[Congressional Record Volume 142, Number 50 (Thursday, April 18, 1996)]
[Senate]
[Pages S3626-S3633]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. WYDEN:
S. 1683. A bill to amend part E of title IV of the Social Security
Act to require States to regard adult relatives who meet State child
protection standards as the preferred placement option for children,
and to provide for demonstration projects to test the feasibility of
establishing kinship care as an alternative to foster care for a child
who has adult relatives willing to provide safe and appropriate care
for the child; to the Committee on Finance.
the kinship care act of 1996
Mr. WYDEN. Mr. President, I introduce the Kinship Care Act of
1996. Today Representative Connie Morella is introducing companion
legislation in the House.
Grandparents caring for grandchildren represent one of the most
underappreciated natural resources in our Nation. They hold tremendous
potential for curing one of our society's most pressing maladies: The
care of children who have no parents, or whose parents simply aren't up
to the task of providing children a stable, secure and nurturing living
environment.
There is such a great reservoir of love and experience available to
us, and more especially to the tens of thousands of American children
who desperately need basic care giving. We provide public assistance to
strangers for this kind of care, but the folks available to provide
foster care homes are in short supply.
At the same time, inflexibility in current regulations often force us
to
[[Page S3627]]
ignore a precious alternative that is right at our doorstep. Our public
policy planners have missed the forest for the trees. Grandparents can
fill the gap. They are ready, willing and able to provide the kind of
care these youngsters so desperately need.
The legislation I plan to introduce in the Senate today will give
States the flexibility to provide the support these grandparents need,
so that our seniors can help fill the care gap.
The House included my legislation, similar to today's bill, as part
of the welfare reform measure last year. My new legislation will
continue the process of shifting the focus of our child welfare system
from turning children over to strangers, to granting them the loving
arms of grandparents and other relatives.
States have been moving in this direction for over a decade. Over the
past 10 years the number of children involved in extended family
arrangements has increased by 40 percent. Currently, more than 3
million children are being raised by their grandparents. In other
words, 5 percent of all families in this country are headed by
grandparents.
It's time that the Federal Government get with the program and start
developing policies that make it easier, instead of more difficult, for
families to come together to raise their children.
My bill has several parts. The first would require States to give
preference to relative providers when a child is removed from their
parents' home. Too often I have heard stories of grandparents or other
relatives, not finding out that their grandchildren have been removed
from their children's home. By the time they know what is happening,
the grandchildren are locked into the foster care system.
Often I have heard stories where brothers and sisters are split up
and grandparents spend years in court trying to reunite their own
families. As we rethink our child protection system, we need to
rededicate ourselves to looking to families, including extended
families, for solutions. When a child is separated from their parents,
it is usually a painful and traumatic experience. Living with people
that a child knows and trusts gives children a better chance in the
world and gives families a better chance to rebuild themselves.
The second part of my bill allows States to obtain waivers to set up
kinship care guardianship systems where grandparents and other relative
providers can receive some financial assistance without having to turn
over custody of the child to the State, and without having to go
through the paperwork and bureaucratic hurdles of the foster care
system.
Our child protection system is where our welfare system was about 10
years ago. We know it isn't working well, but States and the Federal
Government are still fumbling for solutions. What we need to do now, as
we did for our welfare system, is start opening the door for States to
try new ideas to both protect children and keep families together.
As we reevaluate the effectiveness of our country's child protection
systems, it's time that we identify new ideas and new ways to find
loving environments for our Nation's most vulnerable children.
Grandparents can provide the lynchpin for such a new system.
______
By Mr. REID:
S. 1684. A bill to require that applications for passports for minors
have parental signatures; to the Committee on Foreign Relations.
the mikey kale passport notification act of 1996
Mr. REID. Mr. President, I rise to introduce legislation I intended
to offer as an amendment to the immigration bill. Unfortunately, it
does not appear I will have the opportunity to offer this as an
amendment to that bill. I therefore decided to offer this as a
freestanding bill as I believe it is an issue that needs to be
addressed whether or not we decide to go back to this bill.
Much of the debate on the immigration legislation involves complex
issues and arcane areas of the law. My legislation is pretty easy to
understand. It is a common sense legislative solution to a simple, but
troubling, issue. The issue my bill attempts to resolve is that of
international parental abductions. Significantly, my bill does not
attempt to right a wrong. Rather, it attempts to prevent future wrongs
from occurring. And there is little dispute that absent legislation,
future wrongs will occur.
The wrong that occurs is best illustrated by a living nightmare
forced upon an American family from Henderson, NV. No parent should
ever have to go through what Fred and Barbara Spierer went through in
1993. That year, on Valentine's Day, Barbara Spierer's ex-husband took
her son to his native country, war-torn Croatia. She would soon learn
that upon their arrival, her ex-husband initiated official custody
proceedings in a Croatian court.
Through tremendous emotional and financial costs, Fred and Barbara
Spierer were able to secure the return of young Mikey. Incredibly, this
could all have been prevented if our laws didn't permit such easy
procurement of passports for minors. Few would disagree that parental
consent should be given before a passport is issued to a minor child.
Both parents ought to be notified before the State Department issues a
document permitting their child to be taken out of this country.
Presently, such joint notification is not required. Under current
law, one parent can apply for a U.S. passport for his or her child,
receive it, and then depart from the country with that child. Again,
this can all be accomplished without the notification of the other
parent. Current law is an invitation to engage in the grossest of
misbehavior by a scurrilous parent. And engage in it they do. Sadly,
the case of Fred and Barbara Spierer is not an isolated incident.
International parental abductions are a growing problem. In 1994,
there were over 600 cases of children being abducted from the U.S.A.
Thousands of parents are attempting to bring home their children who
were taken from this country by a mother or father. While these cases
are tracked by the State Department, children's advocates believe many
more go unreported. Often, the children are snatched during a divorce.
The abducting parents usually have strong ties to a foreign country.
But sometimes an American-born mother or father will take off for an
unfamiliar nation to flee U.S. law. Regrettably, such surreptitious
travel is made quite easy because of current law. Why? Because one
parent can procure the child's passport without the other one knowing.
Left-behind parents are faced with wading through a maze of foreign
laws and customs in their efforts to secure their child's return.
Imagine how difficult it is to find a missing child in the United
States and then multiply it by 1,000. That's about how difficult it is
to locate and return a child abducted overseas. And finding a missing
child is only the start.
A parent must then take their case to the foreign country's legal
system. Most nations do not recognize custody orders from U.S. courts.
Even when criminal charges have been filed against the abducting parent
in the United States, many nations will not honor a U.S. request for
extradition. Some countries simply discriminate against women. The
decision to fight for a child's return consumes enormous amounts of
time and money. Many parents are simply without the financial
wherewithal to engage in a protracted international legal battle.
For a variety of reasons, the Government is able to do very little to
assist these parents. The current budgetary constraints realistically
preclude doing more to secure the return of abducted children. But they
do not preclude efforts to implement additional barriers to prevent
these tragic abductions from occurring.
My bill takes cost effective steps toward preventing future
abductions. It implements a system of checks prior to the issuance of a
minor child's passport. Both parents would be required to sign the
passport application of a child under the age of 16. Or, if the parents
were already divorced, the application would have to be signed by the
parent of the child having primary custody. If such a law had been in
place by 1993, Barbara Spierer's ex-husband would not have been able to
abduct their child to Croatia. The passport would not have been issued
because her written permission had not been given. I believe it is
drafted in such a manner so as to give the State Department the
[[Page S3628]]
discretion to implement a reasonable and flexible rule.
This bill is not just about parental rights and preventing these
tragic international abductions. It is also about protecting the rights
of our children. No one disagrees that the rights, liberties and
freedoms provided in our Nation make it the best country in the world.
No child should be forced to lose these rights. No child should be
forced to undergo what Mikey Kale lived through. No American child,
regardless of his age, should be abducted to the middle of a war torn
part of the world. American parents should not be forced to endure the
living nightmare that the Spierers' were forced to go through. If my
bill prevents only one family from having to endure this nightmare it
will be judged a success. I believe that more can be done but this is
the most cost effective step we can take today.
I encourage my colleagues to cosponsor this legislation and support
it should we return to consideration of the immigration bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1684
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PASSPORTS ISSUED FOR CHILDREN UNDER 16.
(a) In General.--Section 1 of title IX of the Act of June
15, 1917 (22 U.S.C. 213) is amended--
(1) by striking ``Before'' and inserting ``(a) In
General.--Before'', and
(2) by adding at the end the following new subsection:
``(b) Passports Issued for Children Under 16.--
``(1) Signatures required.--In the case of a child under
the age of 16, the written application required as a
prerequisite to the issuance of a passport for such child
shall be signed by--
``(A) both parents of the child if the child lives with
both parents;
``(B) the parent of the child having primary custody of the
child if the child does not live with both parents; or
``(C) the surviving parent (or legal guardian) of the
child, if 1 or both parents are deceased.
``(2) Waiver.--The Secretary of State may waive the
requirements of paragraph (1)(A) if the Secretary determines
that circumstances do not permit obtaining the signatures of
both parents.''.
(b) Effective Date.--The amendments made by this section
shall apply to applications for passports filed on or after
the date of the enactment of this Act.
______
By Mr. KERRY:
S. 1685. A bill to provide income and economic security to the
American family, and for other purposes; to the Committee on Finance.
The American Family Income and Economic Security Act
Mr. KERRY. Mr. President, today I am introducing the American Family
Income and Economic Security Act.
Not long ago the Treasury announced that the leading economic
indicators were up 1.3 percent for February, the gross domestic product
rose half a percent, the stock market is at record levels, inflation is
subdued, interest rates are stable, unemployment is the lowest in the
industrial world, job growth is the highest with over 8 million jobs
since 1993; and--to topoff all of these positive indicators--the
Democratic economic plan--that passed without one Republican vote--has
cut the deficit by more than half--down from $290 billion to $140
billion.
We worked hard with the President against Republican stonewalling,
gridlock, and continued opposition to make this happen so that even the
Republican Chairman of the Federal Reserve, Alan Greenspan, told me 2
weeks ago, at a Banking Committee hearing, that this is the longest
period of the most robust and sustained economic growth since the end
of the Second World War, and he expects the economy to continue to grow
``at a steady clip.''
But this economic growth is best reflected in corporate boardrooms--
businesses are finding it easier to borrow money, interest rates are
low, executive salaries are up and continue to mushroom, regulations
are being eased in every sector from financial services to basic
manufacturing. But, in living rooms across Massachusetts there is
extraordinary anxiety about jobs, health care, education, wages, and
retirement.
Mr. President, I have talked to family after family in Massachusetts
who told me that people at the top are doing great, but their friends
on the shop floor are not. Statistics show that corporate executives
are earning 170 times that of their lowest paid worker. Just last year
CEO's had an average salary increase of 15 percent while their workers
are downsized into the street. These workers--whose real wages have
fallen half-a-percent every year since 1973--worry about the future,
about elderly parents getting sick, about their kids' education, about
their own health care if they lose their job, about the debt they are
carrying, and about their retirement.
I understand how difficult it is when productivity rose 7 percent but
real wages fell 3 percent in the first 6 years of the 1990's. A family
that used to take out a loan for a major expense like a car, now put
gas on their credit cards. They took out loans to send kids to college,
now they take out loans to send kids to the pediatrician. The American
family is sinking further and further into debt and this Republican
Congress is making it worse.
In 1995 commercial banks earned an all-time record high profit of
$48.8 billion while consumer debt has soared 39 percent in the last 5
years and now exceeds $1 trillion. Personal bankruptcies rose by 6
percent in 1 year, and consumers owe $360 billion on their credit
cards. And families in Massachusetts, fourth in the Nation in loan
delinquencies, have defaulted on $80 million in consumer loans.
Mr. President, in these economic times, the average American family
has four credit cards--each with balances of $4,800. It's no wonder we
are anxious. Thousands and thousands of families are one paycheck away
from economic disaster. But, it took Pat Buchanan to wake up the
Republican Party to do something the Democrats have been doing since
the Roosevelt administration--fighting for working families and people
struggling to make ends meet. Yet the Republicans have done nothing to
alleviate this anxiety. They will not even raise the minimum wage--in
fact they have downsized the American dream for millions of hard
working families, but voted time and again to increase corporate
welfare, and give huge tax breaks to the wealthiest Americans.
Therefore, today, to fight back, I am announcing that I will
introduce the American Family Income and Economic Security Act.
It helps families by increasing the minimum wage, helps them educate
their kids and re-educate themselves, helps secure portable,
affordable, health care with no preexisting conditions clause, and
makes investments for retirement easier. I believe that this
legislation can go a long way to restoring faith in the American dream.
The American Family Income and Economic Security Act gives incentives
to businesses that become better corporate citizens and that foster a
family-friendly environment that provides high-wage jobs for the 21st
century.
It includes 10 new approaches to family economic problems, and 10
initiatives that I have sponsored before. But, what makes this proposal
unique is that it takes simple, necessary, common sense steps in the
right direction. Each element of this plan can stand alone. It uses the
Tax Code to help workers keep up, and rewards businesses that reward
workers.
I believe that these proposals are what real families need to make
ends meet and to feel that they have a chance in the new economy.
Let us start with wages. Under this proposal we reward work--those
who are on the job and off the dole--by increasing the minimum wage
from $4.25 and hour to $5.15 an hour. Maybe my Republican opponents
don't know what an increase means in real terms: It means an additional
$1,800--the equivalent of 7 months of groceries.
Second, when it comes to educating kids--while the Republicans are
cutting Pell grants and student loans for average working families--I
want to use the Tax Code creatively. This proposal gives every family a
$10,000 maximum deduction for tuition costs; and it allows their sons
or daughters, who take out a student loan, to deduct the interest on
that loan so they are not saddled with debt as soon as they graduate.
[[Page S3629]]
But more than helping families pay for tuition costs, I want to help
parents get the lifetime education and training they will need to
compete. That is why my proposal encourages companies to provide
education and training with a $5,200 per employee tax deduction for
training.
These proposals are real-life solutions to real-life family problems.
How can we say that everyone should go to college--everyone should be
trained and retrained--and then make it as difficult as we can to do
it. How can we not provide incentives to help educate our workforce
when we know that in 1972 people with advanced degrees earned 72
percent more than high school graduates--when we know that by 1992
those with graduate degrees made 2.5 times more than high school
graduates--and when we know that today high school dropouts earn
scarcely half as much as high school graduates and the education gap is
widening?
But education costs and retraining are not the only hurdles families
are facing. Health care costs and the fear of catastrophic illness of a
loved one add to America's insecurities. Every American has the right
to feel secure that if they get sick, or their child or parents get
sick, they will not face financial ruin. So, my plan endorses the
Kennedy-Kassebaum bill that makes health insurance portable and limits
preexisting condition clauses. But it goes one step further.
We know too well the horrors of a family who has tragically lost a
loved one at a young age. The entire family, in a time of grief, can be
faced with mounting medical bills. This proposal provides some security
for younger families who are forced to sell family property because of
a terminal illness. It zeroes-out capital gains taxes for them to give
them a chance to recover.
I am tired of going around Massachusetts and hearing stories of a
family that took 10 years to crawl out from under the burden of debt
caused by the loss of a loved one to breast cancer--which strikes 1 in
every 9 Massachusetts women--or AIDS--which is the leading killer of
Massachusetts residents aged 25 to 44. I am tired of going back to
Washington to see Republicans continue their attempts to cut Medicare
and Medicaid and cruelly leave so many of these young families in their
political wake.
Young families are the strength of this Nation. If they work hard
they have every right to expect success, security, and a piece of the
dream--and it is up to us to help them achieve it. I came to the Senate
when my daughters were young and I know how hard it is to have a career
and be a good parent. Many families cannot afford the cost of daycare,
and do not want to be separated from their children. That is why I am
proposing that businesses get a tax credit of up to 50 percent of their
investment up to $150,000 for establishing on-site daycare centers for
employees. Since the average American family spends $9,000 a year on
daycare, it makes sense to help businesses keep families together--kids
can be a few floors away rather than a few miles away, and we can take
away parental anxiety while we raise their productivity. The Glass
Ceiling Commission and others said that on-site daycare raises the
productivity of American workers by 10 percent. So what are we waiting
for?
These are proposals to put more money in people's pockets, and there
is one more proposal that is especially important to Massachusetts and
working families everywhere: I am proposing to create a Federal tax
deduction for local sewer and water fees to help those hardest hit by
soaring water rates that are above 1 percent of a taxpayers adjusted
gross income.
In and around Boston, water rates continue to escalate--from $185 per
year in 1985 to $525 per year in 1992 and $618 for 1996. By the year
2000, the rate is projected to rise to $800. The Tax Code allows
deductions for State and local taxes, and this will similarly avoid the
double tax on water and sewer rates for homeowners.
And most importantly I reiterate my strong desire to double the
income levels for those who participate in IRA's. I want individuals
with incomes of $50,000 and couples who make $80,000 to be allowed to
deduct IRA contributions. And I want them to be allowed early
distribution to finance education, first time home buying, medical
bills associated with catastrophic illness and long-term unemployment.
This is a common sense approach to increasing the national savings rate
without breaking the Treasury. This is an innovative approach that
gives families the flexibility to grow and build and cope with economic
reality.
These are the creative programs we should incorporate into the Tax
Code instead of giving tax breaks to MacDonalds to finance their
foreign advertising budget. That is why I sponsored a bipartisan bill
to cut $60 billion in corporate welfare and that is why I am proposing
to stop companies from deducting the salaries of employees who earn
over $1 million a year.
No wonder the average American does not trust Government to help
them.
To begin helping business move us in the right direction I am
proposing today a seven part business-to-family plan that provides
direct assistance to high-growth, high-wage, job-producing businesses;
and punishes businesses that put the bottom-line first and families
last.
On the positive side, I am proposing to completely eliminate capital
gains taxes for investors who hold stock for more than 10 years in
qualified small, high-growth, job-creating, critical-technology
companies that do at least 75 percent of their business in the United
States; and I am proposing to reduce the tax burden by 50 percent for
investors who hold stock for at least 5 years.
Massachusetts leads the Nation in these cutting-edge technology-
driven businesses, and is a model for the Nation on making investments
count for American working families. Let us make the Massachusetts
high-tech experience, America's experience.
These businesses are doing it right and expanding into the global
market, and we should be encouraging that expansion. That is why this
plan encourages small businesses to export and that is why it levels
the playing field in Federal export financing between the Export-Import
Bank's 90-percent guaranteed coverage and the Small Business
Administration's 75 to 80 percent coverage. The Coalition of New
England Companies for Trade strongly supports this export enhancement
idea because they know it will work. But, most importantly, it
encourages companies to keep jobs in this country and--like Aaron
Feuerstein--it encourages them to recognize that their employees are an
asset not a liability.
My friends, as I meet people across this State, I find that many are
concerned about their retirement. Employee pension plans should be
sacred. That is why this proposal makes sure that private pension plans
are not the toybox of corporate America. I am proposing that we
prohibit companies from using pension plans when considering financing
mergers and acquisitions; and we prohibit companies from deducting
merger and acquisition expenses if the merger results in a 15 percent
reduction in the work force.
And we should not be rewarding corporate behavior with misguided tax
loopholes that gives favorable tax treatment to companies that move
offshore. If nothing else, a good corporate citizen keeps jobs in
America, stays in America, and builds the American economy. I am
proposing that we close those loopholes immediately.
To take corporate citizenship one step further, I think we should
punish Federal contractors that hire illegal immigrants. The Federal
Government should lead by example and not allow its contractors to hire
undocumented foreign workers at the expense of an American job. That is
common sense and its the kind of corporate citizenship that we have
every right to demand.
I am also proposing that Congress give its unequivocal support to the
idea of companies granting stock options to people they layoff and
downsize out of a job. Why should not CEO's with guaranteed golden
parachutes give loyal workers at least a tin parachute to make
downsizing easier?
I am also proposing that we retroactively and permanently extend the
Research and Development tax credit that is so critical to a pro-
growth, future oriented economy that understands that responsible,
thoughtful investment in research and development can and will create
the kind of high-
[[Page S3630]]
wage jobs we need. This provision is, perhaps, the most critical of
all. It establishes our commitment to investing in the future. It is
not a gamble or a waste of taxpayers' dollars. It is a sure bet; and we
should be willing to make it.
We should be willing to accept the costs of any and all of these
proposals--first because they can be offset by the $60 billion in
savings we get from stopping corporate welfare under the bi-partisan
bill that Senator McCain and I sponsored; and second, because we have
to step up to the plate for what's right for working families and
what's right for America.
So, what does my American Family Income and Economic Security Act do?
It helps workers, it supports businesses, and it rewards corporate
citizenship. It addresses the anxieties of American working families,
and it begins to move us in the right direction. It fights against the
wrong-headedness of Republican policies that have downsized the
American dream and shifted wealth to the top 10 percent of Americans.
It is time to begin the shift back at least enough to protect hard
working families from the extreme political agenda of the Republicans
in Congress. So, this proposal is a hedge against the incredible odds
that working families face every day in meeting the bills for health
care, education, and a decent retirement. It is a hedge against
stagnant wages, and it is a challenge to businesses to be good
corporate citizens, and to build a family friendly workplace so that,
together, we can build a better stronger American economy.
______
By Mr. FORD (for himself, Mr. Coats, Mr. Lugar, Mrs. Hutchison,
and Mr. McConnell):
S. 1686. A bill to provide for early deferred annuities under chapter
83 of Title 5, United States Code, for certain former Department of
Defense employees who are separated from service by reason of certain
defense base closures, and for other purposes; to the Committee on
Governmental Affairs.
defense privatization and worker protection legislation
Mr. FORD. Mr. President, this country has undergone tremendous
changes over the last few years as a result of military downsizing and
base closures. Making the transition has proved very difficult to
communities all across the country and today, in an effort to ease that
transition, I am introducing legislation with original cosponsors
Senators Coats, Lugar, Hutchinson, and McConnell directed at specific
problems we've seen with privatization of these bases.
I know many of my colleagues are aware of the job loss that results
from downsizing. That is because many jobs have become obsolete or
redundant. But, there's also a whole other category of affected
employees, whose skills and expertise are still needed by the military
in the same roles, but in new privatized facilities. Under the 1995
Base Closure and Realignment Commission (BRAC), these employees are
still eligible to work for the Federal Government and receive a Federal
pension.
However, this would defeat one of our major goals in privatization--
to save the taxpayer money. The idea under privatization is to continue
utilizing these workers' much-needed skills, but in the private sector,
at a reduced cost to the taxpayer. Yet, by sending these workers out
into the private sector, we are asking a huge portion of them to give
up their retirement benefits.
These workers are in a catch-22. If they move into the privatized
facilities, where they would be performing the same mission and jobs as
they had as Federal employees, they lose hard-earned pensions. If they
remain in the Federal Government, they could face lower paying
positions, while the community loses those workers altogether.
With little incentive to move into the private sector, these
employees could create a vacuum that private contractors are unable to
fill. Under that scenario everyone loses: Highly skilled workers will
be underemployed and underpaid. Private contractors won't be able to
meet the challenge of taking over government facilities. And the
taxpayer will foot the $390 million cost-avoidance bill the Navy
estimates the government faces if they have to keep these workers on
the payroll and deal with the failure of privatization.
This problem was brought to my attention when the Louisville Naval
Ordnance Station began the process of privatization, where unlike other
base closings, moving the work would be a far greater cost than
privatizing. But, it is a problem faced by workers in the same
situation all across the country.
That is why I am introducing legislation to provide a deferred
annuity for those Department of Defense employees who are targeted for
privatization, but stand to lose their benefits under the Civil Service
Retirement System (CSRS). With this legislation, we can make good on
the promise our Government made with these employees when they entered
Government Service, and assure private contractors that a skilled work
force will be available to them when they assume control of former
Defense Department facilities.
Most Federal employees hired before 1984 participate in the CSRS,
while workers hired after 1984 belong to the Federal Employees
Retirement System (FERS). Unlike CSRS, FERS is a portable plan,
allowing a Federal employee to move between Federal and non-federal
employment, without significantly penalizing the accrual of Federal
benefits. Unfortunately, CSRS participants do not enjoy this same
flexibility, because CSRS is a single component defined benefit plan.
Because CSRS-covered employees are forced to separate from Federal
employment before they're eligible for an immediate annuity, they see
their federal retirement benefits lose considerable value. And,
employees who withdraw their retirement contribution not only forfeit
all benefits, but also cost the government money up front.
I think we can all agree that privatization is a key component of
reorganizing our defense priorities in this post-cold-war era of
military downsizing. But, I believe my legislation is critical to
ensuring that privatization works.
It can accomplish these goals by providing a deferred annuity with
indexing pension benefits for CSRS Department of Defense employees.
Their positions will be immediately transferred to contractors assuming
the workload designated for privatization. In this way we can provide a
very restricted, but common sense way of keeping our military
infrastructure running smoothly as we embark on military
privatization's maiden voyage.
And perhaps equally important, my legislation sends a clear message
to this work force that their loyalty and dedication did not go
unnoticed. These workers provided our men and women in uniform with the
finest maintenance, supply and logistics system in the world. The best
way we can repay this commitment to excellence is to uphold the Federal
Government's end of the contract made when these workers first entered
Government Service. That's in the workers' best interest and in the
best interest of the Nation.
I would also like at this time to thank Mrs. Carolyn Merk of the
Congressional Research Service for her outstanding professional work in
helping craft this legislation that we're introducing today.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1686
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EARLY DEFERRED ANNUITIES OF CERTAIN FORMER
EMPLOYEES OF THE DEPARTMENT OF DEFENSE.
(a) Definitions.--For purposes of this section--
(1) the term ``Civil Service Retirement System'' means the
retirement system under subchapter III of chapter 83 of title
5, United States Code;
(2) the term ``defense contractor'' means any entity that--
(A) contracts with the Department of Defense to perform a
function previously performed by Department of Defense
employees;
(B) performs that function at the same installation at
which such function was previously performed by Department of
Defense employees or in the vicinity of that installation;
and
(C) is the employer of one or more transferred employees;
(3) the term ``early deferred retirement age'' means the
first age at which a transferred employee would have been
eligible for immediate retirement under subsection (a)
[[Page S3631]]
or (b) of section 8336 of title 5, United States Code, if
such transferred employee had remained an employee within the
meaning of section 8331(1) of such title continuously until
attaining such age;
(4) the term ``severance pay'' means severance pay payable
under section 5595 of title 5, United States Code;
(5) the term ``separation pay'' means separation pay
payable under section 5597 of title 5, United States Code;
and
(6) the term ``transferred employee'' means a former
employee of the Department of Defense (other than a temporary
employee) who--
(A) while employed by the Department of Defense at a
military installation to be closed or realigned pursuant to
recommendations of the Defense Base Closure and Realignment
Commission that were approved by the President in 1995 under
section 2903(e) of the Defense Base Closure and Realignment
Act of 1990 (title XXIX of Public Law 101-510; 10 U.S.C. 2687
note) and while covered under the Civil Service Retirement
System, was separated from Federal service in a reduction-in-
force resulting from conversion from performance of a
function by Department of Defense employees at that military
installation to performance of that function by a defense
contractor at that installation or in the vicinity of that
installation;
(B) is employed by the defense contractor within 60 days
following such separation to perform substantially the same
function performed before the separation;
(C) remains employed by the defense contractor or a
successor defense contractor, or subcontractor of a defense
contractor until attaining early deferred retirement age or
is involuntarily separated from employment by the defense
contractor before attaining such age for reasons other than
misconduct;
(D) at the time separated from Federal service, was not
eligible for an immediate annuity under the Civil Service
Retirement System;
(E) does not withdraw retirement contributions under
section 8342 of title 5, United States Code; and
(F)(i) has not received separation pay or severance pay due
to a separation described in subparagraph (A); or
(ii) has repaid the full amount of such pay with interest
(as determined by the Office of Personnel Management) to the
Department of Defense before attaining early deferred
retirement age.
(b) Retirement Benefits of Transferred Employees.--
Notwithstanding the age requirement under section 8338(a) of
title 5, United States Code, payment of a deferred annuity
for which a transferred employee is eligible under that
section shall commence on the first day of the first month
that begins after the date on which the transferred employee
attains early deferred retirement age.
(c) Computation of Average Pay.--(1)(A) This paragraph
applies to the computation of the annuity of a transferred
employee who retires under this section who immediately
before separation from Federal service as described under
subsection (a)(6)(A) was employed in a position classified
under the General Schedule.
(B) Subject to subparagraph (C), in the computation of an
annuity referred to under subparagraph (A) for a transferred
employee, the average pay of the transferred employee under
section 8331(4) of title 5, United States Code, shall be
adjusted at the same time and by the same percentage that
rates of basic pay are increased under section 5303 of title
5, United States Code, during the period beginning on the
date on which the transferred employee separates from Federal
service as described under subsection (a)(6)(A) and ending on
the date on which the transferred employee attains early
deferred retirement age.
(C) Average pay as adjusted by this paragraph may not
exceed the limitation on maximum pay, final pay, or average
pay (as applicable) under section 8340(g)(1) (A) or (B) of
title 5, United States Code.
(2)(A) This paragraph applies to the compensation of an
annuity of a transferred employee who retires in accordance
with this section who immediately before separation from
Federal service as described under subsection (a)(6)(A) was a
prevailing rate employee as defined under section 5342(2) of
title 5, United States Code.
(B) In the computation of an annuity referred to under
subparagraph (A) for a transferred employee, average pay
under section 8331(4) of title 5, United States Code, shall
be adjusted at the same time and by the same percentage that
pay rates for positions that are in the same area as, and are
comparable to, the last position the transferred employee
held as a prevailing rate employee, are increased under
section 5343(a) of such title during the period beginning on
the date on which the transferred employee separates from
Federal service as described under subsection (a)(6)(A) and
ending on the date on which the transferred employee attains
early deferred retirement age.
(d) Service for a Defense Contractor Relating to Creditable
Service and Health Insurance.--(1) Service performed by a
transferred employee for a defense contractor after
separation from Federal service as described under subsection
(a)(6)(A) shall not be treated as creditable service for
purposes of computing the amount of an early deferred annuity
in accordance with this section.
(2) Nothing in this section shall be construed to require
employee or agency contributions under chapter 89 of title 5,
United States Code, for any period of service performed by a
transferred employee for a defense contractor after
separation from Federal service as described under subsection
(a)(6)(A).
(e) Receipt of Benefits While Employed by a Defense
Contractor.--A transferred employee may commence receipt of
an early deferred annuity in accordance with this section
while continuing to work for a defense contractor.
(f) Lump-Sum Credit Payment.--If a transferred employee
dies before attaining early deferred retirement age, such
employee shall be treated as a former employee who dies not
retired for purposes of payment of the lump-sum credit under
section 8342(d) of title 5, United States Code.
(g) Implementing Regulations.--The Office of Personnel
Management shall promulgate regulations to carry out the
provisions of this section.
(h) Effective Date.--This section shall take effect on
August 1, 1996, and shall apply to transferred employees
separated from Federal service on or after that date.
____
BRAC Privatization: The CSRS Issue
issue
The 1995 Base Realignment and Closure (BRAC) Commission
recommended the privatization of certain military facilities.
The President has directed the Air Force to privatize two Air
Force logistic centers. For privatization to succeed, the
maintenance of an experienced workforce is critical.
Retirement benefits have become recognized as a major
impediment to the privatization of the Louisville and
Indianapolis Navy facilities and other Department of Defense
(DOD) facilities.
Without legislation to protect their retirement benefits
many employees will--and are--transferring to other Federal
positions to maintain and protect their retirement benefits
under the Civil Service Retirement System (CSRS).
If many key employees transfer within the Government rather
than work for a private sector contractor, privatization
savings to the Government may not be fully realized. The
Department of the Navy estimates that privatization of
Louisville and Indianapolis would provide up to $390 million
in ``cost avoidance'' to the Government. Unlike other Base
closings, the cost to the Federal government to close and
move the work at Louisville and Indianapolis is far greater
than the cost of privatization. The retention of the Federal
employees at these facilities is essential to the private
contractor.
background
The 1995 BRAC Commission directed privatization of two Navy
facilities with a large federal workforce, the Naval Surface
Warfare Center, Louisville, Kentucky and the Naval Surface
Warfare Center, Indianapolis, Indiana. In addition, President
Clinton directed the Air Force to try and privatize two Air
Force logistic centers, one in Texas and one in California
which were ordered to be closed by the 1995 BRAC.
These Federal employees are different from other employees
adversely affected by downsizing. The key difference is that
these employees are not being separated because their
services are no longer needed or because the work they
accomplished is redundant or unnecessary. Under the BRAC
``Close and Move'' scenario, these employees would have been
eligible to continue their Federal employment (and qualify
for an annuity) at another federal installation. These
employees are expected to continue accomplishing the same
mission as before, but they will be working as private sector
employees.
Most Federal employees hired before 1984 currently
participate in the CSRS. Those workers hired after 1984
participate in the Federal Employees Retirement System
(FERS). FERS is different than CSRS because it is a portable
plan that allows a Federal employee to move between Federal
and non-federal employment. In doing so, the accrual of
Federal benefits is not significantly penalized.
However, employees under CSRS have no portability because
it is a single component defined benefit plan. Therefore,
when CSRS-COVERED workers are forced to separate from Federal
employment before they are eligible for an immediate annuity,
their retirement benefits lose considerable value. Employees
who lose their Federal position and withdraw their retirement
contribution early will forfeit all benefits from the Federal
government and thereby are not eligible for a pension.
Employees with the most experience tend to be covered under
CSRS. These are the employees the contractor taking over the
work at a government facility considers to be very valuable.
For example, 46% of the employees at the Louisville Naval
Surface Warfare Center are covered by CSRS and are not
eligible for retirement. Many of these employees, and those
in Indiana, Texas and California who are highly skilled, are
seeking to transfer to other Federal positions. Some are even
accepting lower paid positions within DOD so they may
maintain their CSRS retirement benefits. As a result, there
is little incentive for CSRS employees to accept positions
with the private contractor. Therefore, the privatization of
Federal facilities could fail at a significant cost to the
Government and the U.S. taxpayers.
Legislative remedy:
To rectify the CSRS issue, the attached draft legislation
proposes to index a deferred
[[Page S3632]]
annuity for certain DOD CSRS Employees. The legislation would
address the issue of CSRS employees receiving a retirement
benefit by:
Indexing the average pay on which the annuity is computed,
and
Allowing a Federal deferred annuity to be paid to specific
CSRS employees at the individuals optional retirement age.
The legislation will apply only to Transferred Employees of
the Department of Defense. A Transferred Employee is one
whose job is privatized pursuant to a 1995 decision of the
BRAC Commission and pursuant to a President directive
privatizing a base to be closed by the 1995 BRAC. This
indexedial deferred annuity will be available only to
individuals participating in CSRS, and not to those
participating in FERS. The proposed legislation will apply to
only those CSRS employees who are ineligible to retire and
who accept work with the private contractor. They will be
ineligible for severance pay.
Reasons for legislation:
At this time there are no administrative remedies.
Treats employees equitably and thus stabilizes the work
force for privatization.
______
By Mr. KERRY:
S. 1687. A bill to provide for annual payments from the surplus funds
of the Federal Reserve System to cover the interest on obligations
issued by the Financing Corporation; to the Committee on Banking,
Housing, and Urban Affairs.
The Federal Reserve Surplus Act of 1996
Mr. KERRY. Mr. President, I am introducing the Federal Reserve
Surplus Act of 1996 to provide a solution to an impending crisis in our
financial services industry, and to avoid once again having to use
taxpayers' money to bail out another round of S&L failures. I am happy
to join my colleague in the House, Congressman Barney Frank as well as
other members of the Massachusetts delegation, Congressmen Joe Kennedy,
Marty Meehan, and Richard Neal, who introduced the companion bill in
the House of Representatives.
This bill will ease the obligation remaining from the savings and
loan crisis of the 1980's with a creative approach that does not burden
the banking institutions or taxpayers, but uses an existing $3.7
billion fund at the Federal Reserve. The GAO tells us that because the
Federal Reserve's interest income so far exceeds its expenses, we
believe it is highly unlikely the System will ever incur sufficient
annual losses such that it would be required to use any funds in the
surplus account.
Savings and loans are required to pay almost $800 million per year in
interest on financing corporation bonds which were sold to cover
depositor claims on S&L's that failed in the 1980's. This legislation
would use $3 billion from the Federal Reserve's surplus fund as a
contribution toward the payment of the FICO interest obligation. This
would leave about $1 billion in the fund.
It is generally believed, within the financial community, as
Congressman Frank has said, that ``continuing to require the savings
and loans to pay the entire FICO interest obligation would worsen the
disparity between what banks must pay to such a degree as to risk
default by the SAIF, which would ultimately result in a further drain
on the Treasury.''
Mr. President, this just makes sense. The Federal Reserve is
controlling a fund with no specific purpose--paid in by banks--and the
Congress should turn to this fund first before asking bankers in this
country to bear the burden of recapitalizing the savings association
insurance fund.
Mr. President, I ask unanimous consent to have the bill printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1687
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Reserve Surplus Act
of 1996''.
SEC. 2. TRANSFER OF FEDERAL RESERVE SURPLUS FUNDS TO MEET
FICO CARRYING COSTS.
(a) In General.--Section 7(a) of the Federal Reserve Act
(12 U.S.C. 289) is amended by adding at the end the following
new paragraph:
``(4) FICO payments.--
``(A) In general.--During the period beginning on the date
of enactment of the Federal Reserve Surplus Act of 1996 and
ending on the date on which the Financing Corporation ceases
to have any obligations outstanding under section 21(e) of
the Federal Home Loan Bank Act, the Board shall annually
transfer (in addition to the transfers of funds required
under paragraph (3)) to the Financing Corporation, from
amounts in the surplus funds of the Federal reserve banks, an
amount equal to $3,000,000,000 divided by the number of
calendar years any portion of which falls within such period
for use in accordance with section 21(f)(1) of the Federal
Home Loan Bank Act.
``(B) Allocation.--The Board shall annually determine, on
the basis of such factors as the Board considers appropriate,
the manner in which the amount of the obligation of the Board
under subparagraph (A) shall be allocated among the surplus
funds of the Federal reserve banks.''.
(b) Conforming Amendment.--Paragraph (1) of section 21(f)
of the Federal Home Loan Bank Act (12 U.S.C. 1441(f)) is
amended to read as follows:
``(1) Federal reserve surplus.--
``(A) In general.--Amounts transferred to the Financing
Corporation by the Board of Governors of the Federal Reserve
System from the surplus funds of the Federal reserve banks in
accordance with section 7(a)(4) of the Federal Reserve Act.
``(B) Treatment in case of bank insurance fund member
assessments.--To the extent Bank Insurance Fund members (as
defined in section 7(l)(4) of the Federal Deposit Insurance
Act) are subject to any assessments under this subsection,
the total amount of such assessments which, but for this
subparagraph, would be imposed on all such members for any
year shall be reduced by the transferred amount referred to
in subparagraph (A) with respect to such year.''.
______
By Mr. DOLE (for himself, Mr. Simon, Mr. Abraham, Ms. Moseley-
Braun, Mr. Murkowski, Ms. Mikulski, Mr. Helms, Mr. Roth, Mr.
Santorum, and Mr. Lugar):
S.J. Res. 51. A joint resolution saluting and congratulating Polish
people around the world as, on May 3, 1996, they commemorate the 205th
anniversary of the adoption of Poland's first constitution; to the
Committee on the Judiciary.
poland constitution 205th anniversary commemoration joint resolution
Mr. DOLE. Mr. President, today I am introducing a joint resolution
which salutes and congratulates Polish people around the world on the
occasion of the 205th anniversary of the Polish Constitution. I am
pleased to be joined by Senators Simon, Abraham, Moseley-Braun,
Murkowski, Mikulski, Helms, Roth, Santorum, and Lugar. This resolution
is being introduced today in the House by Congressman Jack Quinn of New
York and a number of bipartisan cosponsors.
Poland is one of America's oldest and closest friends. Many of its
sons and daughters have crossed the ocean to our shores over the past
200 years. Indeed, from the very birth of our great nation we have
benefited from the talent and dedication of the Polish people. When we
fought for our independence, Thaddeus Kosciuszko--a native son of
Poland--fought alongside General Washington. Today, memorials to
Kosciuszko's courage, military skill, and genuine friendship, can be
found in our Capital and in many cities across the United States.
Following the War of Independence, Kosciuszko carried back to Poland
the American concept of constitutional democracy. Poland's 1791
Constitution was the first constitution in Central and Eastern Europe
to secure individual and religious freedom for all persons. It also
formed a government much like ours, composed of distinct legislative,
executive, and judicial powers. I would like to quote from the Polish
Constitution which declares, ``All power in civil society should be
derived from the will of the people.''
Tragically, this Constitution was only in effect for less than 2
years. However, its principles endured for 2 centuries. And over the
last 5 years--since the disintegration of the Warsaw Pact--Poland has
finally realized the promise of freedom and democracy held in the 1791
Constitution.
So, on May 3, 1996, when the citizens of Poland celebrate the 205th
anniversary of the adoption of Poland's first Constitution, we want
them to know that the United States Congress shares in their
celebration. No doubt, all across our 50 States, Polish-Americans will
be celebrating and taking pride in their rich heritage. This joint
resolution salutes and congratulates all Polish people, wherever they
may now reside, on this great and historic occasion.
Mr. President, I ask unanimous consent that the text of the joint
resolution be printed in the Record.
[[Page S3633]]
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 51
Whereas, on May 3, 1996, Polish people around the world,
including Americans of Polish decent, will celebrate the
205th anniversary of the adoption of the first Polish
constitution;
Whereas American Revolutionary War hero Thaddeus Kosciuszko
introduced the concept of constitutional democracy to his
native country of Poland;
Whereas the Polish constitution of 1791 was the first
liberal constitution in Europe and represented Central-
Eastern Europe's first attempt to end the feudal system of
government;
Whereas this Polish constitution was designed to protect
Poland's sovereignty and national unity and to create a
progressive constitutional monarchy;
Whereas this Polish constitution was the first constitution
in Central-Eastern Europe to secure individual and religious
freedom for all persons in Poland;
Whereas this Polish constitution formed a government
composed of distinct legislative, executive, and judicial
powers;
Whereas this Polish constitution declared that ``all power
in civil society should be derived from the will of the
people'';
Whereas this Polish constitution revitalized the
parliamentary system by placing preeminent lawmaking power in
the House of Deputies, by subjecting the Sejm to majority
rule, and by granting the Sejm the power to remove ministers,
appoint commissars, and choose magistrates;
Whereas this Polish constitution provided for significant
economic, social, and political reforms by removing
inequalities between the nobility and the bourgeoisie, by
recognizing town residents as ``freemen'' who had judicial
autonomy and expanded rights, and by extending the protection
of the law to the peasantry who previously had no recourse
against the arbitrary actions of feudal lords;
Whereas, although this Polish constitution was in effect
for less than 2 years, its principles endured and it became
the symbol around which a powerful new national consciousness
was born, helping Poland to survive long periods of
misfortune over the following 2 centuries; and
Whereas, in only the last 5 years, Poland has realized the
promise held in the Polish constitution of 1791, has emerged
as an independent nation after its people led the movement
that resulted in historic changes in Central-Eastern
Europe, and is moving toward full integration with the
Euro-Atlantic community of nations: Now, therefore, be it
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That--
(1) the people of the United States salute and congratulate
Polish people around the world, including Americans of Polish
descent, as on May 3, 1996, they commemorate the 205th
anniversary of the adoption of the first Polish constitution;
(2) the people of the United States recognize Poland's
rebirth as a free and independent nation in the spirit of the
legacy of the Polish constitution of 1791; and
(3) the Congress authorizes and urges the President of the
United States to call upon the Governors of the States, the
leaders of local governments, and the people of the United
States to observe this anniversary with appropriate
ceremonies and activities.
____________________