[Congressional Record Volume 141, Number 141 (Tuesday, September 12, 1995)]
[Senate]
[Pages S13357-S13378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




[[Page S 13357]]


                      FAMILY SELF-SUFFICIENCY ACT

  The Senate continued with the consideration of the bill.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 2565

  Mrs. HUTCHISON. Madam President, I want to talk about the underlying 
formula, the Dole-Hutchison formula that is in this bill. The key to 
our formula is balance. When we looked at the monumental problem of 
welfare reform, the main goal we had was to keep the reform in the bill 
but not penalize any State too much. So what we did was take the high-
payment States, the high-welfare States, and we froze them. That is a 
big gain in the beginning for those States because we felt that we 
could not go to a State like New York or California and say next year 
you are getting a cut. So we freeze them for 5 years.
  When you are talking about a 5-year block grant, you have to be very 
careful. You have to be careful about year 1, but years 3, 4 and 5 are 
just as important, especially if you are a growth State. And, if you 
are a low-benefit growth State, you do not have the margin of error 
that would allow you to absorb growth with a very low benefit in the 
outyears.
  So we took this problem, and we said how can we do a 5-year block 
grant so we can plan for the budget, so that we can balance our budget 
responsibly without hurting any State too much? That is what the Dole-
Hutchison formula does. It leaves the high benefit States whole. They 
never lose anything that they had in 1994 and beyond. No State loses 
anything they had from 1994 on. But we took $887 million and we 
allocated that for low-benefit high-growth States so that in the 
outyears, 3, 4, and 5, we knew what the budget would be but we allowed 
them a modest growth. It is modest. It is 2.5 percent per year for a 
low-benefit high-growth State.
  So our goal is to slowly reach parity. It is slower than many of us 
would like to see because many States start very low like the Senator 
from Arkansas who was just speaking. He is one of the States that is 
going to grow slowly. But, if you put food stamp and AFDC together--and 
they do go together--most States will eventually reach parity. But they 
will do it gradually. They will do it without hurting any other States.
  What is wrong with the Graham amendment? We have heard Senator Graham 
and Senator Bumpers talk about the merits of their formula. If I were 
the dictator, I would say sure, let us start next year, and let us say 
everybody is going to be equal in America. What is the problem with 
that? The problem is this is the United States of America. We have 50 
States that have to come together to make collegial decisions. We have 
to do it in a responsible way so that one State is not such a big loser 
that it could put that State in severe financial straits from which 
they really could not recover. That is what is wrong with the Graham-
Bumpers amendment.
  It is totally fair. There is no question about it. But if you do 
totally fair on paper and do not take into account that someone has to 
pay for this, then it is just what you have--something on paper because 
it will never be a collegial decision that is fair enough that all of 
us could feel in good conscience that we could adopt it.
  Mr. SANTORUM. Mr. President, will the Senator yield for a question?
  Mrs. HUTCHISON. Yes.
  Mr. SANTORUM. The Senator is saying this is totally fair. I think she 
is right given this abstract when you say start all over. But as you 
know, in the bill, I think what we propose is a modification by the 
leader to the substitute. There is going to be an 80-percent 
maintenance of effort provision in all 5 years of this bill which means 
that these States, like New York and California that have high 
maintenance efforts, are going to require that they continue to 
contribute 80 percent of the 1994 funding level. If we are going to 
require 80-percent maintenance of effort, how could there conceivably 
be a situation where New York, for example, where we are going to 
require New York with their maintenance of effort provision to actually 
contribute more on the State level than the Federal Government will 
under the Graham formula? Could that be a result?
  Mrs. HUTCHISON. That is correct. That could be a result. That is 
exactly correct. You see, there is another point here. When we are 
talking about the underlying bill, we are talking about redistributing 
$887 million over a 5-year period. So we are holding everyone harmless. 
Every State is held harmless. And the low-benefit, high-growth States 
that need that extra help are going to divide the $887 million. But the 
Graham-Bumpers amendment does not redistribute $887 million. It 
redistributes $17 billion. It takes the entire pot of $17 billion, and 
it says, OK, we are going to put it on a 5-year plan, and at the end of 
5 years every person in America is going to have the same amount. When 
you do that, someone has to pay.
  Let us look at what happens. New York loses $4.6 billion. In a $17 
billion redistribution, one State loses $4.6 billion to pay for the 
redistribution to the other States. California is the biggest loser. 
California would lose $5.4 billion.
  So really you are talking about almost half of the entire amount--
actually more than half the amount of the entire amount--which is going 
to come out of two States.
  Madam President, we are a country. There is no State that can stand 
to lose that kind of money and make it.
  So that is why it is very important that we look at realism. What do 
you think is going to happen if this amendment passes? If this 
amendment passes, there is no welfare reform. The bill comes down. It 
is over.
  So I ask my colleagues as they are looking at this amendment, which I 
would love to vote for, and 35 States come out better. But the price 
when the pound of flesh comes straight out of the heart is too high. 
And I think if we are not serious about welfare reform that we can go 
blithely along and say, ``Oh, sure. Let California sink into the 
Pacific. Let New York go into the Hudson River. And, sure. We will have 
welfare reform that everybody can live with.'' Well, everybody except 
New York and California, and anyone who has a conscience. It is like 
the child who is going after the big bubbles. When the child gets the 
bubbles the child finds that there is only air in its place.
  So the difference between the two bills is really the difference in 
whether we have welfare reform or not.
  Let me say that I sympathize with Florida, and I sympathize with 
Arkansas. The biggest winner in the Graham amendment is Texas. The 
biggest single winner of any State in the entire Union is my home State 
of Texas. We gain over $1 billion. But I did not come here to get a big 
windfall for Texas when I know that if I went for that beautiful bubble 
what would happen is we would go back to welfare as we know it, which 
no one in good conscience can say is right for this country.
  We must persevere to have welfare reform. All of us must give a 
little. And the underlying Hutchison-Dole formula does give Florida 
growth. We worked very hard to make sure that the 19 States that have--
actually, it is 20 States--that have low benefits and high growth do 
not suffer to such a great extent that they would be in jeopardy. And I 
do sympathize with Florida. Florida is like Texas. We have illegal 
immigration that costs our States dearly. There is no question about 
it.
  However, the Graham-Bumpers amendment is not the answer if we care 
about welfare reform. If we care about welfare reform, we will all give 
a little so that there is a fairness in the system, and we will all win 
a lot because the people of America will have welfare reform that is 
going to allow States to have time limits for able-bodied recipients to 
have welfare, that is going to provide for child care and job training. 
But it is going to require work for welfare for able-bodied recipients, 
and it is going to have caps on spending in welfare so that the hard-
working American family will know that someone is not staying on 
welfare generation after generation having things that the hard-working 
family is not able to buy for its own children. No longer is that going 
to be tolerated in this country.
  That is what welfare reform does, if we are all willing to give a 
little for everyone to win. That is why the underlying formula is 
balanced. It is why no one is completely happy with it and why it is 
easily subject to attack. But 

[[Page S 13358]]
I worked very hard with many other Senators who were concerned about 
the original Finance Committee bill to try to come up with something 
that was fair to everyone--not everyone's total liking but fair so that 
no one would go home saying they did not get something. They either get 
welfare reform that is good for every taxpaying family in this country, 
and they get either a benefit in the beginning if they are a big 
welfare State, or a benefit toward the end if they are a low-benefit, 
high-growth State.
  I think we have accommodated the needs of every State in a reasonable 
manner, and that is the bottom line. It is balance. It is fairness. It, 
above all, is keeping the goal of welfare reform so that everyone knows 
that it is not going to be welfare as we know it. It is not going to be 
business as usual. It is going to be better for every American if we 
can persevere and do the right thing.
  I thank the Chair. I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. I note that the Senator from Texas has to be elsewhere 
in a moment, but if she could stay just for a moment I would like to 
suggest that something exceptional has happened tonight. It may be 
something that Benjamin Disraeli wrote turns out to be wrong, and this 
is a new thought to me. But I was going to read a passage from 
Coningsby published in 1870 when the young Coningsby is having 
breakfast with the old duke, and the old duke says:

       In a couple of years or so you will enter the world; it is 
     a different thing to what you read about. It is a masquerade; 
     a motley, sparkling multitude in which you may mark all forms 
     and colours, and listen to all sentiments and opinions; but 
     where all you see and hear has only one object, plunder.

  Now, I think that the Senator from Texas, having said it is clearly 
the case that she is going to oppose a proposal in which the chief 
beneficiary in the first instance and on a superficial level perhaps 
would be the State of Texas, leads me to raise the question: Did 
Disraeli get it right or was it invariably a rule, or is there a 
Hutchison exception?
  In any event, I thank her for her remarks and do observe if this 
measure would cost the State of California $5.4 billion and the State 
of New York $4.6 billion, it hardly would be a promising addition to 
the legislation, the underlying bill before us.
  I would like to talk just a little bit about this subject, Madam 
President. We are talking about Federalism here. We are talking about 
some of the complexities, some of which have grown too complex over 
time. But the first point I would like to make is this: The disparities 
in AFDC benefits and Federal contributions, sharing contributions, how 
do they arise? The Senator from Texas happens to be right about them. 
They arise primarily for one reason which is very little understood and 
possibly never will be understood, that AFDC is not an entitlement to 
individuals; it is an entitlement to State governments for a Federal 
matching share of what the State governments choose to spend on the 
program.
  This goes back to the 1935 Social Security Act. It has been varied 
somewhat from time to time. But the essential fact is that the States 
are left to design their own programs or have no program.
  It would surprise many today to know that you do not have to have an 
unemployment insurance program. You do not have to have aid to 
dependent children or, as it later was, Aid to Families with Dependent 
Children. If you do, you are guaranteed a Federal match. States may 
choose to set generous eligibility thresholds and benefit levels, or 
they may choose not to. If they opt for a larger social safety net, 
they pay for it. But they also qualify for more matching Federal funds. 
The incentive is optional but intentional.
  Now, that Federal match from the beginning--the beginnings are in the 
Great Depression--was heavily skewed toward States in the South and 
West. It is only beginning to be better understood that it was part of 
a policy of the New Deal, although it comes from New York: a President 
from New York State, a Secretary of Labor from New York State.
  The object of the New Deal was to move resources away from cities 
such as New York, Wall Street as it would be termed, to the South and 
West, the Tennessee Valley, for the great water projects to reclaim the 
arid West. In this particular program, the formula, the matching rate, 
is borrowed from the Hill-Burton formula which came into effect just 
after World War II--Lister Hill of Alabama. The formula was used to 
allocate funding for a great hospital construction program. Our 
esteemed former colleague, Senator Russell Long of Louisiana, informed 
me that the Hill-Burton formula is the South's revenge for losing the 
Civil War.
  What it does, Madam President, it writes algebra into our statutes. 
The States receive a Federal match that is determined by the square of 
their per capita incomes so that the relative difference in those 
incomes becomes exaggerated. And so it is such that until very recently 
some States in the South received an 83 percent match from the Federal 
Government, other States such as New York, California, and I do believe 
Maine--we will check that in a moment--get 50 percent; 50 percent is 
the minimum. Actually, Maine's current Federal match rate is about 63 
percent.
  It now goes from 50 percent to 79 percent. One of the first proposals 
I made when I came to the Senate 19 years ago when this was just 
beginning to be so patently inequitable, simply because costs of living 
were so different, I said, if we were going to have algebra in our 
statutes, instead of the square of the difference, why not the square 
root?
  Well, I did not get much support for the idea. But one did begin to 
study the differences in tax capacity, the differences in costs of 
living. It makes astounding differences. If you just take that fixed 
poverty level, you will find you underestimate the true cost-of-living 
equivalent of the poverty level in a State such as mine by about 30 
percent.
  A word, if I may about per capita income. In virtually every debate 
we have on this floor or in committee about the States' relative fiscal 
capacity, we use per capita income as the proxy. Per capita income is a 
proxy, but not the only one. States such as Texas, for instance, that 
are endowed with natural resources may impose a severance tax when 
those minerals and natural gas and crude oil are severed from the 
ground. A severance tax is a wonderful way to raise revenue because the 
end user, usually out of State, ultimately pays it. I would note that 
Texas does not have a personal income tax. Perhaps one is not needed. 
After all, the State can export much of its tax burden out of State.
  The Advisory Commission on Intergovernmental Relations [ACIR] has 
looked into this. This is the ACIR established under President 
Eisenhower in 1959, a nonpartisan, professional group. In 1982, the 
Advisory Council on Intergovernmental Relations with its long history 
of research, adopted the following resolution.
  It said:

       The Commission finds that the use of a single index, 
     resident per capita income, to measure fiscal capacity 
     seriously misrepresents the actual ability of many 
     governments to raise revenue. Because states tax a wide range 
     of economic activities other than the income of their 
     residents, the per capita income measure fails to account for 
     sources of revenue to which income is only related in part. 
     This misrepresentation results in the systematic over and 
     understatement of the ability of many states to raise 
     revenue. In addition, the recent evidence suggests that per 
     capita income has deteriorated as a measure of capacity.
       Therefore, the Commission recommends that the federal 
     government utilize a fiscal capacity index, such as the 
     Representative Tax System measure, which more fully reflects 
     the wide diversity of revenue sources which states currently 
     use. * * *

  Another problem with viewing income as a proxy for wealth is that it 
fails to consider differences in the cost of living which, as I said a 
moment ago, can be quite large. Residents of New York and Connecticut 
make more than do their neighbors in Mississippi and Alabama. But they 
need to spend more, too.
  The other side of the equation is poverty. We have a national poverty 
threshold adjusted only by family size and composition. I think we 
would all agree if you just looked at the simple numbers, the richest 
people on Earth live in Alaska. Well, no, they do not. They have to pay 
so much more for 

[[Page S 13359]]
what they consume as against the persons in the lower 48, they are 
probably, relatively speaking, not as well off.
  The point about the problem we are dealing with right now is that, 
for example, a family of four just above the poverty threshold living 
in New York City is demonstrably worse off than a family of four just 
below the threshold in rural Mississippi.
  Each year for the last 19 years I put out a compilation of the flow 
of funds between the Federal Government and the 50 States entitled 
``The Federal Budget and the States.'' Here, I will display the report 
for you for the purposes of the Senate.
  More recently, the Taubman Center for State and Local Government at 
the John F. Kennedy School at Harvard has begun computing the actual 
numbers. I write an introduction. They have come up with an index to 
subnational poverty statistics. That is, Professor Herman B. Leonard, 
who is academic dean of the teaching programs, and Baker Professor of 
Public Finance, and Monica Friar, who is his associate in this matter.
  And we just look at the ``Friar/Leonard State cost-of-living index,'' 
as it is known, we find that--again I use my own State because I have 
been working at it--New York's poverty rate jumps from the 18th highest 
in the Nation to the sixth highest. It is no longer the case of the 
Mississippi Delta. It is no longer the case that poverty is more 
prevalent in the high plains. It is no longer the case that it is 
Appalachia. The sixth highest poverty rate in the Nation is in New York 
State once you adjust for the cost of living, which is obviously what 
poverty is all about. What does it get you with what you have?
  Earlier this year, a National Academy of Sciences [NAS] panel of 
experts released a congressionally commissioned study on redefining 
poverty. The study, edited by Constance F. Citro and Robert T. Michael, 
is entitled ``Measuring Poverty: A New Approach.'' According to a 
Congressional Research Service review of the NAS report:

       The NAS panel (one member among the 12 member panel 
     dissented with the majority recommendations) makes several 
     recommendations which, if fully adopted, could dramatically 
     alter the way poverty in the U.S. is measured, how Federal 
     funds are allotted to States, and how eligibility for many 
     Federal programs is determined. The recommended poverty 
     measure would be based on more items in the family budget, 
     would take major noncash benefits and taxes into account, and 
     would be adjusted for regional differences in living costs.
       * * * Under the current measure the share of the poor 
     population living in each region in 1992 was: Northeast: 16.9 
     percent, Midwest: 21.7 percent, South: 40.0 percent, and 
     West: 21.4 percent. Under the proposed new measure, the 
     estimated share in each region would be: Northeast: 18.9 
     percent, Midwest: 20.2 percent, South: 36.4 percent, and 
     West: 24.5 percent.

  But getting back to Hill-Burton, the fact is that this benefit 
formula, called the Federal Medical Assistance Percentage, has always 
been designed to bring more Federal funds to Southern States than to 
Northern ones. And again, when we talk about these matters, we cannot 
seem to get past talk about per capita income as a measure of a State's 
relative capacity.
  It is not, Madam President, as I showed just a moment ago. Per capita 
income disguises the large effects of cost of living.
  Madam President, the point here is that we have a set of Federal 
outlays which have corresponded to two things. First, they have helped 
compensate States with low per capita income way in the back; 83 
percent to Mississippi, but only 50 percent to California, the Federal 
match. But also, the outlays reflect State spending. And the States 
that would be injured in this matter are just those States who of their 
own choice have chosen to provide a higher level of provision for 
dependent mothers and children.
  Per capita disparities exist in the block grant allocations because 
States are different--vastly different--in their willingness to spend 
their own money on their own poor people.
  Now, if at the moment we end the Federal entitlement, turn this 
matter back to the States, where it had been indeed as a widow's 
pension in the early years, in the 1930's, going back to the Depression 
era, what we shall have done is penalize everything we would have 
thought to be admirable in American public life. And by admirable we 
would think of provision for children in a world in which they are so 
extraordinarily exposed to the dissolution of family and the onset of 
enormous levels of dependency such as were never seen in the 1930's and 
we now find ourselves baffled by and troubled by in the 1990's.
  Let us take the analysis a bit further. ACIR does marvelous work and 
issues clearly written reports that too few of us in this Chamber read. 
Over the years, ACIR has developed and refined a really important 
index. They now have a measure of State revenue capacity and tax 
effort, without wishing to make any complaints of one kind or another. 
Here we go back to 1975, and we bring ourselves back up to 1991. And we 
look at New York. New York is the black dots. Its tax capacity goes 
down. And it goes up a bit, then comes down a bit. Just about average 
for the Nation. It was below average and now at 103. The State of 
Florida has stayed about average all along, and right now, 1991, its 
tax capacity is 103 too. The two States--New York and Florida--they are 
identical. They have the same per capita tax capacity.
  But New York, with an older tradition, has a tax effort of 156 as 
against the national norm of 100. And Florida has a tax effort, rising 
a bit of late, nothing dramatic, just as we decline a bit, of 86. New 
York has twice the tax effort of Florida. It is a public choice. Some 
States will value public goods more than private goods and others 
private goods more than public goods. Some have higher capacity. Some 
have less. But the disparities are nothing such as they were thought to 
be in years past. But if the Senator from Florida wants to know why 
there are State-by-State funding disparities under the block grant, he 
need look no further than this chart.
  Now, under the logic of the amendment offered by the senior Senator 
from Florida, we will reward his State's behavior by giving it an 
additional $1.7 billion over the next three years while we punish New 
York by taking away $2.7 billion of its block grant; $4.6 billion over 
the life of the bill.
  The practical effect of the Graham amendment is to reallocate money 
from high tax effort States--States that are willing to spend their own 
resources on their own poor people--to low tax effort States--States 
that, for whatever reason, are not willing to make those investments. 
Even though most of the less generous States benefit from the Hill-
Burton formula and States like New York do not. This certainly does not 
comport with my notion of Federalism.
  I suppose the response is that we are talking about Federal funds. 
Well, why limit ourselves to a discussion of Federal welfare funds? Why 
not consider all other Federal funds? Perhaps we should block grant 
NASA spending and allocate the dollars to each State on a per capita 
basis. Perhaps we should block grant farm price supports. Perhaps, 
even, defense spending. Why not? Given the prevailing opinion regarding 
the competence of Washington, maybe New York would be better off if it 
were to receive block-granted defense funds allocated on a per capita 
basis. After all, I am sure that New Yorkers are more aware than 
distant DoD bureaucrats which points along our boundary with Canada are 
most susceptible to invasion.
  Mr. President, I suggest that, in keeping with the spirit of the 
Graham amendment, we extend it to cover all Federal spending. Let us 
smooth out the disparities that exist in the per capita allocation of 
all Federal dollars. Now, if we consider all Federal spending, we 
discover that it amounts to $5,095 per person in Florida. In New York, 
the total is a less munificent $4,973. Perhaps the senior Senator from 
Florida would be amenable to an effort to reallocate some of the 
Federal funds that flow to his State so that the disadvantage New York 
suffers can be ameliorated.
  Let us extend the analysis and consider not just spending received, 
but taxes paid, as well. Between fiscal years 1981 and 1994, on a 
cumulative basis, if New York's percentage share of allocable Federal 
spending had been equal to its share of taxes paid, the State would 
have received an additional $142.3 billion. Florida, on the other hand, 
would have received $38.5 
 
[[Page S 13360]]

billion less. I think notions of fairness and equity have been turned 
on their head here.
  The same may be said for regions. In the Northeast you find a big 
imbalance, a shortfall in the balance of payments with the Federal 
Government. In the South you find a big surplus. In the Midwest, an 
even bigger shortfall than the Northeast. The greatest--Illinois now 
ranks 49th in its balance of payments with the Federal Government. The 
real concentration of balance of payments deficits is in that old 
Midwest industrial area. And the West is a benefactor, always has been, 
for a variety of reasons of which defense outlays are probably the most 
important. This is a zero-sum situation. Combining the regions, we find 
that the Northeast-Midwest balance of payments deficit totals $690 
billion. And that is the exact windfall the South and West have enjoyed 
over the past 14 years.
  Mr. President, the senior Senator from Texas often refers to ``people 
who pull the wagon'' and ``people who ride in the wagon.'' Well, we 
have States that pull the wagon and States that go along for the ride. 
Make no mistake. I am no fan of the block grant. But I must strenuously 
resist any attempt to raid my State of $4.6 billion, to decrease an 
allocation derived in large measure from New York's willingness to 
``put its money where its mouth is,'' particularly when the ``raiders'' 
represent States that are unwilling to spend their own resources on 
their own poor people.
  Mr. President, in June 1990, during consideration of the housing 
bill, the senior Senator from Texas--then the junior Senator--offered 
an amendment to reallocate community development block grants [CDBG's] 
on the basis of population. I said during the course of that debate, we 
put at risk the principle of federalism if we ever begin to insist on 
this floor that any activity which has a disproportionate impact on one 
State or region as against another cannot be accepted. This floor saw 
the terrible divisions on regionalism that led to the most awful trauma 
of our national existence, which we still have not overcome, still not 
put behind us--the Civil War.
  There is a desk on this floor where a man was clubbed insensible, 
beaten insensible, over regional issues.
  All our intelligence says: Respond to need and be thoughtful and be 
accommodating and try to see that there is some rough balance. I spoke 
earlier of our having documented the imbalance and that we live with 
it. So might my colleagues from Sunbelt States.
  Mr. President, I was not sure this bill could get any worse. But 
after the votes on the Feinstein and Breaux amendments earlier today, 
it has. The race is on. We have dismantled the entitlement status of 
the AFDC program. States no longer have an incentive to spend their own 
money on their own poor. Now, we have no real requirement that they 
spend their own money, either.
  The race to which I refer is the race to the bottom. An article in 
last Wednesday's Washington Post sums up nicely the brave new world we 
are about to enter. The article, by Barbara Vobejda, is entitled States 
Worry Generosity May Be Magnet for Welfare Migrants. Taxpayers and 
State legislators and Governors are determined to prevent their States 
from becoming welfare magnets. Set your benefits as low as possible to 
encourage current welfare recipients to move out and discourage welfare 
migrants from moving in.
  The article reports that many welfare recipients now receive one-way 
bus tickets from their caseworkers out of the States in which they 
reside. Perhaps, under the proposed block grant, that will become the 
biggest welfare expenditure: one-way bus tickets out.
  Mr. President, I find it interesting and revealing that those Members 
whose States spend the least on their own poor people clamor the 
loudest for a more ``equitable'' distribution of the Federal block 
grant and resist most vociferously any attempt to impose a serious 
State maintenance of effort.
  In 1981, George Will wrote a column about the anti-Washington 
sentiment pervasive in public-land States in the West. He pointed out 
that residents of these States were the beneficiaries of considerable 
Federal largesse, particularly in the form of water and power 
subsidies. But these beneficiaries were budget cutters--somebody else's 
budget, that is--through and through. Borrowing a line from that 
eminent American historian Bernard DeVoto, he entitled his column Get 
Out and Give Us More Money. Does that line not wonderfully capture the 
mentality that has crossed the hundredth meridian heading East and has 
percolated up from the South? Get out and give us more money. That is 
the wretched state of debate on this wretched bill.
  The Senator from Nevada is here, and the Senator from New York is on 
the other side. We have been alternating one side of the aisle to the 
other, although the different sides do not represent different views on 
this amendment. Mr. President, I yield to the Senator from Nevada.
  I wonder if my friend from New York--I believe the Senator from 
Nevada has been here for an hour and a half and has a rather brief 
statement and then the Senator from New York, my distinguished friend, 
will follow.
  Mr. D'AMATO. Sure.
  Mr. BRYAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Ashcroft). The Senator from Nevada.
  Mr. BRYAN. Mr. President, let me preface my comments by thanking the 
ranking member for his courtesy in acknowledging that the Senator from 
Nevada has been on the floor and to acknowledge the courtesy of his 
colleague and our friend, the junior Senator from New York.
  Mr. President, I ask unanimous consent that Senators Bob Kerrey and 
Hollings be added as cosponsors to the Graham amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BRYAN. Mr. President, I would like to preface my comments by 
commending my colleague and friend, the senior Senator from Florida, on 
what was truly a very thoughtful and very enlightening presentation, in 
terms of his efforts in developing the formula, the rationale and the 
cause for which he speaks, and that is to provide some sense of equity 
and fairness predicated on the basic proposition that children 
everywhere, irrespective of the States from which they come, are 
entitled to receive a fair and equitable allocation of Federal tax 
dollars providing for their benefit.
  I enjoy, as I know all of my colleagues do, the erudition that is 
continually demonstrated on the floor by the senior Senator from New 
York in explaining the theoretical underpinning and the origin of this 
very complicated formula that we presently work with.
  I say with great respect and deference to him that whatever the merit 
in its origin that formula may have had certainly can have no 
continuing validity when the very basis upon which we are changing the 
law converts an entitlement program to a block grant program that has a 
cap attached to it with a very, very minimal margin to accommodate the 
growth of States such as my own and others, whose Senators I am sure 
will speak in behalf of this amendment, of 2.5 percent a year.
  So I come to the floor this evening to strongly endorse and to 
support the Graham amendment, the children's fair share allocation 
proposal. This amendment will, in my judgment, ensure a more equitable 
Federal funding formula based on the number of children in poverty in 
each State with a small State minimum. The bill before us severely 
penalizes high-growth States by relying on 1994 funding levels for 
fiscal year 1996 and into future years.
  I make it clear at the outset, Mr. President, that there is no 
defender of the current welfare system. It serves neither the taxpayer 
nor the recipient. I want to identify myself as an advocate for change. 
The welfare system in America has failed and we ought to change it in 
rather substantial ways.
  But in doing so, we should ensure that there is equity in allocating 
Federal funds to States--Nevada and others--that will have serious 
welfare problems compounded by the enactment of this piece of 
legislation.
  The Republican welfare proposal uses a block grant approach as a 
replacement for the current system. As a former Governor, I very much 
understand the attraction of block grants for Governors in their 
States. Quite often, block grants can be a better approach. I, for one, 
as a former Governor, recognize that there are circumstances in which 
increased flexibility would have 

[[Page S 13361]]

been immensely helpful in dealing with the problems of my State, which 
may very well have differed from the problems of the State of the 
distinguished occupant of the chair and of the prime sponsor of this 
amendment, all of whom have served as chief executives of their 
respective States.
  But the notion that somehow block grants are a utopian answer to 
every problem we have with the current welfare system is, in my 
opinion, disingenuous, and this is particularly true when high-growth 
States, such as my own, will be left with much, much less resources to 
deal with the problem of an expanding population.
  If States are deprived of the funding necessary to do the job, all of 
the block grant flexibility in the world will not matter a single whit 
because States will not be able to do the job, let alone do it better.
  Earlier this year, I joined with nearly 30 of my colleagues on both 
sides of the aisle in writing to the majority leader to request his 
support for a bipartisan effort to address the funding formula in an 
equitable way. Although the Dole bill includes Senator Hutchison's 
Federal funding formula proposal, it is still, in my judgment, a 
grossly inadequate approach which penalizes high-growth States.
  The Republican leader's proposal hurts high-growth States like Nevada 
by capping Federal funding at the fiscal year 1994 level. High-growth 
States like Nevada will receive less funding at the very time that 
their population is exploding. Nevada is one of 19 States under the 
Dole-Hutchison Federal funding formula proposal which would be eligible 
to receive a very modest 2.5 percent annual adjustment to Federal 
funding in the second and subsequent years of the block grant 
authorization.
  But, Mr. President, this adjustment does not come even remotely close 
to offsetting the damage caused to my State by reason of the fiscal 
year 1994 funding cap. Nevada is the fastest growing State in America. 
I invite my colleagues' attention to this chart. It is dramatic. Beyond 
the comprehension of those of us who have lived in Nevada, as I have, 
for more than a half a century, if you look at the preceding decade, 
1984 to 1994, Nevada's population has grown by 59.1 percent.
  If you look at the next fastest State in percentage of growth, that 
of Arizona, 33.7 percent. When I talk about the horrendous impact and 
consequences of this formula, I am not speaking in the abstract, I am 
speaking in the specific, and it will be devastating.
  Nevada's population is projected to increase from 1995 to the year 
2000 by nearly another 15 percent from approximately 1.47 million to 
approximately 1.69 million. Again, Nevada leads the Nation in projected 
population growth for the remaining years of this decade.
  Nevada's AFDC caseload increased 8 percent from fiscal year 1993 to 
fiscal year 1994, the sixth highest increase in the country. The 
national average was only a 1.4 percent increase. And from fiscal year 
1992 to 1994, Nevada's welfare expenditures increased by nearly 22 
percent, the fourth highest increase in the country, compared to the 
national average of only 4 percent.
  In the 5 years from 1989 to 1994, Nevada experienced a 35.7 percent 
increase in the number of children under the age of 18 years, the 
highest increase of any State in the country. Again, by comparison, the 
national average is 6.1 percent.
  Under the Republican welfare proposal, fast growing States like 
Nevada will suffer a devastating impact. We cannot expect yesterday's 
funding levels are going to come anywhere near meeting the needs of 
Nevada citizens in the years ahead.
  Under the Dole-Hutchison formula, Nevada would receive $36 million in 
fiscal year 1996. Nevada is already in the year of its implementation 
behind its projected needs. For Nevada, a 2.5 percent growth increase 
over the preceding year's block grant does not come close to meeting 
its welfare assistance needs.
  As a consequence, Nevada's State treasury and its taxpayers are 
placed at risk of having to increase the difference occasioned by the 
cap imposed in this formula.
  The children's fair share plan funding formula takes into 
consideration the substantial population growth projections. It does 
this by allocating Federal funds to States, based very simply on the 
number of children who are in poverty in each State.
  Mr. President, what could be more fair than to base the allocation on 
the number of children in poverty in each of the respective States?
  Basing welfare allocations on the number of poor children served puts 
the emphasis on where the priorities should be in this welfare debate, 
and that is on vulnerable, impoverished children throughout this 
Nation, irrespective of where they may live.
  Traditionally, the main goal of welfare cash assistance programs like 
AFDC has been to children who are impoverished, have a minimum standard 
of living. The need to meet that goal continues.
  The National Center for Children in Poverty reports that children 
under the age of 6 living in poverty in America has increased in the 5-
year period from 1987 to 1992 by 1 million--from 5 million to 6 
million. In the 20-year period from 1972 to 1992, the number of our 
children living in poverty nearly doubled. This, Mr. President, is a 
most disturbing trend and one that shows little chance of abeyance.
  None of us want poor children in this country to be unable to count 
on having a meal to eat and a place to sleep. If we cannot continue the 
current entitlement status for the cash assistance program, we must 
provide States sufficient funding on an equitable basis.
  Nevada, each month, draws thousands of people from surrounding States 
who come hoping to find jobs. In my own hometown of Las Vegas, 6,000 to 
7,000 people each month move into the greater metropolitan area of Las 
Vegas. This population influx also brings a rapidly increasing number 
of children. Tragically and unfortunately, many of those children are 
children in poverty.
  The 1995 Kids Count Data Book found that in 1992, Nevada had 6.4 
percent of its children in extreme poverty, that they lived in families 
whose income was below 50 percent of the national poverty level. 
Additionally, 25 percent of Nevada's children lived in poor and near-
poor families.
  Rapid growth States, like Nevada, have always been hurt in receiving 
their appropriate share of Federal funds. Population increases and 
increases in Federal funds have rarely gone hand-in-hand because of 
many reasons. Maybe because the Federal Government was not efficient 
enough to make the sufficient adjustments.
  But it is particularly unfair to hold a rapidly growing State, like 
Nevada, to its 1994 Federal funding level as a baseline for future 
welfare assistance funding. But this will happen, unless the Graham 
amendment is adopted.
  Think about the absurdity, for a moment, of using population figures 
from 1994 as the baseline for all future welfare assistance funding 
increases. From day one, under the Dole bill, Nevada's children in 
poverty are punished. Under the Dole proposal, Nevada would receive $36 
million each year from 1996 through 1998. Under the children's fair 
share plan, Nevada could receive up to $72 million a year. But 
understand that the basic overall amount spent on welfare is not the 
issue here. In my opinion, it is the formula used to allocate that 
amount.
  States like New York and California do better under the Dole bill. 
Fast-growing States like Nevada are seriously damaged.
  The Hutchison ``dynamic growth'' proposal serves Nevada children no 
better. Once again, Nevada would be held, in 1996, to its 1994 level of 
$36 million. In 1997, Nevada would get $1 million more for a total of 
$37 million. In 1998, Nevada would get an additional $1 million more, 
again for a total of $38 million. Yes, it is a funding increase. No, it 
is not based on meeting Nevada's population growth nor its needs.
  I genuinely want to achieve a fair and bipartisan solution to this 
critical issue. The children's fair share proposal, in my judgment, 
provides that solution. If your State has a high number of children in 
poverty, your State receives a higher amount of Federal funding. If 
your State has fewer children in poverty, your State receives a lesser 
amount of Federal funding. The Federal funding follows the need. What 
could be fairer than that?
  Again, I urge my colleagues to think about the impoverished children 
in 
 
[[Page S 13362]]

America. Let us work together to ensure that those children, regardless 
of where they are living, are going to be provided adequate care on an 
equal basis. They depend upon us to care for them. We must not let them 
down.
  Mr. President, I yield the floor.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, we have had an excellent debate. I know 
my colleague from New York wishes to address this amendment, as well.
  I wish to compliment the parties on both sides of this debate. I 
think it has been an excellent debate. I note that my friend and 
colleague from New Mexico is here. He has an amendment. The majority 
leader has indicated to us that he would like to dispose of that 
tonight. My guess is that it is a very important amendment dealing with 
family caps. We will have some good debate on that, as well.
  I urge my colleagues to try and conclude debate on the Graham-Bumpers 
amendment as soon as possible so we can go on to debate the Domenici 
amendment.
  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. D'AMATO. Mr. President, I rise to oppose this amendment. I rise 
to oppose it on a number of grounds and bases.
  First of all, Mr. President, I support welfare reform. We need 
welfare reform. We need sweeping reform. We need workfare. But reform 
cannot come solely at the expense of New York, or New York and 
California, or at the expense of New York, California, and 
Pennsylvania, or at the expense of any of those to whom this amendment 
does grievous harm. We are not just talking about States; we are 
talking about harm to the families, to the children that this amendment 
will devastate.
  This amendment is not about reform. It is not about welfare formulas 
that make sense. It is about taking money from poor children in certain 
States. In many cases, these are the States that have done the most to 
help poor people. And now to penalize them as a result of that and to 
shift those dollars, without regard to the level of resources the 
States are willing to commit on their own, but simply to say that we 
are going to grab more money, we are going to enrich certain States. 
That's wrong and unacceptable. I am going to point out specifically 
some of those areas that cause concern.
  We have tried to be fair in accommodating the concerns of the Senator 
from Florida. This bill contains an $877 million supplemental growth 
formula that will benefit Florida and 18 other States anticipating 
population growth over the life of this bill. And that is fair and that 
is reasonable. They are going to have additional growth. Let us take 
care of that.
  Under the Dole-Hutchison formula, the State of Florida will receive 
$150 million more, over the next 5 years, than they would have received 
under the Finance Committee's initial proposal. But let me tell you, 
the amendment that is before us now, the amendment of the Senator from 
Florida, is fundamentally unfair. Let me tell you what the real impact 
of this amendment would be.
  No. 1, the amendment would reallocate more than $2 billion from 14 
States; 14 States would lose $2 billion, causing a half-million 
families to lose welfare benefits. That is not welfare reform. If we 
want to kill any chance of welfare reform, then adopt this amendment. 
Indeed maybe that is the basis and the genesis of this amendment--to 
kill reform. New York would lose $749 million in fiscal year 1996 
alone. Let me tell you what it would be over 5 years, Mr. President: 
$4.5 billion.
  That is just simply wrong. It is mean spirited, and we have not even 
accounted for the State of California. They have people. They have 
children. They have needs. They have been meeting those needs.
  The loss there would be well over $5 billion. Those two States alone, 
20 million people in New York and 30 million in California--50 million 
people--would account for three-quarters of the funds that were 
redistributed.
  That is not what welfare reform should be about. Fairness, yes. But 
not this kind of attempt to enrich oneself at the expense of others. 
That is not what this country is about.
  When there is a disaster, we all pitch in. We do not say, ``What is 
the population of your State?'' We are there. If there is an 
earthquake, a fire, floods, devastation, we are there.
  If it costs $6 billion, $8 billion, $9 billion to help the State of 
California, we do it. If it cost $4 billion or $5 billion to help a 
State, and the State was Florida, we were there. The Senators from New 
York did not say, ``Well we did not get that portion. We did not get 
that kind of disaster relief.''
  That is what Federalism is about. I did not think it was about 
looking at how we can enrich certain states, and then throwing in a 
bunch of additional States so that we can get votes. That is what this 
bill is about. There are more than a dozen States, 15 I believe, that 
are rewarded arbitrarily--nothing to do with need per se; just worked 
into the formula so we can get more money to get more votes. Supposedly 
this way we will get 30 votes because we have given each of these 15 
States more money.
  Is that the way we will run this country? Is that what this 
legislative body has become?
  By the way, I have seen these kinds of amendments in the past. They 
are wrong. I do not care whether they come from the Republican side or 
the Democratic side.
  Today, there was an amendment offered by one of my colleagues. It 
could have given New York more money. I voted against it. It would have 
disadvantaged other States.
  This is not about trying to be one up on somebody else. That may not 
be what is intended, but that is what this amendment is. It is one-
upmanship.
  We can play that role. It does not take a great genius to figure out 
a formula, and we could come up with such a formula, that would enrich 
maybe 33 States and disadvantage some others. I do not think that is 
what we want to be about--arbitrarily rewarding some States.
  Let me just make several points, and I am not going to take a great 
deal more time, but I am going to say if one were to look at this chart 
which comes from the incredible work of the Northeast-Midwest 
Coalition, under the stewardship of the senior Senator from New York, 
Senator Moynihan, who for years and years and years has been a leader 
in talking about inequities affecting our region. Want to see some 
inequities? I will show you an inequity. If we want to look at what tax 
efforts are and take a look at the Northeast and Midwest from 1981 to 
1994 over a 14-year period of time, you will see there is a $690 
billion inequity relating to Federal allocable dollars spent in our 
region.
  If we want to change things around, if we want to get into who gets 
more money, then look at the tax efforts, look at the taxes paid by our 
respective citizens and our respective States and the amount of money 
that we get back. We would be pretty well enriched.
  Let me tell you again, in this work, Senator Moynihan has been a 
pioneer in this effort. He has talked about this issue over the years, 
but it bears repetition right here.
  If we are going to get into the business of crafting formulas to 
enrich our particular State, fine. But it is a nasty business, and it 
destroys what Federalism is about.
  Why, then, we think we have an argument. Between fiscal year 1981 and 
1994 on a cumulative basis, if New York's percentage of fair, allocable 
Federal spending is equal to the Federal share of taxes paid, the State 
of New York would have received an additional $142 billion. Where is 
our money? We want $142 billion.
  I did not know we were going to get into this business of saying, 
``Oh, no, we sent $142 billion down, more than what we got back.'' That 
is what this kind of amendment is doing. It is mischief-making.
  Take a look at the State of Florida. On the other hand, if we had 
said, ``You get as much as you put in,'' the State of Florida would 
have received $38.5 billion less. In other words, it has done better. 
It got $38.5 billion more than it sent down to Washington.
  Not bad. But now we are going to find a way to get more money for the 
State of Florida. Where do we take it from? We take it from New York, 
its taxpayers and, more importantly, the poor kids, the poor children, 
the poor families. That is absolutely wrong. It is not acceptable.
 
[[Page S 13363]]

  Now, as I have said, we want meaningful welfare reform. And, by the 
way, reasonable people can disagree on the basis of reform. My 
distinguished colleague and I agree that there has to be welfare 
reform. We may not agree on every part of this, but I tell you one 
thing: We all recognize when formulas or propositions--whether they 
come from the Republican side or the Democratic side--are basically not 
fair.
  You do not just enrich States so that you can get Senators from those 
States, so you can say, ``Look, under my formula I will get the $20 
million a year more with no rational basis.''
  By the way, that is another concern, and I will speak to that when I 
get 2 minutes tomorrow morning, whereby if you have an 80 percent 
maintenance of effort, and if the Graham amendment were enacted, New 
York would be forced to contribute $500 million in welfare spending 
than would get in its grant from the Federal Government. Incredible.
  We had better protect our citizens. If there are areas where the 
formulas are inequitable and we can make them work better, we should 
attempt to do that, and we have attempted to do that. But we should not 
get into the business of advancing one's own interest for one's own 
State at the expense of another. I do not think that is what we should 
be about. I do not think that is what this debate should be about.
  I have to say there is a tremendous imbalance here, $690 billion over 
14 years, if we look at how much our region paid and how much it got 
back.
  I want to thank my senior colleague and Senator, the distinguished 
Senator from New York, Senator Moynihan, who has made possible the 
gathering of so much of this information that we could present tonight.
  Mr. DOMENICI. Would the Senator from New York yield for a 
clarification.
  Mr. D'AMATO. Certainly.
  Mr. DOMENICI. You mentioned under the 80 percent maintenance of 
effort, New York would lose $500 million.
  I think what you meant, Senator, was if this amendment passes.
  Mr. D'AMATO. Exactly. I thank my colleague.
  Under this amendment, if this amendment were adopted--the irony would 
be that it would wind up that we would have to spend $1.84 billion and 
we would only be getting $1.32 billion from the Federal side. In other 
words, New York would have to contribute roughly $500 million more it 
would receive from the Federal Government if Senator Graham's amendment 
were to pass.
  It would be devastating. We are not talking about devastating to a 
State, or to some organization, some institution. We are talking about 
over 300,000 families that would be impacted--people, live human 
beings, who, in most cases, would have tremendous problems.
  We are trying to find out how to mainstream them. Mainstreaming is 
one thing. Workfare is one thing, and I support it wholeheartedly. But 
to impose a radical reallocation of dollars that will deny shelter or a 
meal to people in my state is not what welfare reform should be about.
  Again, I want to thank Senator Domenici for pointing out what this 
impact of this amendment would be, and I certainly want to add my 
support to the efforts of Senator Moynihan, my distinguished colleague, 
the senior Senator from New York, in his opposition, to this amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, may I simply thank my distinguished 
friend and colleague for the forcefulness with which he has made an 
unmistakably accurate point.
  I thank him for his generous personal references.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I thank both our colleagues from New York 
for their statements. I note the Senator from Florida, Senator Graham, 
wishes to make a statement. I will just mention to my colleague, 
Senator Domenici, has an important amendment he is prepared to discuss. 
And we have several other amendments we are supposed to, basically, 
debate tonight and hopefully have for consideration and vote tomorrow.
  So it is my hope we can conclude Senator Graham's debate with this 
amendment, take up Senator Domenici's amendment, and then I know 
Senator Daschle has two amendments, Senator DeWine has an amendment, 
Senator Mikulski, Senator Faircloth, and Senator Boxer, that we would 
also like discuss this evening and have ready for a vote tomorrow.
  We still have a lot of work to do tonight and it is my hope maybe we 
can move forward with this debate as expeditiously as possible.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. Mr. President, if no one seeks recognition to speak on 
the amendment, I would like to make a few comments in closing, 
recognizing that there is some time reserved tomorrow morning for final 
comments on this matter.
  My comments this evening will be, first, to express my appreciation 
to all of the Senators who have participated in the debate on this 
amendment on both sides of the aisle and on both sides of this issue. I 
recognize that, whenever you are attempting to allocate not only a zero 
sum, a fixed amount of money, but what actually is a declining amount 
of money because of the decision to freeze 1994 allocations in place 
until the year 2000 with no adjustment for inflation, no adjustment for 
demographic changes, no adjustment for economic changes, you are 
dealing with, effectively, a declining amount of dollars to attempt to 
allocate. That makes the issues of fairness even more difficult, but I 
suggest even more urgent.
  I would like to respond to some of the comments that were made. 
Before doing so, Mr. President, I send to the desk a series of tables 
and other materials which were referenced in my comments, or comments 
of Senator Bumpers or Senator Bryan, in behalf of this amendment. I ask 
unanimous consent they be printed in the Record at the conclusion of my 
remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. GRAHAM. Mr. President, the junior Senator from New York, Senator 
D'Amato, said he opposed this amendment because it had no relationship 
to need, that it was arbitrary and capricious. That is exactly the 
point. What is more related to need than to allocate funds for poor 
children based on where poor children are in the year you are going to 
distribute the money?
  What this amendment states is that the fundamental basis for 
allocating funds will be where poor children are in the year of 
distribution. If the State of Missouri represents 3 percent of the poor 
children in America in 1996, it will get 3 percent of the money. If it 
represents 2.9 percent of the poor children in 1997, it will get 2.9 
percent of the money. That, to me, is a principle which is 
fundamentally as fair and straightforward as the reputation is of 
Missouri for a State that wants you to ``show me'' why you are 
proposing to do what you are proposing to do.
  There has been a theme through some of the comments that have been 
made that we are holding the world constant, and therefore we can 
continue to hold constant the way in which we have distributed money in 
the past for the support of poor children. The fact is, we are engaged 
in reform--some people would say in revolution--of the welfare system. 
Could it be more paradoxical that we are fundamentally changing the 
objectives of the system, the structure and administration of the 
system, the relationship of the States, the Federal Government, and the 
individuals affected, yet we are going to continue to distribute the 
Federal money, 99 percent of it, based on the old allocation formula? I 
think that belies our real commitment to reform.
  What are some of the changes in this revolution in welfare? Those 
changes include massive new mandates to the States to undertake job 
training and preparation, including placement services where necessary, 
transportation services, and child care services for those persons who 
are trying to collect up the necessary personal capabilities to become 
independent, employed persons in our society.
  Those mandates have very serious implications to the States. The 
State of Texas is going to have to spend 84 percent of the Federal 
money that it will receive under this program in 

[[Page S 13364]]
order to meet those mandates. Yet we are going to continue to 
distribute money to the State of Texas as if those mandates did not 
exist because, in fact, those mandates did not exist when this basis of 
allocation of funds was developed.
  We are going to distribute, over the next 5 years, $85 billion of 
Federal money--this is not State money, this is not money to which any 
locality has a particular claim, this is money that belonged to all the 
people of the United States and is paid by all the people of the United 
States--we are going to distribute $85 billion to a status quo program, 
how things were in 1994. We are going to distribute a shade less than 
$900 million based on a formula which will commence 3 years from now, 
that will provide an increase to a handful of States based on growth 
and extreme poverty in terms of how far they fall below the national 
average in their support for poor children.
  It has been suggested that there is an unfairness in this adjustment, 
that we are overly imposing on some States. Let me just look at this 
chart. The garnet bar represents what is in the amendment that is the 
basis of this legislation, the Dole proposal. The gold bar represents 
the modification in funding if the Graham-Bumpers amendment were 
adopted. Let us just look at New York and Arkansas. Under the Dole 
bill, New York will receive over $2,000 per poor child in 1996--over 
$2,000. Arkansas will receive less than $400 per poor child.
  If this amendment, that has been described as overreaching and 
unfair, is adopted, what will happen? What will happen is that in 1996, 
New York will have approximately $1,400 for every poor child, and 
Arkansas, that egregious, greedy State of Arkansas, will jump up to 
approximately $550 per poor child. That is what happens when greed 
takes over the system and Arkansas begins to move somewhat toward 
parity.
  It will take another 3 years before Arkansas finally reaches New York 
in parity. Under the proposal that is in the current bill, it will take 
Arkansas 177 years--177 years before Arkansas would be in parity with 
New York, under the bill as proposed by the majority leader. Yet we are 
being accused of being overreaching.
  It has been suggested that our amendment is inappropriate because of 
the maintenance of effort provision that was in this bill. When we 
wrote this amendment there was zero maintenance of effort in this bill. 
The maintenance of effort--that is what will be required of States in 
order to be eligible to participate--has been a work-in-progress over 
the last several weeks.
  We submit this, what we think is the fundamentally appropriate manner 
in which to allocate $85 billion of Federal funds over the next 5 years 
for poor children, which is the radical idea. Let us put the money 
where the poor children are. When the Senate in its wisdom adopts this 
amendment, then we will come back and look at the issue of what that 
says in terms of appropriate modifications to a maintenance-of-effort 
provision.
  It has been suggested that there is some Machiavellian plot here, 
that we are trying to defeat welfare reform. I want to state in the 
strongest possible terms that I am a strong supporter of welfare 
reform. My State has two of the most successful welfare work projects 
in the country.
  I spent a day recently working at the project in Pensacola which has 
put almost 600 people into productive work, which will have half of the 
welfare population of Pensacola involved in a transition program in the 
next few months, which already has approximately 25 to 30 percent 
involved, is serious about the business, and has learned what it is 
going to take in order to be successful.
  So I take second place to no one in my commitment to seeing that 
there is real welfare reform. But I would suggest that, first, in terms 
of what is in the interest of the vast number of States in America as 
seen on this map where all of the States in yellow will be better 
equipped to meet their responsibilities when the money is distributed 
based on where poor children are, that we have a better chance of 
achieving real welfare reform under that allocation of funds than under 
one which continues to impoverish a large number of States in America.
  I believe that on this Senate floor it is going to be difficult--it 
must be difficult for many Senators who are here tonight; they can read 
the charts; they know what the implications of this are to their 
State--to vote for a bill, even one which has many provisions that they 
support which contains at its heart, at its core, such a cancerous 
unfairness in terms of how the Federal money will be distributed in 
terms of where the poor children, the poor children in their State, the 
poor children in America, live.
  Finally, in terms of, is this a plot to sink welfare reform? In my 
judgment, this is not the plot. The plot is there, Mr. President. It is 
there in the bill as authored by the majority leader. And it is there 
because there are not the resources available in that formula, in that 
bill, in order to meet the objective of having 25 percent of the 
welfare beneficiaries in meaningful employment in 1996 and 50 percent 
in meaningful employment in the year 2000.
  That is not Senator Graham's assessment. That is, among others, the 
assessment of the Congressional Budget Office, which has estimated that 
upwards of 40-plus States will not be able to meet the work 
requirements in the legislation offered by the majority leader, in 
large part because they do not have the resources to pay for those 
things that will be necessary to prepare people for work, including the 
appropriate child care for their dependent children while they are 
preparing themselves to work and during those initial weeks of 
employment.
  So there may be a plot here to sink welfare reform and to show that, 
in fact, it is unattainable, but that plot is contained in the 
legislation which is the underlying proposal of the majority leader, 
not in this proposal, which in fact would give all States an equal 
opportunity to use their creativity, imagination, and unleash what the 
presiding officer as a former Governor and I as a former Governor know 
to be the energy of States to meet a very serious national problem at 
the local level.
  So, Mr. President, I urge the close attention of all of my colleagues 
to the implication of this amendment and urge tomorrow, when this is 
before us for a vote, their favorable consideration.
  Thank you, Mr. President.
[S12SE5-358]{S13364

                                                           STATE-BY-STATE WELFARE ALLOCATIONS                                                           
     Senate Finance Committee Compared with Dole Work Opportunity Act and Graham/Bumpers Children's Fair Share (fiscal years in millions of dollars)    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Dole Work Opportunity Act         Graham/Bumpers children's fair share
                         State                           Senate Finance--  -----------------------------------------------------------------------------
                                                             1996-1998          1996         1997         1998         1996         1997         1998   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama...............................................              107             107          110          112          160          240          258
Alaska................................................               66              66           66           66          100          100          100
Arizona...............................................              230             230          236          242          256          256          256
Arkansas..............................................               60              60           61           63           90          135          150
California............................................            3,686           3,686        3,686        3,686        2,881        2,565        2,495
Colorado..............................................              131             131          134          137          149          149          149
Connecticut...........................................              247             247          247          247          200          179          174
Delaware..............................................               30              30           30           30           60           60           60
District of Columbia..................................               96              96           96           96          100          100          100
Florida...............................................              582             582          596          611          873          997          997
Georgia...............................................              359             359          368          377          450          450          450
Hawaii................................................               95              95           95           95          100          100          100
Idaho.................................................               34              34           34           35           67           69           69
Illinois..............................................              583             583          583          583          780          780          780
Indiana...............................................              227             227          227          227          316          316          316
Iowa..................................................              134             134          134          134          121          110          107
Kansas................................................              112             112          112          112          132          132          132
Kentucky..............................................              188             188          188          188          283          294         294 

[[Page S 13365]]
                                                                                                                                                        
Louisiana.............................................              164             164          168          172          246          369          403
Maine.................................................               76              76           76           76          100          100          100
Maryland..............................................              247             247          247          247          218          198          193
Massachusetts.........................................              487             487          487          487          311          269          260
Michigan..............................................              807             807          807          807          739          669          654
Minnesota.............................................              287             287          287          287          265          240          235
Mississippi...........................................               87              87           89           91          131          196          224
Missouri..............................................              233             233          233          233          309          309          309
Montana...............................................               45              45           46           47           90           90           90
Nebraska..............................................               60              60           60           60          100          100          100
Nevada................................................               36              36           37           38           72           72           72
New Hampshire.........................................               43              43           43           43           85           85           85
New Jersey............................................              417             417          417          417          404          368          360
New Mexico............................................              130             130          133          136          143          143          143
New York..............................................            2,308           2,308        2,308        2,308        1,559        1,361        1,317
North Carolina........................................              348             348          357          365          394          394          394
North Dakota..........................................               26              26           26           26           52           52           52
Ohio..................................................              769             769          769          769          738          672          657
Oklahoma..............................................              166             166          166          166          246          246          246
Oregon................................................              183             183          183          183          168          152          149
Pennsylvania..........................................              658             658          658          658          652          595          583
Rhode Island..........................................               93              93           93           93          100          100          100
South Carolina........................................              103             103          106          109          155          232          253
South Dakota..........................................               23              23           24           24           46           46           46
Tennessee.............................................              206             206          211          216          309          348          348
Texas.................................................              507             507          520          533          761        1,141        1,232
Utah..................................................               84              86           88           88          105          105          105
Vermont...............................................               49              49           49           49           99           99           99
Virginia..............................................              175             175          180          184          242          242          242
Washington............................................              432             432          432          432          260          223          215
West Virginia.........................................              119             119          119          119          150          150          150
Wisconsin.............................................              335             335          335          335          280          251          245
Wyoming...............................................               23              23           24           24           47           47           47
                                                       -------------------------------------------------------------------------------------------------
    United States.....................................           16,696          16,696       16,781       16,869       16,696       16,696       16,696
--------------------------------------------------------------------------------------------------------------------------------------------------------



                                  STATE WELFARE ALLOCATION PER CHILD IN POVERTY                                 
    Senate Finance Committee Compared with Dole Work Opportunity Act and Graham/Bumpers Children's Fair Share   
                                 (dollars per child in poverty per fiscal year)                                 
----------------------------------------------------------------------------------------------------------------
                          Senate          Dole work opportunity act         Graham/Bumpers children's fair share
        State            finance   -----------------------------------------------------------------------------
                        1996-1998       1996         1997         1998         1996         1997         1998   
----------------------------------------------------------------------------------------------------------------
Alabama..............          408          408          418          429          612          919          988
Alaska...............        3,248        3,248        3,248        3,248        4,903        4,903        4,903
Arizona..............        1,045        1,045        1,072        1,098        1,162        1,162        1,162
Arkansas.............          375          375          384          394          563          844          934
California...........        1,716        1,716        1,716        1,716        1,341        1,194        1,162
Colorado.............        1,019        1,019        1,045        1,071        1,162        1,162        1,162
Connecticut..........        1,650        1,650        1,650        1,650        1,335        1,192        1,162
Delaware.............          590          590          590          590        1,181        1,181        1,181
District of Columbia.        4,222        4,222        4,222        4,222        4,411        4,411        4,411
Florida..............          678          678          695          713        1,017        1,162        1,162
Georgia..............          927          927          950          973        1,162        1,162        1,162
Hawaii...............        2,135        2,135        2,135        2,135        2,252        2,252        2,252
Idaho................          564          564          578          592        1,128        1,154        1,154
Illinois.............          869          869          869          869        1,162        1,162        1,162
Indiana..............          834          834          834          834        1,162        1,162        1,162
Iowa.................        1,459        1,459        1,459        1,459        1,314        1,189        1,162
Kansas...............          981          981          981          981        1,162        1,162        1,162
Kentucky.............          745          745          745          745        1,117        1,162        1,162
Louisiana............          390          390          400          410          586          878          959
Maine................        1,193        1,193        1,193        1,193        1,566        1,566        1,566
Maryland.............        1,490        1,490        1,490        1,490        1,318        1,189        1,162
Massachusetts........        2,177        2,177        2,177        2,177        1,390        1,202        1,162
Michigan.............        1,432        1,432        1,432        1,432        1,312        1,188        1,162
Minnesota............        1,419        1,419        1,419        1,419        1,310        1,188        1,162
Mississippi..........          331          331          340          348          497          746          852
Missouri.............          873          873          873          873        1,162        1,162        1,162
Montana..............        1,015        1,015        1,040        1,066        2,030        2,030        2,030
Nebraska.............          895          895          895          895        1,485        1,485        1,485
Nevada...............          671          671          688          705        1,342        1,342        1,342
New Hampshire........        1,430        1,430        1,430        1,430        2,860        2,860        2,860
New Jersey...........        1,345        1,345        1,345        1,345        1,303        1,187        1,162
New Mexico...........        1,053        1,053        1,079        1,106        1,162        1,162        1,162
New York.............        2,036        2,036        2,036        2,036        1,375        1,200        1,162
North Carolina.......        1,026        1,026        1,052        1,078        1,162        1,162        1,162
North Dakota.........        1,027        1,027        1,027        1,027        2,054        2,054        2,054
Ohio.................        1,360        1,360        1,360        1,360        1,304        1,187        1,162
Oklahoma.............          785          785          785          785        1,162        1,162        1,162
Oregon...............        1,428        1,428        1,428        1,428        1,311        1,188        1,162
Pennsylvania.........        1,312        1,312        1,312        1,312        1,299        1,186        1,162
Rhode Island.........        2,244        2,244        2,244        2,244        2,427        2,427        2,427
South Carolina.......          393          393          403          413          590          885          964
South Dakota.........          691          691          708          726        1,381        1,381        1,381
Tennessee............          688          688          705          723        1,032        1,162        1,162
Texas................          405          405          415          425          607          911          982
Utah.................          924          924          947          971        1,162        1,162        1,162
Vermont..............        2,275        2,275        2,275        2,275        4,550        4,550        4,550
Virginia.............          840          840          861          883        1,162        1,162        1,162
Washington...........        2,340        2,340        2,340        2,340        1,407        1,205        1,162
West Virginia........          920          920          920          920        1,162        1,162        1,162
Wisconsin............        1,589        1,589        1,589        1,589        1,328        1,191        1,162
Wyoming..............        1,261        1,261        1,292        1,325        2,522        2,522        2,522
                      ------------------------------------------------------------------------------------------
    United States....        1,162        1,162        1,168        1,173        1,162        1,162        1,162
----------------------------------------------------------------------------------------------------------------


                                                                                                                
                                                                                                   
[[Page S 13366]]                                                    ____
 SENATE FINANCE COMMITTEE PROPOSAL WITH DYNAMIC GROWTH FORMULA ANALYSIS 
                   OF HOW LONG IT WILL TAKE FOR PARITY                  
------------------------------------------------------------------------
                                               Years it                 
                                  Years it    would take  Years it would
                                 would take   for State   take for State
                                  to reach    to get to      to get to  
             State                national    New York's  Pennsylvania's
                                 average at    level of      level of   
                                  2.5% per    funding at    funding at  
                                    year       2.5% per    2.5% per year
                                                 year                   
------------------------------------------------------------------------
Alabama.......................           74          159             89 
Arizona.......................            4           38             10 
Arkansas......................           84          177            100 
Colorado......................            6           40             11 
Delaware......................           39           98             49 
Florida.......................           29           80             37 
Georgia.......................           10           48             17 
Idaho.........................           42          104             53 
Illinois......................           13           54             20 
Indiana.......................           16           58             23 
Kansas........................            7           43             14 
Kentucky......................           22           69             30 
Louisiana.....................           79          169             94 
Mississippi...................          100          206            118 
Missouri......................           13           53             20 
Montana.......................            6           40             12 
Nebraska......................           12           51             19 
Nevada........................           29           81             38 
New Mexico....................            4           37             10 
North Carolina................            5           39             11 
North Dakota..................            5           39             11 
Oklahoma......................           19           64             27 
South Carolina................           78          167             93 
South Dakota..................           27           78             36 
Tennessee.....................           28           78             36 
Texas.........................           75          161             90 
Utah..........................           10           48             17 
Virginia......................           15           57             22 
West Virginia.................           11           49             17 
------------------------------------------------------------------------



 TABLE 2.--THE ADDITIONAL COST OF THE WORK PROGRAM AND ASSOCIATED CHILD CARE UNDER THE AMENDED SENATE REPUBLICAN LEADERSHIP PLAN (ASSUMING THE NATIONAL 
                                  AVERAGE COST PER WORK PARTICIPANT AND ASSOCIATED CHILD CARE SLOT IN FISCAL YEAR 2000)                                 
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Estimated additional                              Estimated additional       Estimated total        Estimated additional 
                              operating cost of the     Estimated additional    operating cost of the    operating cost of the    operating cost of the 
                             work program to meet FY   cost for related child     work program plus         work program and        work program plus   
                             2000 participation rate    care in the FY 2000     related child care in    related child care in    related child care FY 
                              required in the Senate     Senate Republican        the FY 2000 Senate        the FY 2000 as a         1996-2002 Senate   
                              Republican leadership       leadership plan       Republican leadership     percent of the block    Republican leadership 
                                       plan                                              plan                    grant                     plan         
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama....................                      $16                      $27                      $43                       59                     $140
Alaska.....................                        5                        9                       15                       36                       47
Arizona....................                       26                       46                       72                       46                      231
Arkansas...................                        9                       15                       24                       59                       78
California.................                      328                      566                      894                       39                    2,827
Colorado...................                       16                       28                       45                       50                      144
Connecticut................                       24                       42                       66                       43                      213
Delaware...................                        4                        7                       11                       58                       35
District of Columbia.......                       10                       18                       29                       48                       90
Florida....................                       92                      159                      252                       63                      816
Georgia....................                       53                       92                      145                       59                      467
Hawaii.....................                        9                       15                       24                       40                       75
Idaho......................                        3                        6                        9                       41                       29
Illinois...................                       96                      167                      263                       73                      843
Indiana....................                       29                       51                       80                       57                      257
Iowa.......................                       16                       27                       43                       52                      138
Kansas.....................                       12                       21                       33                       48                      105
Kentucky...................                       30                       52                       82                       70                      266
Louisiana..................                       31                       54                       85                       82                      276
Maine......................                       10                       17                       27                       57                       87
Maryland...................                       32                       55                       86                       56                      276
Massachusetts..............                       45                       77                      122                       40                      395
Michigan...................                       94                      162                      255                       51                      823
Minnesota..................                       26                       45                       71                       40                      230
Missippi...................                       19                       33                       53                       88                      173
Missouri...................                       37                       64                      101                       70                      323
Montana....................                        5                        9                       14                       45                       44
Nebraska...................                        5                        9                       15                       39                       48
Nevada.....................                        5                        8                       13                       54                       43
New Hampshire..............                        5                        8                       13                       48                       41
New Jersey.................                       48                       82                      130                       50                      417
New Mexico.................                       13                       23                       36                       40                      115
New York...................                      182                      315                      497                       35                    1,590
North Carolina.............                       49                       84                      133                       56                      428
North Dakota...............                        3                        4                        7                       43                       22
Ohio.......................                       96                      165                      261                       55                      845
Oklahoma...................                       19                       32                       51                       50                      164
Oregon.....................                       16                       27                       43                       38                      140
Pennsylvania...............                       86                      148                      234                       57                      750
Rhode Island...............                        9                       16                       26                       45                       82
South Carolina.............                       17                       29                       46                       65                      150
South Dakota...............                        3                        4                        7                       46                       22
Tennessee..................                       42                       73                      115                       82                      370
Texas......................                      107                      184                      291                       84                      930
Utah.......................                        7                       12                       19                       33                       62
Vermont....................                        4                        7                       11                       37                       37
Virginia...................                       27                       47                       74                       62                      237
Washington.................                       41                       70                      111                       41                      355
West Virginia..............                       16                       28                       45                       61                      143
Wisconsin..................                       29                       51                       80                       39                      260
Wyoming....................                        2                        4                        6                       40                       21
                            ----------------------------------------------------------------------------------------------------------------------------
      Total................                    1,911                    3,300                    5,211                       49                   16,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
HHS/ASPE analysis. State work and child care costs are based on national averages. This analysis assumes that there will be no operating cost in the    
  work program for those combining work and welfare, those sanctioned and those leaving welfare for work. Likewise, the analysis assumes no cost of     
  related child care for those leaving welfare for work and those sanctioned.                                                                           

  
                                                                    ____
             Graham-Bumpers Children's Fair Share Amendment

       Principles: A formula based on fairness should be guided by 
     the following principles:
       (1) Block grant funding should reflect need or the number 
     of persons in the individual states who need assistance;
       (2) A state's access to federal funding should increase if 
     the number of people in need of assistance increases;
       (3) States should not be permanently disadvantaged based 
     upon their policy choices and circumstances in 1994; and
       (4) If requirements and penalties are to be imposed on 
     states, fairness dictates that all states have an equitable 
     and reasonable chance of reaching those goals.
       S. 1120 fails to meet each and every test of fairness.


             GRAHAM-BUMPERS CHILDREN'S FAIR SHARE PROPOSAL

       The Graham-Bumpers Children's Fair Share proposal allocates 
     funding based on the number of poor children in each state. 
     In sharp contrast to S. 1120, the Graham-Bumpers amendment 
     meets all the principles of an improved and much more 
     equitable formula allocation.
       The amendments is needs-based, adjusts for population and 
     demographic changes, treats all poor children equitably, does 
     not permanently disadvantage states based on previous year's 
     spending in a system that is being dismantled, and allows all 
     states a more equitable chance at achieving the work 
     requirements in S. 1120. The Graham-Bumpers Children's Fair 
     Share measure would establish a fair, equitable and level 
     playing field for poor children in America, regardless of 
     where they live. 

[[Page S 13367]]

       Disparities in funding would be narrowed in the short-run 
     and eliminated over time--in sharp contrast to S. 1120.
       Children's Fair Share Allocation Formula: The Children's 
     Fair Share formula would allocate funding based on a three-
     year average of the number of children in poverty. This 
     information would come from the Bureau of the Census in its 
     annual estimate through sampling data. With the latest data 
     available, the Secretary would determine the state-by-state 
     allocations and publish the data in the Federal Register on 
     January 15 of every year.
       Small State Minimum Allocation: For any State whose 
     allocation was less than 0.6%, the minimum allocation would 
     be set at the lesser of 0.6% of the total allocation or twice 
     the actual FY 1994 expenditure level.
       Allocation Increase Ceiling: For all states except those 
     covered by the small state minimum allocation, the amount of 
     the allocation would be restricted to increase not more than 
     50% over FY 1994 expenditure levels in the first year and to 
     50% increases for every subsequent year.
       Final Adjustment to Minimize Adverse Impact: The savings 
     from the ``allocation increase ceiling'' would exceed that 
     for ``small state minimum allocation''. The net effect of 
     these adjustments would be reallocated among the states who 
     receive less than their FY 1994 actual expenditures.
       Implications for the Medicaid Debate: The importance of a 
     fair funding formula to states cannot be overstated.
       With similar proposals to change the Medicaid program 
     expected later this year, how these block grants are 
     allocated among the states is absolutely critical. More than 
     four out of every 10 dollars that Washington sends to state 
     governments are Medicaid dollars. Medicaid is nearly five 
     times bigger than the federal role in welfare: $81 billion a 
     year versus $17 billion. If Congress ``reforms'' welfare by 
     locking in past spending patterns and inequities, that would 
     set a dangerous precedent for Medicaid.
       The unfairness and inequity caused by the S. 1120 Formula

       Under S. 1120, most states will receive a block grant 
     amount frozen at fiscal year 1994 levels through fiscal year 
     2000. Past inequities would be locked into place and future 
     demographic or economic changes would not be adjusted for by 
     S. 1120's funding formula.
       A small number of states would qualify for an extremely 
     limited 2.5% annual adjustment in the second and subsequent 
     years of the block grant authorization. To qualify, states 
     must meet either of two tests:
       Federal spending per poor person in the state must be below 
     the national average and population growth in the state is 
     above the national average; or,
       Federal spending per poor person in the state in fiscal 
     year 1994 is below 35% of the national average.
       S. 1120 Exacerbates and Makes Permanent Enormous 
     Disparities: A formula based largely on shares of 1994 
     federal spending would result in large disparities between 
     states in federal funding per poor child. For example, under 
     S. 1120, Mississippi would receive $331 per poor child per 
     year while New York would receive $2,036 or over six times 
     more per poor child than Mississippi. Massachusetts would 
     receive $2,177 or at least five times more per poor child 
     than the states of Alabama, Arkansas, Louisiana, South 
     Carolina and Texas. There is no justification for poor 
     children to be treated with less or more value by the federal 
     government.
       Proponents of the bill will argue that some states will 
     qualify for 2.5% annual adjustments to address this 
     disparity. However, the bill fails to provide aid to nine 
     states (Kentucky, Oklahoma, Indiana, Illinois, Missouri, 
     Nebraska, West Virginia, Kansas and North Dakota) with below 
     average federal funding per poor child.
       Moreover, even for those who do qualify, the adjustment is 
     glacial and may fail to ever achieve parity. For example, it 
     is estimated that it will take Mississippi over 50 years to 
     reach parity.
       No Policy Justification: There is no justification for 
     allocating future federal funds based on 1994 state spending. 
     The needs of states in the future, both in terms of 
     demographic and economic changes, will have no bearing on 
     spending in 1994. States should not be permanently 
     disadvantaged based upon their policy choices and 
     circumstances in 1994.
       Penalizes Efficiency: Basing all future funding on 1994 
     spending locks in historical inequities and inefficiencies. 
     In 1994, the national average monthly administrative expense 
     per case was $53.42, but New York and New Jersey had costs, 
     respectively, of $106.68 and $105.26, almost eight times as 
     high as West Virginia's cost of $13.34. Those states with 
     higher administrative costs in fiscal year 1994 would receive 
     block grant amounts reflecting their higher fiscal year 1994 
     costs for the next five years.
       Fails to Account for Population Growth: Initial disparities 
     would be further exacerbated by different rates of population 
     growth. Between 1995-2000, ten states are projected to grow 
     at least 8% while eight are projected to grow less than 1% or 
     experience a population decline. Among the 25 states 
     projected to have higher population growth, 17 would receive 
     initial allocations below the national average.
       The initial disparities locked in by the Dole approach 
     would actually intensify as a result of these different rates 
     of anticipated population growth through the end of the 
     decade.
       Proponents of the bill will argue that some states will 
     qualify for 2.5% annual adjustments to address this 
     disparity. However, the bill fails to provide six states 
     (Washington, Alaska, Hawaii, Oregon, California and Delaware) 
     with projected above-average population growth with aid.
       Loser States Double Disadvantaged: States that receive less 
     than their fair share of funding per poor child are the least 
     likely to meet the work requirements under S. 1120, which 
     leads to further funding sanctions. The additional cost of 
     the work program and associated child care in S. 1120 would 
     take up virtually all of the funding for those receiving less 
     than the national average funding per poor child.
       The additional costs to Mississippi, Louisiana, Tennessee 
     and Texas are estimated to exceed 80% of federal funding to 
     those states in the year 2000 compared to less than 40% of 
     the
      cost in states such as California and New York, Oregon and 
     Wisconsin. Ironically, those states receiving less than 
     their fair share of funding will most likely fail to meet 
     the work requirements, and thus, be subject to the 5% 
     penalty in S. 1120.
       Growth States Often Double Disadvantaged: Most growth 
     states will be double disadvantaged. While population growth 
     will fail to be adequately accounted for in the federal 
     funding formula, growth states will have rapidly increasing 
     numbers of people needed to meet the participation 
     requirements. States such as Arizona, Arkansas, Florida, 
     Hawaii, Oklahoma, Tennessee and Texas will need to have three 
     or four times the number of people participating in work 
     program by 2000 than they do in 1994, despite no or very 
     little increasing in funding over the period.
       Block Grant Formula Are ``Forever'': If the Dole formula is 
     adopted, we are creating something that will be difficult, if 
     not impossible, to change for a very long time. Example after 
     example can be cited of block grants that are being allocated 
     today based on funding levels to states over a decade ago.
       No Lesson Learned: The General Accounting Office in a 
     report issued in February 1995 report entitled ``Block Grants 
     Characteristics, Experience and Lessons Learned'' wrote, ``. 
     . .because initial funding allocations [used in current block 
     grants] were based on prior categorical grants, they were not 
     necessarily equitable.'' The Dole approach would once again 
     fail to address these concerns.


 western governors' association: Resolution 95-001, passed unanimously 
                            on June 25, 1995

       In formulating the block grant proposals for welfare and 
     Medicaid the Western Governors' Association strongly urges 
     Congress to account for [these] realities in order to 
     implement block grant funding in an equitable fashion:
       (1) State population levels are growing at different rates, 
     and differences must be recognized in any block grant 
     formula.
       (2) States have different benefit levels for both welfare 
     and Medicaid and the block grant should not reward states 
     that have been operating less efficiently and penalize states 
     that have been operating more efficiently.
       (3) The need for welfare and Medicaid are related to the 
     business cycle, and the federal government should offer 
     assistance to states during down cycles that is timely and 
     responsive.
       After selecting a block grant approach, the next logical 
     question is, ``How should the block grant be divided among 
     the states?'' The compromise reached by your committee was to 
     prorate funds based on historical patterns. In a static 
     world, that would be a perfect solution. However, as you 
     know, Texas has been and will likely continue to be a high 
     growth state. In the interest of fairness, I would urge you 
     to add a significant growth factor to the block grant that is 
     tied to population needs.--Gov. George W. Bush of Texas, 
     April 25, 1995.
       This debate is about fairness and real change versus the 
     status quo . . . . Incredibly, the ``new and improved'' 
     formulas approved by the U.S. House do nothing to address the 
     migration of people within the United States and, in fact, 
     simply set arbitrary spending patterns in stone for the 
     foreseeable future.--Comptroller John Sharp of Texas, April 
     25, 1995.
       It seems to me any welfare proposal should have a basic 
     principle to treat all poor children equitably, and not favor 
     any state's children at the expense of another's. . . . If 
     Congress is going to radically redesign its welfare laws and 
     block grant the money to the states, it needs to allocate 
     that money fairly. States shouldn't be penalized in 1996, or 
     rewarded for that matter, for spending practices of previous 
     years in a system being discarded. That borders on the absurd 
     and it contradicts the very intent of Congress doing away 
     with the system and all of its inherent flaws.--Gov. Lawton 
     Chiles of Florida, May 1, 1995.
       If it's done strictly on prevous year's experience, that is 
     going to disproportionately punish the Southern States. . . . 
     Distributing the funds based on the percentage of population 
     in poverty, with some consideration of the state's tax base 
     would be much more equitable.--Gwen Williams, Medicaid 
     Commissioner for Alabama (quoted on May 22, 1995).
       A poor child in Michigan would get twice as much as a child 
     in my state. That's not right. It's not fair. . . . Let's 
     make equal 

[[Page S 13368]]
     protection of children the foundation for reform.--Gov. Lawton Chiles 
     of Florida, May 11, 1995.
       When a lump sum distribution is made to the states, what 
     fraction of the total should each state receive? The best 
     approach is to base each state's share on the proportion of 
     that nation's poor who reside in the state. A much less 
     desirable approach is currently favored by the Republican 
     leadership in Congress and is reflected in the House bill. 
     This approach would block-grant funds based on current 
     federal spending, rewarding the states that currently spend 
     the most, instead of assisting those with the greatest 
     need.--Dr. John C. Goodman (Goldwater Institute, paper dated 
     July 1995).
       If federal block grants to the states are based on current 
     federal outlays, the effect will be to permanently entrench 
     failed welfare policies in some states. . . . Equally 
     important, the philosophically inclined among us. . . . 
     should wonder why the Congress would enact a block grant 
     system which rewards and continues profligate spending at the 
     expense of states which have done far better at keeping costs 
     down.--Gov. Fife Symington of Arizona, April 26, 1995.
       Block grant funding would be locked in, in spite of rapidly 
     changing patterns of need. This dissonance between need and 
     funding would produce devastating results over a five year 
     period.--Sen. Kay Bailey Hutchison and 39 other senators (in 
     a letter to Sens. Robert Packwood and Daniel Patrick Moynihan 
     on May 23, 1995).
       Under the [Maternal Child Health Block Grant], funds 
     continue to be distributed primarily on the basis of funds 
     received in fiscal year 1981 under the previous categorical 
     programs. . . . We found that economic and demographic 
     changes are not adequately reflected in the current 
     allocation, resulting in problems of equity.--General 
     Accounting Office, February 1995.
  Mr. PRYOR. Mr. President, I wish to add my voice to the debate over 
the amendment to redistribute the limited funds in this block grant 
based on the number of poor children in each State.
  First let me say that I am pleased by the bipartisan nature of this 
amendment. There are many areas in the debate where both Democrats and 
Republicans can agree. We all agree that the current system does not 
work. It does not put people to work. It does not give States enough 
flexibility to craft a system that will keep them working. We can agree 
on what is wrong with the current system. What is much more difficult 
is finding some common ground on the best way to fix it.
  President Clinton called on Congress to end welfare as we know it. 
Yet here we are building a new system on the rotting foundations of a 
system that we all agree has failed.
  Mr. President, welfare reform should be about protecting children and 
putting their parents to work. This bill is a step in the right 
direction, but it uses a formula to distribute block grant funds that 
fails to give States the resources they need to accomplish these goals. 
The children's fair share amendment gives States with high populations 
of poor children the resources they need to serve those children. It 
bases the funds a State receives on the number of needy people the 
State will be asked to serve. It is fair.
  In Arkansas, 25 percent of children live in poverty. One in every 
four children in my State lives below the poverty line.
  Under the formula in this bill, Arkansas would get $375 per poor 
child, while the national average is over $1,000 and some States 
receive over $2,000 per poor child. This block grant is to be used for 
cash benefits, but it also pays for work programs and for child care so 
parents who find work can afford to keep working. It pays for 
administrative costs. Arkansas needs to pay a program director and to 
buy pens and paper just like every other state. Why should the Federal 
Government pay over $2,000 for each poor child in New York and 
Massachusetts and less than $400 per child in Arkansas and South 
Carolina?
  I support this amendment, but I recognize that it still leaves large 
disparities in spending per poor child between States. Under this 
amendment, spending in Arkansas per poor child will rise from $375 to 
$563. In Massachusetts it will fall from $1,761 to $1,341. In New York, 
it will fall from $2,036 to $1,375. States that are getting more money 
per poor child now will still get more money per poor child should this 
amendment pass. This formula doesn't call for complete equity, but it 
does move us a little closer to a distribution of Federal funds that is 
fair.
  This debate is not about benefit levels. We should not lock States 
into the policy decisions they made in years past. I applaud States 
that can afford to spend more money on welfare. But, the Federal 
Government has a responsibility to treat children equally, regardless 
of where they live.
  This formula is based on what is really at the heart of the debate on 
welfare reform--poor children. And I urge my colleagues to join me in 
supporting it.
  Mr. NICKLES. Mr. President, I thank the Senator from Florida as well 
as the Senator from Arkansas for their eloquent debate and the Senator 
from New York for giving the counter view. I think we have had 
excellent debate on this amendment. I know my friend and colleague from 
New Mexico, Senator Domenici, has an amendment that he wishes to 
discuss.
  If no one else wishes to speak on the Graham amendment, Mr. 
President, I hope that we will have debate on the Domenici amendment, 
and I ask my other colleagues who have requested time to discuss their 
amendments tonight. Senator Domenici has mentioned that he will not be 
on the floor too long on this amendment. Other Senators that have 
amendments listed in the unanimous-consent order, if they wish to 
debate those tonight, I hope they will come to the floor in the near 
future.
  Mr. MOYNIHAN. Mr. President, might I add that, if they think they 
wish not to do so, they would let us know.
  Several Senators addressed the Chair.
  Mr. BUMPERS. Mr. President, I wonder if the distinguished floor 
manager would yield for a question. We are going to vote tomorrow, as I 
understand it. We are going to stack the votes on these amendments. I 
just wondered if there had been any kind of consent agreement about 
allowing the proponents and opponents 2 or 3 minutes before each vote 
to sort of recapitulate the amendment.
  Mr. NICKLES. Mr. President, to respond to our colleague from 
Arkansas, part of the unanimous-consent agreement would allow 10 
minutes of debate to be equally divided between the Senators on this 
amendment, and actually on the Graham amendment there will be 20 
minutes equally divided.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER (Mr. Smith). The Senator from New Mexico is 
recognized.
                           Amendment No. 2575

  Mr. DOMENICI. Mr. President, I call up my printed amendment No. 2575 
and ask for its consideration.
  The PRESIDING OFFICER. Without objection, that will be the pending 
question.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that Senators 
Moynihan, Nunn, Breaux, and Kassebaum be added as original cosponsors 
of the Domenici amendment on a family cap.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, this is a very serious issue. I do not 
think we are going to take a lot of time tonight because I think the 
issue has been thoroughly discussed in various meetings, in 
conferences, and in caucuses, and clearly among various groups in our 
country, pro-life groups, pro-choice groups, proabortion groups, 
welfare reform groups, and so on.
  So I am probably only going to take 15 or 20 minutes at the most. I 
do not want anyone to think that brevity has anything to do with the 
seriousness of this issue.
  I want to talk a little bit about what I am trying to do and give the 
Senate my best perception of why I think it is the best thing we can do 
in a welfare reform bill that is attempting to experiment, innovate, 
and send a program that has failed back to the States so that they 
might consider handling it differently and tailoring it to the needs of 
their States within the amount of money that is going to be allowed in 
whatever formula we end up adopting.
  So, as currently amended, the bill in front of us contains a 
provision requiring States to impose a so-called family cap. This 
provision says that, if a mother has a child while on welfare, the 
State cannot increase cash benefits to that mother for that child.
  I want to stress that what we are saying to the States is, even if 
you consider it to be the best thing to do, and even if you have some 
evidence that, working within a proposal that provides additional cash 
benefits, you might prevent more teenagers from having children or 
welfare mothers from having children, you cannot do it 

[[Page S 13369]]
because, while we are busy here saying let us send these programs to 
the States, we are busy in this bill saying, but we know best, the U.S. 
Congress knows best.
  The Governors came to us and said, let us run the programs. We have 
now said, Governors, you have to run it with State legislators. We 
voted that in recently.
  So out in the country Republicans have been acknowledging that we 
want to send programs closer to home where those who are close to the 
people can carry out the laws as they see them best for their people.
  Why do we decide then, with all of that excellent rhetoric about 
sending programs closer to home, to Governors and legislators, why do 
we think we are so wise that we say with reference to one of the most 
serious problems around--teenage pregnancies and welfare mothers that 
have children--we know the way to fix that is to say if you are a 
welfare mother and have a child, the State cannot give you any cash 
assistance? Mr. President, I am not wise enough to know whether they 
should or whether they should not.
  So my amendment is a very simple amendment. In fact, I think I could 
call it after one of the most distinguished Republican Governors 
around, for I could call it the Engler amendment. It happens that he is 
not a Senator, so we are going to call it the Domenici-Moynihan 
amendment. It could be the Engler amendment, Governor Engler, because 
he said without any question, testifying before the Budget Committee, 
which I happen to chair, that ``conservative strings are no better than 
liberal strings.'' Got it? He said, ``Conservative strings are no 
better than liberal strings.''
  For what was he arguing? He was arguing for his State to have the 
authority to determine whether there should be a family cap or not and 
that they ought to be able to put a plan together on a yearly basis. 
They do not even have to get that plan on for 5 years. We are sending 
them a 5-year State entitlement, I say to my friend from New York. Each 
year they are going to get for 5 years a State entitlement.
  What Governor Engler was saying is, let us every year decide on a 
plan to use that money in the best interests of those who need welfare 
assistance. And, mind you, everyone should know that the Senator from 
New Mexico is here arguing about this aspect of a growing disagreement 
in the Senate, but I want welfare reform. And I want it to be a 5-year 
program, not a program that people can have forever. And we are on the 
road to doing that. It should not have been a lifestyle. It should have 
been a stopover point to get some assistance and training and get on 
with trying to do for yourself.
  So make no bones about that. That is what I want. And I believe the 
States are apt to do a better job than we have done. Why? Because I 
think they can experiment and innovate, and, frankly, I cannot 
understand, since that is the basis of all of this, why in the world we 
would say that to them, but when it comes to one of the most serious 
problems with reference to society today--unwed mothers and teenage 
pregnancies--we know best. We know best. And we think in our wisdom 
that if we say no cash benefits, I say to the distinguished Senator 
from New Hampshire in the chair, that somehow or another it will reduce 
the number of children born to teenagers or mothers who happen to be on 
welfare. And there is no empirical evidence that that is true.
  Mr. MOYNIHAN. None.
  Mr. DOMENICI. None. There is a bit, a smattering of evidence that 
came out of the State of New Jersey because they tried this, and that 
smattering of evidence was soon refuted by an in-depth study by Rutgers 
University which ended up suggesting that probably it had no effect at 
all with reference to the numbers of pregnancies. As a matter of fact, 
I do not know why it took so long and two studies, one they did at the 
State level and one by Rutgers.
  Can we really believe, with the problems teenagers are having and the 
societal mixup that they find themselves in, that cash benefits are 
going to keep them from getting pregnant? I cannot believe it. Frankly, 
there is no evidence of that.
  Let me tell you, there is a smattering of evidence--not a lot, I say 
to my friend from New York, but a little bit--that abortions have 
increased, that abortions have increased.
  Frankly, that is not too illogical either. If one is going to stand 
up and argue that by denying $284 or $320, just that notion out there 
will keep them from getting pregnant and having babies out of wedlock 
or as welfare mothers, why would it not be logical to assume that if 
they are pregnant somebody would say, ``You are not going to get any 
help. Why don't you have an abortion.''
  If one might work, the other might work. I do not want the second 
one. I do not want to be for a welfare program that I have to vote for 
and have on my conscience that I was part of a program to do some good 
and at the same time said to teenagers, ``Maybe you ought to get an 
abortion.'' I do not want to vote for that.
  So some people ask me: Why do you offer this amendment? After all, 
the bill before us says there can be some noncash--there can be; it is 
permissive--some noncash benefits that can be provided. Well, I want 
them to be able to provide noncash benefits, but I want them to be able 
to provide cash benefits, not mandatory but that they can.
  Now, Mr. President, from what I can tell, clearly we do not know what 
we are talking about in terms of impact when we say, tell the States 
what to do and tell them not to give one penny to a welfare mother, 
teenager or otherwise, who has another child, when we stand up and say, 
we do not want any more teenage pregnancies, we do not want any more 
welfare mothers who have another child, and then to say, and if we just 
do not give them any money, it will all stop.
  Frankly, that is the state of the debate we are in, as I see it. I 
would almost think that we would have been within our rights to say 
they have to continue to support them. But I do not choose to do that.
  My amendment is very simple and very neutral. If Governor Engler, who 
has designed one of the best welfare programs in America--and, 
incidentally, one of the best Medicaid block grant programs on waivers 
and otherwise--if he chooses to say I have a program and I want some 
cash benefits to the second child of one of these situations that we 
really pray to God would not be around, but if he says I would like to 
try that for 2 or 3 years, why should we say no? Why should we say no? 
Under the guise of what authority, what wisdom, what prerogative other 
than we know best and it might sound good? It might sound good to say 
we are not going to let them have any cash. That may really resonate 
out there very well. But I am not sure in the end that we would not be 
better off, since we are trying a program for 5 years and giving an 
entitlement, to decide that conservative strings are no better than 
liberal strings, to quote the distinguished Governor, Governor Engler, 
from the State of Michigan.
  I know my friend--and he is my friend. I just saw him arrive in the 
Chamber. The first time he started sitting at committee hearings I sat 
right by him in Banking, and I have great respect for him--and I just 
happen on this one to disagree. I think we are going to have to vote on 
it, and then obviously the House has different opinions yet from what 
we have.
  I wish to just once again say that in New Jersey, the State that 
pioneered the family cap, originally claimed through officials that 
there was a reduction in out-of-wedlock births. Subsequent studies from 
Rutgers University indicates that that cap had no significant effect on 
birth rates among welfare mothers. More ominously, in May, New Jersey's 
welfare officials announced that the abortion rate actually increased 
3.6 percent in 8 months after the New Jersey statutes barred additional 
payments to women on welfare.
  Now, I am not vouching for these statistics. That is a small 
percentage and a short period of time. But it surely points up, Mr. 
President and fellow Senators, that we really do not know. If we really 
do not know, it would seem to me we ought to err on the side of giving 
the Governors and legislatures who have to otherwise put the program 
together this option.
  If they want to put the family caps on, let them vote it in. If they 
do not want to, let them have a plan that provides otherwise. And it 
would seem to 

[[Page S 13370]]
me that we will end up having done a far better job under the 
circumstances for the poor people in this country, poor in many ways, 
not only poor financially but poor of spirit, clearly, though many of 
them do not like the situation they are in.
  We ought to continue pushing for job training and employment 
opportunities and employment because that will build a better society 
for them and that spirit that is so down might be lifted up and they 
might have a chance.
  Now, I urge that my colleagues resist putting strings back into this 
block grant. And, finally, I point out there is no budgetary impact, no 
budgetary savings attributed to the family cap provision. So I am not 
here arguing for more money. I am merely arguing that with whatever 
money the States get, let them be able to pass judgment on this aspect 
of their program, which is very, very difficult for us to comprehend in 
terms of the human aspects of it.
  And I hope I am not, by doing this, causing this bill any harm, this 
welfare bill, because anybody that listened to me here tonight knows I 
want to try this welfare reform. And I think there is room for the 
Domenici-Moynihan amendment as a part of this program as we send it 
back to the States to see if we cannot do better than the last 2 or 3 
years.
  I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. I could not have stated this case more emphatically, 
with more clarity and more charity than the Senator from New Mexico. We 
are talking about children who do not have any control over when they 
come into the world or in what circumstances.
  I would want to make one point. It need not be made in the Senate 
Chamber, but just for the record. There is a notion that somehow 
welfare families are large. They are not. They are smaller than the 
average, husband-and-wife family. The average number of children is 
1.9. They begin too early. They begin without the arrangements that 
need to accompany, ought to accompany, the beginning of a family, a 
stable husband-wife relationship. Children born to these single women 
in poverty do poorly the rest of their lives, by and large. We know so 
little about why all this has happened.
  There are efforts abroad to change this culture of dependency, to get 
the mothers on welfare off the rolls and into work. We have heard one 
Senator after another describing the programs in place in their 
States--Iowa, California, Georgia, Michigan--under the Family Support 
Act, in which States do what they think best and experiment.
  But do not put the lives of children at risk in this way. Or at least 
do not do it because the Federal Government says you have to. That 
would be unpardonable. I fear that we are making a grave mistake by 
prohibiting benefits to children born into welfare families, but if it 
is to be done, far better that the Federal Government not impose the 
requirement upon States which do not desire it. Therefore I very much 
hope that this amendment is approved tomorrow. I have every confidence 
that it will be. Ask any of us--any of us--ask what if one of our 
children was in this situation? That could happen. We know what we 
would say. These other children are our children, too.
  I hope that the Senator's amendment will be adopted when it is 
debated tomorrow morning. And, again, I note that there will be 10 
minutes equally divided at that time. I thank the Chair.
  I see the Senator from North Carolina is on the floor. He has an 
amendment, as I believe.
  Mr. FAIRCLOTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. FAIRCLOTH. I do rise in opposition to the amendment offered by my 
friend and colleague from New Mexico. I do strongly disagree with the 
approach we have taken on welfare. And I strongly believe that it has 
been a total failure and it is time we do something about it.
  We have to do something firm and strong. I have been saying, ever 
since Congress began to debate the issue of welfare reform, that unless 
we address illegitimacy, which is the root cause of welfare dependency, 
we will not truly reform welfare. Only by taking away the perverse cash 
incentive to have children out of wedlock can we hope to slow the 
increase in out-of-wedlock births and ultimately end welfare 
dependency.
  I am pleased that the bill before us today has been strict, since it 
was reported out of the Finance Committee, by the inclusion of a family 
cap provision. This prohibits the use of Federal funds to give higher 
welfare benefits to women who have more children while already 
receiving welfare. This is a sensible, commonsense step towards 
encouraging personal responsibility on the part of welfare recipients. 
And it is time that they accept personal responsibility. It would 
establish the principle that it is irresponsible for unmarried women, 
already on welfare, to have additional children and to expect the 
taxpayers to pay for them.
  Middle-class American families who want to have children plan, 
prepare, and save money because they understand the serious 
responsibility involved in bringing children into this world. I think 
it is grossly unfair to ask these same people to send their hard-earned 
tax dollars--and tax dollars are earned--to support the reckless, 
irresponsible behavior of a woman who has children out of wedlock, 
continues to have them, and is expecting the American taxpayers to pay 
for them. It is time they become responsible.
  The State of New Jersey is the only State in the Nation which has 
instituted a family cap policy denying an increase in cash welfare 
benefits to mothers who have additional children while already 
receiving welfare benefits. The evidence now available from New Jersey, 
I say to the Senator from New Mexico, as of this morning, shows that 
the family cap resulted in a decline in births to women on aid to 
families with dependent children by a 10-percent drop, but did not 
result in any significant increase--0.2 percent maybe--in the abortion 
rate.
  Information presented yesterday in Washington by Rudy Meyers of the 
New Jersey Department of Human Services indicates that in the 16 months 
after the cap was initiated, there was a 10-percent decrease in the 
rate of out-of-wedlock births. Clearly, the family cap was responsible 
for this significant decline.
  Critics claim that the policy has not caused a reduction in the 
number of illegitimate births. They claim that there is merely a delay 
in welfare mothers reporting births to the welfare office. This is not 
the case. Under the family cap, AFDC mothers still have a strong 
financial incentive to notify the welfare bureaucracy of any additional 
births. The family cap limits only AFDC benefits. They still receive 
increased food stamps and Medicaid benefits for each additional child 
born. So AFDC mothers still have a monetary incentive to notify the 
welfare bureaucracy of an additional child.
  There has been concern that the family cap would reduce out-of-
wedlock births by increasing abortions. However, the current data from 
New Jersey indicates that it did not result in any significant increase 
in the rate of abortions among these women, but did result in fewer 
children being conceived.
  The New Jersey family cap was based on the principle that the welfare 
system should reward responsible rather than irresponsible behavior. 
Few expected the modest limits on benefits to result in a significant 
drop in births to welfare mothers.
  The fact that New Jersey's limited experiment has surprisingly caused 
a drop in illegitimate births and hence in welfare dependency, merely 
enhances the case for the policy that is now in this welfare bill.
  Nevertheless, it is clear that this country must begin to address the 
crisis of illegitimacy. Today, over one-third of all American children 
are born out of wedlock.
  According to Senator Moynihan, the illegitimate birth rate will reach 
50 percent by 2003, if not much sooner. The rise of illegitimacy and 
the collapse of marriage has a devastating effect on children and 
society. Even President Clinton has declared that the collapse of the 
family is a major factor driving up America's crime rate.
  Halting the rapid rise of illegitimacy must be the paramount goal of 
welfare reform. It is essential that any welfare 

[[Page S 13371]]
reform legislation enacted by Congress send out a loud and very clear 
message that society does not condone the growth of out-of-wedlock 
childbearing and that taxpayers will not continue to open-endedly fund 
subsidies for illegitimacy which has characterized welfare in the past. 
The New Jersey family cap policy shows that welfare mothers will 
respond to this message.
  I support such a policy at the Federal level, and I strongly urge my 
colleagues to vote against the pending amendment.
  Mr. President, I yield the floor.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, with some reluctance, I rise in 
opposition to the amendment of my friend and colleague, Senator 
Domenici. First, let me make sure everyone is clear in what we have in 
the Dole amendment. The Dole language does not tie the hands of 
Governors to spend their own dollars. They can give cash benefits using 
their own money. If the states want to give additional cash assistance 
to welfare recipients who have additional children while on welfare, 
they could do so. In addition, the state can even use Federal dollars 
to provide vouchers or noncash assistance. So I think maybe there might 
have been some understanding as to what is actually in the proposal 
before us.
  The Dole amendment says that there will be no additional Federal cash 
benefits given to welfare mothers if they have additional children. In 
other words, we want to take the financial cash incentive away from 
welfare mothers for having additional children.
  Senator Faircloth mentioned, I think, the only real experiment we 
have had on the family cap is in New Jersey. Let us just look at the 
New Jersey experiment. I am not an expert on this case, but there has 
been significant homework done on New Jersey in a recent report by the 
Heritage Foundation: ``The Impact of New Jersey's Family Cap on Out-of-
Wedlock Births and Abortions.''
  First, let me mention, I compliment my friend and colleague from 
North Carolina, Senator Faircloth, because he has mentioned repeatedly 
that illegitimacy and out-of-wedlock births are a big part of our 
welfare problem, and he is right.
  I want to compliment my friend and colleague from New Mexico, because 
he also decried the facts of family breakup and the fact that so many 
kids are born out of wedlock. I happen to agree with him. It is a 
staggering statistic when you find out that over one-third of America's 
babies today are born in a single-parent home. They do not have the 
luxury of having a father and a mother. Those kids, those newborn 
babies are starting life at a significant disadvantage. The probability 
that they end up in welfare, the probability that they end up in crime 
or some other environment is much, much greater than those babies who 
are fortunate enough to be born into a family with both a father and a 
mother.
  So we need to reduce the incidence of children born out of wedlock. I 
do not think there is any doubt and I do not think anyone would contest 
that fact. If one looks at the crime statistics clearly that is true.
  Would we make a difference if we say under this legislation we are 
going to take away the cash incentive for welfare mothers who have 
additional children? New Jersey tried it. What have been the results? I 
will read from the Heritage Foundation's report. It is dated September 
6, 1995:

       New Jersey is the only State in the Nation that instituted 
     a family cap policy: denying an increase in cash welfare 
     benefits to mothers having additional children while already 
     receiving welfare. The evidence currently available from New 
     Jersey indicates that the family cap has resulted in a 
     decline in births to women on AFDC but not an increase in the 
     abortion rate.

  I will highlight a couple of other points that are in the report. It 
says:

       The cap appears to have caused an average decrease of 134 
     births per month, or 10 percent.

  So it has reduced the number of children born to welfare mothers.
  Has that caused a corresponding increase in abortion? I happen to 
agree with my colleague from New Mexico, I do not want that to happen. 
I think that would be a terrible result if it does.
  I will read from the report:

       There has been a concern that family cap in national 
     welfare reform legislation would reduce out-of-wedlock births 
     by increasing abortions. However, the data currently 
     available from New Jersey indicate that while the 
     establishment of the family cap was followed by a clear and 
     significant decrease in the number of births to welfare 
     mothers, it did not result in any significant increase in the 
     rate of abortions among these women.

  I will just read one additional line:

       The difference between pre- and post-cap abortion rate is 
     extremely small and not statistically significant. Overall, 
     the available data indicate the family cap did not cause an 
     increase in either the abortion rate or the number of 
     abortions.

  Again, I am not an expert in that. I do have confidence in the 
Heritage Foundation. I think they are a very reputable group. I read 
portions of this study into the Record for my colleagues' information.
  Again, let me repeat what we have in the underlying Dole bill. It 
says that no Federal cash benefits would be given to welfare mothers if 
they have additional children. It does not prohibit States from giving 
additional cash if they want to do so with their own money. The States 
can do so if they want to do it.
  States are given a block grant. With that Federal money, they can use 
some of that money to provide noncash benefits. Maybe those benefits 
would be in the form of food supplements, maybe in the form of 
additional medical care, maybe in the form of day care assistance, 
whatever. The State would have the option to do what they want with the 
vouchers but not cash; in other words, trying to take the additional 
cash incentive out of welfare.
  I think the Dole compromise is a good one. Again, I want to 
compliment my friend and colleague from North Carolina and also Senator 
Dole for this provision and compliment as well my friend and colleague 
from New Mexico, because I understand his sincerity, I understand his 
conviction about not wanting to increase the number of abortions, and I 
appreciate that. But I hope, in the final analysis, that his amendment 
will not be agreed to.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Mr. President, might I ask Senator Nickles, who I 
assume is managing the bill, does he know whether the other amendments 
that people were going to offer are ready?
  Mr. NICKLES. Mr. President, I will just respond to my colleague, I 
know Senator DeWine wishes to discuss his amendment. He also wishes to 
discuss the amendment of the Senator from New Mexico briefly. I am not 
sure if Senator Faircloth wanted to discuss his amendment tonight.
  Mr. FAIRCLOTH. Yes, I do.
  Mr. NICKLES. And I think Senator Daschle has two amendments, and he 
may wish to discuss his briefly as well.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I yield myself 4 minutes. I do not want 
to exceed that.
  The PRESIDING OFFICER. Time is not controlled.
  Mr. DOMENICI. I understand, but will the Chair advise me of that so I 
will not waste too much time?
  The PRESIDING OFFICER. The Chair will do so.
  Mr. DOMENICI. Mr. President, just so we make it clear, the Senator 
from New Mexico is not telling anybody, any State, any program or 
putting together a State program, any legislator, individually or 
collectively anywhere in America that they have to continue cash 
benefits to a mother who is on welfare who has another child.
  All I am suggesting is that while we are busy structuring a new 
program, we ought to take advice from people like Governor Engler, who 
has led the way in terms of Medicaid reform at the local level, and 
welfare reform, when he suggests that we ought to leave this up to the 
States.
  So all I am doing is adding to the voucher system--substituting for 
that voucher system a permissive payment of cash benefits by the 
States, if they choose that as part of their plan, and if they think 
that is better in the overall prevention and assistance to welfare 
mothers who have another child.
  I believe the argument is on the side of prudence, on the side of 
using some rationale. Let us give the program a chance to work, and let 
us not dictate 

[[Page S 13372]]
up here, as we are prone to do when we do not know the results.
  I have great confidence in the Heritage Foundation. But I have in my 
hands the summary of a study done by Rutgers University. I believe it 
is right, and I believe it is the official study on the State of New 
Jersey. It was a controlled case study, Mr. President, whereby for a 
period from August of 1993 through July of 1994, 2,999 AFDC mothers 
that were subject to the family cap were evaluated, and the percentage 
of birth rate was 6.9 percent. And the AFDC mothers not subject to a 
family cap was 1,429, and the difference was two-tenths of 1 percent, 
which is not sufficient for any conclusion to be drawn.
  Frankly, I am not surprised at that. But I think it clearly points 
out that there is some serious doubt about its efficacy with reference 
to this aspect of the results of the program. I am merely saying, once 
again, why not give the States a chance? I would assume that New Jersey 
tried this and some other States want to try it--that is, putting the 
family cap on. I would assume that if it is so right, and so right for 
our country, and for the taxpayers, that most States would try it. I 
just would like to give them the option to do otherwise, if they 
choose.
  I also want to point out that this amendment is supported by the 
National Council of Bishops, the National Conference of State 
Legislators, the U.S. Catholic Conference, the National Governors 
Association, the Women's Defense League Fund, and many others, 
conservative and liberal. I believe this is not a conservative or 
liberal issue. This is an issue of how are we going to be most wise and 
prudent as we deliver up for use this block grant money in an area that 
is strewn with heartache and problems and misery and waste. I believe 
this is a better way.
  I yield the floor.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. DeWINE. Mr. President, I rise in strong support of Senator 
Domenici's amendment. I think, as we debate welfare reform tonight and 
as we debate the amendment of my friend from New Mexico, we need to 
step back a little bit from this whole welfare debate. We are a number 
of days into this now. It is rather late in the evening. But I think we 
need to look at this from the big picture.
  Mr. President, one of the main reasons that we are on the floor 
tonight debating meaningful, true welfare reform is because our current 
welfare system simply does not work. We have decades of experience. We 
have decades of experience and examples of what does not work. Quite 
frankly, what we do not know is what does work. We are just now, in the 
last several years, beginning to see more experimentation at the State 
level. And while some of the early returns are in, frankly, it is still 
very difficult to see what works and what does not work.
  I support this bill because I believe that all wisdom does not reside 
in this Capitol Building, in this U.S. Senate, in the House of 
Representatives. And I am convinced that the only way we are going to 
genuinely reform welfare is to allow the States to truly be the 
laboratories of democracy, and to allow them to experiment, and to make 
it so that no longer will they have to come, hat in hand, on bended 
knee, to a bureaucrat in Washington, DC, to see whether they can get a 
waiver or an exemption, or if they can try something different--
something that might even work, Mr. President. That is the background 
by which I approach this amendment.
  Both sides of this particular debate on this amendment, I think, 
would agree--and do agree--about the tremendous problem, the tragedy 
that we have in this country today with the growing rate of 
illegitimacy. Senator Moynihan, who was on the floor a few minutes ago 
speaking in favor of the Domenici amendment, is probably the foremost 
experiment in the country on this issue. He forecasted, long before 
anyone else understood, the importance and significance of what the 
trend lines really meant.
  The tragedy today, Mr. President, is that in some of our major 
cities, two out of every three births are, in fact, illegitimate. On 
the national average, we are approaching one out of three. None of us 
know what the long-term consequences of this will be. But neither do we 
know what to do about it. We have heard already, just in the short 
amount of time we have debated this tonight, several different studies 
that have been cited. I will cite one in a moment. But the fact is that 
we do not have enough years of experience in New Jersey, or in any 
other State, to know what effect this family cap has. Does it increase 
abortions? Does it, in fact, cut down on the illegitimacy rate, without 
increasing abortions? We have two studies, with contradictory results. 
The jury--as we used to say when I was a county prosecutor in Greene 
County--is still out, deliberating. We do not know.
  What kind of arrogance is it for this Congress and this Senate--I use 
the word ``arrogance''--how arrogant would we be--when we do not know 
what works and what does not work, when we really do not know how to 
get at the issue of illegitimacy, certainly not from the Government's 
point of view, if the Government can do anything about it--to then turn 
around and tell every State in the Union that this is what you have to 
do; we now know best. And to put it on maybe a partisan point of view, 
now that this side of the aisle is in control, we do not like your 
mandates, but we like our mandates. Arrogance.
  I have been on this floor before talking about things where I thought 
there should be Federal mandates and where I thought there should be 
uniformity. But I did so only when I felt, at least, the evidence was 
overwhelming that we knew what worked and what did not work and the 
statistics just did not lie. In this case, we do not know what the 
statistics show. We just do not know.
  So this is one U.S. Senator who is not going to take a chance that 
this action by this body of telling every single State of the Union 
what they have to do--I am not going to take the chance that it might 
just increase abortions, or it might not work at all. It might not have 
any impact. So I am voting with my friend and colleague from New 
Mexico, and I think it is proper, as he has very well stated, to 
restate what his amendment does.
  It does not tell any of the States what to do. A State can impose a 
cap. A State can impose a very tough cap if they want to. They can 
impose a cap as New Jersey has.
  However, under Senator Domenici's amendment, we would simply say we 
are not going to tell you that you have to do that.
  Mr. President, I ask unanimous consent to be added as a cosponsor to 
the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeWINE. Let me close by reading from an article of the Sunday, 
July 2, 1995, Baltimore Sun. This references the Rutgers study that my 
friend from New Mexico has already mentioned.
  Let me directly quote from the article. ``A recent Rutgers University 
study indicates that New Jersey's family cap has had no impact on 
welfare mothers.''
  Later on in the story, this quote appears, again reading from the 
same article: ``However, the 4 percent increase in the abortion rate 
occurred over a relatively short period of time.''
  So the article points out you still cannot tell what the statistics 
really mean.
  I think we should err on the side of States. I think we should err on 
the side of caution. I think we should err on the side of allowing the 
States to truly be the laboratories of democracy.
  I am convinced that this is the only way that we are going to in any 
way begin to deal with our welfare problem. Nobody knows all the 
answers. We have suspicions about what we think might work.
  In this bill, Mr. President, we should encourage more creativity, 
more diversity, more taking of chances. Quite frankly, trying to run 
welfare from this body and the other body and the bureaucrats in 
Washington, DC, has not worked. We ought to try something else, and 
support for the Domenici amendment really, when you strip everything 
else away, is a statement that we want to turn this responsibility and 
the creativity, opportunities, back to the individual States.
  I thank the Chair. I yield the floor.
  Mr. DOMENICI. Mr. President, might I thank my good friend for his 
eloquent statement and for his support of the amendment. I yield the 
floor.

[[Page S 13373]]



                           Amendment No. 2672

  Mr. DASCHLE. Mr. President, I ask unanimous consent to call up 
amendment No. 2672.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, I know that other Senators are waiting to 
offer amendments and so I will not take a long period of time, but I 
want to talk about two amendments on which I hope we could find some 
resolution prior to the time of final passage.
  The first has to do with the need for a State contingency fund. As I 
have talked to our Governors, Republican and Democratic alike, the 
concern they have expressed to me with unanimity is the issue of what 
happens when circumstances beyond their control affect their own 
situation within the State.
  Perhaps the most illustrative example of their concern occurred 
earlier this decade during the recession that began in the late 1980's 
and went into the early 1990's. During that time, the AFDC caseload 
grew by 1 million families. That represented, Mr. President, a 26 
percent increase in the level of AFDC cases with which States had to 
contend.
  The level of monthly benefits increased by $337 million. That was a 
22 percent increase. The cumulative increase in the total benefit 
payments was $7.1 billion during the 36-month period between 1990 and 
1992.
  Unfortunately, under the pending legislation, the Dole bill, there is 
no opportunity for States to deal with circumstances like that. The 
Dole bill does provide a loan fund of $1.7 billion from which States 
can borrow to deal with contingencies of this kind. But if the level of 
monthly benefits rose $337 million, as it did in the early 90's, that 
would amount to only 5 months of benefits. In a 36 month recession like 
the one in the early 90's, you would have 31 months of recession for 
which States would have absolutely no resources at all.
  Unfortunately, many Members are very concerned about the consequences 
of a situation like that. States could be facing economic downturns, 
dramatically increased unemployment levels, natural disasters, plant 
closings--that is why there has to be a realization that States 
themselves cannot be required to shoulder this entire burden. We have 
to ensure that families in similar circumstances, regardless of where 
they may be, will receive some assistance.
  What I am offering tonight with this amendment is a couple of things. 
First of all, we would change the amendment from a loan to a grant. We 
simply recognize that in cases like this, a loan may not provide States 
with the help they truly need.
  So the grant, something I understand Governors on both sides of the 
aisle feel they need, is much more prudent and much more practical in 
responding to the circumstances we know will be faced by States at some 
point in the future.
  The difference between this amendment and what is currently found in 
the Dole bill is that in our amendment, we recognize that States cannot 
be held 100 percent accountable for circumstances beyond their control, 
not only circumstances like natural disasters but the circumstances 
that come once they borrow the money.

  What happens if States are unable to repay a loan within the 3-year-
period of time? Certainly in many recessions circumstances would not 
allow a State with very limited resources--that would be especially 
true in a State like South Dakota, where resources are not available--
to repay the loan with interest in the period of time required.
  So this recognizes, Mr. President, that there has to be a 
partnership. We recognize that because of recessions, huge natural 
disasters, or other unanticipated circumstances, no matter what level 
of funding we provide to States for welfare in the future, there are 
going to be times when that level of funding simply is not going to be 
enough to cope with the extraordinary circumstances that these States 
may have to deal with.
  We require that States maintain at least a minimal effort--the level 
they spent in 1994--if they are going to be eligible for the 
contingency fund. In other words, they have to make a good-faith effort 
to deal with their own set of circumstances.
  So, in essence, this is simply attempting to deal with the problem in 
a much more meaningful way. We recognize the need for a partnership. We 
recognize the responsibility of the Federal Government and States to 
work together to ensure that we do not exacerbate the problem when we 
get into an unforeseen situation of some kind. We recognize that, in 
many cases, smaller States in particular simply are not going to have 
the means by which to borrow the money and pay it back with interest in 
a very short timeframe.
  So this assists States in a much more meaningful way. I hope our 
colleagues recognize the need and recognize that, as Governors and 
State legislators have talked to us about their biggest concern 
regarding the transition that we will be undertaking as a result of the 
passage of this legislation, should it pass--the biggest concern they 
have is how they are going to cope with unforeseen circumstances, and 
how they are going to deal with all of the financial and economic 
ramifications of this plan when, in cases of dire need such as a 
recession, they do not have the resources or the ability to deal with 
them.
  So, this is a realistic approach to trying to deal with the problem 
in a better way, and I hope our colleagues see fit to support it 
tomorrow. I will have a lot more to say about it prior to the time we 
vote. I will return to this issue tomorrow morning.
  Mr. President, on the other amendment, I now ask unanimous consent 
that amendment No. 2672 be set aside and we call up amendment No. 2671. 
I am reading the top of my note here.
  The PRESIDING OFFICER. The Chair advises the Senator that amendment 
No. 2672 is the pending question.
  Mr. DASCHLE. I ask that be laid aside and we call up amendment No. 
2671.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2671

  Mr. DASCHLE. Mr. President, with regard to this amendment, let me 
simply say there is a realization, I think on both sides of the aisle, 
that we have a special relationship with our tribal governments, and 
that special relationship requires a special arrangement as situations 
like this are addressed. It is very important that we recognize the 
issue of tribal sovereignty, and also the need for tribes to take 
responsibility for addressing the serious problems that they face, both 
socially and economically.
  The Dole bill would require that funding be provided to tribes out of 
the allocation given to each State. This amendment simply says we are 
going to set aside 3 percent of the resources allocated nationally 
before the money is given to the States. The allotment formula for 
distributing money from the set-aside would be determined by the 
Secretary, but it would be based on the need for services and on data 
common to all tribes, to the extent that is possible.
  We also allow tribes to borrow from the contingency loan fund. Tribes 
would be able to borrow up to 10 percent of their grant allocation, and 
the Secretary may waive the interest requirement or extend the time 
repayment period at times when circumstances would warrant.
  I do not know that there is any place in the country more deserving 
and more in need of special attention than reservations. The poverty 
rate for Indian children on reservations is three times the national 
average, 60.3 percent. Per capita U.S. income is about $14,420. Per 
capita income on the reservations is a mere $4,478. Mr. President, 36 
percent of Indian children under 6 live in homes today without even a 
telephone. In South Dakota, over half of all Indian children live in 
poverty. Mr. President, 63.8 percent of all children on AFDC in South 
Dakota are Native American.
   Shannon County, the location of Pine Ridge Reservation, is the 
poorest county in the country. Todd County, the location of the Rosebud 
Reservation, is the fourth poorest county in the country.
  Unemployment on reservations is four to seven times the national 
average. In South Dakota, unemployment rates on the reservations range 
from 29 percent to 89 percent. There are a lot of reasons for that, no 
different in South Dakota, perhaps, than other States. But the barriers 
to work are there. Serious problems that we have to address, problems 
having to do with the lack of 

[[Page S 13374]]
skills, the lack of education--these are problems that I hope we can 
begin to resolve much more effectively with meaningful welfare reform.
  States have been running these programs for many years; tribes have 
not. In many places tribes have attempted to work with States to create 
an infrastructure for running these programs. Frankly, in many places 
it does not exist yet. This is something in which tribes will need to 
invest. Tribal programs run on a smaller level and, this will take some 
overhead. Additionally, we have not always had a proportionate level of 
assistance from the private sector. Less than one-tenth of 1 percent of 
Combined Federal Campaign contributions go to Indian programs. Less 
than two-tenths of 1 percent of foundation grant money goes to support 
tribal human services.
  So, Mr. President, we need to ensure that we get an adequate level of 
assistance from States and the Federal Government. And I am not talking 
necessarily about only resources. We are talking about an 
infrastructure. We are talking about ways with which to make the money 
that we already spend work better, providing job skills and providing 
good education, providing help, providing a workfare opportunity. 
Certainly there is a need for that.
  There is ample precedent in current law for earmarking funds for 
native Americans. I believe a set-aside under this legislation is 
appropriate.
  We need to set this money aside for tribal governments. The Federal 
Government has a trust responsibility to assure appropriate funding. I 
believe this amendment will do it.
  I yield the floor.
  Mr. NICKLES. Mr. President, I appreciate my friend and colleague, 
Senator Daschle, for sending his two amendments. I know Senator DeWine 
has an amendment. Let me make a couple of brief comments concerning 
both Daschle amendments.
  One concerning the 3-percent set aside for Indian tribes--I might 
mention that for Indian welfare programs under the Dole bill we have a 
provision but it would be allocated strictly on the ratio of AFDC 
numbers. I am not sure exactly what the number is. I think it is 
something like not 3 percent but more like 1.7 percent. I will have 
that figure more accurately in the morning. So we are talking about a 
lot of money.
  I will certainly concur with the gist of my colleague's amendment, 
that we have a lot of Indian welfare programs that are not working. I 
am not sure that money is necessarily the answer. My State happens to 
have more Indian population than any State in the Nation. I have seen a 
lot of Indian welfare programs that have not worked, again not 
necessarily because of a lack of money. But I will try to have those 
facts and statistics for tomorrow for debate.
  Also, I would like to make a brief comment concerning the first 
amendment. That is the amendment calling for setting aside and 
appropriating money for contingency funds, that contingency fund being 
in the form of a grant, not in the form of a loan. Under the Dole 
provision, we have over $1 billion set aside for loans that the States 
could borrow from but they would have to pay it back within 3 years. 
Under the Daschle amendment it would appropriate $5 billion over 7 
years for a contingency fund that says to States, if you have a higher 
unemployment rate than you did in 1994, you could qualify, and, if you 
have more children receiving food stamps than you did in 1994, you 
could qualify, and, if you are spending at least as much money as you 
are spending in 1994. In other words, a 100-percent maintenance of 
effort. Then you could qualify.
  So it is kind of an idea that here is more money for more welfare. I 
do not see that as reform. I understand the States might have some 
problem.
  It was also said that there would be distributed in the same formula 
that we do with Medicaid, match their rates; therefore, for every 
dollar they spent the State would spend three. They would have an 
additional dollar grant from the Federal Government, almost an 
incentive for the State to spend more money on welfare. I am afraid 
that might increase our dependency on welfare, and maintain welfare as 
a life cycle, not reverse it. Many of us are trying to reverse that. We 
are trying to break the welfare cycle, and reduce welfare dependency.
  Mr. President, I know my friend and colleague from Ohio is supposed 
to preside over the floor, and I also know that he has an amendment 
that he wishes to discuss briefly. Looking at the list, I also see that 
Senator Faircloth is on the floor and he has an amendment. I believe 
Senator Boxer has an amendment; all of which we are trying to have 
discussed this evening so we can have them voted on tomorrow.
  So I will yield the floor in anticipation of the Senator from Ohio 
who will bring up his amendment.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. DeWINE. Mr. President, I inquire of the Chair what the pending 
business is.
  The PRESIDING OFFICER. When the Senator from Ohio calls his amendment 
up, it will be the pending business.
  Mr. DeWINE. Thank you, Mr. President.


                           Amendment No. 2518

  Mr. DeWINE. Mr. President, I call up my amendment No. 2518, the 
caseload diversion amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Ohio [Mr. DeWine] proposes an amendment 
     numbered 2518.

  Mr. DeWINE. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in the Friday, September 8, 
1995, edition of the Record.)
  Mr. DeWINE. Mr. President, I ask unanimous consent to add the name of 
Senator Kohl as a cosponsor of this amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeWINE. Mr. President, the purpose of our amendment was to make 
sure the States tackle the underlying problem of the welfare system. 
Too often, welfare ends up being quicksand for people--quicksand 
instead of a ladder of opportunity. The underlying legislation before 
us will help change this by creating a real work requirement that will 
help boost welfare clients into the economic mainstream of work and 
opportunity.
  Mr. President, we need to help people get off of welfare. One very 
important way we can do this is by helping them avoid getting on 
welfare in the first place. That brings me to the specific proposal 
contained in my amendment.
  This amendment will give States credit for making real reductions in 
their welfare caseload--not illusory reductions based on ordinary 
regular turnover, nor, for that matter, reductions based on changes in 
the eligibility requirements. No. What we are talking about is real 
reduction in caseload.
  Let me cite a statistic, Mr. President. Since 1988, over 14 million 
Americans have left the AFDC rolls. That is the good news. Now for the 
bad news. Over the same period there has not been a reduction in the 
welfare caseload. In fact, there has been a 30 percent increase in the 
net welfare caseload. More people are coming on welfare every day than 
are getting off.
  So it is clear that our problem is not just a problem of getting 
people off welfare. We also have to slow the rate of those going on 
welfare.
  We have to make sure, Mr. President, that we keep our eye on the 
ball, and the ball in this case is keeping people out of the culture of 
welfare dependency and off welfare.
  Under the bill, States will have to meet a very specific work 
requirement, and that is good. But I think this policy will have an 
unintended side effect--a side effect that none of us will want. It is 
a side effect I believe my amendment will cure.
  Mr. President, if there is a work requirement, States obviously have 
an incentive to meet that requirement. If States face the threat of 
losing Federal funding for failing to meet the work requirement, they 
could easily fall into the trap of judging their welfare policies 
solely by the criterion of whether or not they help meet the specific 
work requirement.
  What we have to remember is that the work requirement is not an end 
in 

[[Page S 13375]]
and of itself. Our goal rather is to break the cycle of welfare 
dependency. We have found that helping people before they ever get on 
AFDC--through job training, job search assistance, rent subsidies, 
transportation assistance, and other similar measures--all of these 
things are cheaper to do. There are cheaper ways of doing this than 
simply waiting for the person to fall off the economic cliff and become 
a full-fledged welfare client.
  One positive measure, Mr. President, some States have taken, a 
measure that we should encourage, is remedial action, early 
intervention to help people before they go on the welfare rolls. In the 
health care field we call this prevention. In welfare, as in health 
care, it is both cost effective and the right thing to do.
  Mr. President, the last thing we want to do in welfare reform is to 
discourage this kind of prevention program. Just the contrary. We in 
this Congress through this bill should try to encourage the States to 
do this. But under the current bill, as currently written, States are 
given no incentive to make these efforts to help people. If anything, 
there is a disincentive.
  If a State makes an active, aggressive, successful effort to help 
people stay off welfare, then the really tough welfare cases will make 
up an increasing larger and larger portion of the remaining welfare 
caseload. That will in turn make the work requirement every year 
tougher and tougher to meet.
  Under the bill, as currently written, without my amendment, there is 
an incentive to wait to help people--to wait until they are on welfare. 
Then the States can take action, get them off welfare, and get credit 
for getting people off welfare.
  Mr. President, if the States divert people from the welfare system, 
keep them off, stop them from ever going on by helping them, the people 
who stay on welfare will tend to be more hard-to-reach welfare clients. 
And that will make it more difficult for the States to meet the work 
requirement.
  That really is exactly the opposite, Mr. President, of what we should 
be trying to do. My amendment would eliminate this purely perverse 
incentive.
  My amendment would give States credit, credit toward meeting the work 
requirement if they take steps to help before they go on welfare--and, 
in doing so, keep those people from falling into the welfare trap.
  Helping citizens stay off welfare is just as important as making 
welfare clients work, and just as important as getting people off 
welfare. Indeed, the reason we want to make welfare clients work, of 
course, in the first place is to help them off of welfare. But--there 
is a very important provision in my amendment--we cannot allow this new 
incentive for caseload reduction to become an incentive for the States 
to ignore poverty, and to ignore the problem.
  Under my amendment, a State will not--let me repeat--will not get 
credit toward fulfilling the work requirement if that State reduces the 
caseload by changing the eligibility standard.
 They get no credit for that. A State will get credit toward a work 
requirement by reducing caseloads through prevention and early 
intervention programs that help people stay off welfare in the first 
place.

  Ignoring the problem of poverty will not make it go away. Arbitrarily 
kicking people off of relief is not a solution to welfare dependency. 
States should not--let me repeat--not get credit under the work 
requirement of this bill for changing their eligibility requirements.
  Welfare reform block grants are designed to give States the 
flexibility they need to meet their responsibilities. They must not 
become an opportunity for the States to ignore their responsibilities. 
States need to be rewarded for solving problems. Giving States credit 
for real reductions in caseload will provide this reward.
  I believe my amendment will yield another benefit. It will enable the 
States to target their resources on the most difficult welfare cases, 
the at-risk people who need very intensive training and counseling if 
they are ever, ever going to get off welfare.
  It will not do us any good as a society to pat ourselves on the back 
because people are leaving AFDC if at the very same time an even 
greater number of people are getting on the welfare rolls and if the 
ones getting on are an even tougher group to help than the ones who are 
getting off.
  The American people demand a much more fundamental and far-reaching 
solution. They demand real reductions in the number of people who need 
welfare. Two States, Mr. President, Wisconsin and Utah, have really led 
the way with the kind of prevention programs that I have been talking 
about. Other States, including my home State of Ohio, are starting to 
implement this type of program, a prevention program, to help people 
before they literally drop off the cliff and go down into the abyss of 
welfare, some of them never ever to climb out. As part of this welfare 
reform legislation, I believe we have to encourage States to take this 
type of remedial action, to take this type of action that will in fact 
make a difference in people's lives.
  Reducing the number of people who need welfare in this country is 
going to be a very tough task, but it is absolutely necessary that we 
do it. The issue must be faced. I believe it will be faced with all the 
creativity at the disposal of the 50 States, the 50 laboratories of 
democracy.
  How are States going to do it? There are probably as many ways of 
doing it as there are States. There is no single best answer. That is 
the key reason why we need to give the States flexibility to 
experiment.
  In Wisconsin, for example, the Work First Program, with its tough 
work requirement, has reduced applications to the welfare system. That 
is a promising approach, reducing the number of out-of-wedlock births 
and getting rid of the disincentives to marriage.
  The bottom line is simply this: We have to solve the problem and not 
ignore it. States should be encouraged to take action and to take 
action early to keep people off welfare, to help them before they drop 
down into that welfare pit.
  This is the compassionate thing to do. It is also the cost-effective 
thing to do. That is why I am urging the adoption of this amendment.
  I thank the Chair.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. NICKLES. Mr. President, I believe the Senator from North Carolina 
will be next in line according to the unanimous-consent agreement.


                           Amendment No. 2608

  Mr. FAIRCLOTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mr. FAIRCLOTH. I call up my amendment 2608.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from North Carolina [Mr. Faircloth] proposes an 
     amendment numbered 2608.

  Mr. FAIRCLOTH. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in the Friday, September 8, 
1995, edition of the Record.)
  Mr. FAIRCLOTH. I thank the Chair.
  I rise to offer an amendment to provide funding for abstinence 
education.
  It is a sad fact that our society is being destroyed by soaring out-
of-wedlock birth rates. As Senator Moynihan has pointed out, in areas 
of some cities, illegitimacy rates are approaching 80 percent. 
President Clinton has warned us of the close link between family 
collapse and crime, and he has warned us of the link between welfare 
and illegitimacy.
  What we need is a policy which promotes responsible parenthood, a 
policy which says to our children: Do not have a child until you are 
married; do not have a child until you and your husband have enough 
education, work experience, and will be able to support that child 
yourself and not expect the taxpayers and the Federal Government to do 
so; do not have a child until you are old enough and mature enough to 
be the best parent you are capable of being.
  What my amendment would do is take a tiny portion of the enormous 
amount of money that this bill spends on job training programs and put 
it toward a program which would actively and deliberately educate 
children to abstain from premarital sex.
  Most liberal welfare programs funded by the Congress through the 
years have 

[[Page S 13376]]
tried to pick up the pieces after the child has already been born, and 
they have failed miserably. Does it not make common sense to prevent 
out-of-wedlock births from occurring in the first place, those that 
taxpayers are expected to support?
  The fact is abstinence education programs work. This is a proven 
fact. Imagine if we saw nationwide the success we have seen in Atlanta 
with abstinence education--a real miracle. In Atlanta, abstinence 
education has reduced sexual activity among young teenagers by over 75 
percent. The program in Atlanta is called Preventing Sexual 
Involvement, and it is specifically targeted to inner-city children. 
The results have been a reason for optimism and a new belief in what we 
can do to change this whole sad subject of illegitimacy and social 
decay in our inner cities.
  The bottom line is that only 1 percent of the inner-city girls who 
participated in the program became sexually active compared to 15 
percent of the same girls, the same communities not involved in the 
program. This kind of result, multiplied nationwide, literally could 
turn the country around, and that is not an exaggeration. It does work.
  Senator after Senator has come to the floor and talked about the 
shame and failure of our welfare programs. Time and time again we hear 
everyone agree that welfare is broken. This is an opportunity and a 
chance to literally turn the issue around and vote to discourage the 
activities which have caused the problem.
  As currently written, the Dole bill will spend over $35 billion in 
the next 5 years on job training and vocational education, but not one 
single penny to promote abstinence education. We will spend a fortune 
trying to reduce welfare dependency, but not one penny trying to 
prevent the out-of-wedlock births that cause welfare dependency in the 
first place.
  Again, the amendment that I have is simple. It provides $200 million 
per year for abstinence education. That amounts to about 3 cents out of 
every dollar that this bill will spend on job training and vocational 
education. We take that 3 cents and spend it on abstinence.
  We have all talked about the crisis of illegitimacy and the collapse 
of the family. Here is an opportunity to do something about it with 
this small amount of money that could make a difference, that could 
turn the problem around.
  Mr. President, I ask for the yeas and nays on my amendment in 
accordance with the previous order.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I appreciate the Senator from North 
Carolina for his amendment and also for his bringing it at this late 
hour, as well as the Presiding Officer of the Senate for his offering 
his amendment. I congratulate both Senators for the work they are doing 
and compliment them for their initiatives.
  I believe that the last amendment that will be discussed tonight in 
the Senate is the amendment to be offered by the Senator from 
California, Senator Boxer.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER (Mr. DeWine). The Senator from California.


                           Amendment No. 2592

  Mrs. BOXER. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside and we take up amendment No. 2592.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Thank you very much, Mr. President.
  I hope we will have bipartisan support for this amendment. Right now 
in the Dole bill we keep a separate federally means-tested program for 
abused, neglected and abandoned children. The title IV-E foster care 
system provides a refuge for children in abusive families, and the Dole 
bill continues this Federal policy. And I strongly agree with that. I 
am glad we do not put that into a block grant and leave these kids to 
fend for themselves because, Mr. President, I know how much you care 
about kids. If we have to get a child out of an abusive home situation, 
we want to give a little assistance to the foster family or the 
adopting parents.
  Now, there is one group of children left out in the cold in the 
current Dole bill. And that is legal immigrant children who have been 
brought into this country completely in accordance with all the laws. 
Unfortunately, the way that the bill is now drawn, they would be 
ineligible for Federal foster care and adoption assistance. Now, we 
know that the Dole bill restricts benefits to legal immigrants, and 
there are certain exemptions to that. Such things as immunizations, 
emergency medical care, and emergency disaster relief are exempted. I 
believe we should exempt foster care and adoption assistance.
  Now, Mr. President, we know that children are placed into foster care 
because a judge determines that there is a serious risk of the child 
being hurt in the current home. So I know that my colleagues on both 
sides of the aisle do not want to single out legal immigrant children 
and say that we are going to walk away from them. Under the current 
bill--and I hope it is just an oversight, Mr. President--legal 
immigrant children would be made ineligible for title IV-E foster care 
or adoption assistance due to the fact that there is no exemption for 
it.
  We know that title IV-E foster care and adoption assistance helps at-
risk children get placed in the homes where they will be safe from 
abuse and neglect. The adoption assistance is used to help families pay 
for special needs that the children have. The payments assist adopting 
families meet the cost incurred due to their new child's physical or 
emotional disability. Often, the child's disability is a direct result 
of abuse. Title IV--E foster care assistance helps pay for a child's 
room and board whether it is in a group home or a family.
  So, to sum up the point of my amendment, what we are saying is, those 
of us who support my amendment, we are very pleased that the Dole bill 
does keep a separate program for foster care and adoption assistance 
but we need to make sure it goes to these legal immigrant children.
  Mr. President, in the interest of time, let me say this to you. Just 
because we do not have the money available for these legal immigrant 
children who are abused and neglected and sometimes abandoned does not 
mean the problem will go away. I think you and I know what will happen. 
We both come from local government. And the local people who are 
compassionate, the local governments, will move in. And that could be a 
very large unfunded mandate. For example, in Los Angeles, Los Angeles 
County there are an estimated 1,500 legal immigrant children currently 
in their system. And if they had to pick up the tab for all of those 
children, it would be very, very difficult. And you would find that, I 
am sure in your cities as well. So, again, I hope there will be strong 
bipartisan support to correct what I hope was a legislative oversight.
  I feel very strongly the Senate should show its support for 
protecting abused and neglected children by supporting this amendment. 
And I think we ought to think about it. A lot of our parents were legal 
immigrants. And a lot of the people we know today are legal immigrants 
who waited in line, were very patient, and came to this country. It 
seems to me since Senator Dole did find in his heart his other 
exemptions such as the ones I have mentioned--emergency medical 
services, emergency disaster relief, school lunch, and child 
nutrition--I hope this was just an oversight. And that these young 
children would be able to go into a foster home, be adopted by a loving 
family and that those families could get the benefit of the program 
that all other families get when they adopt children or take children 
into foster homes.
  I do not know, Mr. President, if it is necessary to ask for the yeas 
and nays now.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mrs. BOXER. Thank you very much, Mr. President.
  In the interest of time, I will see you in the morning and have 
another 5 minutes to explain this amendment. 

[[Page S 13377]]

  I yield floor.
                           Amendment No. 2542

  Mr. McCAIN. Mr. President, the welfare reform bill imposes upon the 
States a 6-month time limitation for any individual to participate in a 
food stamp work supplementation program. This amendment would replace 
the 6-month limit with a 1-year limit. It would continue to allow an 
extension of this time limitation at the discretion of the Secretary.
  Arizona's current cash-out of food stamps under its EMPOWER welfare 
program allows individuals to participate in subsidized employment for 
9-months with an option for a 3-month extension. There is no reason 
that the State should have to make another special request to the 
Secretary in order to maintain this policy. This amendment would allow 
States with such policies to continue their programs without 
disruption.
  Ideally, I would prefer that the States be able to plan their work 
supplementation programs without being constrained by requirements 
imposed by the Federal Government. The States know best how to 
structure their programs to help their citizens become employable. 
Thus, my preference would be to eliminate the time limitation 
altogether.
  However, I recognize that many of my colleagues are insisting upon a 
time limitation for individuals under the program, and I am pleased 
that we were able to come to an agreement that meets the needs of 
Arizona and other States that wish to pursue similar policies. In the 
future, I plan to revisit this issue to allow States maximum 
flexibility to plan their work supplementation programs.
  Mr. President, a primary objective of this bill is to encourage the 
States to innovate. The best way to achieve this is to get out of their 
way. We should not impose requirements limiting the States' flexibility 
unless there is a compelling reason to do so. This amendment will give 
States additional leeway to innovate in their work supplementation 
programs and will thereby help them achieve their employment 
objectives.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.


     Amendments Nos. 2511, 2674, 2675, 2574, 2585, 2555, 2570, 2480

  Mrs. HUTCHISON. I ask unanimous consent to call up and adopt the 
following amendments, en bloc. These amendments have been cleared by 
both the majority and the Democratic managers of the bill.
  I further ask consent that any statements accompanying these 
amendments be inserted at the appropriate place as if read. Those 
amendments are as follows: Abraham amendment No. 2511; McConnell 
amendments Nos. 2674 and 2675; Domenici amendment No. 2574; Stevens 
amendment No. 2585; Bryan amendment No. 2555; Leahy amendment No. 2570; 
and Feingold amendment No. 2480.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  So, the amendments Nos. 2511, 2674, 2675, 2574, 2585, 2555, 2570, and 
2480, en bloc, were agreed to.
  Mrs. HUTCHISON. I move to reconsider the vote by which the amendments 
were agreed to, en bloc, and I move to lay that motion on the table.
  So, the motion to lay on the table was agreed to.
                           amendment no. 2511

  Mr. ABRAHAM. Mr. President, I rise today to offer a sense-of-the-
Senate resolution, amendment No. 2511. This resolution would state our 
commitment to passing enterprise zone legislation in this session of 
Congress. I believe this commitment is crucial because, as we debate 
welfare reform, we also must find ways to create the jobs necessary to 
rescue people from the welfare trap.
  Enterprise zones are a crucial part of our effort to help poor people 
in this country. Too many Americans far too long have been trapped in 
lives of desperation. They have been left without the support of their 
communities, without meaningful lives and without hope of good jobs and 
economic advancement.
  Many of our urban centers in particular are saddled with high levels 
of poverty, high rates of welfare dependency, high crime rates, poor 
schools and joblessness. Indeed, Mr. President, half of the people who 
reside in our distressed urban areas live below the poverty line.
  All of these factors add to the sense of hopelessness in distressed 
areas. All of them have been made worse by ill-conceived Federal 
policies, including taxes that discourage investment, regulations that 
punish innovation and a welfare system that punishes work and fosters 
dependency.
  One step toward restoring hope to our distressed areas, Mr. 
President, is the welfare reform measure we are debating today. But, as 
we work to end welfare as we know it, we must give careful thought to 
what we want to have replace it. We must institute policies that will 
further our fundamental goal of providing Americans with the 
opportunity to get off of welfare and into decent jobs.
  This requires pro-growth policies that will spawn greater economic 
activity and job creation. This requires enterprise zones.
  The concept of enterprise zones has been with us for some time. 
Former Congressman Jack Kemp introduced legislation on the subject in 
1978. The Senate has endorsed and enacted the concept in one form or 
another over the years.
  We have endorsed the concept because it is clear that enterprise 
zones will spur investment, entrepreneurship, public spirit and the 
development of skills necessary for participation in our market 
economy.
  To give credit where it is due, President Clinton has instituted an 
enterprise zone program in an attempt to help distressed areas.
  The Clinton plan sets up nine empowerment zones in which businesses 
quality for an employment tax credit and an increase in expending, and 
95 enterprise communities that quality for $280 million social services 
block grants.
  But the plan in my judgment provides for no significant tax 
incentives to spur investment entrepreneurship and job creation. And 
its social services block grants are based on the failed notion that 
Government can help create jobs and prosperity in America's inner 
cities.
  We have spent over $5 trillion on social services, and our distressed 
areas have only grown worse. Why? Because Government cannot create 
wealth. The best it can do is unleash our citizens' drive and 
initiative to succeed in the market economy.
  The last time we freed up capital and the entrepreneurial spirit 
minority business--and the American economy--greatly benefitted. Under 
Ronald Reagan's progrowth policies, from 1982 to 1987 the number of 
black-owned firms increased by nearly 38 percent to a total of 425,000. 
During the same period Hispanic-owned firms surged by 83 percent, 
according to the Wall Street Journal. Economically distressed areas 
contain disproportionate numbers of minorities. Thus these figures show 
an undeniable increase in economic opportunity in those areas.
  Unfortunately, in 1986 the capital gains tax rate was increased by 65 
percent. And that huge increase brought us 4 straight years in which 
Americans started fewer businesses each year than the year before. The 
result, of course, was less job creation and less economic opportunity, 
particularly among minorities in our distressed areas.
  To reverse this dynamic, Senator Lieberman and I have coauthored the 
Enhanced Enterprise Zone Act of 1995. This act contains provisions, 
called for in the sense-of-the-Senate resolution, designed to help 
distressed areas.
  It provides Federal tax incentives that expand access to capital, 
increase the formation and expansion of small businesses and promote 
commercial revitalization.
  It includes regulatory reforms that allow localities to petition 
Federal agencies for waivers or modifications of regulations to improve 
job creation, community development and economic revitalization.
  It includes home ownership incentives and grants to encourage 
resident management and ownership of public housing.
  Finally, it includes a school reform pilot project to provide low 
income parents with options for improved elementary and secondary 
schooling in the designated zones.
  The bill recognizes that private enterprise, not Government, is the 
source of economic and social development.

[[Page S 13378]]

  We know the program will work because 35 States and the District of 
Columbia already have enterprise zones that have produced over 663,000 
new jobs and $40 billion in capital investment. And the concept has 
been endorsed by the National Governors' Association, the Conference of 
Black Mayors, the Council of Black State Legislators and the U.S. 
Conference of Mayors.
  Taken together, these incentives for investment, entrepreneurship, 
home ownership and skill development will bring the economies in 
distressed areas back to life. They will encourage full participation 
in our market economy and public interest in the local neighborhood. 
The result will be economic growth and, more important, new jobs.
  It is my hope that a positive vote on this resolution will put this 
Senate on record in favor of creating jobs and opportunity. The sense-
of-the-Senate resolution I, with Senator Lieberman, am proposing will 
in my view spur us to enact legislation to strengthen enterprise zones. 
In this way it will increase the chances for people in distressed areas 
to get off of welfare and into decent jobs. Strengthened enterprise 
zones will add to the hopes of our people, the vitality of our cities 
and the proper functioning of our economy.
  I urge your support for this resolution.
  Mr. President, I ask unanimous consent that an excellent article on 
the Abraham-Lieberman enterprise zone bill by Mr. Stuart Anderson of 
the Alexis de Tacqueville Institution appear in the Record following my 
remarks.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Connecticut Post, Sept. 10, 1995]

       Lieberman Bill Takes Right Approach to Helping Our Cities

                          (By Stuart Anderson)

       ``Poverty is the open-mouthed, relentless hell which yawns 
     beneath civilized society.'' Henry George wrote these words 
     in 1879 and they remain true today. Unfortunately, many of 
     the techniques we have tried to alleviate suffering and break 
     the cycle of poverty have fallen far short of their goals. 
     These programs--the core of the Great Society--not only have 
     failed to revitalize cities, they have likely made the 
     situation worse.
       A new, more comprehensive approach is needed to renew the 
     blighted portions of America's cities. Past programs have 
     relied on cash payments to the poor, government job training, 
     and even government-provided jobs. The key, however, is to 
     create wealth in the inner city, and to understand that 
     wealth cannot be created by government but only by the 
     private sector.
       This understanding of wealth creation is at the core of a 
     promising new bill introduced by Connecticut U.S. Sen. Joseph 
     I. Lieberman and Sen. Spencer Abraham, R-Mich. The Enhanced 
     Enterprise Zone Act of 1995 would establish a host of 
     incentives and reforms that would be added to those Congress 
     approved in the nine Empowerment Zones and 95 Enterprise 
     Communities in 1993. That legislation got bogged down in 
     details and without reform cannot achieve the goals that so 
     many of us have for improving life in the inner cities.
       The reforms in Abraham and Lieberman's bill fall into three 
     categories: tax incentives, regulatory reform and educational 
     initiatives.
       First, on tax incentives, the bill would establish a zero 
     capital gains rate on the sale of any qualified investment 
     held five years or longer in the zone. It would allow 
     additional income deductions to purchase qualified stock in 
     companies located in an enterprise zone. The bill would 
     double what small business owners in these zones could 
     expense and would provide a limited tax credit for 
     renovations of low-income properties. These are the types of 
     incentives to encourage entrepreneurs to plant roots for the 
     long haul.
       Second, the senators realize that regulations, not just 
     high tax burdens, inhibit job creation in the inner city. The 
     bill would allow local governments to request waivers and 
     modifications of environmental and other regulations that a 
     mayor finds to be counterproductive and hindering job growth. 
     Federal agencies could disapprove requests at their 
     discretion but powerful political pressure could be brought 
     to bear on the bureaucracy that might create fascinating 
     experiments at the local level. Another reform of federal 
     regulations, based upon Jack Kemp from his stay at the 
     federal Department of Housing and Urban Development, would 
     provide both incentives and grants for homeownership and 
     resident management of public housing, vacant and foreclosed 
     properties, and financially-distressed properties.
       Third, the bill recognizes that lack of educational 
     opportunity can subject children to a life without a real 
     economic future. The legislation therefore would create in 
     the nine Empowerment Zones, two supplemental empowerment 
     zones, and in Washington, D.C., a pilot school choice 
     program. This would allow parents with a low income to send 
     their children to public or private schools of their 
     choosing. Such parents would receive a certificate that could 
     be used to pay a portion of tuition and transportation costs 
     for elementary and high school children.
       Already the debate over affirmative action has grown 
     divisive, especially because many African-Americans believe 
     that what few opportunities are available in the inner cities 
     will be snatched away from them by changed federal policies 
     or new court rulings. But as the Democratic Leadership 
     Council's Progressive Policy Institute report on affirmative 
     action notes, ``For blacks trapped at the bottom of the 
     economic pyramid, the main obstacle is not vestigial 
     discrimination but the breakdown of critical social and 
     public institutions, chiefly family and schools. Can anyone 
     doubt that dramatically lifting their academic and 
     occupational skills would have a greater impact on their life 
     prospects than maintaining preferences that mostly benefit 
     middle-class blacks, Hispanics, and women?
       Let's get beyond the divisiveness of affirmative action, 
     which courts are already ruling to be unconstitutional. 
     Instead, we should look toward constructive solutions that 
     are more appropriately premised on a commitment to limited 
     government, personal responsibility, and a free market 
     economy. The tax incentives, regulatory reform, and school 
     choice initiatives in the Abraham-Lieberman bill will help 
     unleash the power of countless individuals. And while in the 
     past we have ignored this truism at our peril, it should be 
     remembered that only individuals and businesses, not 
     governments, can create the wealth that will lift people out 
     of poverty.

  Mr. LIEBERMAN. Mr. President, I am pleased to join with the Senator 
from Michigan in proposing this important statement of Senate support 
for an enhanced enterprise zone effort.
  From the time I came to the Senate in 1989, I have been proud to work 
with people like Jack Kemp in advocating enterprise zones for America's 
troubled neighborhoods. He has been a true visionary, not only on the 
subject of enterprise zones, but on the whole question of what America 
must do to redeem the promise of economic opportunity for all 
Americans.
  We made progress on the road toward empowering poor Americans and 
revitalizing impoverished communities in 1993 when we passed 
legislation creating empowerment zones and enterprise communities in 
more than 100 neighborhoods across this country. While a handful of 
empowerment zones received fairly substantial incentives through the 
1993 legislation the enterprise zones received very little in the way 
of incentives. Still, when all is said and done, enactment of this 
legislation was a fundamental change in urban policy. It was a 
recognition that Government did not have all the answers to the ills of 
poverty in this country. It recognized that American businesses can and 
must play a role in revitalizing poor neighborhoods. Indeed, American 
business involvement is essential if we are to break the cycle of 
poverty, drug abuse, illiteracy, and unemployment.
  The 1993 breakthrough was a good start but it did not go far enough. 
That is why I have joined with the Senator from Michigan in announcing 
an Enhanced Enterprise Zone Act of 1995. The sense-of-the-Senate we are 
considering today recognizes the need for this Senate to consider an 
enhanced enterprise zone package.
  I urge my colleagues to support this amendment.
  

                          ____________________