[Congressional Record Volume 141, Number 83 (Thursday, May 18, 1995)]
[Senate]
[Pages S6912-S6930]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CAMPBELL (for himself, Mr. Cochran, Mr. Hatch, Mr. Mack, 
        Mr. DeWine and Mr. McCain):
  S. 817. A bill to require the Secretary of the Treasury to mint coins 
in commemoration of the Native American history and culture; to the 
Committee on Banking, Housing, and Urban Affairs.
[[Page S6913]]

           THE BUFFALO NICKEL COMMEMORATIVE COIN ACT OF 1995

  Mr. CAMPBELL. Mr. President, this morning I take great personal 
pleasure in introducing the Buffalo Nickel Commemorative Coin Act of 
1995.
  Those of us with more than a little gray hair will remember this 
unique piece of history, with the Indian head design on one side and 
the buffalo design on the reverse side.
  This coin was in general circulation from 1913 to 1938, which is a 
very short timeframe, only 25 years, but it is still one of the most 
recognizable coins in American history.
  Now, nearly 60 years after the mint ceased production of the Indian 
head nickel, I would like this generation of Americans to reacquaint 
themselves to this unique piece of American heritage.
  It is also an opportunity to raise some extra needed revenue for the 
National Park System. For these reasons, Senator Cochran, who has 
cosponsored this legislation with me, and I propose a limited edition 
commemorative Indian head nickel.
  The artist who designed the coin over 80 years ago is James Earle 
Fraser. He wanted to produce a coin that was truly American, according 
to his original writings, that cannot be confused with the currency of 
any other country. There is no more significant motif, I suppose, than 
the American bison, the only animal in this country not found in any 
other place in the world.
  Mr. Fraser himself was a famous artist, having done many works of 
art, including ``End of the Trail,'' which is now in the Cowboy Hall of 
Fame in Oklahoma City.
  The Indian head motif has always been accepted as an impression of 
liberty in this country. The American bison was certainly an important 
part of our history.
  Mr. Fraser himself said:
       In designing the buffalo nickel, my first object was to 
     produce a coin which was truly American, and that could not 
     be confused with the currency of any other country. I made 
     sure, therefore, to use none of the attributes that other 
     nations had used in the past. And, in my search for symbols, 
     I found no motif within the boundaries of the United States 
     so distinctive as the American buffalo or bison.

  According to historical sources, the Indian head on the nickel was 
created by Fraser based on three models: Iron Tail, an Olala Sioux; Two 
Moons, a northern Cheyenne, a greater leader of the tribe, of which I 
am an enrolled member; Big Tree, a Seneca Iroquois, which is part of 
the Iroquois Confederation.
  Supposedly the three Indians were all performers appearing in wild-
west shows in New York City at the time they posed for Mr. Fraser.
  Most historians generally accept that the model for the buffalo on 
the nickel was a famous bull bison in the Central Park Zoo. The name of 
the bull was Black Diamond. Unfortunately, after being immortalized on 
the coin, he was slaughtered for meat and hide in 1915, which was the 
same demise many of his wild brethren met on the plains.
  These coins would serve another purpose, appropriate to their 
heritage: Profits from their sale would be earmarked for the 
maintenance and improvement of our national parks, which are virtually 
being ``loved to death'' by far too many people coming to them now.
  This is not meant, by the way, to replace any of the appropriated 
money that now goes to parks. It was meant that the profit would 
supplement the amount of money they now receive from the appropriations 
process.
  Mr. President, we are working closely with the Citizens Commemorative 
Coin Advisory Committee and the U.S. Treasury to make this 
commemorative coin a success. Last year, the committee recommended the 
consideration of a Native American theme for a commemorative coin. I 
think that the buffalo nickel fits that theme perfectly.
  I wish I could take credit for having this idea, which I think is a 
good idea, but I cannot. It was originally suggested to me by a man by 
the name of Mitchell Simon, who contacted my office and suggested it. 
Former U.S. Senator Tim Wirth from Colorado also sent me a note saying 
he thought it was a good idea. And since that time we received a pile 
of postcards from people all over the country saying they thought 
reissuing the buffalo nickel would be well received.
  Mr. President, I welcome my colleagues to join me in reintroducing 
this coin act, a coin with deep historical and cultural significance to 
this Nation. I would especially like to thank my colleagues, Senators 
Cochran, Hatch, Mack, DeWine, and McCain who joins me as original 
cosponsor.
      By Mr. KERREY (for himself and Mr. Simpson):
  S. 818. A bill to amend title II of the Social Security Act to 
increase the normal retirement age to age 70 by the year 2017, to 
provide for additional increases thereafter, and for other purposes; to 
the Committee on Finance.
  S. 819. A bill to amend chapters 83 and 84 of title 5, United States 
Code, to provide for more uniform treatment of Members of Congress, 
congressional employees, and Federal employees, to reform the Federal 
retirement systems, and for other purposes; to the Committee on 
Governmental Affairs.
  S. 820. A bill to amend title 10, United States Code, to eliminate 
the increase in the retired pay multiplier for service in the uniformed 
services in excess of 20 years by members first entering the uniformed 
services after July 31, 1986; to the Committee on Armed Services.
  S. 821. A bill to require a commission to study ways to improve the 
accuracy of the consumer price indexes and to immediately modify the 
calculation of such indexes; to the Committee on Banking, Housing, and 
Urban Affairs.
  S. 822. A bill to provide for limitations on certain retirement cost-
of-living adjustments, and for other purposes; to the Committee on 
Finance.
  S. 823. A bill to amend the Congressional Budget Act of 1974 to 
require that the report accompanying the concurrent resolution on the 
budget include an analysis, prepared after consultation with the 
Director of the Congressional Budget Office, of the concurrent 
resolution's impact on revenues and outlays for entitlements for the 
period of 30 fiscal years and to require the President to include a 30-
year budget projection and generational accounting information each 
year in the President's budget; to the Committee on the Budget and the 
Committee on Governmental Affairs, jointly, pursuant to the order of 
August 4, 1977, with instructions that if one committee reports, the 
other committee have 30 days to report or be discharged.
  S. 824. A bill to amend the Internal Revenue Code of 1986 and the 
Social Security Act to provide for personal investment plans funded by 
employee social security payroll deductions; to the Committee on 
Finance.
      By Mr. KERREY (for himself, Mr. Simpson, and Mr. Robb):
  S. 825. A bill to provide for the long-range solvency of the old-age, 
survivors, and disability insurance program, and for other purposes; to 
the Committee on Finance.


           social security and retirement reform legislation

 Mr. SIMPSON.
 Mr. President, I join my able and steady colleague Senator Bob Kerrey 
from Nebraska in introducing a series of proposals we have crafted in 
an effort to address the long-term problems of Social Security.

  I emphasize that our goal is to ``save'' this program--not, as some 
of the senior citizen and other groups will claim, to ``savage'' it. We 
are well aware that it is politically hazardous to even breathe a word 
about reforming Social Security. But we also believe the people of this 
country will be receptive to what we have to say. They know that they, 
or their loved ones, will most surely suffer over the long haul if we 
continue to cling blindly to the ``status quo.'' I believe they will 
embrace ``change'' when they are presented with the honest facts and 
the harsh reality of what the future holds for them if we continue on 
our present course.
  Before I outline the details of our bills, let me briefly review why 
we feel compelled to address this issue. Last year, I served on the 
Bipartisan Commission on Entitlement and Tax Reform, which was guided 
through the deep swamps of entitlement spending by two remarkable and 
courageous men--Senator Bob Kerrey, who served as our able chairman, 
and our former colleague Senator Jack Danforth, who served as vice 
chairman.
  From June through December, the Commission held a series of public 
meetings in which we looked for any [[Page S6914]] and all ways to slow 
down the incredible pace at which entitlement spending is growing. 
Along the way, the Commission approved--by a vote of 30 to 1--an 
interim report which spelled out some highly sobering truths about 
Federal spending. Perhaps the single most important finding in the 
interim report was that entitlement spending and interest on the debt 
together accounted for almost 62 percent of all Federal expenditures in 
1993. Furthermore, according to the Congressional Budget Office, this 
spending will consume fully 72 percent of the Federal budget by he year 
2003 if the present trends continue. These are expenditures that occur 
automatically without Members of Congress casting so much as a single 
vote. This ought to serve as a ``wake-up call'' to all of us that we 
are headed on a course to disaster.
  Unfortunately, the Commission concluded its business in December 
without reaching an agreement on specific recommendations for bringing 
entitlement spending under control.
  That was most disappointing to me. However, 24 of the Commission's 32 
members joined in writing a letter to President Clinton, emphasizing 
the need for ``immediate action'' and outlining various policy 
options--some of which Senator Kerrey and I have included in the bills 
we introduce today.
  On April 3 of this year, another clanging ``wake-up call'' rang from 
the Social Security and Medicare board of trustees. The trustees 
informed Congress and the American people in their annual report that--
according to their best projections--the Social Security retirement 
trust fund will be exhausted in 2031, the disability trust fund will 
run out in 2016, and the Medicare trust fund will be depleted, that is, 
broke, in 2002.
  These dates will be upon us sooner than one can imagine. The 
``doomsday'' date for Medicare is only 7 short years away. The 
situation with Social Security may seem less urgent, but we must not be 
lured into complacency. Although the ``doomsday'' dates are currently 
set at 2031 and 2016 for the retirement and disability programs, the 
trustees' report also indicates that combined expenditures for the two 
programs will begin to exceed revenues in the year 2013. From 2013 to 
2019, it will be necessary to ``dip into'' the interest income that is 
earned on the principal in order to pay out benefits. And then, 
beginning in the year 2020, we will have to ``dip into'' the principal 
itself just to keep the benefits flowing.
  Because this is such a crucial point that every American must 
realize, I will repeat it again--to continue paying Social Security 
benefits, we will have to dip into--that is, spend--the trust fund's 
principal and interest beginning in 2013. We will be running a negative 
cash flow beginning in 2013. What this means is that come 2013, the 
Government will have several options: borrow money from the Treasury 
and drive up the deficit; raise payroll taxes on current workers; or 
reduce benefits to retirees.
  These figures are not based on hysteria or fiction. They are cold, 
hard, clear, painful facts. No one can refute them--but we can take 
action to change our course and prevent these forecasts from coming 
true. That is why Senator Kerrey and I are here today. We are 
introducing seven separate bills that taken together will shore up 
Social Security.
  We are also introducing a package of bills, some of which duplicate 
the separate bills. This package will also solve Social Security's 
long-term solvency crisis. We've shored up Social Security in two ways 
to show our colleagues that there are a variety of ways to do it.
  Our first bill deals with the Social Security retirement age. Many 
Americans may not know this, but current law already provides that the 
normal retirement age--the age at which full benefits can be received--
will begin to slowly increase in the year 2000 for people who were born 
after 1937, and it will continue to gradually increase until it reaches 
age 67 for those who were born after 1959. This law is already ``on the 
books.''
  Senator Kerrey and I are proposing that the increases which are 
already scheduled be gradually accelerated. Our bill proposes that the 
normal retirement age begin to increase, beginning in the year 2000, so 
it reaches 66 in the year 2005, 67 in the year 2011, 68 in the year 
2017, 69 in the year 2023, and 70 in the year 2029.
  We also gradually increase the early retirement age to 65 by 2017 
beginning in the year 2000. The early retirement age would reach 63 in 
the year 2005, 64 in the year 2011 and 65 in the year 2017.
  I want to emphasize that the first group of people subject to the 
retirement age of 70 are those who are presently in their early 30's. 
Current retirees are not affected at all by this proposal. Thus, no one 
can let out a howl that we are calling for sweeping changes ``at the 
last minute,'' without giving people a chance to adjust their 
retirement plans. That is not what we are up to.
  I also think it is useful to review the extent to which life 
expectancies have increased in the last 50 years. In 1940, the average 
life expectancy in the United States was 61.4 years for a male and 65.7 
years for a female, yet the retirement age was 65. Today, the average 
life expectancy is about 72 years for men and 79 years for women. 
According to the Social Security Administration, more than 75 percent 
of the people who were born 65 years ago are still alive today. These 
individuals, once they have reached the age of 65, can expect to live 
another 15 years if they are men and another 19 years if they are 
women.
  The authors of the original Social Security Act of 1935 had no way of 
knowing ``back then'' that today's retirees would be living for so 
long. Had they known then what we know now, I believe they would have 
agreed that a higher retirement age would be appropriate in the 21st 
century.
  Our second bill would allow taxpayers to reduce their Social Security 
payroll tax payments by 2 percentage points and direct this money into 
a personal investment plan [PIP] of their own choice. Workers who 
choose this option would have their future benefits reduced by a 
corresponding amount, but this reduction would be offset with earnings 
from their personal investment plan. The question of whether lost 
benefits would be partially, completely or more than offset by these 
earnings would depend upon the decisions each individual makes with 
respect to his or her private investment plan.
  I often hear from constituents who insist that if they were allowed 
to invest their Social Security taxes themselves, they could earn a 
much higher rate of return than the 8 percent return U.S. Treasury 
securities yielded last year. This bill gives them a chance to do just 
that. Some taxpayers will prove that, indeed, they can do better 
investing these funds on their own. Others may learn the hard way that 
private sector investments always carry a certain element of risk. 
Either way, I believe it is important to give people more control over 
decisions relating to their retirement.
  Our third bill is guaranteed to bring howls of glee from the 
hinterlands. It calls for reductions in the pensions of Members of 
Congress and certain Federal employees. These reductions are achieved 
through three separate provisions.
  First, the accrual rates used to calculate pensions would be reduced 
by one-tenth of 1 percent for future years of service. This means that 
the pension of a typical Federal employee--whose accrual rate would go 
from 1.0 to 0.9--would be reduced by up to 10 percent.
  Second, the accrual rates used to calculate congressional pensions 
would be made equal to those used to calculate the pensions of typical 
Federal employees. Thus, a Member of Congress would have his or her 
pension calculated on the basis of a 0.9-percent accrual rate for 
future years of congressional service instead of a 1.7-percent accrual 
rate, thereby reducing his or her pension by as much as 47 percent.
  Third, our bill would require that the pensions of certain Federal 
employees, including Members of Congress, be based on their five 
highest salary years--instead of their three highest salary years.
  These provisions demonstrate in the most vivid manner possible that 
we, as elected officials, are willing to make sacrifices ourselves. 
This is something we must do to show the American people that we are 
serious about getting our fiscal house in order. We all understand that 
reducing our own pensions won't make a dent in the deficit, but 
[[Page S6915]] the symbolism of this gesture is absolutely crucial to 
our success in other areas.
  Our fourth bill deals with the retirement benefits that are received 
by individuals who joined the military after July 31, 1986 and 
therefore aren't able to retire until the middle of
 2006. We propose that the accrual rates used to calculate their 
pensions on be limited to 2 percent per year, regardless of how many 
years of service an individual may have. Currently, the accrual rate is 
2 percent for each of the first 20 years and 3.5 percent for the 21st 
through 30th years of military service. This is an extraordinarily 
generous system by any standard.
  I am fully prepared for the cries of outrage this will bring from 
some of the many men and women who serve with honor and distinction in 
the military. I served in the military too, as did Bob Kerrey who won 
the Medal of Honor for his bravery. We would never do anything to 
diminish the importance or value of their service. But it is hard to 
justify an accrual rate of 3.5 percent for military retirees when civil 
service Federal employees have an accrual rate of 1.0 percent and we 
are talking about bringing that down to 0.9 percent. I believe the 
changes Senator Kerrey and I propose are appropriate in the context of 
what we are doing with congressional and civil service pensions.
  Our fifth bill would change the manner in which cost of living 
adjustments [COLA's] are awarded. We propose that limits be placed on 
the COLA's of all Social Security beneficiaries and Federal and 
military retirees--except the 30 percent who receive the smallest COLA 
in each program.
  Under this approach, the ``poorest'' 30 percent of recipients would 
continue to receive their full COLA's. The other 70 percent would also 
receive a COLA each year, but they would receive a COLA that is 
equivalent only to the actual dollar amount of the COLA that is 
received by recipients who are down there at the 30-percent level.
  One important point I want to emphasize with respect to Social 
Security is that--since COLA's did not begin until the early 1970's and 
thus were not even included in the original Social Security Act of 
1935--this proposal would not in any way ``break'' or alter the 
``contract'' that is considered to exist between senior citizens and 
Social Security.
  It is also important to note that this approach does not discourage 
people from saving for their retirement. It does not in any way 
penalize seniors who have personal savings or other sources of income. 
The amount of one's benefit is the sole determinant of whether or not a 
retiree is subject to the COLA cap. There are no other factors 
involved.
  Our sixth bill focuses on the Consumer Price Index [CPI], which is 
used to calculate cost-of-living adjustments [COLA's] for Social 
Security beneficiaries and for military and Federal retirees. Alan 
Greenspan, the Chairman of the Federal Reserve, and other very credible 
witnesses have testified before the Senate Finance Committee that the 
CPI, as currently calculated, ``overstates'' actual inflation by as 
much as one or two percentage points. This may seem like an almost 
benign or inconsequential fact, but when you consider that hundreds of 
billions of dollars in Federal payments are increased each year on the 
basis of the CPI alone--and, furthermore, that the Federal income tax 
brackets are also adjusted annually according to the CPI--it becomes 
very clear that this is not a small matter.
  Senator Kerrey and I are proposing today that the annual CPI 
calculation be automatically reduced by one-half of a percentage point. 
According to the experts who testified before the Senate Finance 
Committee, this is a conservative estimate of how much the CPI is 
overstated. We also call for the creation of a seven-member commission 
that would be charged with studying the accuracy of the CPI and 
reporting its findings to the Secretary of Labor and Congress within 1 
year. It is our sincere desire that this process would eventually lead 
to a more accurate measure of inflation, thus eliminating the need for 
an automatic reduction each year.
  The seventh and final bill which Senator Kerrey and I introduce today 
is one that all 100 senators should be able to agree on. We propose 
that the Congressional Budget Office and the OMB be required to use a 
30-year ``budget window'' instead of a five-year ``budget window'' in 
evaluating any legislation that affects entitlement spending. This is a 
matter of common sense. By definition, entitlement programs go on 
forever unless Congress takes specific action to stop them. To say that 
we will look only at the first 5 years of such programs is now 
unacceptable. It is absolutely essential that we begin to view these 
programs from a longer-term perspective.
  These seven bills represent the best efforts of my friend Senator 
Kerrey and myself to protect and preserve these retirement programs for 
many generations to come. We invite our colleagues to join us in 
supporting and advancing these measures--or to come up with various 
alternatives of your own.
  Each of us has an obligation--not only to our constituents, but to 
ourselves and our children and grandchildren--to confront these issues 
head-on. Whatever outrage and hostility we may encounter from today's 
defenders of the ``status quo''--and there will be plenty of it--it 
will pale in comparison to the truly richly deserved scorn we will 
receive from future generations if we fail to have the courage to act. 
I eagerly look forward to a spirited debate on these issues and I urge 
my colleagues to join the fray.
  Mr. ROBB. Mr. President, I support the Strengthening Social Security 
Act of 1995. I commend my distinguished colleagues, Senators Bob Kerrey 
and Alan Simpson, for their hard work on this important legislation, 
and I am pleased to be an original co-sponsor.
  I compliment my friends from Nebraska and Wyoming, Mr. President, 
because tackling the problems associated with social security takes 
enormous personal and political courage. In an era when news is 
conveyed in quippy, provocative soundbites, ``touching'' social 
security is anathema--even when reforming social security is clearly 
the only way to save it.
  For the bottom line is this, Mr. President: if we don't change the 
way we do business around here, spending on entitlements and interest 
on the debt will consume all Federal revenues by the year 2012. That 
same year, social security expenditures will begin to exceed revenues 
coming into the trust fund, and by the year 2029, the Social Security 
trust fund will be exhausted.
  Because of demographics and increasing life expectancies, this Nation 
has evolved from a system where 15 workers supported each Social 
Security beneficiary when the program was created, to five workers for 
each beneficiary today, to just three workers for each beneficiary when 
the Baby Boom generation retires.
  It's clear to me, Mr. President, that we have promised our people 
more than we can deliver, and that our present path is simply 
unsustainable.
  Unless we act today, we place an unconscionable financial burden on 
our children and our grandchildren--and we fail to ensure the 
retirement security of future generations of Americans.
  This legislation strengthens the retirement security of future 
generations. It abolishes the actuarial deficit in the trust fund and 
allows the fund to pay benefits on an uninterrupted basis for the 75-
year timeframe reviewed by the fund's actuaries.
  More young Americans believe in UFO's than believe that Social 
Security will be there for them, and we urgently need to restore in 
young Americans a genuine confidence in the system. One of the most 
intriguing and attractive provisions of this bill to me, Mr. President, 
allows for almost 30 percent of payroll taxes to be designated for the 
creation of a personal investment plan--a tangible account--for future 
beneficiaries.
  Mr. President, powerful interests will fight even minor changes to 
the Social Security system, and to succeed, we will have to engage in a 
battle of our own. This means educating the American people on what the 
problems are and how to responsibly solve them--convincing our citizens 
that the time to act is today, when the remedies are so much easier to 
absorb.
  This also means persuading our colleagues on both sides of the 
capitol and both sides of the aisle that touching Social Security does 
not mean destroying it. Touching Social Security does 
[[Page S6916]] not mean abandoning our senior citizens, who have 
contributed so much to our country.
  Reforming Social Security, Mr. President, can mean strengthening it. 
Reforming Social Security can mean saving it for future generations. 
And reforming Social Security can mean that we in Congress fulfill our 
responsibility to govern, and to govern well.
  I urge my colleagues to take an honest look at this legislation.
                                 ______

      By Mr. THURMOND:
  S. 826. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation with appropriate endorsement for 
employment in the coastwise trade for the vessel Prime Time, and for 
other purposes; to the Committee on Commerce, Science, and 
Transportation.


                      JONES ACT WAIVER LEGISLATION

  Mr. THURMOND. Mr. President, I rise today to introduce a bill today 
to direct that the vessel Prime Time, official number 660944, be 
accorded coastwise trading privileges and be issued a coastwise 
endorsement under 46 U.S.C. sections 12106, 12107 and 12108.
  This vessel was purchased in 1994 by Everett Ballenger of Columbia, 
SC, to provide charters from Hilton Head Island, SC. This chartering 
business was to be Mr. Ballenger's sole livelihood. Because the vessel 
was foreign built, it did not meet the requirements for coastwise 
trading privileges in the United States. When Mr. Ballenger sold his 
home to buy this vessel from a broker in Baltimore, he was unaware that 
it could not be legally used for its intended purpose.
  Therefore, Mr. Ballenger is thus seeking a waiver of the existing law 
because he wishes to use the vessel for charters. If he is granted this 
waiver, he intends to comply fully with U.S. documentation and safety 
requirements. The purpose of the legislation I am introducing is to 
allow the Prime Time to engage in the coastwise trade and fisheries of 
the United States.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 826

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

     SECTION 1. CERTIFICATE OF DOCUMENTATION.

       Nothwithstanding section 27 of the Merchant Marine Act, 
     1920 (46 U.S.C. App. 883), section 8 of the Act of June 19, 
     1886 (24 Stat. 81, chapter 421; 46 U.S.C. App. 289), and 
     section 12106 of title 46, United States Code, the Secretary 
     of Transportation may issue a certificate of documentation 
     with appropriate endorsement for employment in the coastwise 
     trade for the vessel PRIME TIME, United States official 
     number 660944.
                                 ______

      By Mr. PRESSLER:
  S. 827. A bill to amend the Internal Revenue Code of 1986 to limit an 
employer's deduction for health care costs of its employees if the 
employer fails to honor its commitment to provide health care to its 
retirees; to the Committee on Finance.


                  RETIREE HEALTH BENEFITS LEGISLATION

  Mr. PRESSLER. Mr. President, I am introducing legislation today to 
rectify a great disservice done to a number of retired Americans, 
including many in my State of South Dakota.
  Specifically, the retired employees of John Morrell & Co.--a 
meatpacking plant located in Sioux Falls--were promised life-time 
health benefits by the company when they retired. As these workers 
planned for their retirement, they relied upon the Morrell promise of 
continued health care benefits.
  However, in January of this year, Morrell unilaterally terminated all 
of its retiree health insurance benefits--suddenly leaving about 3,300 
retirees and their families throughout the country without health 
insurance. These individuals now find themselves with little or no 
options for replacing their health insurance.
  Mr. President, this is patently unfair. As policymakers, we must not 
allow these inequitable actions to remain unchallenged. If we do, we 
risk establishing a precedent that encourages other companies to 
violate good faith agreements with their employees' health care 
benefits.
  The parent company of Morrell is Chiquita Brands, Inc., a highly 
successful multinational corporation known to many Americans. Chiquita 
has refused several good faith offers to negotiate with the Morrell 
retirees on this issue. Chiquita has moved to save money for the 
company at the expense of those who have no standing to defend 
themselves.
  In March of 1991, Morrell sent a letter to its retirees announcing it 
reserved the right, at its sole discretion, ``to alter, modify, or 
terminate'' any benefit at any time. In December, 1991, Morrell 
announced the first unilateral reduction in retiree health benefits. 
Legal proceedings challenging the action began immediately.
  So far, efforts to reverse the decision in Federal court have been 
unsuccessful. In October 1992, a Federal district court trial was held 
in South Dakota. The trial court refused to overturn Morrell's action. 
It concluded that the health benefits were not contractually guaranteed 
by the company. When a divided panel of the U.S. Court of Appeals for 
the Eighth Circuit affirmed the lower court decision, Morrell 
immediately terminated all health benefits for all retirees. An appeal 
has been made to the U.S. Supreme Court, though review is unlikely 
given the few cases selected by the Court each year.
  The Morrell retirees are at the end of their rope. They have tried to 
retain their health benefits through negotiations and through the 
courts. When it comes to matters such as this, legislation must be 
considered the last best alternative. Frankly, we have reached that 
point. It is time for Congress to step in.
  Therefore, today I am introducing legislation that is intended to 
stop the transaction in its tracks, and prevent similar injustices from 
being done in the future. My bill, the Retiree Health Benefit 
Protection Act, would end these abuses by making it costly for those 
companies who entice their employees to rely upon the company's good 
will and then, subsequently, renege on their promises of continued 
health benefits.
  The Retiree Health Benefit Protection Act would reduce significantly 
the amount of the current tax deduction that a company can take for 
expenses made to provide medical care to its employees. Under current 
law, companies are allowed to take a 100 percent tax deduction for 
these expenses. My bill would reduce that to 25 percent--the same rate 
at which a self-employed individual can deduct their expenses--if a 
company refuses to honor its prior health benefit commitment to its 
retirees.
  Mr. President, some will say this bill is tough. It is. As we all 
know, businesses make their decisions largely by looking at the bottom 
line. For Chiquita, its seems that its bottom line requires it to drop 
health benefits to Morrell retirees. My bill is designed to alter the 
bottom line--to make it clear that companies cannot break a promise to 
its retirees without paying a great price. The Morrell retirees are 
paying an unfair and unjustified price right now for Chiquita's action. 
But what price is Chiquita paying? I do not believe that a company 
should be allowed to continue to take full advantage of the tax 
benefits of providing health care if they do not continue to fully 
provide promised health care benefits. Therefore, my bill is designed 
to impose a price--to alter the bottom line--and in a manner that I 
believe will make companies keep the promises they make to their 
employees.
  We in Congress have an obligation to be sure that policies that 
impact our retirees are fair. For many years, retired Americans work 
and plan for a day when they can spend their later years reaping the 
benefits of hard work. These plans depend largely on promises made by 
others, including their employers. Retirees make financial decisions 
counting on these promises being kept.
  The Federal Government--through the tax code--provides tax breaks to 
those companies who provide benefits to their workers, such as health 
care. In short, we use the tax code to reward good faith behavior. It 
is now time to consider using the code to prevent a violation of good 
faith, or to punish such violations. Chiquita/Morrell made a promise to 
their employees. It has an obligation to live up to its word to the 
many retired Americans who made Morrell an integral part of South 
Dakota's economy. [[Page S6917]] 
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 827

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

     SECTION 1. REDUCTION IN HEALTH CARE DEDUCTION OF EMPLOYERS 
                   FAILING TO HONOR COMMITMENT TO PROVIDING HEALTH 
                   CARE TO RETIREES.

       (a) In General.--Section 162 of the Internal Revenue Code 
     of 1986 (relating to deduction for trade or business 
     expenses) is amended by redesignating subsection (o) as 
     subsection (p) and by inserting after subsection (n) the 
     following new subsection:
       ``(o) Reduction in Certain Health Care Deductions of 
     Employees.--
       ``(1) In general.--Notwithstanding any other provision of 
     this chapter, if--
       ``(A) an employer provided medical care to its retired 
     employees and their spouses and dependents during the 10-year 
     period ending on December 31, 1993, and
       ``(B) the employer does not provide that medical care for 
     any period after December 31, 1993,

     the amount allowable as a deduction under this chapter for 
     expenses incurred in providing medical care to officers and 
     employees of the employer (and their spouses and dependents) 
     during the period described in subparagraph (B) shall not 
     exceed 25 percent of the amount of the deduction without 
     regard to this subsection.
       ``(2) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Medicare care.--The term `medical care' has the 
     meaning given such term by section 213(d)(1).
       ``(B) Failure to provide medical care.--For purposes of 
     paragraph (1)(B), an employer shall be treated as failing to 
     provide medical care for any period if there is a substantial 
     reduction in the level of medical care provided during the 
     period from the level provided on December 31, 1993.
       ``(C) Predecessors.--For purposes of paragraph (1)(A), an 
     employer shall be treated as having provided any medical care 
     which any predecessor of the employer provided.
       ``(D) Controlled groups.--All employers who are treated as 
     one employer under subsection (a) or (b) of section 52 shall 
     be treated as one employer for purposes of this subsection.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to periods beginning on and after January 1, 
     1994, in taxable years ending after such date.
                                 ______

      By Mr. MOYNIHAN:
  S. 828. A bill to enable each State to assist applicants and 
recipients of aid to families with dependent children in providing for 
the economic well-being of their children, to allow States to test new 
ways to improve the welfare system, and for other purposes; to the 
Committee on Finance.


                     THE FAMILY SUPPORT ACT OF 1995

  Mr. MOYNIHAN.
   Mr. President, I rise for the purpose of introducing the Family 
Support Act of 1995. Senators who have been following the subject of 
welfare policy will recognize this as a successor to the Family Support 
Act of 1988, which was adopted in this Chamber just this side of 7 
years ago, on September 29, 1988, by a vote of 96 to 1. I was the 
manager on our side and recall very specifically the atmosphere, the 
emotion; we knew this bill, from a near unanimous Senate, was going out 
the door to the House of Representatives where it would be received and 
treated in much the same manner; only thereafter to go to the White 
House where President Reagan, having helped shape the legislation would 
welcome it, sign it. He would sign what he called ``this landmark 
legislation'' in the company of such great Senators still in this body 
as our hugely respected majority leader, Senator Dole; my revered 
colleague, now chairman of the Finance Committee, Senator Packwood; our 
former colleague, subsequently Secretary of the Treasury, Lloyd 
Bentsen, as well as Members of the House of Representatives.

  It was a grand moment in the Rose Garden. President Reagan said that 
Congress and those particularly active on this measure would be 
remembered for accomplishing what many have attempted but no one had 
achieved in several decades, ``a meaningful redirection of our welfare 
system.''
  It will seem unimaginable to us today, but the Family Support Act of 
1988 was not a partisan political measure. There in the Rose Garden was 
Senator Dole, Senator Bentsen, the Speaker was there, Mr. Foley, Mr. 
Michel, the minority leader representing the Republicans. The chairman 
of the Governors Association of the United States, William Jefferson 
Clinton, was there, having been a wondrous, energetic advocate on 
behalf of the Governors. And with him his then colleague, as Governor 
of Delaware, the Honorable Mike Castle, now Representative from the 
State of Delaware in the House of Representatives. Democrat and 
Republican alike, joining in a near unanimous measure to do what needed 
doing, a good 50 years, a good half century into the experience with 
what we have called welfare, under the Social Security Act of 1935.
  We redefined the statute to bring it in line with a new reality. The 
original Social Security Act of 1935, adopted in the midst of the 
Depression, provided for aid to dependent children. Basically, it 
represented the Federal Government picking up the widows' pensions 
which had been adopted in almost half the States by this point. But 
these States were under severe economic stress in that Great 
Depression; the Federal Government assumed the responsibility for the 
children. In 1939 the mother of the family was included as well so it 
became Aid to Families with Dependent Children. And it was expected to 
be a bridge, very similar to Old Age Assistance, which would last until 
Social Security having matured, widows with their children were 
entitled to survivors insurance--Old Age and Survivors Insurance 
[OASI].
  Indeed, that has happened. I think it is the case that only 71 
percent of the recipients of Social Security benefits are in fact 
retired adults. The rest are, indeed, survivors and dependent children.
  But then something new happened. Family structure began to change in 
our country. It is not the most comfortable subject to deal with, but 
it is a necessary one, Mr. President, and we have become more open 
about it. In fact, it is President Clinton who now speaks of this. He 
spoke to us about this in a joint session of the Congress. We now have 
a rate of births of children in single-parent families that has reached 
33 percent. At the time the Social Security Act was enacted it was 
probably 4 percent. Our first hard number is 4 percent, in 1940.
  We are not alone in this. The same phenomenon has taken place in the 
United Kingdom, in France, in Canada. We find it difficult to explain. 
Our other neighbors, as it were, find it difficult to explain. But we 
cannot doubt its reality.
  In 1992, for example, the ratio in New York City had risen to 46 
percent, approaching half. It may be at that point now. Because we 
observe a regular rise, year after year, at a very steady rate of about 
0.86 percent a year. There has not been one year since 1970 in which 
the ratio has not risen.
  One of the consequences has been the rise in the number of cases, of 
families receiving Aid to Dependent Children. There was a sharp rise in 
the late 1960's. It reached a certain plateau in the 1980's, which we 
think to be--do not know but think to be--a matter of demography. The 
childbearing population was flat or even declined a little bit. Then, 
starting in 1989 it begins a very pronounced rise. We go from 3.5 
million to almost 5 million in 4 years. It is dropping just a little 
bit now, but we anticipate an increase in the population of 
childbearing age such that we have every reason to think there will be 
an increase in this caseload. And we knew those things in 1988. And we 
knew we had to do something quite different. We had to redefine 
welfare. It was no longer a widow's pension.
  I have the great honor to know Frances Perkins, the Secretary of 
Labor, who had been chairman of the Committee on Economic Security that 
presented the program to President Roosevelt, and she would describe a 
typical recipient--this is 1962, 1963--as a West Virginia miner's 
widow.
  Miners' women did not work in coal mines, and widows were not 
expected to do such things in any event. It was a permanent condition. 
Suddenly we found a population of young persons with very young 
children who were dependent but ought not to remain so. It is not fair 
to them, it is not fair to their children, it is not fair to the 
society that is maintaining them. So the Family Support Act of 1988, 
the first such act, said we will make a contract. We will say that 
society has a responsibility to help dependent families become 
independent, and they in turn have a responsibility to help 
themselves--a mutual responsibility. [[Page S6918]] 
  We started the JOBS Program, the Job Opportunities and Basic Skills 
Program. We said we will expect people to work. Well, of course. I have 
here a button from one of the JOBS programs in Riverside, CA. We had 
testimony in the Finance Committee just a while ago. It is a wonderful 
button. The director is an enthusiastic man. The button says, ``Life 
Works If You Work.'' He is right. And there is nothing wrong with that. 
Twenty years ago such ideas would possibly have been thought of as 
punitive, possibly stigmatizing. We are well beyond that in large part 
because of the JOBS Program.
  There is no doubt that we passed this legislation because States had 
begun to innovate. Those innovations seemed promising, and the Manpower 
Development Research Corp. based in New York City could measure 
results. And these innovations went right across the political 
spectrum. Governor Dukakis, a liberal Democratic Governor of 
Massachusetts, and Governor Deukmejian, a conservative Republican 
Governor of California, adopted very similar ideas--get people ready to 
work, get them thinking they can do it, and get them out of the house 
and into the mainstream.
  We based our program on those experiments that had taken place. We 
very carefully said we are going to work on the hardest cases, not the 
easiest ones.
  If I can say, Mr. President, at the risk of being a little too 
statistical, the population of the AFDC cases is what statisticians 
call bimodal. A little less than half, about 40, 45 percent are mature 
women whose marriages have broken up, or they are separated, or 
divorced. They will come into this arrangement for a brief period and 
they go off on their own. They organize their lives as people do, and 
the research is very clear on that. You can do all the effort you want 
with such people. They do not need your help, thanks very much. They 
just need some income support for a period until they get their other 
affairs in shape on their own. But slightly more than half are young 
people with no marriage, no job experience or little, often in settings 
where they are surrounded by such persons.
  Mr. President, may I ask if I can continue in morning business, there 
being no other Senator seeking recognition?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Thank you, Mr. President.
  So we launched this program. Having been involved with this subject 
for 30 years and more, may I say one recognizes in the State 
governments enormous creativity. There is scarcely a day or week that 
you do not read of some new program in one State or another.
  I believe it was Monday evening on one of the evening news programs, 
it was NBC. It was Lisa Myers interviewing persons in Connecticut 
including the Governor where a very bold set of ideas has been 
developed around the principles of the Family Support Act of 1988. You 
are in here, it is a temporary arrangement, we are going to help you 
get out of this. We realized what obstacles we had inadvertently put in 
place to becoming free of welfare. In 1965 we enacted Medicare and 
Medicaid. So then a welfare mother had health care for her children, 
full, free health care. The minute she left welfare she lost it. Many 
mothers are going to think twice about that, particularly if a child 
has a health condition that is chronic and requires care. It would be 
unfair to the child to deprive him or her of that care. We said we will 
give you a year on Medicaid after you leave the rolls, as the term was. 
We will give a year of child care. We will help you along in this.
  States are innovating all the time. Up in Connecticut they are 
saying, ``Remember. You only have''--as I believe it was--``21 months. 
In the meantime any job you get you keep it.''
  That is the kind of waiver which we anticipated in the legislation, 
bipartisan and unanimous legislation, and the Clinton administration 
and Secretary Shalala have been very good about getting these things up 
and out, but not fast enough, a problem addressed by the legislation I 
introduce today. We say a waiver decision will be handed down in 90 
days. The presumption is the States know what they are doing, and we 
want them to try it.
  This morning the front page of the Washington Post has a story, 
``Virginia Suburbs To Test Allen Welfare Plan. Area Has Eleven Months 
to Adopt Changes, Find Thousands Work.''
  Work. ``Life Works If You Work.'' We are not afraid of that. We 
wanted that. We encouraged that. That is what the legislation did. 
Governor Allen, a Republican Governor. The article says:

       That means one of the country's boldest welfare plans will 
     unfold in the back yard of its top leaders, virtually 
     guaranteeing the attention of Congress and the White House as 
     they shape national policy.
       ``Virginia is again making history,'' said Allen, a 
     Republican. ``It is the most sweeping and, I think, the most 
     compassionate welfare reform plan anywhere in the nation.''

  This is taking place under the Family Support Act of 1988. And it is 
being paid for by the Federal matching funds and the guaranteed 
matching support for children. There is something very important there 
that might easily have been missed in that statement. I will say it 
again.
  Governor Allen says, ``Virginia is again making history. It is the 
most sweeping and, I think, the most compassionate welfare reform plan 
anywhere in the nation.''
  A welfare reform designed to say to people you have got to go to 
work, you have a set time where you have to get yourself together, and 
we will help you to get on your way.
  Years ago no one would have described such an effort as 
compassionate. Indeed, I have been through these matters and I can say 
to you the slightest suggestion that work might be appropriate for 
welfare recipients was decried as punitive, and those who suggested it 
said, ``No, no, no. There is no such intention.'' Now, openly, 
Governors will say, if you care about your fellow citizens, you have to 
help them get out of the debilitating and unfair situation.
  And that is what we do. That is what we can do more of. The bill I 
introduce today will provide an additional $8 billion over 5 years with 
every penny paid for, every penny provided through closing tax 
loopholes, refining the Supplementary Security Income program.
 I had a hand in the proposals under President Nixon that led to SSI as 
we called it. It was intended to deal with the problem of adults who 
could not work, the permanent, totally disabled, and such like. We 
close loopholes such as that egregious practice we have come upon of 
American citizens renouncing their citizenship in order to avoid their 
taxes. There will be no more of that. The chairman of the Finance 
Committee, Mr. Packwood, and I agreed as of the day this issue was 
brought up you cannot do it anymore. This bill will provide funds for 
that purpose and other such matters. We are not adding a penny to the 
deficit. I would not dare, particularly with that most formidable and 
knowledgeable chairman of the Budget Committee in the Chamber. We pay 
for this provision for women and children to help them pay for 
themselves.

  Mr. DOMENICI. Will the Senator yield?
  Mr. MOYNIHAN. I am happy to yield for a question.
  Mr. DOMENICI. I was just passing through. I was not going to even 
pass on the Senator's eloquence or arguments, but since the Senator 
mentioned my name, I ask that the Senator particularly use his good 
head during the next 5 or 6 days and help us get a balanced budget.
  Mr. MOYNIHAN. I will most assuredly help the Senator do that, and we 
want to balance the budget for the children of America, too, and we 
have it here and we are going to pay for it.
  If the distinguished chairman could just let me point out, in the 
midst of the Depression of the 1930's, we could provide for dependent 
children as a Federal responsibility. In the 1990's, when we have a $7 
trillion economy, it has been proposed to take that away.
  Look at what we have done to our children. The average benefit, in 
1995 dollars, two decades ago was $650. It is down to $350. That is not 
the social policy the chairman of the Budget Committee is associated 
with and not the one with which I think this Senate should wish itself 
to be associated.
  I thank my friend.
  Mr. DOMENICI. I thank the Senator. Let me just mention, however--and 
the Senator would agree--since the early days of that program to help 
our poor children, we have, indeed, passed more [[Page S6919]] than a 
dozen major programs that also help our children that were not in 
existence then.
  Mr. MOYNIHAN. Entirely.
  Mr. DOMENICI. I do believe, from the standpoint of our people who are 
contributing mightily in tax dollars, they ought to have an 
understanding that even though that came down in real dollars, that is 
not the whole story, and yet I am not here to argue with the good 
Senator from New York.
  Mr. MOYNIHAN. That is not the whole story. I was speaking earlier of 
Medicaid.
  Mr. DOMENICI. Right.
  Mr. MOYNIHAN. It was made available in 1965, previously unknown. But 
curiously a benefit to the children became an obstacle to leaving 
welfare and that is what we overcame. The Senator was one of the fine 
supporters of the Family Support Act of 1988. And I will see how we 
proceed at this point. But I thank the Senator.
  Mr. DOMENICI. I would just add one other comment if the Senator would 
permit.
  Mr. MOYNIHAN. I would.
  Mr. DOMENICI. Frankly, the reason I am going to start this afternoon 
at noon for the balanced budget 2002 is for the children of this 
country. It may not be exactly for the children the Senator is 
referring to. I am hopeful that will all work out fine. But actually I 
believe the continuation of a deficit of the size we are incurring is 
actually antikids, antichildren.
  Mr. MOYNIHAN. And antigrand- children.
  Mr. DOMENICI. Please.
  MR. MOYNIHAN. It is certainly anti-grandchildren.
  Mr. DOMENICI. That is right, and I have a few of those. The Senator 
has a few.
  Mr. MOYNIHAN. I could not start working into my wallet, but I know 
the Senator could work into his.
  Mr. DOMENICI. Nobody bids against me when it comes to children and 
grandchildren. They give up and say, ``That's off the record now.''
  But anyway, I do believe a continuation of the policies of the past--
and it is not just now, this year, last year--is probably the meanest 
policy we could have for the children of the future because they are 
going to have to pay our bills, and they are going to have to suffer a 
standard of living decrease to pay our bills, and we are not adult 
enough to stand up and say we ought to pay for it.
  Mr. MOYNIHAN. I agree.
  Mr. DOMENICI. I thank the Senator.
  Mr. MOYNIHAN. I agree, Mr. President, and I would also say that we 
have an immediate problem of the 14, 14.5 million persons in this 
present program who are living today. And in very short periods of time 
we raise children, watch children being raised, we know how quickly 
things go badly or, alternatively, how quickly things get on the good 
road and how hard it is to change thereafter.
  There are those who suggest that some savage removal of this entire 
Social Security provision will somehow change behavior. And I say, Mr. 
President, that is so deeply irresponsible as to make one wonder how it 
ever could have gained currency.
  Lawrence Mead, who is a professor at New York University, now 
visiting professor at the Woodrow Wilson School of Public and 
International Affairs at Princeton, testified before the Finance 
Committee on March 9 about the proposals which have come to us, in 
effect, are here now from the House, in H.R. 4, the Personal 
Responsibility Act of 1995.
  I think Dr. Mead would not in the least object to being described as 
a conservative. He has been very much at odds with what he thought of 
as a liberal social policy in the time when it went pretty much 
unchallenged in New York City officialdom. He said to us, however, now, 
just wait a minute. What are you doing? What do you know now that you 
did not know previously when we enacted the Family Support Act? I do 
not wish to have him quoted as referring specifically to the Family 
Support Act, but he was saying what do we know now different from what 
we have known? I quote him:

       Can the forces behind growing welfare be stemmed? 
     Conservative analysts say that unwed pregnancy is the 
     greatest evil in welfare, the cause not only of dependency 
     but other social ills. On all sides, people call for a family 
     policy that would solve this problem, but we have no such 
     policy. The great fact is that neither policymakers nor 
     researchers have found any incentive, benefit or other 
     intervention that can do much to cut the unwed pregnancy 
     rate.

  This bears repeating, from a social scientist of impeccable 
conservative antecedence, appearing before our committee, the Committee 
on Finance, which will deal with this legislation, this area of 
legislation. He said:

       Can the forces behind growing welfare be stemmed? 
     Conservative analysts say that unwed pregnancy is the 
     greatest evil in welfare, the cause not only of dependency 
     but other social ills. On all sides, people call for a family 
     policy that would solve this problem.

  May I interject that he could be describing this Senator. I have 
spoken of family policy; I have written on the subject for a generation 
now and watched family circumstances only worsen and have been as 
baffled as any other.
  But then to continue Lawrence Mead:

       But we have no such policy. The great fact is that neither 
     policymakers nor researchers have found any incentive, 
     benefit or other intervention that can do much to cut the 
     unwed pregnancy rate.
  And if we do not know how to do it, how can we possibly decide to do 
nothing, when we have in place a program that is showing some results, 
not in changing family structure but in the response of dependent 
families to their situation?
  Dr. Mead has done some analysis of the effects of the JOBS Program 
where it has been attempted. It had a problem of coming into place just 
as we went into recession. State governments had not the resources they 
needed and the Federal funds were not, in fact, fully used. But where 
they were used, there were responses, not large but real. And every 
time you succeed, you change the lives of a mother and her children, 
and there can be no larger purpose in domestic social policy.
  The same sentiments were echoed by Nathan Glazer, perhaps our 
reigning sociologist, professor emeritus now at Harvard University. He 
wrote a paper for an Urban Institute conference here in Washington just 
a year ago, anticipating some of the turmoil we have seen in this 
debate.
  The Urban Institute, Mr. President, was, of course, established in 
the mid-1960's in the aftermath of the first turmoil associated with 
some of these changes in social structure that appeared in American 
cities. President Johnson help sponsored it. It passed the Congress. 
Mr. William Gorham has dedicated a very distinguished career to the 
Urban Institute.
  Here is what Nathan Glazer said on April 12, 1994.

       Do we know that much more than we knew in 1988 to warrant 
     new legislation? I don't not think so. Do we feel confident 
     enough about the programs we prescribed to States to 
     undertake in 1988 to put substantially larger sums into them? 
     It seems doubtful to me. Can we get a substantial part of 
     long-term welfare clients off the welfare roles by increasing 
     their earned income through investments and learning how to 
     work, basic education, training programs, and the like? We 
     cannot.

  That is the passage I quote from Dr. Glazer.
  I think we can do better than that. I think the record is better than 
that. I think the case is to be made: Continue what you are doing and 
strengthen what you are doing.
  The Family Support Act of 1995 builds on what we have learned, even 
as the original was based on what we had learned. Social learning is 
hard. It takes generations sometimes. No one in 1950 could have 
imagined that our GDP would double and redouble and we would end up 
with the poverty that we see in cities everywhere in our country, that 
kind of intractable poverty that is not associated with employment or 
economic growth.
  There is a measure to which the AFDC caseload responds to cyclical 
changes in the economy. Dr. David Ellwood, who is the distinguished 
Assistant Secretary of Health and Human Services for Policy Planning, 
estimates that somewhere between 10 and 20 percent of the rise in 
caseload in recent years might fairly be ascribed to the rise in 
unemployment in the beginning of the last recession. And yet, the 
unemployment figures go down, the caseload figures continue to go up. 
There is a lag, but even so we are not dealing basically with an 
economic issue in the sense that we think of in terms of employment, 
earnings. We are dealing [[Page S6920]] with social change for which we 
have little, little explanatory device.
  And so, Mr. President, I would like to thank the Senate for the kind 
attention in these somewhat extended remarks to the introduction of the 
Family Support Act of 1995.
  Mr. President, I ask unanimous consent to have printed in the Record 
a brief summary of the bill; the wonderful remarks on the signing of 
the Family Support Act of 1988 by President Reagan; and also an item in 
this morning's New York Times in which representatives of the U.S. 
Conference of Mayors and of the National Association of Counties 
observed that the legislation that has been sent us could be 
devastating to county government and to city government. I think in 
time more Governors will recognize the same. We are on a good steady 
path. Steady on.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
            Brief Summary of the Family Support Act of 1995

       The bill builds on the Family Support Act of 1988 as 
     follows:
       JOBS and child care.--Participation rates under the JOBS 
     program are increased from 20 percent in 1995 to 50 percent 
     in 2001. The Federal matching rate for JOBS and child care is 
     increased from a minimum of 60 percent under current law to a 
     minimum of 70 percent (or, if higher, the State's medicaid 
     matching rate plus 10 percentage points). The funding cap for 
     JOBS is phased up from $1.3 billion in 1995 to $2.5 billion 
     in 2001.
       The bill also--
       (1) emphasizes work by requiring States to encourage job 
     placement by using performance measures that reward staff 
     performance, or such other management practice as the State 
     may choose;
       (2) provides for a job voucher program that uses private 
     profit and nonprofit organizations to place recipients in 
     private employment;
       (3) eliminates certain Federal requirements to give States 
     additional flexibility in operating their JOBS programs; and
       (4) allows States to provide JOBS services to non-custodial 
     parents who are unemployed and unable to meet their child 
     support obligations.
       Teen parents.--For purposes of AFDC, teen parents (under 
     age 18) are required to live at home or in an alternative 
     adult-supervised setting. Teen parents (under age 20) are 
     required to attend school, or participate in other JOBS 
     activity approved by the State.
       Encourage States to test alternative strategies.--Without 
     requesting a waiver, States may adopt their own AFDC rules 
     for (1) earnings disregards, (2) income and assets, and (3) 
     eligibility for the unemployed parent program, for a period 
     of five years. The Secretary of Health and Human Services 
     must evaluate a sufficient number of program changes to 
     determine their impact on AFDC receipt, earnings achieved, 
     program costs, and other factors.
       Interagency Welfare Review Board.--The bill establishes an 
     Interagency Welfare Review Board to expedite waiver requests 
     that involve more than one Federal agency. In considering an 
     application for a waiver under section 1115 of the Social 
     Security Act, there will be a presumption for approval in the 
     case of a request for a waiver that is similar in substance 
     and scale to one the Secretary has already approved. 
     Decisions on section 1115 waiver requests must be made within 
     90 days after a completed application is received.
       Child support enforcement.--The bill includes provisions to 
     increase child support collections by establishing a 
     directory of new hires, requiring States to adopt uniform 
     State laws to expedite collections in interstate cases, 
     requiring States to improve their paternity establishment 
     programs, and making other changes.
       In addition, the bill makes changes in SSI program rules 
     and in rules relating to the deeming of income of sponsors to 
     aliens for purposes of eligibility and benefits under the 
     AFDC, SSI, and food stamp programs, and makes other changes, 
     as follows:
       SSI.--The bill includes provisions to modify disability 
     eligibility criteria for children, to provide for increased 
     accountability for use of benefits, and to require that 
     retroactive benefits be used on behalf of the child.
       Alien deeming.--The period during which a sponsor's income 
     is deemed to an alien for purposes of eligibility for AFDC, 
     SSI, and food stamps is extended from 3 to 5 years. 
     Eligibility rules for AFDC, medicaid, SSI, and food stamps 
     are made uniform.
       Tax responsibilities incident to expatriation.--A taxpayer 
     deciding to expatriate would owe income tax on asset gains 
     that accrued during the period of U.S. citizenship, absent an 
     election to instead continue to treat an asset as subject to 
     U.S. tax. Similar rules would apply to certain long-term U.S. 
     residents relinquishing that status.
       Earned income tax credit changes.--Eligibility for the 
     earned income tax credit would be limited to those authorized 
     to work in the United States. In addition, the bill would 
     provide more effective rules for verifying EITC claims where 
     tax returns have social security number errors or omissions. 
     Finally, an individual's net capital gains would be added to 
     the categories of unearned income that are currently totalled 
     in determining whether the taxpayer is eligible for the EITC.
       Treatment of corporate stock redemptions.--The bill 
     includes a provision that would assure the proper tax 
     treatment of corporate stock redemptions. Under the bill, non 
     pro rata stock redemptions received by a corporate 
     shareholder would generally be treated as a sale of the stock 
     to the redeeming corporation rather than as a dividend 
     qualifying for the intercorporate dividends received 
     deduction.

                       Description of Provisions

     A. Job Opportunities and Basic Skills Training (JOBS) Program


                1. Increase in JOBS Participation Rates

       Present Law.--Under the provisions of the Family Support 
     Act of 1988, 7 percent of adults in single parent families 
     were required to participate in the JOBS program in fiscal 
     year 1991, increasing to 20 percent in 1995. This requirement 
     expires at the end of fiscal year 1995.
       In the case of a family eligible for AFDC by reason of the 
     unemployment of the parent who is the principal earner, the 
     Family Support Act mandated that the State require at least 
     one parent to participate, for a total of at least 16 hours a 
     week, in a work experience, community work experience, or 
     other work program. The participation rate that the State 
     must meet was set at 40 percent in 1994, increasing to 50 
     percent in l995, 60 percent in 1996, and 75 percent in 1997 
     and 1998.
       Persons exempt from this requirement include individuals 
     who are ill or incapacitated, are needed to care for another 
     individual who is ill or incapacitated, needed to care for a 
     child under age 3 (or age 1 at State option), live in a 
     remote area, work 30 hours or more a week, and children age 
     16 and under who are full time students.
       Proposed Change.--The participation rate is increased to 30 
     percent in 1997, 35 percent in 1998, 40 percent in 1999, 45 
     percent in 2000, and 50 percent in 2001 and years thereafter. 
     Those who combine participation in JOBS and employment for an 
     average of 20 hours a week, and those who are employed for an 
     average of 20 hours a week, are counted as participants in 
     JOBS for purposes of calculating the State's participation 
     rate. The work requirement provisions for unemployed parents 
     are retained.


                  2. Change in Purpose of the Program

       Present Law.--The stated purpose of the JOBS program is to 
     assure that needy families with children obtain the 
     education, training, and employment that will help them avoid 
     long-term welfare dependence.
       Proposed Change.--The purpose of the program is modified by 
     adding: to enable individuals receiving assistance to enter 
     employment as quickly as possible; and to increase job 
     retention.


             3. Requirement for Staff Performance Measures

       Present Law.--There is no provision relating to staff 
     performance measures.
       Proposed Change.--A State will be required to have 
     procedures to: encourage the placement of participants in 
     jobs as quickly as possible, including using performance 
     measures that reward staff performance, or such other 
     management practice as the State may choose; and assist 
     participants in retaining employment after they are hired.
       The Secretary of Health and Human Services is required to 
     provide technical assistance and training to States to assist 
     them in implementing effective management practices and 
     strategies.


                    4. Job Placement Voucher Program

       Present Law.--There is no provision for a job placement 
     voucher program.
       Proposed Change.--The bill provides that, as part of their 
     JOBS programs, States may operate a job placement voucher 
     program to promote unsubsidized employment of welfare 
     applicants and recipients.
       The State will be required to make available to an eligible 
     AFDC applicant or recipient a list of State-approved job 
     placement organizations that offer job placement and support 
     services. The organizations may be publicly or privately 
     owned and operated.
       The State agency will give an individual who participates 
     in the program a voucher which the individual may present to 
     the job placement organization of his or her choice. The 
     organization will, in turn, fully redeem the voucher after it 
     has successfully placed the individual in employment for a 
     period of six months, or such longer period as the State 
     determines.


       5. Increased Flexibility in Administering the JOBS Program

       Present Law.--The Family Support Act requires States to 
     include in their JOBS programs certain specified services, 
     including education activities, skills training, job 
     readiness, job development, and at least two work programs 
     (including job search, work experience, on-the-job training, 
     and work supplementation). There are also rules relating to 
     when and how long individuals may be required to search for a 
     job, as well as other program rules.
       Proposed Change.--The bill allows States to establish their 
     own requirements for when and how long a recipient or 
     applicant must participate in job search. It also eliminates 
     the present law requirement that individuals who are age 20 
     or over and have not graduated from high school (or earned a 
     GED) must be provided with education activities, and 
     eliminates the requirement that States [[Page S6921]] offer 
     specified education and training services. The requirement 
     that the State have at least two work programs is retained.


   6. Permit States to Provide Employment Services for Non-custodial 
                                Parents

       Present Law.--The Family Support Act allowed up to 5 States 
     to provide JOBS services to non-custodial parents who are 
     unemployed and unable to meet their child support 
     obligations.
       Proposed Change.--All States will be given the option of 
     providing JOBS services to non-custodial parents who are 
     unemployed and unable to meet their child support 
     obligations.


                    7. Funding for the JOBS Program

       Present Law.--States are entitled to receive their share of 
     Federal matching payments up to a capped amount of $1.3 
     billion in fiscal year 1995 to operate the JOBS program. The 
     State's share of the capped amount is based on its relative 
     number of adult AFDC recipients.
       The Federal matching rate is the greater of 60 percent or 
     the State's medicaid matching rate, whichever is higher, for 
     the cost of services; and 50 percent for the cost of 
     administration, and for transportation and other work-related 
     supportive services.
       Proposed Change.--The Federal matching rate for JOBS 
     expenses by States is increased and simplified. Beginning in 
     fiscal year 1997, the Federal matching rate will be 70 
     percent or the State's Federal medicaid matching rate plus 10 
     percentage points, whichever is higher. This rate will apply 
     to all JOBS costs, including administrative costs and the 
     costs of transportation and other work-related supportive 
     services. The cap on Federal spending is $1.3 billion in 
     1997, increasing to $1.6 billion in 1998, $1.9 billion in 
     1999, $2.2 billion in 2000, and $2.5 billion in 2001 and 
     years thereafter.


                       8. Funding for Child Care

       Present Law.--States must guarantee child care for 
     individuals who are required to participate in the JOBS 
     program. Child care must also be guaranteed, to the extent 
     the State agency determines it to be necessary for an 
     individual's employment, for a period of 12 months to 
     individuals who leave the AFDC rolls as the result of 
     increased hours of, or increased income from, employment. 
     (Funding for this transitional child care expires at the end 
     of fiscal year 1998.) States are entitled to receive Federal 
     matching for the costs of such care at the State's medicaid 
     matching rate. States are also entitled to receive Federal 
     matching at the medicaid matching rate for care provided to 
     individuals whom the State determines are at risk of becoming 
     eligible for AFDC if such care were not provided. There is a 
     cap on Federal matching for ``at risk'' child care of $300 
     million in any fiscal year. Funds are distributed to the 
     States on the basis of the relative number of children 
     residing in each State.
       Proposed Change.--The Federal matching rate for child care 
     is increased to 70 percent, or the State's medicaid matching 
     rate plus ten percentage points, whichever is higher. The 
     authority for Federal funding for transitional child care for 
     persons who leave the AFDC rolls is made permanent.


         9. Evaluation of JOBS Programs; Performance Standards

       Present Law.--The Family Support Act of 1988 required the 
     Secretary of Health and Human Services to evaluate State JOBS 
     programs in order to determine the relative effectiveness of 
     different approaches for assisting long-term and potentially 
     long-term AFDC recipients. The Secretary was required to use 
     outcome measures to test effectiveness, including employment, 
     earnings, welfare receipt, and poverty status. These 
     evaluations are being conducted in large part by the Manpower 
     Demonstration Research Corporation.
       The Family Support Act also required the Secretary to 
     develop performance standards that measure outcomes that are 
     based, in part, on the results of the JOBS evaluations. On 
     September 30, 1994, the Department of Health and Human 
     Services issued a report on the progress that has been made 
     in developing an outcome-based performance system for JOBS 
     programs. The report stated that recommendations for outcome 
     measures will be transmitted to the Congress by April 1996. 
     Final recommendations on performance standards will be ready 
     before October 1998.
       Proposed Change.--The bill authorizes such sums as may be 
     necessary for fiscal years 1996-2000 to enable the Secretary 
     to continue evaluating the effectiveness of State JOBS 
     programs. The information derived from these evaluations is 
     to be used to provide guidance to the Secretary in making 
     improvements in the performance standards that were required 
     by the Family Support Act. It is also to be used to enable 
     the Secretary to provide technical assistance to the States 
     to assist them in improving their JOBS programs, and in 
     meeting the required performance standards. The evaluations 
     shall include assessments of cost effectiveness, the level of 
     earnings achieved, welfare receipt, job retention, the 
     effects on children, and such other factors as the State may 
     determine.

           B. Aid to Families with Dependent Children (AFDC)


                    1. Teen Case Management Services

       Present Law.--There is no requirement in present law that 
     States must provide case management services to teen parents 
     who are receiving AFDC.
       Proposed Change.--State welfare agencies will be required 
     to assign a case manager to each custodial parent who is 
     under age 20. The case manager will be responsible for 
     assisting teen parents in obtaining services and monitoring 
     their compliance with all program requirements.


  2. Requirement for Teen Participation in Education or Other Activity

       Present Law.--The statute provides that States generally 
     must require teen parents under age 20 (regardless of the age 
     of the child) to attend school or participate in another JOBS 
     activity, but only if the program is available where the teen 
     is living, and State resources otherwise permit.
       Proposed Change.--The rules requiring teens to attend 
     school or participate in another JOBS activity are 
     strengthened. Teen parents under age 20 who have not 
     completed a high school education (or its equivalent) must be 
     required to attend school, participate in a program that 
     combines classroom and job training, or work toward 
     attainment of a GED. A teen parent who has successfully 
     completed a high school education (or its equivalent) must 
     participate in a JOBS activity (including a work activity) 
     approved by the State. States may provide for exceptions to 
     this requirement, in accordance with regulations issued by 
     the Secretary of Health and Human Services. However, 
     exceptions to the requirement may not exceed 50 percent of 
     eligible teens by the year 2000.
       In addition, States may also have programs to provide 
     incentives and penalties for teens to encourage them to 
     complete their high school (or equivalent) education.


                3. Living Arrangements for Teen Parents

       Present Law.--States have the option of requiring a teen 
     under the age of 18 and has never married, and who has a 
     dependent child (or is pregnant) to live with a parent, legal 
     guardian, or other adult relative, or reside in a foster 
     home, maternity home, or other adult-supervised supportive 
     living arrangement. The State is required, where possible, to 
     make the AFDC payment to the parent or other responsible 
     adult. Certain exceptions to these requirements are provided 
     in statute.
       Proposed Change.--The bill requires all States to require a 
     teen under age 18 who has a dependent child (or is pregnant) 
     to live with a parent, legal guardian, or other adult 
     relative, or reside in a foster home, maternity home, or 
     other adult-supervised supportive living arrangement. 
     Assistance will be paid to the teen's parent or other adult 
     on the teen's behalf. Exceptions to this requirement may be 
     made by in cases where the State determines that the physical 
     or emotional health or safety of the teen parent or child 
     would be jeopardized if they lived with the teen's parent, or 
     where the State determines (under regulations issued by the 
     Secretary) that there is good cause. The State agency will 
     have responsibility for assisting teens in locating 
     appropriate living arrangement when this is necessary.


          4. Establishment of Interagency Welfare Review Board
       Present Law.--At the present time there is no interagency 
     board to review requests by States for waivers from Federal 
     program rules that involve more than one agency.
       Proposed Change.--In order to facilitate the consideration 
     of welfare program requirement waiver requests that involve 
     more than one Federal department or agency, an Interagency 
     Welfare Review Board would be created. Members would include 
     the Secretaries of Agriculture, Health and Human Services, 
     Housing and Urban Development, Labor, and Education, or their 
     designees. The President may make such other appointments to 
     the Board as he determines appropriate.
       The Board will act as the central organization for 
     coordinating the review of State applications for waivers 
     that involve more than one Federal department or agency, and 
     will provide assistance and technical advice to the States. 
     The Board may issue an advisory opinion with respect to a 
     waiver request, but final decisions will be made by the 
     Secretaries of the departments or agencies that have 
     responsibility for the programs involved. The Board must 
     establish a schedule for the consideration of a waiver 
     application to assure that the State will receive a final 
     decision not later than 90 days after the date the completed 
     application is received by the Board.


            5. Consideration of Section 1115 Waiver Requests

       Present Law.--Section 1115 of the Social Security Act gives 
     the Secretary of Health and Human Services authority to waive 
     State compliance with specified rules under the AFDC, child 
     support and medicaid programs. There is no authority to waive 
     JOBS program rules.
       The purpose of the waiver authority is to enable States to 
     implement demonstration projects that the Secretary finds 
     will assist in promoting the objectives of the programs. 
     States must evaluate their demonstration programs, and the 
     programs must not increase Federal spending.
       Proposed Change.--States will be allowed to apply for 
     waivers of JOBS program rules in order to conduct JOBS 
     demonstration projects.
       In addition, the Secretary will be required to approve or 
     disapprove a section 1115 waiver request within 90 days after 
     the completed [[Page S6922]] application is received. In 
     considering an application for a waiver, there will be a 
     presumption for approval in the case of a request for a 
     waiver that is similar in substance and scale to one that has 
     already been approved.


           6. State Authority to Establish Certain AFDC Rules

       Present Law.--The Social Security Act specifies the rules 
     States must follow with respect to income and resource 
     requirements, the disregard of income, and the definition of 
     unemployment and the number of quarters of work required for 
     eligibility under the Unemployed Parent (UP) program.
       Proposed Change.--Any State may, without receiving a 
     waiver, establish any of the following program changes: 
     income and resource requirements, requirements relating to 
     the disregard of income, standards for defining unemployment 
     that are different from those prescribed by the Secretary in 
     regulations (which currently limit eligibility for UP 
     benefits to families in which the principal earner works 
     fewer than 100 hours a month), and rules that prescribe the 
     numbers of quarters of work that a principal earner must have 
     to qualify for Unemployed Parent benefits. This authority 
     expires at the end of five years.
       The Secretary is required to evaluate a sufficient number 
     of the program changes established by the States pursuant to 
     this authority to determine the impact of the changes on AFDC 
     recipiency, earnings achieved, program costs, and such other 
     factors as the Secretary may determine. A State chosen by the 
     Secretary for an evaluation must cooperate in carrying out 
     the evaluation.

                  C. Child Support Enforcement Program

       The Family Support Act of 1988 strengthened the Child 
     Support Enforcement program, which was enacted in 1975 (Title 
     IV-D of the Social Security Act), by: requiring States to 
     establish automated tracking and monitoring systems (with 90 
     percent of the funding provided by the Federal government); 
     requiring wage withholding beginning in 1994 for all support 
     orders (regardless of whether a parent has applied to the 
     child support enforcement agency for services); and requiring 
     judges and other officials to use State guidelines to 
     establish most child support award levels.
       States were required to review and adjust individual case 
     awards every three years for AFDC cases (and every three 
     years at the request of a parent in other IV-D cases); meet 
     Federal standards for the establishment of paternity; require 
     all parties in a contested paternity case to take a genetic 
     test upon the request of any party (with 90 percent of the 
     laboratory costs paid by the Federal government); and to 
     collect and report a wide variety of statistics related to 
     the performance of the system. The Act also established the 
     U.S. Commission on Interstate Child Support, which issued its 
     report with recommendations in May 1992.


1. Require the Adoption by All States of the Uniform Interstate Family 
                          Support Act (UIFSA)

       Present Law.--The Uniform Interstate Family Support Act 
     (UIFSA) was approved by the National Conference of 
     Commissioners on Uniform State laws in August 1992. It 
     contains a wide variety of provisions designed to improve 
     enforcement of interstate child support cases by providing 
     uniformity in State laws and procedures, and creating a 
     framework for determining jurisdiction in interstate cases. 
     Not all States have adopted UIFSA.
       Proposed Change.--All States are required to adopt UIFSA 
     not later than January 1, 1997.


            2. Rules for Paternity Establishment Cooperation

       Present Law.--The statute requires AFDC applicants and 
     recipients, as a condition of aid, to cooperate with the 
     State in establishing paternity and in obtaining support 
     payments unless there is good cause for refusal to cooperate. 
     It does not define what constitutes cooperation. The 
     determination as to whether an individual is cooperating or 
     has good cause for refusing to cooperate is made by the 
     welfare agency.
       Proposed Change.--Cooperation is defined in statute as the 
     provision by the mother of both a name and any other helpful 
     information to verify the identity of the putative father 
     (such as the present or past address, the present or past 
     place of employment or school, date of birth, names and 
     addresses of parents, friends, or relatives able to provide 
     location information, or other information that could enable 
     service of process). The good cause exemption in present law 
     is retained.
       For purposes of AFDC eligibility, a mother (or other 
     relative) will not be determined to be cooperating with 
     efforts to establish paternity unless the individual provides 
     the required information. The child support enforcement 
     agency is required to make this determination within 10 days 
     after the individual has been referred for services by the 
     welfare agency. However, the State cannot deny benefits on 
     the basis of lack of cooperation until such determination is 
     made.


                3. Streamlining Paternity Establishment

       Present Law.--States are required to have procedures for a 
     simple civil process for voluntarily acknowledging paternity 
     under which the rights and responsibilities of acknowledging 
     paternity are explained, and due process safeguards are 
     afforded. The State's procedures must include a hospital-
     based program for the voluntary acknowledgement of paternity. 
     States must also have procedures under which the voluntary 
     acknowledgement of paternity creates a rebuttable, or at the 
     option of the State, conclusive presumption of paternity, and 
     under which such voluntary acknowledgment is admissible as 
     evidence of paternity, and procedures under which the 
     voluntary acknowledgment of paternity must be recognized as a 
     basis for seeking a support order without requiring any 
     further proceedings to establish paternity.
       Proposed Change.--States are required to strengthen 
     procedures relating to establishment of paternity. A parent 
     who has acknowledged paternity has 60 days to rescind the 
     affidavit before the acknowledgement becomes legally binding 
     (with later challenge in court possible only on the basis of 
     fraud, duress, or material mistake of fact). However, minors 
     who sign the affidavit outside the presence of a parent or 
     court-appointed guardian have greater opportunity to rescind 
     the acknowledgement after 60 days. Due process protection is 
     enhanced by requiring that States more adequately inform 
     parents of the effects of acknowledging paternity.
       The bill also provides that no judicial or administrative 
     procedures may be used to ratify an unchallenged 
     acknowledgement, and that States may not use jury trials for 
     contested paternity cases. Where there is clear and 
     convincing evidence of paternity (such as a genetic test), 
     States must, at a parent's request, issue a temporary order 
     requiring the provision of child support. Finally, States 
     must have procedures ensuring that fathers have a reasonable 
     opportunity to initiate a paternity action.


                  4. Paternity Establishment Outreach

       Present Law.--There is no requirement that States have a 
     paternity outreach program.
       Proposed Change.--States are required to publicize the 
     availability and encourage the use of procedures for 
     voluntary paternity establishment and child support through a 
     variety of means, including distribution of written materials 
     at health care facilities and other locations such as 
     schools; pre-natal programs to educate expectant couples on 
     individual and joint rights and responsibilities with respect 
     to paternity; and reasonable follow-up efforts after a new-
     born child has been discharged from a hospital if paternity 
     or child support have not been established. States may 
     receive 90 percent Federal matching for these outreach 
     efforts.


                   5. Review and Adjustment of Orders

       Present Law.--States are required to review and adjust 
     child support orders at least every 36 months (1) in the case 
     of an AFDC family, unless the State determines that a review 
     would not be in the best interests of the child and neither 
     parent has requested review; and (2) in the case of any other 
     order being enforced by the child support enforcement agency, 
     if either parent has requested review.
       Proposed Change.--States are required to review both AFDC 
     and non-AFDC child support orders every three years at the 
     request of either parent, and to adjust the order (without a 
     requirement for any other change in circumstances) if the 
     amount of child support under the order differs from the 
     amount that would be awarded based on State guidelines.
       Upon request at any time of either parent subject to a 
     child support order, the State must review the order and 
     adjust the order in accordance with state guidelines based on 
     a substantial change in the circumstances of either such 
     parent.
       Child support orders issued or modified after the date of 
     enactment must require the parents to provide each other with 
     an annual statement of their respective financial condition.


            6. National Child Support Guidelines Commission

       Present Law.--Among its other recommendations, the U.S. 
     Commission on Interstate Child Support recommended the 
     establishment of a commission to study issues relating to 
     child support guidelines.
       Proposed Change.--The bill establishes a commission to 
     determine whether it is appropriate to develop a national 
     child support guideline, and if it determines that such a 
     guideline is needed, to develop such a guideline. The 
     commission is to make its report no later than two years 
     after the appointment of its members.


7. Establish Centralized State Case Registries and Enforcement Services

       Present Law.--Child support orders and records are often 
     maintained by various branches of government at the local, 
     county, and State level. Under the current program, IV-D 
     services are provided automatically without charge to 
     recipients of AFDC and Medicaid. Other parents must apply for 
     services, and may at State option be required to pay a fee 
     for services.
       Proposed Change.--The bill requires each State to establish 
     both a Central Registry for all child support orders 
     established or registered in the State, and a centralized 
     payment processing system in order to take advantage of 
     automation and economies of scale, and to simplify the 
     process for employers. For enforcement purposes, States must 
     choose one of two types of systems for payment processing: 
     (a) an ``opt-in'' centralized collections system where one 
     parent would have to apply to the IV-D agency to receive 
     services, or (b) an ``opt-out'' centralized system where all 
     cases would automatically have withholding and enforcement 
     [[Page S6923]] done by IV-D unless both parents make a 
     request to be exempt from the process. Under either option, 
     the centralization process for enforcement would be used for 
     collections and disbursement.


 8. Establish Federal Data Systems: A Directory of New Hires Within an 
             Expanded Federal Parent Locator Service (FPLS)

       Expanded Federal Parent Locator Service (FPLS):
       Present Law.--State child support agencies now have access 
     to the FPLS, a computerized national location network 
     operated by the Office of Child Support Enforcement, which 
     obtains information from six Federal agencies and the State 
     employment security agencies. This information only relates 
     to a parent's location, and does not include income and asset 
     information. It is used for enforcement of existing child 
     support orders, not to establish paternity or establish and 
     modify orders.
       Proposed Change.--A New Hire Directory, and a new Data Bank 
     on Child Support Orders which contains information of all 
     cases sent by the State registries, are added to the current 
     FPLS. The FPLS database is expanded to provide States with 
     additional information about not only the location of the 
     individual but also income, assets, and other relevant data. 
     States may access this information for enforcement, 
     establishing paternity, and establishing and modifying 
     orders.
       a. Directory of New Hires:
       Present Law.--Employers are currently required, generally 
     on a quarterly basis, to report employee wages to State 
     employment security offices. These reports are used to 
     determine unemployment benefits. In order to more rapidly and 
     effectively implement wage withholding to enforce child 
     support orders, a number of States have adopted laws 
     requiring employers to report information on each newly hired 
     individual within a specified number of days after the 
     individual is hired.
       Proposed Change.--A national New Hire Directory is created 
     within the FPLS. Employers will be required to report the 
     name, date of birth, and social security number of each newly 
     hired employee to the New Hire Directory within 10 days of 
     hiring. This information will be compared with information in 
     the expanded FPLS, and matches will be sent back to the 
     appropriate States to be used for enforcement.


                   9. Require Suspension of Licenses

       Present Law.--There is no provision in present law 
     requiring States to withhold or suspend, or restrict the use 
     of, professional, occupational, recreational and drivers' 
     licenses of delinquent parents.
       Proposed Change.--States are required to have such 
     procedures and to use them in appropriate cases.


            10. Increased Use of Consumer Reporting Agencies

       Present Law.--State child support enforcement agencies are 
     required to report periodically the names of obligors who are 
     at least 2 months delinquent in the payment of support and 
     the amount of the delinquency to consumer reporting agencies. 
     If the amount of the delinquency is less than $1,000, such 
     reporting is optional with the State. The State's procedural 
     due process requirements must be met.
       Proposed Change.--States are required to report 
     periodically to consumer reporting agencies the name of any 
     parent who is delinquent in the payment of support, but only 
     after the parent has been afforded due process under State 
     law, including notice and a reasonable opportunity to contest 
     the accuracy of the information.


                   11. Require Interest on Arrearages

       Present Law.--There is no requirement that States charge 
     interest on child support arrearages.
       Proposed Change.--States must charge interest on 
     arrearages.


               12. Deny Passports for Certain Arrearages

       Present Law.--There is no provision in present law relating 
     to denial of passports for failure to pay child support.
       Proposed Change.--If the Secretary of HHS receives a 
     certification by a State agency that an individual owes 
     arrearages of child support in an amount exceeding $5,000 or 
     in an amount exceeding 24 months' worth of child support, the 
     Secretary shall transmit such certification to the Secretary 
     of State for action. The Secretary of State shall refuse to 
     issue a passport to such an individual, and may revoke, 
     restrict, or limit a passport issued previously to such 
     individual.


                   13. Extend Statute of Limitations

       Present Law.--There is no provision for a statute of 
     limitations for purposes of collecting child support.
       Proposed Change.--States must have procedures under which 
     the statute of limitations on arrearages of child support 
     extends at least until the child owed such support is 30 
     years of age.


     14. Requirements for Federal Employees and Military Personnel

       Present Law.--The armed forces have their own rules 
     relating to child support enforcement. Procedural rules for 
     wage withholding for Federal and military employees, and for 
     other employees, are not uniform.
       Proposed Change.--Federal employees are made subject to the 
     same withholding procedures as non-Federal employees. The 
     Secretary of Defense is required to streamline collection and 
     location procedures of military personnel. The military would 
     be treated similarly to a State for purposes of child support 
     enforcement interaction with other States, and more as any 
     other employer for purposes of wage withholding.


        15. Grants to States for Access and Visitation Programs

       Present Law.--The 1988 Family Support Act authorized $4 
     million for each of fiscal years 1990 and 1991 to enable 
     States to conduct demonstration projects to develop and 
     improve activities designed to increase compliance with child 
     access provisions of court orders.
       Proposed Change.--The bill authorizes $5 million for each 
     of fiscal years 1996 and 1997, and $10 million for each 
     succeeding fiscal year to enable States to establish and 
     administer programs to support and facilitate non-custodial 
     parents' access to and visitation of their children, through 
     mediation, counseling, education, development of parenting 
     plans, visitation enforcement, and development of guidelines 
     for visitation and alternative custody arrangements.


                  16. Change Distribution Requirements

       Present Law.--If a family is receiving AFDC, the family 
     receives the first $50 of the monthly child support payment. 
     Additional amounts that are paid are used to reimburse the 
     State and Federal governments for assistance paid to the 
     family. When a family leaves AFDC, the State must pass 
     through all current monthly child support to the family, but 
     has the option whether to first pay the family any arrearages 
     which are collected, or whether to reimburse the State and 
     Federal governments.
       Proposed Change.--The bill requires States to pay all 
     families who have left AFDC any arrearages due the family for 
     months during which a child did not receive AFDC, before 
     using those arrearages to reimburse the State and Federal 
     government. States are given the option of passing through to 
     families receiving AFDC the difference between the $50 pass-
     through amount and the amount of child support due for that 
     month.


                      17. Change in Lump-Sum Rule

       Present Law.--If a family receiving AFDC receives a lump-
     sum tax refund, the family loses eligibility for the number 
     of months equal to the amount of the lump sum payment divided 
     by the State payment standard.
       Proposed Change.--Any lump-sum child support payment 
     withheld from a tax refund for a family receiving AFDC may be 
     placed in a Qualified Asset Account not to exceed $10,000. 
     Funds in this account may only be used for education and 
     training programs, improvements in the employability of an 
     individual (such as through the purchase of an automobile), 
     the purchase of a home, or a change of family residence. They 
     may not be taken into account for purposes of AFDC benefit 
     eligibility.


                      18. Increase Federal Funding

       Present Law.--The Federal Government pays 66 percent of 
     most State and local IV-D costs, with a higher matching rate 
     of 90 percent for genetic testing to establish paternity and, 
     until October 1, 1995, for statewide automated data systems. 
     The Federal government also pays States an annual incentive 
     payment equal to a minimum of 6 percent of collections made 
     on behalf of AFDC families plus 6 percent of collections made 
     on behalf of non-AFDC families. The amount of each State's 
     incentive payment can reach a high of 10 percent of AFDC 
     collections plus 10 percent of non-AFDC collections depending 
     on the cost-effectiveness of the State's program. The 
     incentive payments for non-welfare collections may not exceed 
     115 percent of the incentive payments for welfare 
     collections. These incentive payments are financed from the 
     Federal share of collections.
       Proposed Change.--The Federal matching rate will increase 
     to 75 percent in 1999, and there will be a maintenance of 
     effort required by the State. The Secretary will issue 
     regulations creating a new incentive structure for State IV-D 
     systems based on paternity establishment throughout the State 
     (not just within the IV-D system) and a series of measures of 
     overall performance in collections and cost-effectiveness of 
     the IV-D system. The incentives will range up to 5 percentage 
     points of the matching rate for paternity establishment, and 
     up to 10 percentage points for overall performance measures. 
     States must spend incentive payments on the IV-D system. If a 
     State fails to meet certain performance standards such as for 
     paternity establishment or overall performance, the IV-D 
     agency will be assessed penalties ranging from at least 3 
     percent of funding as a first sanction, up to 10 percent for 
     a third sanction.


19. Limit on Match for Old Systems, and Cap Funding for the New Systems

       Present Law.--The 1988 Family Support Act required States 
     to establish automated tracking and monitoring systems for 
     child support enforcement by October 1, 1995, with 90 percent 
     of the funding for planning, development, installation, or 
     enhancement of such systems provided by the Federal 
     government.
       Proposed Change.--The Federal matching rate for the new 
     systems requirements in this bill is 80 percent or, if 
     higher, the rate the State is entitled to receive for other 
     program purposes, as described above (combining the new 
     Federal matching rate and the [[Page S6924]] State's 
     incentive payments). Federal spending for this purpose may 
     not exceed $260 million annually for fiscal years 1996 
     through 2001.


                        20. Audit and Reporting

       Present Law.--The statute mandates periodic comprehensive 
     Federal audits of State programs to ensure compliance with 
     Federal requirements. If the Secretary finds that a State has 
     not complied substantially with Federal requirements, the 
     State's AFDC matching is reduced not less than one nor more 
     than two percent for the first finding of noncompliance, 
     increasing to not less than three nor more than five percent, 
     if the finding is the third or a subsequent consecutive such 
     finding.
       Proposed Change.--The Secretary will establish standards to 
     simplify and modify Federal audit requirements, focusing them 
     more on performance outcomes.

             C. Supplemental Security Income (SSI) Program


            1. Revised SSI Childhood Disability Regulations

       Present Law.--In determining whether a child under the age 
     of 18 is disabled for the purpose of qualifying for 
     Supplemental Security Income, regulations require the Social 
     Security Administration (SSA) to consider the degree to which 
     an impairment or combination of impairments affects a child's 
     ability to develop, mature and to engage in age-appropriate 
     activities of daily living.
       In making these evaluations, SSA conducts what is called an 
     ``individualized functional assessment'' (IFA) in which a 
     child's activities are broken into ``domains'' of functioning 
     or development, such as cognition, communication, and motor 
     ability. Under current regulations, the limitation in 
     functioning caused by conduct disorders, or maladaptive 
     behavior, may be considered under several domains.
       To be found to be disabled based on an IFA under the 
     Commissioner's current regulations, a child's impairment(s) 
     must, at a minimum, cause a moderate limitation in 
     functioning in at least three domains of functioning.
       Proposed Change.--The Commissioner of Social Security is 
     required to revise SSA's regulations for adjudicating claims 
     for SSI benefits filed for children by reducing the number of 
     domains considered in determining whether a child is disabled 
     based on an individualized functional assessment, to consider 
     maladaptive behavior in only one domain, and to require that, 
     at a minimum, a child's impairment(s) cause a ``marked'' 
     degree of limitation in at least two domains, or an extreme 
     limitation in at least one domain.
       The Commissioner is required to promulgate the new 
     regulations within 9 months, and, within two additional 
     years, redetermine the eligibility of children on the rolls 
     whose disability was originally determined under the 
     regulations that are revised as a result of this provision.


              2. Required Treatment for Disabled Children

       Present Law.--There is no provision that requires a 
     disabled child who qualifies for Supplemental Security Income 
     benefits to receive medical treatment or have a treatment 
     plan.
       Proposed Change.--Within three months after a child has 
     been found to be eligible for SSI, the parent or 
     representative payee will be required to file a treatment 
     plan for the child with SSA (through the State Disability 
     Determination Service of the State in which the child 
     resides). The plan will be developed by the child's physician 
     or other medical provider. SSA will evaluate compliance with 
     the treatment plan when SSA conducts a continuing disability 
     review for the child.
       If the parent or representative payee fails, without good 
     cause, to meet these requirements, SSA will appoint another 
     representative payee, which can be the State Medicaid agency 
     of the State in which the child resides, or another State 
     agency or individual.


                    3. Continuing Disability Reviews

       Present Law.--Beginning in fiscal year 1996, the 
     Commissioner of Social Security will be required to conduct 
     periodic continuing disability reviews (CDRs) for disabled 
     SSI recipients (including both disabled children and adults). 
     The provision expires in fiscal year 1998, and the 
     Commissioner will be required to conduct CDRs for not more 
     than 100,000 SSI recipients a year for the period 1996-1998.
       Proposed Change.--The Commissioner is required to conduct 
     periodic CDRs for disabled children who receive SSI. Reviews 
     for all children other than those whose disabilities are not 
     expected to improve must be conducted at least every three 
     years, with more frequent reviews for those whom SSA 
     determines may improve within a shorter period of time. 
     Children who are awarded SSI benefits because of low birth 
     weight must be reviewed after receiving benefits for 18 
     months.


         4. Special Savings Accounts for Children Under Age 18

       Present Law.--Large retroactive payments are often made 
     when a disabled child first qualifies for SSI benefits. The 
     retroactive payment is excluded from the $2,000 resource 
     limit for six months, but thereafter, any remaining portion 
     of the retroactive payment could, alone or in combination 
     with other assets, render the child ineligible for SSI 
     benefits.
       Proposed Change.--The representative payee of a disabled 
     child will be required to deposit the initial retroactive 
     payment into a special account if the amount of the 
     retroactive payment is equal to or exceeds six times the 
     maximum Federal benefit rate. Smaller retroactive payments 
     and underpayments may be deposited in the special account if 
     the representative payee chooses to do so. The money in the 
     account will not be considered to be a resource and may be 
     used only to benefit the child and only for such purposes as 
     education or job skills training; personal needs assistance; 
     special equipment; housing modification; medical treatment, 
     therapy, or rehabilitation; or other items or services 
     determined appropriate by the Commissioner.


             5. Graduated Benefits for Additional Children

       Present Law.--Each disabled child is eligible, under the 
     SSI program, for an amount equal to the full Federal monthly 
     benefit rate, which currently is $458.00, plus any 
     supplementary payment made by the State. The benefit may be 
     reduced because of other income received by the child, or 
     because of parental income that is deemed to the child.
       Proposed Change.--The amount payable to a child will be 
     reduced if two or more SSI-eligible children reside together 
     in a household. The amount for the first child will be 100 
     percent of the full benefit; the amount for the second 
     eligible child will be equal to 80 percent of the full 
     benefit; the amount for the third eligible child will be 
     equal to 60 percent of the full benefit; and the amount for 
     the fourth and each subsequent child will be equal to 40 
     percent of the full benefit. Children living in group homes 
     or in foster care will continue to be eligible for 100 
     percent of the full benefit. The aggregate amount payable to 
     all SSI-eligible children in a household will be paid to each 
     child on a ``per capita'' basis.
       For the purpose of determining eligibility for Medicaid, 
     each SSI-eligible child in a household shall be considered to 
     be eligible for an amount equal to 100 percent of the full 
     Federal benefit rate.


                      6. Use of Standardized Tests

       Present Law.--There is no provision relating to use of 
     standardized tests for purposes of determining whether a 
     child is disabled.
       Proposed Change.--The Commissioner of Social Security is 
     required to use standardized tests that provide measures of 
     childhood development or functioning, or criteria of 
     childhood development or function that are equivalent to the 
     findings of a standardized test, wherever such tests or 
     criteria are available and the Commissioner determines their 
     use to be appropriate.


                        7. Directory of Services

       Present Law.--There is no provision requiring a directory 
     of services that are available to assist children with 
     disabilities.
       Proposed Change.--For the purpose of expanding the 
     information base available to members of the public who 
     contact the Social Security Administration, the Commissioner 
     of Social Security shall establish a directory of services 
     for disabled children that are available within the area 
     serviced by each Social Security office. Each such directory 
     shall include the names of service providers, along with each 
     provider's address and telephone number, and shall be 
     accessible electronically to all Social Security employees 
     who provide direct service to the public.


                      8. Coordination of Services

       Present Law.--There is no provision that establishes a 
     system for assuring that SSI disabled children have access to 
     available services.
       Proposed Change.--In order to assure that a child receiving 
     SSI benefits on the basis of disability has access to 
     available medical and other support services, that services 
     are provided in an efficient and effective manner, and that 
     gaps in the provision of services are identified, the State 
     agency that administers the Maternal and Child Health block 
     grant would be made responsible for developing a care 
     coordination plan for each child.
       The Secretary of Health and Human Services, the Secretary 
     of Education, and the Commissioner of Social Security are 
     directed to take such steps as may be necessary, through 
     issuance of regulations, guidelines, or such other means as 
     they may determine, to assure that, where appropriate, the 
     State medicaid agency, the State Department of Mental Health, 
     the State Disability Determination Service, the State 
     Vocational Rehabilitation Agency, the State Developmental 
     Disabilities Council, and the State Department of Education: 
     (1) assist in the development of the child's care 
     coordination plan; (2) participate in the planning and 
     delivery of the services called for in the care coordination 
     plan; and (3) provide information to the Secretary of Health 
     and Human Services with respect to the services that they 
     provide.

                          D. Other Provisions


          1. Alien Eligibility for Public Assistance Programs

       Present Law.--The AFDC, SSI, medicaid, and food stamp laws 
     provide for limiting eligibility of immigrants for assistance 
     by means of so-called ``deeming'' rules. The rules provide 
     that for the purpose of determining financial eligibility for 
     benefits and services, immigrants are deemed to have the 
     income and resources of their immigration sponsors available 
     for their support for a period of 3 years. P.L. 103-152, the 
     Unemployment Compensation Amendments of 1993, included a 
     provision extending the sponsor-to- [[Page S6925]] alien 
     deeming period for SSI from 3 to 5 years, effective from 
     January 1, 1994 to October 1, 1996.
       Proposed Change.--The bill makes the SSI 5-year deeming 
     period permanent, and extends it to the AFDC and food stamp 
     programs. It also provides for uniform alien eligibility 
     criteria for the SSI, AFDC, medicaid, and food stamp 
     programs.


            2. Tax Responsibilities Incident to Expatriation

       Present Law.--Under current law, a taxpayer's accrued asset 
     gains are not taxed at the time he or she expatriates or 
     gives up U.S. residence. Further, the taxpayer's accrued 
     gains with respect to foreign assets are never taxed by the 
     United States. In cases when it can be demonstrated that a 
     taxpayer expatriated for purposes of tax avoidance, accrued 
     gains with respect to U.S. assets are taxed if a taxable 
     disposition occurs within the ten-year period following 
     relinquishment of U.S. citizenship.
       Proposed Change.--A U.S. citizen relinquishing citizenship 
     generally would be taxed on any accrued asset gains as of the 
     date of expatriation. Certain long-term residents of the 
     United States would similarly be taxed on accrued gains upon 
     losing such resident status. Exceptions would be provided for 
     the first $600,000 of a taxpayer's gain, gain with respect to 
     U.S. real estate, and pension gains. A taxpayer could elect, 
     on an asset by asset basis, to avoid immediate gain taxation 
     and instead continue to be subject to U.S. taxes with respect 
     to an asset.


                  3. Earned Income Tax Credit Changes

       (i) Illegal aliens--
       Present Law.--Currently, persons resident in the United 
     States for over six months who are not U.S. citizens are 
     eligible for the EITC in some circumstances, even if they are 
     working in the country illegally.
       Proposed Change.--Eligibility for the EITC would be limited 
     to those residents authorized to work in the United States.
       (ii) Social Security numbers--
       Present Law.--Procedurally, the IRS must use its normal 
     deficiency procedures, which involve a series of written 
     communications with the taxpayer, if it decides to challenge 
     a taxpayer's EITC claim that may be erroneous. This is true 
     even in the case of a missing or erroneous social security 
     number.
       Proposed Change.--The IRS would be provided with the 
     authority to process EITC claims in a more effective manner. 
     Social security numbers (valid for employment purposes in the 
     case of the earner(s)) would be required for the taxpayer, 
     his or her spouse, and each qualifying child. The IRS would 
     be permitted to handle any errors in social security numbers 
     under the simplified procedures currently applicable to math 
     errors on a taxpayer's return, rather than under the normal 
     tax deficiency procedures.
       (iii) Modification of unearned income test--
       Present Law.--Individuals with more than $2,350 of interest 
     (taxable and tax-exempt), dividends, net rents and net 
     royalties are not eligible for the EITC. (This provision was 
     enacted this year in H.R. 831.)
       Proposed Change.--An individual's net capital gains would 
     be added to the other categories of unearned income that are 
     totalled for purposes of determining an individual's 
     eligibility for the EITC.


              4. Treatment of Corporate Stock Redemptions

       Present Law.--Corporate shareholders are allowed a special 
     deduction (the ``dividends received deduction'') with respect 
     to qualifying dividends received from taxable domestic 
     corporations. The deduction equals 70 percent of dividends 
     received if the corporation receiving the deduction owns less 
     than 20 percent of the stock of the distributing corporation. 
     The deduction equals 80 percent of the dividends received if 
     20 percent or more of the stock is owned by the receiving 
     corporation. Members of a group of affiliated corporations 
     can elect to claim a 100 percent dividends received deduction 
     for qualifying dividends paid by a member of the affiliated 
     group. No deduction is allowed for dividends received from 
     tax-exempt corporations.
       An amount treated as a dividend in the case of a non pro 
     rata redemption of stock (or a partial liquidation) is 
     considered an extraordinary dividend under Internal Revenue 
     Code section 1059(e)(1). Generally, the basis of the 
     remaining stock held by a corporation receiving a dividend 
     must be reduced by the nontaxed portion of any extraordinary 
     dividend (i.e., the amount of the dividends received 
     deduction) received by the corporation with respect to the 
     stock.
       Proposed Change.--The bill would replace the provision 
     under current law (Code sec. 1059(e)(1)) that allows a 
     corporate shareholder to reduce its basis in the remaining 
     stock by the amount of the nontaxed portion of an 
     extraordinary dividend. Instead, the bill would provide that, 
     except as specifically set forth in regulations, any non pro 
     rata redemption (or partial liquidation) would be treated as 
     a sale of the redeemed stock, even if such distribution would 
     otherwise be treated as a dividend and entitled to a 
     dividends received deduction under present law.
       The bill would be effective for redemptions occurring after 
     May 3, 1995, except for those redemptions occurring pursuant 
     to the terms of a written binding contract in effect on May 
     3, 1995 or pursuant to the terms of a tender offer 
     outstanding on May 3, 1995.
 Remarks of President Reagan on Signing the Family Support Act of 1986

       I am pleased to sign into law today a major reform of our 
     nation's welfare system, the Family Support Act. This bill, 
     H.R. 1720, represents the culmination of more than 2 years of 
     effort and responds to the call in my 1986 State of the Union 
     Message for real welfare reform--reform that will lead to 
     lasting emancipation from welfare dependency.
       It is fitting that the word ``family'' figures prominently 
     in the title of this legislation. For too long the Federal 
     Government, with the best of intentions, has usurped 
     responsibilities that appropriately lie with parents. In so 
     doing--does anyone have a Stinger? [Laughter] In so doing, it 
     has reinforced dependency and separated welfare recipients 
     from the mainstream of American society. The Family Support 
     Act says to welfare parents, ``We expect of you what we 
     expect of ourselves and our own loved ones: that you will do 
     your share in taking responsibility for your life and for the 
     lives of the children you bring into this world.''
       Well, the Family Support Act focuses on the two primary 
     areas in which individuals must assume this responsibility. 
     First, the legislation improves our system for securing 
     support from absent parents. Second, it creates a new 
     emphasis on the importance of work for individuals in the 
     welfare system.
       Under this bill, one parent in a two-parent welfare family 
     will be required to work in the public or private sector for 
     at least 16 hours a week as a condition of receiving 
     benefits. This important work requirement applies to families 
     that come into the welfare rolls as a result of the 
     unemployment of the principal wage earner. It recognizes the 
     need for a family's breadwinner to maintain the habits, 
     skills, and pride achieved through work. This work 
     requirement also allows us to expand coverage for two-parent 
     families to all States without dangerously increasing welfare 
     dependency. A key part of this bill is to make at least one 
     of the parents in a welfare family participate in meaningful 
     work while still getting a needed cash support.
       Single parent families also share in the message of hope 
     underlying this bill. They, too, will know that there is an 
     alternative to a life on welfare. To ensure that they get a 
     better start in life, young parents who have not completed 
     high school will be required to stay in or return to school 
     to complete the basic education so necessary to a productive 
     life. Other parents will be offered a broad range of 
     education, employment, and training activities designed to 
     lead to work.
       To provide new employment opportunities to welfare 
     recipients, States will be entitled to receive $6.8 billion 
     over the next 7 years. They also will receive the funding 
     necessary to provide child care and Medicaid benefits. This 
     financial assistance represents a significant and generous 
     national
      commitment to enhancing the self-sufficiency of welfare 
     recipients. To ensure that meaningful numbers of 
     recipients actually do benefit from welfare reform, each 
     State must be required to involve increasing percentages 
     of welfare families to participate in employment and 
     training activities over time.
       The Family Support Act also contains significant reforms in 
     our nation's child support enforcement system. These reforms 
     are designed to ensure that parents who do not live with 
     their children nevertheless meet their responsibilities to 
     them. To improve the adequacy of child support awards, judges 
     and other officials will be required to apply support 
     guidelines developed by their States for setting award 
     amounts. And to help ensure that the child support awarded 
     actually is paid, child support payments will be 
     automatically withheld from the responsible parent's 
     paycheck.
       Reflecting the concern we all share over the Federal budget 
     deficit, the Family Support Act contains funding provisions 
     to offset the increased new spending in the bill. The single 
     largest source of the funding comes from a temporary 
     extension of current authority for the Treasury to collect 
     overdue debts owed the Federal Government by reducing Federal 
     tax refunds of individuals not paying those debts on time.
       In 1971, when I was Governor of California, we put into law 
     a work-for-welfare requirement similar to the one in the bill 
     before us today. It was called community work experience, and 
     its purpose was to demonstrate to the disadvantaged how 
     ennobling a job could be. And that lesson is as clear today 
     as it was then, and the successes of many fine State programs 
     like that one have made this landmark legislation possible.
       As lead Governors on welfare reform for the National 
     Governors' Association, Governors Castle and Clinton 
     consistently presented the interests of the States in getting 
     welfare reform enacted. And that interest has been manifested 
     by many States carrying out their own welfare reform 
     programs. Leaders in this effort are Governors Kean, Tommy 
     Thompson, Moore, and Hunt who have paved the way for this 
     legislation through unique welfare reform initiatives in 
     their States. Legislators like Wisconsin's Susan Engeleiter 
     were instrumental in achieving welfare reform and showing 
     Congress how well it works.
       Many Members of Congress share the credit for the 
     responsible welfare-to-work and child support enforcement 
     reforms in the Family Support Act. In particular, Senators 
     Moynihan, Armstrong, Dole, and Packwood, and Bentsen, and 
     Representatives Rostenkowski, Hank Brown, Michel, Frenzel, 
     and Downey played key roles in forging the consensus for this 
     landmark legislation. They and the members of the 
     administration who [[Page S6926]] worked so diligently on 
     this bill will be remembered for accomplishing what many have 
     attempted, but no one has achieved in several decades: a 
     meaningful redirection of our welfare system.
       And I think it is time now for me to sign the bill. And I 
     thank all of you, and God bless you all.
                                                                    ____


                [From the New York Times, May 18, 1995]

     GOP Bills To Overhaul Welfare Worry City and County Officials

                            (By Robert Pear)
       Washington, May 17.--Mayors and other local officials from 
     around the country said today that they opposed major 
     elements of the Republican welfare bills moving through 
     Congress, in part because the bills would eliminate the 
     Federal guarantee of a subsistence income for millions of 
     poor families.
       The local officials said that cities and counties would 
     ultimately have to deal with the effects of such legislation, 
     which they said could include an increased demand for food, 
     shelter and social services.
       Mayor Kay Granger of Fort Worth, an independent, speaking 
     for the United States Conference of Mayors, and Randall 
     Frankie of Oregon, a Republican who is president of the 
     National Association of Counties, said their groups opposed 
     the Republican plan to give each state a fixed sum of money 
     each year to assist poor people in any way it chose. These 
     block grants would replace Federal programs that provide 
     benefits to anyone who meets eligibility criteria based on 
     income and other factors.
       ``We oppose repealing the entitlement status of benefit 
     programs such as Aid to Families With Dependent Children, 
     food stamps, child nutrition programs, Medicaid and foster 
     care,'' Ms. Granger said. ``We believe that the individual 
     entitlement to a minimum level of assistance must be 
     maintained for our children and families.''
       The National League of Cities and the National School 
     Boards Association expressed similar views at a news 
     conference with mayors and county commissioners. It was the 
     first time local officials had spoken out in a coordinated 
     effort to influence Congress on this issue.
       The local officials said that Congress had paid too much 
     attention to a small number of Republican governors like John 
     Engler of Michigan and Tommy G. Thompson of Wisconsin, who 
     had lobbied for block grants. Mr. Franke, a member of the 
     Board of Commissioners in Marion County, Ore., said: ``A few 
     Republican governors have had a great influence on
      this. It hasn't had the kind of broad input from governors, 
     or from local government officials, that it really 
     deserves.''
       Carolyn Long Banks, a Democrat on the Atlanta City Council, 
     said that city and county officials had been ``left out of 
     the process of decision making,'' but would have to deal with 
     the effects of any welfare legislation adopted by the Federal 
     Government. Mr. Franke said counties were ``the front-line 
     deliverers of basic social services'' in many states.
       The local officials said it was wrong for the Government to 
     push people off welfare if it did not provide the education, 
     training and child care they needed to get jobs. ``If we 
     simply cut welfare and there's not an organized effort to 
     move them into work, then they land on our doorsteps,'' Mayor 
     Granger said.
       A welfare bill passed by the House in March would establish 
     block grants to the states in place of the current program of 
     Aid to Families With Dependent Children. Senate Republicans 
     have endorsed the approach. Republicans in the House and the 
     Senate are working on a separate bill to eliminate the 
     individual entitlement to Medicaid and replace it with a 
     block grant.
       Republican governors say the block grants would free them 
     from burdensome Federal regulations and give them the 
     authority to design their own welfare programs, tailored to 
     local needs.
       But Gov. Lawton Chiles of Florida, a Democrat, said the 
     block grants were ``a prescription for disaster'' in fast-
     growing states like Florida, Texas, California and Arizona.
       Mr. Chiles said Speaker Newt Gingrich had found ``a few 
     G.O.P. governors--Judas goats--to go along with the idea'' of 
     block grants. ``It's no wonder the Governors of Wisconsin, 
     Michigan and Massachusetts are on this bandwagon,'' because 
     they would not suffer any financial harm and could obtain 
     additional money at the expense of the fast-growing states, 
     Mr. Chiles said.
       A Judas goat is an animal used to lead others to slaughter. 
     Charles S. Salem, special counsel in Governor Chiles's 
     Washington office, said, ``That is what he intended to say.''
       In a speech here last week, Mr.
        Chiles said the formula for distributing Federal money 
     under the Republican welfare bills was inequitable. ``A 
     poor child in Massachusetts would get three times as much 
     as a poor child in Florida,'' he said. ``A poor child in 
     Michigan would get twice as much as a child in my state.''
       Governor Engler rejected Mr. Chiles' contentions. ``The 
     only successes in welfare reform have been achieved at the 
     state level,'' he said. ``Federal involvement has served only 
     to hogtie state reform efforts.''
       Gov. Mike Leavitt of Utah, chairman of the Republican 
     Governors Association, disputed Mr. Chiles' assertion that 
     fast-growing states would suffer under the Republican 
     proposal to distribute the block grants in proportion to 
     current levels of Federal welfare spending in various states.
       But another Republican Governor, Fife Symington of Arizona, 
     expressed concerns similar to those of Mr. Chiles. He said 
     the proposal for block grants would penalize states like 
     Arizona with high population growth and comparatively low 
     levels of welfare spending.
       Governor Symington said the block grants should be based 
     not on past spending, but on each state's share of the total 
     number of Americans living below the official poverty level 
     ($11,817 for a family of three).
       The block grants ``should not reward states that have been 
     granting excessive benefits and penalize states that have 
     maintained only a modest safety net,'' Mr. Symington said in 
     a letter to Bob Dole, the Senate Republican leader.

  Mr. MOYNIHAN. Mr. President, I thank the Chair for his kind 
attention.
                                 ______

      By Mrs. HUTCHISON:
  S. 829. A bill to provide waivers for the establishment of 
educational opportunity schools; to the Committee on Labor and Human 
Resources.


                         education legislation

 Mrs. HUTCHISON. Mr. President, the bill I introduce would make 
it possible, in a limited number of school districts, for students to 
learn in a single-sex classroom setting if they so wish.
  Let me emphasize--``If they wish.'' This bill does not compel any 
school to offer or any student to participate in single-sex classes. It 
merely allows students--and their parents--in a qualifying school 
district, to exercise that choice.
  Our Nation has a compelling interest in assuring that all children 
receive a high-quality education. Providing families with another 
constructive educational option will further this interest.
  This legislation has three purposes: First, I want the Secretary of 
Education to give schools the discretion to experiment with offering 
same-gender classes to low-income, educationally disadvantaged 
students. Second, I want to establish reliable information to determine 
whether or not single-gender classes make a difference in the 
educational opportunities and achievements of low-income, educationally 
disadvantaged students. Finally, I want to involve parents in the 
educational choices their children make.
  Let me stress that this legislation imposes no financial obligation 
on the part of the Federal Government. My bill requires the Secretary 
of Education to grant up to 10 waivers to title IX of the Education 
Amendments of 1972. The bill would not provide school districts or 
schools any additional funding if they apply for and are granted a 
waiver of title IX. The waiver is very narrowly tailored to ensure the 
unimpeded development and operation of single-gender classes.
  In recent years, efforts to experiment with same-gender classes and 
schools have been inhibited by lawsuits and threats of lawsuits from 
private groups, as well as Government. My bill would ensure that such 
threats can no longer interfere with educational innovation.
  Nothing in my legislation affects efforts at overcoming the effects 
of past discrimination made on the basis of sex. Research indicates 
that single-sex classes can help minorities--girls and boys--perform 
better in school. African-American students in single-sex classrooms 
scored nearly a grade level higher than their coeducational 
counterparts in academic achievement tests. Girls in single-sex schools 
scored a full grade above their coeducational counterparts on academic 
ability tests. And girls in single-sex schools outperformed girls in 
coeducational schools almost a full grade level on science tests 
scores.
  Some studies indicate that boys may perform better in single-sex 
schools as well. Cornelius Riordan, of Providence College, has found 
that a cognitive development among boys enrolled in single-sex Catholic 
high schools is more advanced than that of boys enrolled in 
coeducational Catholic high schools.
  Mr. President, there is a compelling Government interest in granting 
the Secretary authority to insulate from lawsuits, for a limited time, 
a small number of local educational agencies and schools which 
experiment with same-gender classes.
  My bill addresses this Government interest, and will allow data to be 
compiled to prove that single-sex classes can work to the advantage of 
children.
  Most importantly, by offering parents and children a choice, this 
legislation would re-involve the family in educational decisionmaking 
processes. [[Page S6927]] 
  It is my hope that my colleagues will recognize the value of such 
academic innovation and support this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 829

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

     SECTION 1. EDUCATIONAL OPPORTUNITY DEMONSTRATION PROGRAM.

       (a) In General.--Title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.) is amended--
       (1) by redesignating part F as part G;
       (2) by redesignating sections 1601 through 1604 as sections 
     1701 through 1704, respectively; and
       (3) by inserting after part E the following new part:
        ``PART F--EDUCATIONAL OPPORTUNITY DEMONSTRATION PROGRAM

     ``SEC. 1701. SHORT TITLE; FINDINGS; AND PURPOSES.

       ``(a) Short Title.--This part may be cited as the 
     `Educational Opportunity Demonstration Act'.
       ``(b) Findings.--The Congress finds that--
       ``(1) while low-income students have made significant gains 
     with respect to educational achievement and attainment, 
     considerable gaps still persist for these students in 
     comparison to those from more affluent socioeconomic 
     backgrounds;
       ``(2) our Nation has a compelling interest in assuring that 
     all children receive a high quality education;
       ``(3) new methods and experiments to revitalize educational 
     achievement and opportunities of low-income individuals must 
     be a part of any comprehensive solution to the problems in 
     our Nation's educational system;
       ``(4) preliminary research shows that same gender classes 
     and schools may produce promising academic and behavioral 
     improvements in both sexes for low-income, educationally 
     disadvantaged students;
       ``(5) extensive data on same gender classes and schools are 
     needed to determine whether same gender classes and schools 
     are closely tailored to achieving the compelling government 
     interest in assuring that all children are educated to the 
     best of their ability;
       ``(6) in recent years efforts to experiment with same 
     gender classes and schools have been inhibited by lawsuits 
     and threats of lawsuits by private groups as well as 
     governmental entities; and
       ``(7) there is a compelling government interest in granting 
     the Secretary authority to insulate a limited number of local 
     educational agencies and schools which are experimenting with 
     same gender classes for a limited period of time from certain 
     law suits under title IX of the Education Amendments of 1972, 
     section 204 of the Education Amendments of 1974, section 1979 
     of the Revised Statutes (42 U.S.C. 1983), or any other law 
     prohibiting discrimination on the basis of sex, in order to 
     collect data on the effectiveness of such classes in 
     educating children from low-income, educationally 
     disadvantaged backgrounds.
       ``(c) Purposes.--It is the purpose of this part--
       ``(1) to give the Secretary discretion to allow 
     experimentation with same gender classes for low-income, 
     educationally disadvantaged students;
       ``(2) to determine whether same gender classes make a 
     difference in the educational achievement and opportunities 
     of low-income, educationally disadvantaged individuals; and
       ``(3) to involve parents in the educational options and 
     choices of their children.

     ``SEC. 1702. DEFINITIONS.

       ``As used in this part--
       ``(1) the term `educational opportunity school' means a 
     public elementary, middle, or secondary school established by 
     a local educational agency receiving a waiver under this 
     part, or a consortium of such schools, that--
       ``(A) establishes a plan for voluntary, same gender classes 
     at one or more than one school in the community;
       ``(B) provides same gender classes for both boys and girls, 
     as well as a coeducational option for any parent that chooses 
     that option;
       ``(C) gives parents the option of choosing to send their 
     child to a same gender class or to a coeducational class;
       ``(D) admits students on the basis of a lottery, if more 
     students apply for admission to the same gender classes than 
     can be accommodated;
       ``(E) has a program in which a member of the community is 
     asked to volunteer such member's time in classes of children 
     of the same gender as the member; and
       ``(F) operates in pursuit of improving achievement among 
     all children based on a specific set of educational 
     objectives determined by the local educational agency 
     applying for a waiver under this part, in conjunction with 
     the educational opportunity advisory board established under 
     section 1703(b) and agreed to by the Secretary; and
       ``(2) the term `educational opportunity advisory board' 
     means an advisory board established in accordance with 
     section 1703(b).

     ``SEC. 1703. WAIVER AUTHORITY.

       ``(a) Authority.--
       ``(1) In general.--The Secretary shall waive any statutory 
     or regulatory requirement of title IX of the Education 
     Amendments of 1972, section 204 of the Education Amendments 
     of 1974, section 1979 of the Revised Statutes (42 U.S.C. 
     1983), and any other law prohibiting discrimination on the 
     basis of sex, for each local educational agency (but not more 
     than 10) that has an application approved under section 1704 
     and otherwise meets the requirements of this part, and for 
     any educational opportunity school established by such 
     agency, but only to the extent the Secretary determines 
     necessary to ensure the development and operation of same 
     gender classes in accordance with this part.
       ``(2) Duration.--The Secretary shall issue a waiver under 
     subsection (a) for a period not to exceed 5 years.
       ``(b) Educational Opportunity Advisory Board.--Each local 
     educational agency receiving a waiver under this part shall 
     establish an educational opportunity advisory board. Such 
     advisory board shall be composed of school administrators, 
     parents, teachers, local government officials and volunteers 
     involved with an educational opportunity school. Such 
     advisory board shall assist the local educational agency in 
     developing the application under section 1704 and serve as an 
     advisory board in the functioning of the educational 
     opportunity school.

     ``SEC. 1704. APPLICATIONS.

       ``(a) Applications Required.--Each local educational agency 
     desiring a waiver under this part shall submit, within 180 
     days of the date of enactment of the Educational Opportunity 
     Demonstration Act, an application to the Secretary at such 
     time, in such manner and accompanied by such information as 
     the Secretary may reasonably require.
       ``(b) Scope of Application.--Each application described in 
     subsection (a) may request a waiver for a single educational 
     opportunity school or for a consortium of such schools.
       ``(c) Application Contents.--Each application described in 
     subsection (a) shall include--
       ``(1) a description of the educational program to be 
     implemented by the proposed educational opportunity school, 
     including--
       ``(A) the grade levels or ages of children to be served; 
     and
       ``(B) the curriculum and instructional practices to be 
     used;
       ``(2) a description of the objectives of the local 
     educational agency and a description of how such agency 
     intends to monitor and study the progress of children 
     participating in the educational opportunity school;
       ``(3) a description of how the local educational agency 
     intends to include in the educational opportunity school 
     administrators, teaching personnel, and role models from the 
     private sector;
       ``(4) a description of how school administrators, parents, 
     teachers, local government, and volunteers will be involved 
     in the design and implementation of the educational 
     opportunity school;
       ``(5) a justification for the waiver or inapplicability of 
     any Federal statutory or regulatory requirements that the 
     local educational agency believes are necessary for the 
     successful operation of the educational opportunity school 
     and a description of any State or local statutory or 
     regulatory requirements, that will be waived for, or will not 
     apply to, the educational opportunity school, if necessary;
       ``(6) a description of how students in attendance at the 
     educational opportunity school, or in the community, will 
     be--
       ``(A) informed about such school; and
       ``(B) informed about the fact that admission to same gender 
     classes is completely voluntary;
       ``(7) an assurance that the local educational agency will 
     annually provide the Secretary such information as the 
     Secretary may require to determine if the educational 
     opportunity school is making satisfactory progress toward 
     achieving the objectives described in paragraph (2);
       ``(8) an assurance that the local educational agency will 
     cooperate with the Secretary in evaluating the waivers issued 
     under this part;
       ``(9) assurances that resources shall be used equally for 
     same gender classes for boys and for girls;
       ``(10) assurances that the activities assisted under this 
     part will not have an adverse affect, on either sex, that is 
     caused by--
       ``(A) the distribution of teachers between same gender 
     classes for boys and for girls;
       ``(B) the quality of facilities for boys and for girls;
       ``(C) the nature of the curriculum for boys and for girls;
       ``(D) program activities for boys and for girls; and
       ``(E) instruction for boys and for girls;
       ``(11) an assurance that the local educational agency will 
     comply with the research and evaluation protocols developed 
     by the Secretary under section 1706(a); and
       ``(12) such other information and assurances as the 
     Secretary may require.

     ``SEC. 1705. SELECTION OF GRANTEES.

       ``The Secretary shall issue waivers under this part on the 
     basis of the quality of the applications submitted under 
     section 1704, taking into consideration such factors as--
       ``(1) the quality of the proposed curriculum and 
     instructional practices;
       ``(2) the organizational structure and management of the 
     school; [[Page S6928]] 
       ``(3) the quality of the plan for assessing the progress 
     made by children in same gender classes over the period of 
     the waiver;
       ``(4) the extent of community support for the application;
       ``(5) the likelihood that the educational opportunity 
     school will meet the objectives of such school and improve 
     educational results for students; and
       ``(6) the assurances submitted pursuant to section 
     1704(c)(10).

     ``SEC. 1706. STUDY AND REPORT.

       ``(a) Study.--The Secretary shall conduct a study of the 
     waivers issued under this part, including establishing 
     appropriate research and evaluation protocols, to compare the 
     educational and behavioral achievement of those students 
     choosing same gender classes established under this part and 
     those students choosing the coeducational option.
       ``(b) Report.--The Secretary shall submit, within 1 year 
     after the date of enactment of the Educational Opportunity 
     Demonstration Act, a report to the appropriate committees of 
     the Congress regarding the findings of the study conducted 
     under subsection (a).

     ``SEC. 1707. CONSTRUCTION.

       ``Nothing in this part shall be construed to affect the 
     availability under title IX of the Education Amendments of 
     1972 of remedies to overcome the effects of past 
     discrimination on the basis of sex.''.
       (b) Conforming Amendments.--
       (1) Committee of practitioners.--Section 1111(c)(5) of such 
     Act (20 U.S.C. 6311(c)(5)) is amended by striking ``section 
     1603(b)'' and inserting ``section 1703(b)''.
       (2) State assistance for school support and improvement.--
     Section 1117(a)(2) of such Act (20 U.S.C. 6318(a)(2)) is 
     amended by striking ``section 1603(c)'' and inserting 
     ``section 1703(c)''.
       (3) State applications.--Section 1304(c)(2) of such Act (20 
     U.S.C. 6394(c)(2)) is amended by striking ``part F'' and 
     inserting ``part G''.
       (4) Use of funds.--Section 1415(a)(2)(C) of such Act (20 
     U.S.C. 6435(a)(2)(C)) is amended by striking ``part F'' and 
     inserting ``part G''.
       (5) State data.--The matter preceding subparagraph (A) of 
     section 14204(a)(2) of such Act (20 U.S.C. 8824(a)(2)) is 
     amended by striking ``section 1603'' and inserting ``section 
     1703''.
                                 ______

      By Mr. SPECTER:
  S. 830. A bill to amend title 18, United States Code, with respect to 
fraud and false statements; to the Committee on the Judiciary.


                           crime legislation

  Mr. SPECTER. Mr. President, earlier this week, the Supreme Court 
decided Hubbard versus United States. Overturning a 1955 decision 
called Bramblett versus United States, the Court held that section 1001 
of title 18 of the United States Code, which prohibits making false 
statements to the Federal Government applies only to false statements 
made to executive branch agencies.
  It is highly unusual that the Supreme Court reverses a prior decision 
on a question of statutory interpretation. The reversal of the 
longstanding decision in Bramblett is particularly troubling because of 
the nature of the offense.
  The language of the statute itself criminalizes false statements made 
to any ``department or agency of the United States.'' Relying on the 
purpose and the legislative history of the provision, the Supreme Court 
held in Bramblett that the statute covered making false statements to 
Congress. The term ``department'' was read as broad enough to cover the 
executive, judicial, and legislative branches of government. Since 
then, it has always been understood to cover Congress and the courts.
  As Chief Justice Rehnquist argued in his dissent in Hubbard, it has 
been ``the very justifiable expectation'' that one who lies to 
Congress, whether or not under oath, would be punished under section 
1001.
  While perjury laws and other statutes exist to cover false statements 
made under oath or under specific circumstances, section 1001 was a 
broad law covering all false statements made to Congress, as well as 
the courts and executive agencies. In order to protect the Congress, I 
believe we must restore section 1001 to its meaning under Bramblett.
  In order to do so, I am introducing legislation to overturn the 
Supreme Court's decision in Hubbard. We are able to do so because the 
Court's decision rests solely on a question of statutory 
interpretation. There is no constitutional dimension to the Court's 
decision.
  Accordingly, Congress is able to decide the public policy question 
for itself. I have no doubt of the importance of having in the law a 
provision that sets forth clearly and succinctly the principle that it 
is illegal to ``knowingly and willfully falsif[y], conceal[] or cover[] 
up by any trick, scheme, or device a material fact, or make[] any 
false, fictitious or fraudulent statements or representations'' to 
Congress or any committee or subcommittee in any matter within our 
jurisdiction.
  My bill is quite simple. It will simply add to the text of section 
1001 language that will broaden the newly narrowed statute to cover 
false statements made ``in any matter within the jurisdiction of any 
department, agency, or court of the United States, or of Congress or 
any duly constituted committee or subcommittee of Congress.''
  The purpose of this provision is to restore the meaning of the 
statute that it was given under Bramblett and to overturn Hubbard. No 
other change in meaning is intended.
  I believe this bill will not be controversial, and I urge my 
colleagues to support its prompt enactment.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 830

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

     SECTION 1. FRAUD AND FALSE STATEMENTS IN MATTERS WITHIN THE 
                   JURISDICTION OF THE COURTS OF CONGRESS.

       Section 1001 of title 18, United States Code, is amended by 
     striking ``any department or agency of the United States'' 
     and inserting ``any department, agency, or court of the 
     United States, or of Congress or any duly constituted 
     committee or subcommittee of Congress,''.
                                 ______

      By Mr. SMITH (for himself, Mr. Dole, Mr. Helms, Mr. Thurmond, Mr. 
        Grassley, Mr. Gramm, Mr. Campbell, and Mr. Thomas):
  S.J. Res. 34. A joint resolution prohibiting funds for diplomatic 
relations and most favored nation trading status with the Socialist 
Republic of Vietnam unless the President certifies to Congress that 
Vietnamese officials are being fully cooperative and forthcoming with 
efforts to account for the 2,205 Americans still missing and otherwise 
unaccounted for from the Vietnam war, as determined on the basis of all 
information available to the United States Government, and for other 
purposes; to the Committee on Foreign Relations.


                  vietnam pow/mia full disclosure act
  Mr. SMITH. Mr. President, on behalf of Senator Dole, Senator 
Thurmond, Senator Helms, Senator Grassley, Senator Gramm of Texas, 
Senator Campbell, and Senator Thomas, and myself, I rise to introduce a 
joint resolution entitled ``The Vietnam POW/MIA Full Disclosure Act of 
1995.'' I understand a similar resolution is being introduced in the 
House this week by Congressman Ben Gilman, the Chairman of the House 
International Relations Committee.
  This resolution is aimed at getting the maximum amount of information 
possible from Vietnam on Americans still missing from the Vietnam war. 
Specifically, the resolution prohibits both the establishment of 
diplomatic relations with Vietnam and the extension of most favored 
nation trading status to Vietnam unless the President informs Congress 
that we are getting full cooperation and full disclosure by Vietnam on 
the POW/MIA issue.
  If the Communist Government in Vietnam is continuing to withhold 
information that would account for missing Americans, as I believe they 
are, then now is not the time to normalize relations.
  I am very pleased that this resolution is supported by the 
distinguished majority leader and the distinguished chairmen of both 
the Armed Services Committee and the Foreign Relations Committee, among 
others. I know Senators Dole, Thurmond, and Helms have been closely 
involved with this issue for many, many years, and they share my 
concerns.
  Perhaps most importantly, this resolution is supported by virtually 
all of the families of the 2,205 Americans still unaccounted for from 
the Vietnam war. It is also consistent with the resolutions that have 
been passed in recent years by our national veterans organizations.
  Will every single American support the approach to resolving the POW/
MIA issue outlined in this resolution? [[Page S6929]] Of course not. 
Indeed, there are Vietnam veterans in this body other than myself who 
advocate a different approach, or have a different view on the 
cooperation we are getting from Vietnam. Some have said that we should 
normalize relations with Hanoi because Vietnam is being fully 
cooperative on the POW/MIA issue. Others say we should normalize 
relations because it would give an incentive for Vietnam to increase 
its cooperation. I still have not figured out which reason the 
President used when he lifted our embargo on Vietnam last year.
  Nonetheless, I reject both these positions and would simply point out 
that the position of the majority of our Nation's
 veterans and the POW/MIA families is very clear--they want the 
Communist Government in Hanoi to come clean on the POW/MIA issue before 
we normalize relations.

  In my judgment, using every reasonable standard I can come up with--
and I have worked on this issue for 11 years in the Congress--Vietnam 
has not come clean on the POW/MIA issue. The Communist Government in 
Hanoi continues to withhold relevant politburo and military records 
pertaining to American POWS and MIAS from the war. There is no 
disputing that fact.
  Earlier this week, they dribbled out more records for a high-level 
administration delegation. They have done this for years. I suspect 
Vietnamese officials looked the administration delegation in the eye 
and said ``we just located this information.'' In 1993, they did the 
same thing when documents surfaced in Russian archives indicating that 
more Americans were held than those who came home. They suddenly came 
up with records they had withheld for 20 years. They just pulled it off 
the shelf.
  This ``timed'' release of documents, only when it is deemed important 
enough for Vietnam, proves to me that Hanoi's Communist Politburo is 
continuing to manipulate the POW/MIA issue for its own political 
advantage. As a result, Vietnam is prolonging the anguish and 
uncertainty of MIA family members.
  I wrote a letter today, signed it today, and sent it out from a 
family who still is anguishing over this with new information that they 
received, even as recently as this month.
  Mr. President, the American people are not naive. They know that many 
records could have been turned over long ago. If they held back the 
most recent set of records until the right moment surfaced, what else 
are they still holding? And why, Mr. President, has this administration 
failed to vigorously seek access to Vietnam's wartime central committee 
records on POWs? Every historian knows that those records might 
conclusively answer the most nagging and haunting questions that keep 
this issue alive and have kept the family members waiting for so many 
years.
  And why is it that there are family members of MIAs who are being 
denied visas to go to Vietnam to look for answers? Is this a country 
that is cooperating? I do not think so. I though when the President 
lifted the embargo in 1994, we were supposed to get unprecedented 
access and cooperation, and the family members who have loved ones 
missing cannot get a visa to get into Vietnam.
  My colleagues do not have to accept Bob Smith's judgment on whether 
there's been full disclosure by Vietnam on missing Americans. Under the 
resolution we have introduced today, the President is required to make 
the final judgment, whoever the President is, after consultation with 
the Director of Central Intelligence. If he feels we are getting full 
disclosure, then he can move forward, so long as he notifies Congress. 
That is all we are asking.
  I would remind the President, However, that he was the one who 
stated, following his election in 1992, and I quote, ``I have sent a 
clear message that will be no normalization of relations with any 
country that is at all suspected of withholding information on missing 
Americans.''
 I submit to you that there is still information being withheld.

  The resolution we have introduced today asks the President to keep 
the promise he made to the MIA families and our Nation's veterans 
during his last campaign.
  And that's really what this is all about, Mr. President--keeping our 
commitment that we will not let Vietnam off the hook until there has 
been full disclosure on the fate of our POW's and MIA's.
  Revisionists are in full bloom these days. There has been a lot of 
revisionist history and frankly a lot of propaganda recently as we 
marked the 20th anniversary of the Communist victory over South 
Vietnam. But make no mistake about it--Vietnam needs us more then we 
need Vietnam. And if the last 20 years have taught us anything about 
Communist Vietnamese behavior, it is this--Vietnam only responds on the 
POW/MIA issue when it is clear to them that the United States will go 
no further to meet Vietnam's agenda. If Vietnam is that desperate for 
American business investment and diplomatic relations, then let them 
come clean on the POW/MIA issue.
  Unfortunately, there have been mixed signals, which have been fueled, 
in part, by certain lobbyists in the American business community who 
want to put business over principle. My response to this lobbying 
effort is let us put principle over profit, not vice-versa. The only 
business we should be doing with Vietnam is the business of getting 
Hanoi to come clean on the POW/MIA issue.
  Then and only then, should we normalize or restore any type of 
diplomatic relations. It is only fair. Think of the suffering of these 
families. How could we possibly want to do anything else but honor 
them?
  There have also been statements from some administration officials 
seem eager to move forward with Vietnam by lowering the priority that 
was placed on the POW/MIA issue by Presidents Reagan and Bush. Perhaps 
these officials have become exhausted. I can understand that. It has 
been a long, long time.
  Maybe they are embarrassed by their inability to convince Hanoi to 
come clean on the POW/MIA issue before we normalize. Maybe they would 
like this issue to go away.
 I know the families would like it to go away. But it ought to go away 
on honorable terms, honorable terms, a full accounting, a full 
accounting. That is the only way the issue should go away. In this 
environment, I would not be surprised if Vietnam might be thinking that 
they can hold out on disclosing their central committee records and 
meeting our intelligence community's expectations on what they can 
still do to help resolve this issue. They might think that they can 
achieve their economic and political goals just by waiting us out. That 
is the message we are sending.

  Mr. President, I would simply say that I am not going to stay silent 
and let that happen. I have a responsibility here. This week, the 
President's top defense official on the POW/MIA issue, Deputy Assistant 
Secretary Jim Wold, stated that the decision on whether to move forward 
with Vietnam ``will be made by the President alone.'' The resolution we 
have introduced today states that Congress expects to be informed on 
whether there has been full disclosure by Vietnam on POW's and MIA's 
before the President moves forward. That is a very reasonable 
requirement. I am confident that the American people want this question 
answered before normalizing with Vietnam. That is a reasonable 
requirement, and I am confident the American people would like an 
answer to this question before we move forward with Vietnam.
  I would remind my colleagues of something the English novelist Aldous 
Huxley once said--``Facts do not cease to exist just because they are 
ignored.'' Our intelligence community has made assessments of what 
Vietnam could still do if it truly wanted to come clean on the POW/MIA 
issue.
  Those facts exist. Those facts are a matter of public record in some 
cases, and in other cases where they are not public, they are available 
for my colleagues to see.
  This Chamber is also awaiting a final response from the Secretary of 
Defense on the total number of POW/MIA cases where the likelihood is 
greatest that Vietnam could produce additional information or remains, 
or perhaps in some cases possibly even a live American. This was a 
requirement, which I originally sponsored in last year's Defense 
Authorization Act. In February, we were told that only 50 percent of 
[[Page S6930]] this work had thus far been done and that we will have 
to wait several more months just to get a complete list of names. We 
should have a chance to review this information required by law, Mr. 
President, before we even consider further overtures to Vietnam.
  Finally, I would point out that President Clinton himself stated on 
January 26 of this year that he is not fully satisfied that progress on 
the POW/MIA issue has been sufficient to justify moving beyond the 
steps agreed to last year when we lifted the embargo.
  I would say to the President, ``Keep your promise, Mr. President, 
because they have not made the progress that you asked for since we 
lifted the embargo.''
  On that point, I would agree with the President. For those who take 
the time to really study this issue, as I have, it is difficult to see 
how you can come to any other conclusion--there has not been full 
disclosure by Vietnam.
  With that in mind, I would urge my colleagues to join with the 
majority leader, and our distinguished committee chairmen and others by 
cosponsoring this resolution. Let us send a clear signal to Vietnam. 
Let us tell them that, while we appreciate some of the cooperation we 
have received to date, we will accept nothing less than full disclosure 
on the POW/MIA issue before agreeing to normalize relations.
  That is the way to honor the men and women who served, and the men 
and women who are missing, and the families of the missing.
  Mr. DOLE. Mr. President, I rise today in support of Senator Smith's 
Vietnam POW/MIA bill. As the members of this Chamber know, Senator 
Smith has worked long and hard in the effort to make Hanoi account for 
our missing in action and prisoners of war from Vietnam. This bill is 
not only the most recent example of that fine work, but also a reminder 
to the administration and other supporters of rushing to diplomatic 
relations with Vietnam that Hanoi has 2,000 unanswered questions to 
answer before proceeding with recognition.
  My association with Vietnam POW/MIA's goes way back to 1970. I helped 
found the National League of Families of POW/MIAs. I remember going to 
President Nixon and saying we had to do something about the POW and MIA 
problem--answers had to be given before the people of America could 
rest easy that all had been done to find their loved ones and account 
for their fate.
  Mr. President, this is not an onerous bill. It requires Presidential 
certification on three key issues before moving ahead on normalization: 
(1) a listing of cases for which the likelihood is the greatest that 
Vietnam has information; (2) that Vietnam is fully cooperating in the 
four key areas outlined by President Clinton; and (3) that Vietnam is 
cooperating in providing access to records concerning Americans 
captured during the war.
  Mr. President, I note that the distinguished chairman of the Foreign 
Relations Committee, Senator Helms and the distinguished chairman of 
the Armed Services Committee, Senator Thurmond, as well as Senators 
Thomas, Grassley, Campbell, and Gramm of Texas are original sponsors of 
the Vietnam POW/MIA Full Disclosure Act of 1995. Once again, I commend 
Senator Smith for his leadership on this issue and yield the floor.


                          ____________________