[Congressional Record Volume 142, Number 1 (Wednesday, January 3, 1996)]
[Senate]
[Pages S14-S18]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE GOVERNMENT SHUTDOWN

  Mr. SARBANES. Mr. President, we have witnessed over the last few 
weeks an unprecedented effort to use a coercive tactic in order to 
achieve a particular substantive result--in my judgment, a totally 
irresponsible and outrageous tactic; and, this is, to hold Government 
hostage by closing it down and, therefore, not only depriving the 
Federal workers of the opportunity to 

[[Page S15]]
render service but depriving the American people of the service which 
they render. And I am going to develop here in a moment the impact this 
is having in the private sector.
  There is a tendency to think primarily about the Federal workers who 
cannot come to work and cannot get paid. And that is true, and that is 
creating a tremendous hardship and tremendous crisis in many, many 
families all across the country. But a similar crisis is being created 
in the private sector which interrelates with the Government in terms 
of its economic activity.
  The Government ought to be allowed to go about its normal activities 
while this struggle and debate over a 7-year budget plan takes place. 
There are very important fundamental differences over that budget plan. 
Very deep cuts in Medicare are proposed by some. There is strong 
resistance to that. At the same time, those who want the deep cuts in 
Medicare want to give large tax breaks. A lot of people do not see the 
sense in giving large tax breaks primarily at the upper end of the 
income scale at the same time that you are going to be imposing cuts in 
medical services on people with very modest means.
  In all of this there is an effort in effect to create chaos, to hold 
the Government hostage as a bargaining tactic; a coercive bargaining 
tactic.
  The majority leader yesterday here in the Senate, Senator Dole, when 
we passed the clean continuing resolution which would allow the 
Government to resume its normal activities for a temporary period of 
time--workers would be back at work, they could do their job, people 
could get services, workers would be paid--said, and I quote him: 
``People have been gone from their jobs long enough. Enough is 
enough.''
  Today, the Washington Post in an editorial said, ``They ought to 
reopen the closed agencies while they talk, since in fact they do 
finally seem to be talking. It's a nasty game, the shutdown, and it's 
gone on long enough.''
  At the outset of that editorial the Washington Post said, and I quote 
them:

       Hostage-taking is an ugly business. It doesn't matter what 
     the cause. Innocent people are seized and used as pawns; they 
     become political trading stamps whose welfare is exchanged 
     for things the hostage-taker could not win by normal means. 
     That, even more than the mindlessness, the waste (in the 
     supposed cause of economy in government), the inconvenience 
     and the instances of outright harm to unpaid workers and 
     unserved citizens alike, is what is finally wrong with the 
     current government shutdown.

  The basic issue raised is to what lengths will people go to try to 
get their way?
  It is the hallmark of a democracy that you have to accommodate 
conflicting viewpoints. Democracy does not guarantee you that your way 
is necessarily going to prevail. It gives you an opportunity to try to 
persuade others.
  We have a constitutional system of separation of powers and checks 
and balances, and it requires restraint and good judgment on the part 
of decision-makers not to sacrifice the means in order to gain their 
particular end.
  Now, we have a classic case of sacrificing the means, the proper 
workings of democracy, in order to gain a particular substantive 
result. It has never happened before. Never before has the closure of 
the Government been used as a coercive tactic over substantive issues 
about which there are very sharp differences. But it is happening in 
this instance, and it is wreaking havoc.
  I ask unanimous consent that this editorial from the Washington Post 
be printed in the Record.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, Jan. 3, 1996]

                      The Government as Stage Prop

       Hostage-taking is an ugly business. it doesn't matter what 
     the cause. Innocent people are seized and used as pawns; they 
     become political trading stamps whose welfare is exchanged 
     for things the hostage-taker could not win by normal means. 
     That, even more than the mindlessness, the waste (in the 
     supposed cause of economy in government), the inconvenience 
     and the instances of outright harm to unpaid workers and 
     unserved citizens alike, is what is finally wrong with the 
     current government shutdown.
       Senate Majority Leader Bob Dole was trying again last night 
     to find the formula to reopen temporarily. Good for him; it's 
     the right position; and he takes it at a certain cost. 
     Speaker Newt Gingrich said it would be ``very hard'' to find 
     the necessary votes in the House without a budget agreement. 
     Does he really lack the power to produce such a limited 
     result? Sen. Phil Gramm, meanwhile, one of Sen. Dole's rivals 
     for the Republican presidential nomination, spoke for the 
     vaudeville wing of the party. He is one of those who, over 
     the years, have found it convenient to make almost a cartoon 
     of the federal government.
       It's a straw-man style of politics. First you portray the 
     awful thing, then you run against it, and no matter if the 
     portrayal bears scant relation to the reality. ``I do think 
     we've discovered one thing,'' he said on television Sunday, 
     ``and that is, Have you missed the government? I mean, 
     doesn't it strike you funny that 280,000 government employees 
     are furloughed, large segments of the government are shut 
     down? I think this proves beyond a shadow of a doubt that we 
     need to go back and eliminate 150,000 to 200,000 bureaucratic 
     positions.'' Mr. Gramm and others thus use the government as 
     a stage prop. Rather than make the decisions they ought to be 
     making--ought in fact to have made weeks ago--both parties 
     are using it, or the lack of it, to score political points 
     and gain leverage in the underlying budget talks, even as 
     they also scramble to avoid the blame for the spectacle they 
     have jointly achieved. We have a suggestion for them. They 
     ought to reopen the closed agencies while they talk, since in 
     fact they do finally seem to be talking. It's a nasty game, 
     the shutdown, and it's gone on long enough.

  Mr. SARBANES. I also ask unanimous consent that at the end of my 
remarks three articles from the Post about the impact of this shutdown 
also be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. SARBANES. Mr. President, one article talking about the impact 
across the Nation of the partial Government shutdown. Let me quote from 
it:

       Kansas stopped paying unemployment benefits yesterday, the 
     first time a State has turned away claims in the federal 
     program's 60-year history.
       The Environmental Protection Agency sent home 2,400 of its 
     ``Superfund'' workers and stopped toxic waste cleanup work at 
     609 sites across the Nation throwing hundreds of contract 
     employees out of work . . .
       With the holiday season over, the impact of the partial 
     Government shutdown came into sharper focus as private sector 
     companies and State agencies struggled with the ripple 
     effects from Washington . . .
       ``We've never been through anything like this before,'' 
     said Ronald Frank, Executive Vice President of Ecology and 
     Environment, a Superfund contractor based near Buffalo that 
     will furlough ``a couple hundred'' workers today. ``I don't 
     think this is the way the system ought to work.''

  He is absolutely right, it is not the way the system ought to work.
  Another private sector operator, ``Michael Tilchin, Director of 
Superfund programs at CH2M Hill Ltd, said `hundreds of employees' would 
be furloughed.''

       His company is helping clean up an old manufacturing plant 
     in Hellertown, PA, where hazardous wastes have contaminated 
     the groundwater.
       The job is 95 percent complete and may have an ``unintended 
     consequence,'' Tilchin said. ``In the event the shutdown 
     persists, the costs of shutting it down and restarting it may 
     be larger than the cost of completing the work.''

  And another private sector businessman said: ``If they had their own 
business, would they run that business this way?'' he asked, referring 
to Congress. For the Government to have no plan to ensure that its 
programs will continue operating, he said, ``seems kind of 
ridiculous.''
  It is ridiculous, and it is stupid and it is irrational, and it lacks 
any common sense. It just shows the limits to which some are prepared 
to go in terms of using coercive tactics in order to gain their way on 
another issue. That is what is at work here.
  Are you entitled to use any and all tactics, no matter how 
disruptive, no matter how much chaos they create, no matter how much 
injury they do, no matter how much harm they inflict on people in order 
to gain your way?
  That is not my understanding of how democracy works, and that is not 
my understanding of how our constitutional system is supposed to work. 
Every time there is a sharp disagreement, is the Government to be taken 
hostage as a coercive tactic? In fact, we have a national policy of not 
negotiating with hostage-takers. That is the position the United States 
takes when it is confronted with this situation in the international 
arena.

  The ripple effect that is being felt throughout the economy is 
extraordinary. ``Hundreds of companies whose 

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Federal contracts were frozen when the furlough began * * * have either 
sent employees home or may have to do so soon.''
  These are not Federal employees. These are private sector employees. 
The Federal employees, many of them, are coming into work, over 
500,000, and not being paid. And I ask people to stop and think: How 
long could they go without a paycheck?
  Now, there is apparently a certain insensitivity in the Congress to 
that, but it may just reflect the fact that many Members of the 
Congress have significant economic means and the loss of a paycheck 
would not impact upon them the way it does on ordinary citizens who 
cannot go without a paycheck. They have mortgage payments to make; they 
have car payments to make; they have school payments to make.
  Beyond the Federal employees are all of the private sector employees 
who are being impacted very sharply, and those employees, unlike 
furloughed Federal workers who expect to be reimbursed eventually for 
time off the job, most employees of Federal contractors and vendors 
will not be paid retroactively.
  Mr. President, the impact of this is reaching not only locally and 
nationally, it is also reaching internationally. Visa applications by 
foreigners to come to this country have come to a complete halt. There 
are 20,000 to 30,000 applications made a day. Many of these people want 
to come for business purposes, for tourism, which is, of course, 
important to the functioning of our economy. We have just cut that off. 
These visas are backed up. Americans are backed up now waiting for 
passports. In many instances, people have forfeited payments for travel 
arrangements.
  With the action taken by the Senate yesterday we have the opportunity 
to correct this situation. There is a clean resolution that has gone to 
the House. I very much hope the House will pass it; that this exercise 
in hostage-taking will come to a halt and the talks on the overall 7-
year plan can continue with their sharp differences, but this 
irresponsible tactic, this impermissible tactic of coercion by closing 
the Government down ought to come to a halt.
  I yield the floor.

                               Exhibit 1

                [From the Washington Post, Jan. 3, 1996]

                  Inconvenience Edges Toward Emergency

                         (By Thomas W. Lippman)

       In Vietnam, the government has threatened to cut off 
     electricity to the U.S. Embassy because the $1,600 bill 
     hasn't been paid.
       In Russia, U.S. diplomats took out an interest-free loan 
     from the Moscow embassy's community association to cover the 
     payroll for Russian employees.
       In Cuba, the trucker who hauls drinking water to the U.S. 
     interests section has refused to make any more deliveries 
     until paid.
       Between 20,000 and 30,000 applications by foreigners for 
     visas to come to this country are going unprocessed each day, 
     creating a huge backlog of paperwork and infuriating 
     prospective visitors. And in this country, more than 200,000 
     Americans are waiting for passports that cannot be issued.
       Such is life in the State Department in the third week of a 
     partial government shutdown that has cut off the department's 
     money and blocked almost all nonemergency spending. Senior 
     officials yesterday described a mounting sense of crisis as 
     undone paperwork piles up, the backlog of unprocessed visa 
     and passport applications grows, travel plans are canceled 
     and embassy officials scramble for funds to pay restive local 
     employees.
       ``We just don't have any cash,'' said Richard M. Moose, 
     undersecretary of state for management. As long as suppliers 
     and contractors are willing to extend credit for the few 
     expenditures authorized, the State Department can get by, 
     Moose said. But in the many parts of the world where the 
     department has to lay out cash as services are provided--
     including several countries where security companies demand 
     payment up front to provide guards--the current mass 
     inconvenience is about to become an emergency, Moose and 
     other officials said.
       People around the world may find it hard to believe that 
     the United States could be reduced to the level of ``banana 
     republic,'' Moose said, but ``my threshold of believing what 
     can't happen is getting lower all the time.''
       State is one of nine Cabinet departments and assorted 
     independent agencies whose fiscal 1996 appropriations bills 
     have not been signed into law by President Clinton and thus 
     are mostly shut down because of the budget impasse between 
     Clinton and the Republican-controlled Congress. State, more 
     than any other agency, has spread the impact of the shutdown 
     around the world.
       Among those who have felt it are students who planned to 
     start classes this month in foreign universities, vacationers 
     who had firm travel plans and nonrefundable tickets, and 
     people with job offers from employers overseas.
       ``We had an 84-year-old woman who wanted a passport to go 
     to Rome because her bishop was being elevated to cardinal'' 
     in the Roman Catholic church, a State Department consular 
     official said. ``We had to say no because it wasn't an 
     emergency.''
       In many foreign countries, according to Moose and other 
     officials, local laws do not permit the furloughing of local 
     employees. As a result, ``we have to let them come to work, 
     but we can't pay them.'' Worse than that, other officials 
     said, is the fact that visa applicants can see all these 
     furlough-proof local employees at their desks, but are unable 
     to obtain any service because the workers are not permitted 
     to do anything.
       ``All this is unprecedented. We hope for a solution soon. 
     Otherwise things will just get worse and worse,'' said Pamela 
     Harriman, U.S. ambassador to France.
       State Department and Office of Management and Budget 
     officials said the cutoff of visas and passports has cut into 
     airline revenue at a peak travel season because tens of 
     thousands or even hundreds of thousands of prospective 
     travelers had to stay home. Airline industry spokesmen, 
     however, said they have so far noticed little impact.
       Some of the impact of the shutdown is more embarrassing 
     than substantive. Harriman and all other ambassadors, for 
     example, have been told they cannot spend money on what is 
     known as ``representation,'' which mostly means 
     entertainment. No luncheons for visiting business executives, 
     no cocktail parties for important locals, no travel to 
     ribbon-cutting and statue dedications.
       The shutdown also is undermining morale in the ranks as 
     leaves and long-planned transfers are canceled and work that 
     is being done goes unrewarded, senior officials said.
       In Colombia, for example, U.S. consular officials who 
     worked all last week to help families of the victims of an 
     American Airlines crash were treated as ``volunteers'' 
     because there is no money to pay them.
       In Washington, newly appointed foreign service officers are 
     planning to meet tonight to commiserate over cancellation of 
     their first deployments.
       And morale among State Department and U.S. Information 
     Agency employees at overseas posts is likely to fall further 
     on the next scheduled payday, officials said, because their 
     colleagues from funded agencies, such as Defense and 
     Agriculture, get full paychecks but they do not.
       Those concerns, however, pale before impending crises in 
     security and communications, officials said.
       ``I don't think the system can tolerate this for many more 
     days,'' said OMB Deputy Director John Koskinen, noting that 
     local personnel in many foreign countries ``live paycheck to 
     paycheck. That raises a serious problem for us because a 
     number of those people provide security.''
       ``The places that really worry us are the ones where the 
     FSNs [foreign service nationals, or local employees] are at 
     the lower end of the pay scale anyway,'' Moose said, citing 
     Cairo, New Delhi and Moscow as examples. He said in many 
     embassies funds used for recreation or commissaries are being 
     tapped to cover the payroll shortfall.
       In embassies that have U.S. Marine guards, Moose said, the 
     State Department is responsible for paying for the Marines' 
     food but no longer has the funds to do so. ``Maybe we can get 
     the Corps to carry us on the cuff. It doesn't do a lot for 
     our image,'' he said.
       As if to underline his point about image, the U.S. Embassy 
     in Mexico City, where the shutdown has been front-page news, 
     sought to allay fears about the solvency of the government in 
     Washington.
       ``The embassy wishes to make it clear that this situation 
     arises from the constitutional definitions of how the United 
     States budget is passed into law and does not represent any 
     fundamental inability of the United States of America to pay 
     its bills,'' the statement said.
       On Saturday, Moose said, the State Department will run out 
     of money to pay the contractors who run its worldwide 
     communications network. Diplomatic cables, e-mail and secure 
     telephones--the lifeblood of diplomatic communication--could 
     be truncated or cut off, he said.
       The restriction on all but emergency travel will not block 
     Secretary of State Warren Christopher and a sizable entourage 
     from flying this weekend to Paris and the Middle East, 
     officials said. One reason is that Christopher travels on an 
     Air Force plane, and the State Department's credit is good 
     with the Air Force.

                [From the Washington Post, Jan. 3. 1996]

                                 ______


                 Ripple Effect Could Leave Area Reeling

                            (By Peter Behr)

       On a normal day, Duke Chung's Manhattan Bagel shop would 
     serve more than 1,500 bagels to employees of the National 
     Science Foundation and nearby contractors in Ballston. Now he 
     feels like the hole, not the dough.
       ``Today, it was a little over 200,'' said Chung; who 
     operates the bagel franchise on NSF's ground floor. The 
     building, usually filled with 1,400 workers is closed except 
     for several dozen supervisors, security and custodial 
     workers, he said. ``I used to have 13 employees. Now I have 
     about three. Merry Christmas.''
       As the partial federal shutdown enters its third week, the 
     economic damage has begun to spread into many corners of the 
     Washington area, from people who run government 

[[Page S17]]
     computers to those who supply its desks and bake its morning bagels.
       Hundreds of local companies whose federal contracts were 
     frozen when the furlough began Dec. 16 have either sent 
     employee home or may have to do so soon, officials said.
       ``In the local area there have to be thousand of 
     [contractor] employees who aren't working. It's of that 
     order,'' said Edward H. Bersoff, chairman of BTG Inc., a 
     Vienna information technology company. Bersoff also chairs 
     the Fairfax County Chamber of Commerce.
       If it continues, the shutdown could soon threaten the 
     entire region's economy, first through the direct impact of 
     federal furloughs and private-sector layoffs and then through 
     the secondary, ripple effects from loss of local wages, 
     economists said. The shutdown may ``feed on itself,'' said 
     Russel C. Deemer, regional economist with Crestar Bank in 
     Richmond.
       Unlike furloughed federal workers, who expect to be 
     reimbursed eventually for time off the job, most employees of 
     federal contractors and vendors will not be paid 
     retroactively.
       Companies that avoided layoffs by requiring employees to 
     use vacation and comp days over the period from Christmas to 
     New Year's Day are running out of time, said Olga Grkavac, 
     vice president of the International Technology Association of 
     America in Arlington, which represents about 150 area 
     technology companies.
       ``Unless something is resolved quickly, we'll see more 
     layoffs,'' she said.
       There are no estimates of how many contractors' employees 
     have been sent home-federal departments and agencies whose 
     budgets have not yet been approved provided about one-fourth 
     of the nearly $18 billion in contracts that went to area 
     firms in 1994.
       But ``we are starting to see some pretty significant 
     impacts,'' said John F. Dealy, a Washington attorney and 
     business consultant who advises technology companies. The 
     contractors ``aren't able to continue working on projects so 
     they have to lay people off. That's accelerating.''
       BTG's Bersoff said he knows of companies that are preparing 
     to cut off or curtail medical coverage for laid-off workers. 
     ``There are second- and third-tier effects of all kinds,'' he 
     said.
       The blow already has fallen on hundreds of merchants and 
     suppliers who depend on federal workers and contractors for 
     their business.
       Mark Herman, who manages the Au Bon Pain restaurant at 
     Union Station, said he has seen a sharp falloff in breakfast 
     and lunch business since the Bureau of Labor Statistics 
     office across the street shut down two weeks ago.
       Until Dec. 16, Christine Webb, a computer systems developer 
     with a Labor Department contractor, worked at keeping the BLS 
     computers going and bought her lunch at Herman's counter. 
     Now, she's home and preparing to file for unemployment 
     benefits.
       Soon, some of Herman's employees who have been using up 
     vacation and sick leave will face layoffs too, he said. 
     Moreover, he has no idea how many croissants and sandwich 
     fillings to order for the days ahead. ``It's just totally 
     confusing. It's just nuts.''
       Others describe a chain reaction of disruption.
       Richard A. Morsell, president of Office Furniture Concepts/
     Federal Supply Contracts Group Inc. in Chantilly, ships desks 
     and chairs to federal offices around the nation. In the past 
     week, some of those shipments have gone into limbo because 
     the federal doors are closed. ``This stuff is floating all 
     over the country,'' he said.
       He said he is out several hundred thousand dollars in 
     shipments on which the government has not made payment and he 
     intends to see that the bills are paid, with interest. But 
     who knows where the invoices are? Somewhere in the mountains 
     of unprocessed paperwork in federal mail rooms, he said. 
     ``I'm going to have to wait a . . . long time while they work 
     through that paperwork and get to us,'' he said.
       Meantime, his staff has shrunk from 19 to 11 since 
     government purchases began to slow last summer, he said. 
     ``It's utterly stupid.''
       The long-term consequences of the upheaval may hurt local 
     federal contractors for months to come, according to 
     executives such as J.P. ``Jack'' London, chairman of CACI 
     International Inc., an Arlington-based information technology 
     company.
       The next batch of contracts his company would compete for 
     may well be delayed by the shutdown. ``It takes people to put 
     those out,'' London said.
                                                                    ____


                [From the Washington Post, Jan. 3, 1996]

                 Jobless Aid, Toxic Waste Cleanup Halt

                  (By Stephen Barr and Frank Swoboda)

       Kansas stopped paying unemployment benefits yesterday, the 
     first time a state has turned away claims in the federal 
     program's 60-year history.
       The Environmental Protection Agency sent home 2,400 of its 
     ``Superfund'' workers and stopped toxic waste cleanup work at 
     609 sites across the nation, throwing hundreds of contract 
     employees out of work.
       Eleven companies, including Blue Cross, are using $5 
     million to $6 million a day of their own money, rather than 
     the government's, to process Medicare claims and pay their 
     employees.
       With the holiday season over, the impact of the partial 
     government shutdown came into sharper focus as private sector 
     companies and state agencies struggled with the ripple 
     effects from Washington. It also generated more disgust with 
     Washington's ways.
       ``We've never been through anything like this before,'' 
     said Ronald Frank, executive vice president of Ecology and 
     Environment, a Superfund contractor based near Buffalo that 
     will furlough a ``couple hundred'' workers today. ``I don't 
     think this is the way the system ought to work.''
       Stephen Crickmore, the president of AdminiStar Federal in 
     Indianapolis, administers Medicare claims for the government. 
     He has been paying 650 employees out of company reserves 
     since the shutdown started on Dec. 16.
       ``If they had their own business, would they run that 
     business this way?'' he asked, referring to Congress. For the 
     government to have no plan to ensure that its programs will 
     continue operating, he said, ``seems kind of ridiculous.''
       His company, Crickmore said, is ``looking at how long we're 
     going to continue what we're doing at this point, which is 
     subsidizing the federal government.'' Early next week, he 
     said, the company will have to decide whether to furlough 
     employees.
       Other companies, however, have started sending workers 
     home. EPA contractors across the country received ``stop 
     work'' orders yesterday, the first wave of several that could 
     jeopardize the jobs of up to 10,000 Superfund workers.
       In Houston, Peter Arrowsmith, president of NUS, a Superfund 
     contractor, said his company had started laying off employees 
     and would soon have 125 employees, 15 percent of his work 
     force, sent home without pay.
       Michael Tilchin, director of Superfund programs at CH2M 
     Hill Ltd., said ``hundreds of employees'' would be 
     furloughed. His company is helping clean up an old 
     manufacturing plant in Hellertown, Pa., where hazardous 
     wastes have contaminated the ground water.
       The job is 95 percent complete and may have an ``unintended 
     consequence,'' Tilchin said. ``In the event the shutdown 
     persists, the costs of shutting it down and restarting it may 
     be larger than the cost of completing the work,'' he said.
       Like the other EPA contractors, Frank said his New York-
     based company would furlough ``a couple hundred'' workers 
     today unless the White House and Congress agreed to end the 
     shutdown.
       Administration officials, such as Labor Secretary Robert B. 
     Reich and Health and Human Services Secretary Donna E. 
     Shalala, have said repeatedly that the shutdown would disrupt 
     services to a wide range of Americans, not just federal 
     employees. But Republicans, such as Sen. Phil Gramm (Tex.), 
     have argued that, if anything, the shutdown would show what 
     little role the government plays in the lives of ordinary 
     citizens. Republicans point out that the agencies now closed 
     kept about 480,000 employees on the job to provide services 
     while sending a smaller number--280,000--home.
       Yesterday, Reich pointed to the closure of the Kansas 
     unemployment offices as an example of the shutdown's fallout, 
     saying, ``The people who have lost their jobs in Kansas this 
     week are simply out of luck.''
       The Labor Department estimated there are between 1,900 and 
     2,600 new claims for unemployment benefits in Kansas each 
     week. Wayne Franklin, state secretary of human resources in 
     Topeka, said the state did not have the $60,000 a day to keep 
     the unemployment benefits offices open.
       Kansas has plenty of money in the unemployment insurance 
     trust fund to pay the benefit claims, but it relies on the 
     federal government to pay the cost of administering the 
     program.
       At least 10 other states and the District of Columbia also 
     have exhausted federal funds to administer their unemployment 
     insurance programs, Reich said. District officials said 
     yesterday that 40,000 furloughed federal employees have filed 
     unemployment claims related to the current shutdown. The 
     city, which usually pays about 35,000 claims a year, could 
     issue its first shutdown checks next week.
       Reich said officials do not know how long the District 
     offices can stay open. New Mexico, which has a relatively 
     large federal population, also has run out of federal money. 
     ``It is an open question whether they'll be able to continue 
     at all,'' Reich said.
       Alaska will try to stay open until Saturday, while Alabama 
     is also using state money to finance the unemployment program 
     through Friday.
       In Little Rock, officials with the Arkansas Rehabilitation 
     Services virtually disbanded their state agency for the 
     disabled because the federal money has stopped coming from 
     Washington.
       Commissioner Bobby Simpson said he had to furlough 495 of 
     the agency's 603 employees, meaning that 17,000 Arkansas 
     residents with physical and mental disabilities will have no 
     office to turn to for help with job training, special 
     vehicles for commuting to work, and other services. The state 
     rehabilitation office, which has an annual budget of $38 
     million, receives 76 percent of its funding from the federal 
     government.
       ``It's ironic because we're in the business of putting 
     people to work, of helping to turn tax users into 
     taxpayers,'' Simpson said. ``We held on as long as we could. 
     . . .''
       Despite the problems in some states, reports yesterday by 
     Washington Post correspondents showed that other states were 

[[Page S18]]
     coping with the shutdown, keeping their services available even when 
     faced with lapses in federal funding.
       Michigan, for example, has been using its own revenue to 
     make up for the cutoff of federal funds in crucial programs 
     such as Aid to Families with Dependent Children (AFDC) 
     and Medicaid, said John Truscott, a spokesman for Gov. 
     John Engler (R). ``We can't fund them forever, but for the 
     next couple of weeks we're okay,'' Truscott said.
       Wisconsin is preparing to use more of its own funds for 
     those two major programs this week but is counting on an 
     eventual reimbursement from the federal government, said 
     James R. Klauser, the state's secretary of administration. He 
     said AFDC and Medicaid payments range between $25 million and 
     $40 million a week in Wisconsin. ``We look at it every 
     week,'' he said. ``We're comfortable right now.''
       California is losing more than $5 million a day in tourism 
     revenue. Officials of Mariposa County, the home of Yosemite 
     National Park, asked Gov. Pete Wilson (R) to declare the 
     county an economic disaster zone, but Wilson turned down the 
     request, saying it exceeded the scope of his authority.
       The shutdown also cut into the pensions of about 150,000 
     retired railroad workers. The retirees, most over 70 years of 
     age, receive a portion of their pension from appropriated 
     funds and the rest from a retirement trust fund. They will 
     lose about two-thirds of an average $130 monthly payment that 
     is paid directly from the treasury; the rest of their annuity 
     from the railroad trust fund will not be reduced.
       Federal agencies, meanwhile, continue to struggle to 
     provide services.
       Only two of the 15 employees that the Department of Housing 
     and Urban Development has in Flint, Mich., for example, have 
     been allowed to report to work during the shutdown. That has 
     forced the office to delay opening any bids from families or 
     real estate agents for HUD property. Also, none of the 
     roughly 500 families who have home-purchase loans through the 
     field office have been able to get any help, especially those 
     who are drifting further into delinquency.
       ``The sense of emergency is much higher now than before,'' 
     HUD coordinator Gary LeVine said. ``The three-day shutdown 
     before wasn't so bad. Three weeks is. This is no way to treat 
     the public.''

  The PRESIDING OFFICER. The Senator from New York.

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