards
entirely, leaving those decisions not to the jury but to judges alone.
All of these proposals, in my view, evidence a clear and very
disturbing distrust of the jury system itself. And it looks to me like
a presumption somehow that juries are incapable of reaching good
decisions without these kinds of federally mandated restraints and
constraints on the jury. That is what this is--a new Federal mandate
that constrains and restrains juries.
Mr. President, as we debate whether Congress should place these kinds
of mandates or restrictions on the deliberation of juries, it may help
actually to take just a few moments to reflect upon the historical
importance placed upon the jury system in our Nation.
The right to a trial by jury in civil as well as criminal cases was
one of the most important rights that was sought by the framers of our
Constitution.
Indeed, one of the primary grievances of the American colonists
against the British was the extensive effort by the British to shift
the adjudication of civil and criminal disputes from the colonial
courts, where the local juries traditionally sat, to the vice-admiralty
courts and other nonjury tribunals administered by judges who were, of
course, completely beholden to the British Crown.
So this is not something that we just came up with recently. This
goes back as far as our country's history to the colonial era.
This anger over the fact that under the British rule juries were
being deprived of their authority was actually expressed in the
Declaration of Independence itself, which cites among the many
grievances lodged at the British, ``For depriving us in many cases, of
the benefits of Trial by Jury.''
Thomas Jefferson described the jury in his writings as ``the only
anchor yet imagined by man, by which a government can be held to the
principle of its Constitution.''
Mr. President, in the constitutional convention, the proposed
Constitution included the right to trial by jury in criminal cases
under article III, but the absence of an expressed guarantee of the
right in civil actions was condemned by the antifederalists as
sufficient cause to reject the entire Constitution.
[[Page S5988]] So the entire Constitution was in some jeopardy
because of that omission. And, of course, it was those kinds of
concerns of those who were not entirely happy with the Constitution
itself that led to our Bill of Rights, specifically their demand for an
explicit guarantee for the right of a trial by jury for civil cases,
that led to its inclusion in the seventh amendment to the U.S.
Constitution in our Bill of Rights.
Mr. President, it was included from the first among Madison's
proposals for the Bill of Rights, noting ``in suits at common law, the
trial by jury, as one of the best securities to the right of the
people, ought to remain inviolate.''
Juries were regarded by the Framers, according to one constitutional
scholar, Morris Arnold, in a 1980 University of Pennsylvania Law Review
article, ``A Historical Inquiry into the Right to Trial by Jury in
Complex Civil Litigation,'' ``as more than a `mode of trial' they were
instruments of local government as well.''
I find that very interesting. The 104th Congress, I think, should be
given the most credit on any issue perhaps so far for having dealt with
that whole overriding issue of unfunded mandates, of showing respect
for the local levels of government.
Mr. President, our Framers perceived the jury as one of those local
levels of government, one of those institutions that was made up of the
people back home not specifically beholden either to this Federal
Government or, before the revolution, the British Crown.
Indeed, this view of juries as a critical element of the American
democracy prompted Alexis de Tocqueville to observe in ``Democracy in
America,'' ``The jury is, above all, a political institution, and it
must be regarded in that light in order to be duly appreciated.''
More recently in our modern history, Chief Justice Rehnquist
recognized the historical role of the American jury in his dissenting
opinion in Parklane Hosiery Co. versus Shore in 1979, in which our
current Chief Justice stated, ``The founders of our nation considered
the right of trial by jury in civil cases an important bulwark against
tyranny and corruption, a safeguard too precious to be left to the whim
of the sovereign.''
Mr. President, that is what this bill is all about today. This is the
sovereign, the Federal Government, choosing to override the right of
State and local juries to make the decisions about what a jury should
be free to do. This is exactly what Chief Justice Rehnquist must have
meant.
The Supreme Court has repeatedly recognized the fundamental
importance of trial by jury, stating in Dimmick versus Schiedt, that
``Maintenance of the jury as a fact-finding body is of such importance
and occupies so firm a place in our history and jurisprudence that any
seeming curtailment to the right to a jury trial should be scrutinized
with the utmost care.''
Tort reform, particularly limits on the amount of damages that juries
may award, clearly implicates this right to trial by jury, as a number
of State court decisions have held with respect to State laws and
constitutional guarantees to trial by jury.
As the Washington Supreme Court found in the Sophie case, statutory
damage limits interfere with the jury's traditional function to
determine damages.
That case also contains a very instructive discussion of the
difference between a trial judge's power of remittitur to reduce a jury
verdict and a statutory cap, an overall, across-the-board cap, on the
amount of damages a jury can award.
The court observed that the judicial finding that an award is too
high in a particular case is fundamentally different from a
legislatively imposed ``remittitur'' that operates automatically in all
cases without regard to the facts and justice of the case.
A judge implements remittitur only under well-developed
constitutional guidelines that provide that a judge can only reduce a
jury's damages determination when that determination was wholly
unsupported by the evidence, obviously motivated by passion or
prejudice, or when in certain cases it actually shocks the conscience
just for a jury to have given such an excessive award.
Mr. President, absent such factors, there is a strong presumption in
favor of the jury's determination. And that comes to us all the way
back from the Framers and the seventh amendment.
Finally, the opposing party in cases of remittitur has the choice
generally of accepting the reduction or seeking a new trial. It is not
necessarily completely the end of the line.
None of these safeguards, as was observed by the court in the Sophie
case, is present in one of these across-the-board statutory damage
limits that is contemplated by the legislation before us.
The system of remittitur thus operates in a fashion very different
from the kind of statutory caps that are being advocated by the people
who are presenting the so-called tort reform.
Mr. President, I do not intend to get into an extensive debate about
whether or not the pending legislation violates the seventh amendment
in practical terms, since the seventh amendment has not, to this date,
actually been applied to the States through the 14th amendment,
although it is certainly applicable, of course, to proceedings in
Federal court.
It certainly, however, Mr. President, violates the spirit of the
seventh amendment, which was intended to assure that local juries,
local folks on local juries comprised of one's peers, not just
governmental officials in Washington, would be the ones to makes these
decisions.
I am advised that this measure, should it be enacted, Mr. President,
will be challenged in court before the ink is dry, both on the basis of
the seventh amendment and on the basis of last week's decision in
United States versus Lopez, which restricts the right of Congress to
intrude upon areas which have been traditionally regulated by the
States under their own powers.
The decision in Lopez states that the scope of constitutional
authority under the interstate commerce power ``must be considered in
light of our dual system of government and not be extended so as to
embrace effects upon interstate commerce so indirect and remote that to
embrace them, in view of our complex society, would effectually
obliterate the distinction between what is national and what is local
and create a completely centralized government.''
Now that sounds like language, Mr. President, of the so-called
Contract With America--let us not take away the power of the States and
the local governments. But, in a very real sense, that is the best
description of this bill I have heard.
Mr. President, I am one of the few Members of Congress who voted
against the 1994 crime bill; in fact, one of only two Democrats to vote
against the crime bill. I did it, in part, because I believe it
represented an inappropriate incursion of the Federal Government into
areas of law enforcement which had throughout our history been within
the province of State and local law enforcement agencies.
My reasons at the time were based upon policy concerns that the
Federal Government ought to do a better job with the responsibilities
that clearly rested at the Federal level than seeking to usurp State
and local law enforcement responsibilities.
Last week's decision, of course, by the U.S. Supreme Court adds an
even more compelling argument to the debate.
Congress does need to learn to restrain itself from trying to take on
every problem that gets a headline in the newspaper. We need to learn
to say that some problems are better addressed at the State and local
level.
That is why I voted for the unfunded mandates bill, and I believe,
Mr. President, if especially the new Senators take a look at this bill,
tort reform is clearly one of those areas that belongs with the States.
I do not think the Federal Government knows better than the 50 States
of this country as to what should be a law in this area.
There is often a great deal of rhetoric about what the Founding
Fathers might think about various contemporary problems and how our
Government deals with those problems. All we can do is speculate. It
was 200 years ago. But every argument makes us want to know, even
though we cannot know for sure, what the Framers would have said.
[[Page S5989]] At least one of the proponents of this legislation
argued last week that if we asked the Framers, they would not have
wanted juries to consider medical malpractice or product liability
cases. I do not agree with that at all. I think that would have made a
lot of sense to them.
I, for one, believe that the Framers would be horrified--horrified--
at the idea of the Federal Government passing legislation like this to
preempt the powers of State governments, to require State courts to
follow Federal law in an area which has been the domain of the States
and local governments and local juries for 200 years.
They would have been horrified to hear the arguments that somehow the
common citizens, the average folk of this country who comprise American
juries, are somehow out of control and that they need the Federal
Government in Washington to check their powers. That is about as direct
an offense to the folks back home as I can think of, saying they cannot
handle it on these juries, that they are out of control.
I think the American patriots who fought against the British attempts
to take power away from colonial courts, to prevent local juries from
rendering decisions would turn over in their graves to hear such
arguments advanced in their name and in defense of this legislation.
Mr. President, this legislation is nothing more or less than an
assault on the American jury system. It is predicated on a belief that
local juries are not capable of rendering fair decisions. It is an
attempt--a serious attempt--to diminish the role of juries, a role
which our Framers regarded as vital to our democracy and system of
government, and I think it should be soundly rejected.
I just want to raise one last point that actually came out during the
Commerce Committee hearing, and I think it is worth repeating.
Testifying on behalf of the Conference of Chief Justices and in
opposition to this bill was the Honorable Stanley Feldman, the chief
justice of the Arizona State supreme court. The chief justice pointed
out that in many States, we have entrusted juries with virtually all
major decisions, including the decision of whether or not to sentence a
criminal defendant to death.
In criminal courts, we say to the juries, here are the facts of the
case, here is what the prosecution claims the defendant did, here is
the defendant's alibi or confession and here is the doctor's
psychiatric evaluation. We give the juries all of this information, and
then we ask them to make a final judgment about whether a person should
live or die.
As Chief Justice Feldman illustrated, it is almost bizarre that those
who believe we should entrust with juries the power to put people to
death also maintain that juries are unable to objectively calculate
what a reasonable punitive damage award should be.
I find it unfathomable that we can say that juries are qualified to
impose the death penalty on criminal defendants but underqualified and
incapable to assess monetary penalties against civil defendants. I am
afraid that says something about what our society has come to value in
this day and age.
Mr. President, to conclude, this may not literally be an issue of
whether the seventh amendment literally applies in this situation. It
may, as constitutional interpretation has done with respect to Federal
aspects of this bill. But, obviously, the right to trial by jury has to
have some core meaning and, at some point, if you limit what a jury can
do to make a person whole or you restrict the evidence a jury can hear
to make its decision, it has to have an impact on the right to trial by
jury.
Maybe we have not reached that point yet in our legislation in this
country, but I believe this bill takes us quite far over the line and
does seriously diminish what I think most Americans would agree is
properly the role of the jury, not the role of the U.S. Congress.
I thank the Chair, and I yield the floor.
Exhibit 1

Dear Colleague: As the debate continues around the product
liability bill, I wanted to address one of the many myths
circulating about the need for this legislation: that juries
are out of control and they are subject to no restraints
under current law. Quite simply, I believe this attack upon
the jury system is unwarranted.
For over two hundred years Americans have valued the jury
box as much as they have valued the ballot box. Perhaps there
is nothing more symbolic of or distinguishing about the
American judicial system--the greatest judicial system in the
world--than the principal of trial by jury.
The one distinguishing characteristic about American jurors
is that they have no distinguishing characteristics. A juror
could be the waitress that served you breakfast this morning.
It could be the person who delivers your mail. It could be
your doctor, a family member or even your favorite celebrity.
And we must remember that jurors today are just as capable of
administering fair and equal justice as were jurors in 1791,
the year the Seventh Amendment and the Bill of Rights were
ratified.
Unfortunately, the powerful supporters of S. 565 have run
an effective campaign of misinformation about jury verdicts
in recent months. They have tried to convince this country
that jurors are determined to drive American manufacturers
and corporations into bankruptcy. Of course, nothing could be
further from the truth.
A well-known study by Professors Michael Rustad and Thomas
Koening--referred to by the Supreme Court as the ``the most
exhaustive study'' ever on punitive damages--found only 355
punitive damages awards in federal and state courts for
product liability cases between the years 1965-1990. Not
counting the cases that related to asbestos, that is an
average of about 10 punitive damage awards a year--hardly a
situation of vindictive juries running amok in America.
Does this mean that juries are inhuman and incapable of
mistakes? Does it mean that jury decisions should be absolute
with no checks or limits? Of course not. In fact, just last
year the Supreme Court affirmed in Honda Motor Company v.
Oberg that judges have a clear authority and obligation to
limit punitive damages awarded by juries. As Justice Stevens
wrote in his majority opinion, ``. . . judicial review of the
size of punitive damage awards has been a safeguard against
excessive verdicts for as long as punitive damages have been
awarded.''
In their study, Professors Rustad and Koening found that of
the 355 punitive damage awards in the past 25 years, 90 of
these awards--about 25 percent--were either reversed or
remitted by the presiding judge. Take the infamous McDonald's
coffee case. The jury awarded $2.7 million in that case--the
equivalent of two days' worth of McDonald's coffee sales. The
judge reduced this to $480,000 or three times the plaintiff's
economic damages. Judges can and do reduce these awards.
In short, this is reflective of a system of justice in
which juries prescribe appropriate sanctions against parties
that have been found guilty in a product liability action and
at the same time bestows upon judges a necessary oversight
role that is exercised with frequency and prudence.
The fundamental issue here is this: If an injured consumer
sues a manufacturer in a state court, who do you trust to
administer justice in that case--the judge and the jury, or
Congress?
Best regards,
Russell D. Feingold.

Mrs. HUTCHISON addressed the Chair.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. Mr. President, the time has come for us to put some
common sense in our court system. There is no question that we must
make sure that every person has a right to go to court if that person
has been injured. But we see courts being overcrowded, we see
defendants having to settle because it is less expensive to settle than
to go ahead and try a case. We have seen research, particularly in the
area of women's health, being shut off because the drug companies and
the pharmaceuticals just cannot do it. They cannot do it because of the
liabilities they are afraid they will incur.
This is the eighth consecutive Congress in which the Senate or the
Commerce Committee has considered product liability. During that time,
the need for product liability reform has grown by leaps and bounds. A
study by the Texas Public Policy Foundation found that from the early
1980's to the early 1990's, the total number of punitive damage awards
in Dallas County was 14 times greater and the average award, adjusted
for inflation, was 19 times higher.
In Harris County, which is Houston, total awards were up 26-fold and
the average award was up eightfold, and that is from a House Judiciary
Committee report.
My State of Texas and the State of California have begun to take
steps to control this growth. But this is all over the country. These
things are happening all over our country, and it is affecting the
price of our products and the ability to do research.
[[Page S5990]] In a recent letter, Robert Bork, the judge, explained
how product liability laws force national manufacturers to plan and
protect themselves against lawsuits in the most litigious States. He
said a State like California or Texas can impose its views of
appropriate product design and the penalties for falling short on
manufacturers and distributors across the Nation. He found this to be a
perversion of federalism. Instead of national standards being set by
the National Legislature, national standards are set by the courts and
juries of particular States. He was making the case that it is
Congress' role at the Federal level to take control of this situation.
It is a matter of interstate commerce. It is something that we must
deal with.
Today, we are talking about an amendment by the majority leader--and
I am a cosponsor of this amendment--to provide the same protection from
excessive punitive damage awards that this bill provides for
manufacturers and retailers, to civic groups, to charities, to
churches, and to local governments. Our courts are being misused.
People who have not done anything wrong are being held up for
settlements, and now this applies to Girl Scouts and Boy Scouts, to our
Boys and Girls Clubs of America.
Congress must take control. We can lower prices, we can lower
insurance premiums, we can have new business starts, we can get new
products and drugs on the market, we can increase jobs, and we can free
the people who want to volunteer to do that without fear of retribution
by a lawsuit.
We can keep cities and towns from being bankrupted by lawsuits over
playground accidents. We can keep volunteers helping the needy by
maintaining a proportionality between compensatory and punitive damage
awards in tort actions. We must expand the product liability bill to
protect all Americans from unnecessary and frivolous lawsuits, from
excessive damages for injuries they did not cause.
This bill, under the leadership of Senators Gorton and Rockefeller,
goes a long way in the right direction to try to bring these abuses to
heel. It is time to end the judicial lottery and put common sense back
in the courts. If we are going to do that, Mr. President, I think we
must apply it to the cities because, after all, it is the taxpayer who
always foots the bill when there is a lawsuit that gets an award that
the city's insurance does not cover. Who pays? You know. We all know.
It is the taxpayers of this country. When it is the Girl Scouts selling
cookies and they have a frivolous lawsuit because it is just assumed
they would have deep pockets, who pays? It is all the good deeds and
the leadership qualities that Girl Scouts give that will suffer.
It goes on and on, Mr. President. We must take control of the
situation. I hope the Senate will not let this bill go by the wayside.
I hope we do not argue and bicker so that we are not able to get a good
bill out of this body, so that we can go to conference and work with
the House and send something to the President that I hope he will sign.
If we can do that, we will be able to reopen research that has been
left out of the game right now because people are just not able to
afford to do it, because they cannot protect themselves from the
litigation attempts.
So I am hoping that we will take action so that we can open up the
research capabilities and open up our playgrounds and swimming pools.
Personal responsibility is a new theme in America that has been
rejuvenated from the past. I think personal responsibility is part of
what we are about. We are not talking about legitimate issues of a
person being injured. We are not talking about the right to have
economic damages, some damages for pain and suffering--absolutely not.
I have heard stories on the floor for the last week that are heart
wrenching.
There is no question that some people are entitled to damages. But we
have to curb the excesses. We have to bring common sense back into the
mix. That is what this bill will do. I urge my colleagues to support
the Dole amendment so that everyone will have the same coverage as the
corporations do. I urge my colleagues to look at the big picture and
try to make the decision to get a good bill out of the Senate so that
we can send something to the President that I hope he will, in the name
of responsibility, be able to sign.
I yield the floor.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SHELBY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SHELBY. Mr. President, the legislation that we are considering
today has no place on the Senate floor or on the Senate calendar. This
legislation is a blatant attempt to eliminate over 750 years of Anglo-
American common law and to federalize over 200 years of State Tort law
in this country.
I want to return power to the States, not federalize important areas
of State control. I thought that returning power to the States was a
major part of the philosophical victory of the Republican party, my
party, which occurred last fall.
Mr. President, our current legal system, based on Anglo-American law,
has its beginning in A.D. 1215 when the barons of England forced King
John to sign the Magna Carta at Runnymede. The Magna Carta placed the
King under the law and put limits on royal power. It also created
remedies for many of the abuses that were occurring in England and gave
legal protection to the English ruling class, which was later expanded
to all Englishmen. Following the Magna Carta other English legal
documents provided for additional legal protections for British
citizens and the concept of rule of law.
Ultimately, the Magna Carta has come to stand for the proposition
that no man is above the law.
English courts, after the Magna Carta, went on to develop a system of
common law to provide legal protection to all men and women, the likes
of which the world had never seen. Common law, including all Tort law,
is basically judge-made law. For hundreds of years English judges
decided cases which in turn formed the basis for future decisions.
Under the Magna Carta, the later laws passed by the British
Parliament, and the English common law, men were for the first time
given certain basic rights in the legal system such as due process,
jury trials, and the right to cross examine witnesses.
Mr. President, this system of Anglo-American law was brought to our
shores by English settlers and was adopted by our Founding Fathers when
they wrote the United States Constitution--the single most important
document in our land. Many of the provisions of the Magna Carta
anticipate rights that were embedded in the U.S. Constitution and
American law.
Our Constitution created a Federal system of Government. Under this
system, that so many in this body appear to want to do away with, the
Federal Government has certain areas of responsibilities and the States
have their areas of influence.
As early as 1648 in the Maryland Act for the Liberties of the People,
American colonists explicitly recognized that they were protected and
governed by the common law. In 1774, the Declaration of Rights of the
First Continental Congress stated that the ``Colonies are entitled to
the common law of England.'' After the American Revolution, the
colonies, and later the 13 States developed and adopted the common law
to their own needs and circumstances. Common law, including Tort law,
has remained solely a responsibility of the States for over 200 years.
Mr. President, I would like to direct my colleagues' attention to the
tenth amendment of the U.S. Constitution, the tenth amendment states
that:

The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are
reserved to the States respectively, or to the people.

For over 200 years, the States have had the responsibility and a
duty, Mr. President, to develop tort law. They have done so.
The bill we are considering today is the first step, I believe, in
destroying the States' important role in developing and administering
rules and laws for the redress and compensation for various torts,
including product liability cases.
In addition to eliminating over 750 years of Anglo-American common
law, this bill violates the 10th amendment
[[Page S5991]] of our Constitution and the basic principles of
American federalism.
Mr. President, the States have truly served as laboratories of
democracy over the last 20 years in the area of tort reform. Virtually
every State in the country has significantly reformed its legal system
as it relates to product liability.
Where there have been problems, the States have examined their legal
systems and corrected the problems. As Supreme Court Justice Powell has
stated,
Our 50 States have developed a complicated and effective
system of tort laws and where there have been problems, the
States have acted to fix those problems.
There is no current justification, I believe, Mr. President, for
federalizing our Nation's tort system. Under the logic of this bill, if
we carry it a step farther, if we federalize all product liability
cases, why do we not federalize all civil and criminal statutes?
The Federal Government can usurp all State power. We know that.
Unfortunately, Mr. President, there are many in this body who see
federalizing product liability law and other things as a first step to
federalizing all legal matters.
This bill will substantially disrupt and may end our country's State
common law system. It will result in additional litigation in both
State and Federal courts.
Mr. President, I hope that my colleagues will think long and hard
before they go down the path toward ending federalism as we know it and
preempting all State common law.
The Federal Government, including the Congress, I believe, cannot
solve all of our society's ills by Federal statute.
I find this legislation totally unacceptable, and I urge all my
colleagues to vote and work against it.

Amendment No. 621 to Amendment No. 617

(Purpose: To provide that a defendant may be liable for
certain damages if the alleged harm to a claimant is death
and certain damages are provided for under State law, and for
other purposes)

Mr. SHELBY. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The pending question is the Gorton amendment
No. 620.
Mr. SHELBY. Mr. President, I ask unanimous consent that this
amendment be made a second-degree amendment to the Dole amendment.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The assistant legislative clerk read as follows:

The Senator from Alabama [Mr. Shelby], for himself and Mr.
Heflin, proposes an amendment numbered 621.

Mr. SHELBY. Mr. President, I ask unanimous consent that the reading
be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place insert the following:

SEC. . LIABILITY FOR CERTAIN CLAIMS RELATING TO DEATH.

In any civil action in which the alleged harm to the
claimant is death and the applicable State law provides, or
has been construed to provide, for damages only punitive in
nature, a defendant may be liable for any such damages
regardless of whether a claim is asserted under this section.
The recovery of any such damages shall not bar a claim under
this section.

Mr. SHELBY. Mr. President, I have made statements in the past about
the negative effects this bill will have on State laws and federalism
in general. Tonight, I want to be more specific.
My State of Alabama has a wrongful death statute whose damages are
construed as only punitive in nature--yes, only punitive in nature.
Under the product liability bill that we are considering today in the
Senate, along with some of the proposed amendments to this bill, people
who have committed or are guilty of a wrongful death in my State of
Alabama, the damages available will be severely limited.
In 1852, quite a while ago, the Alabama legislature passed what is
known as the Alabama Homicide Act. This act permits a personal
representative to recover damages for a death caused by a wrongful act,
omission, or negligence. For the past 140 years, the Alabama Supreme
Court has interpreted this statute as imposing punitive damages for any
conduct which causes death.
Alabama believes that all people have equal worth in our society, so
the financial position of a person is not used as the measure of
damages in wrongful death cases in my State. The entire focus of
Alabama's wrongful death civil action is on the cause of the death.
The amendment that I am offering tonight on behalf of myself and my
colleague, Senator Heflin, will provide that in any civil action where
the alleged harm to the claimants is death and the applicable State law
only allows for punitive damages such as Alabama, the punitive damages
provision of this bill will not apply--in other words, of the Federal
statute if it were to pass.
Mr. President, I believe there are legitimate reasons to exclude from
coverage of this bill actions such as those brought under Alabama's
wrongful death statute.
I urge all of my colleagues to support this important amendment to my
State.
Mr. HEFLIN. Mr. President, I rise in support of the Shelby amendment.
In all of the 50 States, Alabama has a different and unique recovery
in the event that a decision is made by a court or jury in regard to
the death of an individual, whether it be brought by negligence or any
form of action. Alabama's wrongful death statute is unlike any other
State's wrongful death statute because its damages are punitive only. A
person cannot prove, in a wrongful death case in Alabama, compensatory
damages. An Alabama plaintiff cannot show his wages, his doctor bills,
or anything similar of an economic or noneconomic nature. Alabama's
statute is very unique and different from any other State.
The language of the Shelby amendment was included in a number of
previous bills that were reported out of the Commerce Committee. In the
102d Congress, in the bill that was reported out, S. 640, and in
several bills that were reported out of the Commerce Committee on
product liability previous to that, they contained the exact language
of the pending Shelby amendment. This had been worked on, and there had
been several drafts and everybody agreed that it was a proper amendment
to be included.
I suppose since I have opposed the overall product liability, this
provision may have been taken out. What I am saying is that the
citizens of Alabama ought not to be at a disadvantage in regard to
recovery under whatever product liability bill is passed.
The language of this amendment was agreed to and was in previous
bills but has been omitted from this bill. Basically, it allows for
punitive damages as the element of damages that is allowable. A person
is not allowed to have compensatory damages. A wrongful death statute
does not allow even for the matters pertaining to loss of wages or pain
and suffering or anything else. It is strictly a matter left to the
jury on the wrongful death issue, and has been in existence for a long
time. The defense bar, the plaintiff bar, have all agreed that this is
a type of damage that ought to prevail, pertaining to wrongful death in
Alabama.
This concept was developed many years ago in what we know as the Lord
Campbell Act. The Lord Campbell Act was passed because English
jurisprudence realized that a defect existed in common law in that
there were questions as to whether or not when someone died, that the
cause of action survived.
Many States passed wrongful death statutes, and following the Lord
Campbell Act that was passed in England, the Alabama Supreme Court a
number of years ago, well over 100 years ago, interpreted that act as
being punitive in nature only and compensatory damages could not be
proved.
As a result, under the current language of punitive damage provisions
in the product liability bill, unless the Shelby amendment is adopted,
then a person who is killed in my State in a wrongful manner could not
recover any damages.
I support the Shelby amendment. I think it ought to be adopted. I
think if we look back into the past history and those that have dealt
with it, we see that everybody at a previous time who worked on this
came up with an agreement language, and it is one, I think,
[[Page S5992]] that ought to be adopted by the Senate.
I want Members to check with various people involved in this, and I
think it is a legitimate amendment. It ought to be passed, or otherwise
the people in the State of Alabama will be the only State in the Nation
that could not recover when an individual is killed by negligence or by
gross negligence or recklessness or wantonness or any type of proof
that is necessary to prove a cause of action.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call.
Mr. DOLE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 617, As Modified

Mr. DOLE. Mr. President, I send a modification to my amendment to the
desk.
The PRESIDING OFFICER. The Senator has that right. The amendment is
so modified.
The amendment (No. 617), as modified, is as follows:

On page 19, strike line 12 through line 5 on page 21, and
insert the following:

SEC. 107. PUNITIVE DAMAGES IN CIVIL ACTIONS.

(a) Findings.--The Congress finds that--
(1) punitive damages are imposed pursuant to vague,
subjective, and often retrospective standards of liability,
and these standards vary from State to State;
(2) the magnitude and unpredictability of punitive damage
awards in civil actions have increased dramatically over the
last 40 years, unreasonably inflating the cost of settling
litigation, and discouraging socially useful and productive
activity;
(3) excessive, arbitrary, and unpredictable punitive damage
awards impair and burden commerce, imposing unreasonable and
unjustified costs on consumers, taxpayers, governmental
entities, large and small businesses, volunteer
organizations, and nonprofit entities;
(4) products and services originating in a State with
reasonable punitive damage provisions are still subject to
excessive punitive damage awards because claimants have an
economic incentive to bring suit in States in which punitive
damage awards are arbitrary and inadequately controlled;
(5) because of the national scope of the problems created
by excessive, arbitrary, and unpredictable punitive damage
awards, it is not possible for the several States to enact
laws that fully and effectively respond to the national
economic and constitutional problems created by punitive
damages; and
(6) the Supreme Court of the United States has recognized
that punitive damages can produce grossly excessive, wholly
unreasonable, and often arbitrary punishment, and therefore
raise serious constitutional due process concerns.
(b) General Rule.--Notwithstanding any other provision of
this Act, in any civil action whose subject matter affects
commerce brought in any Federal or State court on any theory,
punitive damages may, to the extent permitted by applicable
State law, be awarded against a defendant only if the
claimant establishes by clear and convincing evidence that
the harm that is the subject of the action was the result of
conduct by the defendant that was either--
(1) specifically intended to cause harm; or
(2) carried out with conscious, flagrant disregard to the
rights or safety of others.
(c) Proportional Awards.--The amount of punitive damages
that may be awarded to a claimant in any civil action subject
to this section shall not exceed 2 times the sum of--
(1) the amount awarded to the claimant for economic loss;
and
(2) the amount awarded to the claimant for noneconomic
loss.
This subsection shall be applied by the court and the
application of this subsection shall not be disclosed to the
jury.
(d) Bifurcation.--At the request of any party, the trier of
fact shall consider in a separate proceeding whether punitive
damages are to be awarded and the amount of such an award. If
a separate proceeding is requested--
(1) evidence relevant only to the claim of punitive
damages, as determined by applicable State law, shall be
inadmissible in any proceeding to determine whether
compensatory damages are to be awarded; and
(2) evidence admissible in the punitive damages proceeding
may include evidence of the defendant's profits, if any, from
its alleged wrongdoing.
(e) Applicability.--Nothing in this section shall be
construed to--
(1) waive or affect any defense of sovereign immunity
asserted by the United States, or by any State, under any
law;
(2) create any cause of action or any right to punitive
damages;
(3) supersede or alter any Federal law;
(4) preempt, supersede, or alter any State law to the
extent that such law would further limit the availability or
amount of punitive damages;
(5) affect the applicability of any provision of chapter 97
of title 28, United States Code;
(6) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation; or
(7) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum.
(f) Federal Cause of Action Precluded.--Nothing in this
section shall confer jurisdiction on the Federal district
courts of the United States under section 1331 or 1337 of
title 28, United States Code, over any civil action covered
under this section.
(g) Definitions.--For purposes of this section:
(1) The term ``claimant'' means any person who brings a
civil action and any person on whose behalf such an action is
brought. If such action is brought through or on behalf of an
estate, the term includes the decedent. If such action is
brought through or on behalf of a minor or incompetent, the
term includes the legal guardian of the minor or incompetent.
(2) The term ``clear and convincing evidence'' means that
measure or degree of proof that will produce in the mind of
the trier of fact a firm belief or conviction as to the truth
of the allegations sought to be established. The level of
proof required to satisfy such standard shall be more than
that required under preponderance of the evidence, and less
than that required for proof beyond a reasonable doubt.
(3) The term ``commerce'' means commerce between or among
the several States, or with foreign nations.
(4)(A) The term ``economic loss'' means any objectively
verifiable monetary losses resulting from the harm suffered,
including past and future medical expenses, loss of past and
future earnings, burial costs, costs of repair or
replacement, costs of replacement services in the home,
including child care, transportation, food preparation, and
household care, costs of making reasonable accommodations to
a personal residence, loss of employment, and loss of
business or employment opportunities, to the extent recovery
for such losses is allowed under applicable State law.
(B) The term ``economic loss'' shall not include
noneconomic loss.
(5) The term ``harm'' means any legally cognizable wrong or
injury for which damages may be imposed.
(6)(A) The term ``noneconomic loss'' means subjective,
nonmonetary loss resulting from harm, including pain,
suffering, inconvenience, mental suffering, emotional
distress, loss of society and companionship, loss of
consortium, injury to reputation, and humiliation.
(B) The term ``noneconomic loss'' shall not include
economic loss or punitive damages.
(7) The term ``punitive damages'' means damages awarded
against any person or entity to punish such person or entity
or to deter such person or entity, or others, from engaging
in similar behavior in the future.
(8) The term ``State'' means any State of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Northern Mariana Islands, the Virgin Islands, Guam,
American Samoa, and any other territory or possession of the
United States, or any political subdivision of any of the
foregoing.

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