[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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