[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.

                          ____________________