Congressional Record, Volume 142 Issue 102 (Thursday, July 11, 1996)

[Congressional Record Volume 142, Number 102 (Thursday, July 11, 1996)]
[Senate]
[Pages S7762-S7769]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. GRAHAM (for himself, Mr. Reid, Mr. DeWine, Mr.
Dorgan, Mr. Mack, Mr. Conrad, and Mr. Bryan):

S. 1943. A bill to amend the Fair Labor Standards Act of 1938 to
exempt inmates from the minimum wage and maximum hour requirements of
such Act, and for other purposes; to the Committee on Labor and Human
Resources.

THE FAIR LABOR STANDARDS ACT OF 1938 AMENDMENT ACT OF 1996

Mr. GRAHAM. Mr. President, with my colleague, Senator Reid, we
introduce today legislation which will clarify the Fair Labor Standards
Act and the issue of minimum wage, as it applies to prisoners
incarcerated in State and local institutions. I send the legislation to
the desk.
The PRESIDING OFFICER. The bill will be received and appropriately
referred.
Mr. GRAHAM. Mr. President, the main points of this legislation are as
follows. No. 1, it will exempt prison workers from the minimum wage
provisions. No. 2, it will put an end to a cascade of lawsuits that our
States have been faced with by prisoners demanding back wages. It
enables the effective prison work and employment training programs that
have been developed within many of our State corrections facilities to
continue without the fear of these lawsuits.
Mr. President, I am pleased to be able to cosponsor this legislation
with my colleague, Senator Reid, who, during

[[Page S7763]]

the last Congress and previously, has brought this issue so effectively
to our attention. This legislation has engendered bipartisan support
and today we are joined by Senators Mack, DeWine, Bryan and Dorgan in
our efforts to correct the application of minimum wage to State
prisons.
This is an issue of national concern. Class action lawsuits by
prisoners demanding backpay at minimum wage are entangling Federal
courts in many sectors of the country. Florida alone has faced two such
class action lawsuits in the last 24 months. In 1992, 18 States asked
Congress for clarification of this issue. Today, 4 years later, we have
yet to answer their call for help. It seems appropriate that we should
address this issue in the very week that we have taken action to
increase the minimum wage in the law.
Many prisoners participate in job training and work programs which
provide numerous benefits. This legislation restricts its applicability
in terms of prohibition from the application of the minimum wage to
those prison industry programs which are providing goods or services to
either a local, State, or Federal governmental agency. We are not
including where there might be the production of products or the
delivery of services that would be beneficial and therefore in
competition with commercial, private-sector activities.
Not only are these activities beneficial in terms of providing
services which range, in my State, from supplies such as furniture and
printed materials, to the provision of services which are valuable to
local, State, or Federal governments, but they also deal with one of
the major issues that affects recidivism, the likelihood of a person
upon release from prison returning to a life of crime. Consistently,
one of the key factors in the likelihood of a prisoner either living a
life of law and order and production or returning to their previous
criminal behavior is whether they leave the prison prepared to hold a
job.

These programs provide that kind of on-the-job training and
experience that make prisoners, upon release, more likely to be
employable, more likely to have the cultural skills, the understanding
of what it means to go to work every day in order to get and hold a
job.
I am very proud that in our State, the recidivism rate among those
prisoners who have been through our prison industry program is one-
fifth of the recidivism rate of the population as a whole. We want to
protect these programs by eliminating the prospect that they might be
subjected to the minimum wage.
What would happen if the minimum wage were to be made applicable to
these prison work programs? Again, using the State of Florida as an
example, it has been estimated that if the State were to lose the class
action suit that is before it, it would cost millions of dollars in
backpay and an additional $24 million every year to continue the
programs as they are currently in place.
In a time of tight State budgets, there is very little likelihood
that there would be this $24 million forthcoming, and, therefore, the
prospect would be that this effective program that is serving so many
important interests would be terminated.
So, Mr. President, this legislation is beneficial to the States and
the communities that are the direct beneficiaries of the products and
services produced by these prison industries. There is even a greater
benefit in terms of reducing the likelihood of prisoners, upon release,
returning to a life of crime and, therefore, being a predator upon
society.
But it also gives us a chance, frankly, to eliminate a provision
which makes us appear to be foolish to the American public. If you were
to tell the average citizen in New Hampshire, did you know that there
is an interpretation of the Federal minimum wage law that requires your
State, if a prisoner is working while they are incarcerated, doing
something productive, helping prepare themselves for their post-
incarceration life, requiring the State to pay minimum wage to that
person, in spite of the fact that the State is also providing them a
place to live, to eat, their medical services, all of the requirements,
and then to say they have to receive the minimum wage, which is now
going to be raised over the next 2 years to $5.15 an hour, you would
first encounter bemusement and then, I think, public anger at what they
would see to be such a foolish idea.
So, Mr. President, I hope that, albeit 4 years late, we would respond
to the request of the States to clarify that we do not intend to apply
the minimum wage to those persons engaged in prison industries and
allow the States to continue with this thoroughly rational and
important part of their corrections program.
It is my honor to turn the remainder of the time to my colleague and
cosponsor, Senator Reid.
Mr. REID addressed the Chair.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, I appreciate very much the efforts of my
colleague. When this matter was first introduced in August 1992,
Senator Graham was a steadfast supporter of this legislation. He
indicated that I have been a good advocate of this legislation. I say,
Mr. President, not good enough. It seems that we should have this in
law. We have not been able to do that.
I think it is fair to say that we should put the committee of
jurisdiction, or committees of jurisdiction, on notice that we are
going to move forward with this legislation. It is important we do so,
and if we do not get it done in the committees, then we are going to
have to do it here on the floor. We have waited too long.
The legislation that I introduced in 1992 was in response to the
decision of the Ninth Circuit Court of Appeals that all inmates working
in correctional institutions and industries in those institutions are
covered by the Fair Labor Standards Act. That was stunning to me. As my
colleague from Florida has indicated, this decision is beyond the
ability to comprehend.
The decision has been overturned, and the courts around this country
are confused on this issue, and it calls for a clarification. In fact,
it is a pending court case in Florida that has brought Senator Graham
and I to the floor this morning to reintroduce the prison wage bill.
Clarification is needed, not only for the direction of the courts, but
to dissuade prisoner lawsuits to recover minimum wage payments for work
done while in prison.
If inmates were covered by the Fair Labor Standards Act, they would
not only be eligible--listen to this--for minimum wage, but it would
open the door for unemployment compensation for prisoners, it would
open the door for worker's compensation for prisoners, it would open
the door for paid vacations for prisoners, it would open the door for
overtime pay for prisoners. I mean, is this ridiculous?
If the Federal Government or States are required to pay minimum wage,
it would mean the end of most prison work programs. We simply would not
be able to afford them. State governments are already staggering from
budget deficits. Inmates would lose their job training, in most
instances, lose their opportunity to produce something during their
incarceration and lose the incentive to reform themselves and return to
society. Prisoners would sit idle in their cells. Taxpayers already pay
for room, board, even cable TV for prisoners. I do not believe they
want to pay for minimum wage as well.
Mr. President, I, frankly, would like to go further. I do not think
they should have cable television. I do not think they should have some
of the things they have in prison that they do have, but I am going to
let well enough alone and see if we can move forward on this very
meaningful legislation.
We in Congress just spent months, as my colleague has indicated,
fighting for an increase in the minimum wage. Were we fighting for a
worker trying to raise a family on $8,500 a year--that is minimum
wage--or were we fighting for a wage increase for prisoners? I know
that I was fighting for the working family and not the prisoner who has
not played by the rules of society and is supposed to be punished, in
my estimation.
Some opponents of this bill have raised the question of low-wage
inmate competition with the private sector. But this issue has already
been adequately explained by my colleague. This issue has already been,
I repeat, addressed by the Ashurst-Sumners Act, as well as the Prison
Industry Enhancement Certification Program. This is only talk.

[[Page S7764]]

Further, in our bill, we provide specifically that our language does
not affect programs certified pursuant to the Ashurst-Sumners Act.
Mr. President, I asked, sometime ago, the General Accounting Office
to look into this matter, and they rendered a very fine report on
prison labor. I quote from this report:

If the prison systems we visited were required to pay
minimum wage to their inmate workers and did so without
reducing the number of inmate hours worked, they would have
to pay hundreds of millions of dollars more each year for
inmate labor. Consequently, these prison systems generally
regard minimum wage for prison work as unaffordable, even if
substantial user fees (e.g.: charges for room and board) were
imposed on the inmates.

They went on to say:

Prison systems officials consistently identified large-
scale cutbacks in inmate labor as likely and, in their view,
a dangerous consequence of having to pay minimum wage. They
believed that less inmate work means more idle time and
increased potential for violence and misconduct.

Therefore, paying minimum wage to prisoners would not only be
expensive, but dangerous and counterproductive.
The Fair Labor Standards Act of 1938 was enacted as a progressive
measure to ensure all able-bodied working men and women a fair day's
pay for a fair day's work. It was never, never intended to cover
criminals in our prisons.
______

By Mr. HATFIELD (for himself, Mr. Grassley, and Mr. Harkin):

S. 1944. A bill to establish a commission to be known as the Harold
Hughes Commission on Alcoholism; to the Committee on Labor and Human
Resources.

The Harold Hughes Commission on Alcoholism Act of 1996

Mr. HATFIELD. Mr. President, it is my honor today, along with
my distinguished colleagues, Senators Grassley and Harkin, to introduce
legislation that will fulfill a lifetime dream. The Honorable Harold
Hughes, the ``man from Ida Grove,'' has made the struggle against
alcoholism and its affects on individuals and their families his life
work. Harold Hughes vision is to combat alcoholism, not only on a
personal level, but on a community and national level as well. His
dream will be fulfilled with the creation of a commission on all
matters related to alcoholism and its affects on America.
The Talmud defines a good man as, ``one who needs no monuments
because their deeds are shrines.'' The Honorable Harold Hughes deeds
are indeed shrines. My distinguished friend has devoted his life to
helping others. He has served as Governor of Iowa, U.S. Senator, and
now as a leader in the fight against the abuse of alcohol and drugs. He
is the founder and chairman of the Hughes Foundation as well as the
Harold Hughes Centers for Alcoholism and Drug Treatment. He has become
a front-line soldier in the war against alcohol abuse in the United
States.
Alcohol use and abuse in the United States affects all of us.
Although alcohol is a legal drug, its effects are devastating.
Alcoholism tears apart marriages, families and communities. As a
Nation, we cannot allow the devastating effects to continue.
Alcohol abuse and dependency affects 10 percent of Americans, 18.5
million, but we all pay the price for this addiction.
About 56 percent of American families are affected by alcoholism.
If alcohol were never carelessly used in our society, 105,000 fewer
people would die each year.
Alcohol is a factor in one-half of all homicides, suicides, and motor
vehicle fatalities.
Treatment, support, direct health care costs, as well as lost work
time and premature death cost the public $98.6 billion in 1990.
The Harold Hughes Commission on Alcoholism will provide the
President, Congress, and the American people with the tools that are
necessary to address the effects of this disease. Unlike commissions of
the past, which studied the affects of alcoholism on our society, the
work of this Commission will be uniquely narrowly tailored. The focus
will not be on the big picture of alcoholism in the United States,
rather it will be on the limited, practical, and cost-effective
solutions to our growing crisis with alcoholism. The Commission will
examine better ways to coordinate existing Government programs, improve
education on the affects of alcohol, improve alcoholism research, and
increase public/private sector cooperation in combating this disease.
This work will be carried out by small working groups that will include
academics, business executives and alcoholism experts. These working
groups will focus on single policy issues in order to produce
recommendations that will lead to tangible solutions to alcoholism.

Currently, the National Institute on Alcohol Abuse and Alcoholism
under the National Institutes of Health is the leading research and
funding organization for issues dealing with alcohol abuse. NIAAA
conducts 90 percent of all research in these areas. Current research in
the area of alcoholism includes: Searching for the genome for genetic
markers that are linked to alcoholism; developing and approving a new
drug, Naltexone, for the treatment of alcoholism; educating mothers on
the risks drinking poses during pregnancy; preventing alcoholism
through educational programs developed for schools, the workplace, and
the community. This research and programming will greatly reduce the
overall cost of alcohol abuse to society.
The Harold Hughes Commission will be a vehicle for existing programs
like NIAAA as well as other research programs and Government agencies
to increase their effectiveness. The coordination of exsisting programs
will increase the success rate of all the programs.
This legislation marks the beginning of a renewed congressional
commitment to fighting alcoholism in America. It also pays tribute to a
man who made a similar commitment in his own life for himself, his
community, and others who are fighting the battle against
alcoholism.
______

By Mr. DeWINE:
S. 1945. A bill to broaden the scope of certain firearms offenses; to
the Committee on the Judiciary.

Gun Crimes Legislation

Mr. DeWINE. Mr. President, prosecutions of gun criminals are
down 20 percent under the Clinton administration. At a time when 10
million Americans every year become victims of violent crime, the
administration is not making the prosecution of armed criminals a major
priority.
I think that's a mistake. I think we have to do more to get violent
felons off the streets. And I am introducing a bill that will help make
sure this happens.
Recently, the Supreme Court handled down a unanimous decision that
essentially disarmed a very effective weapon that Federal prosecutors
use to combat violence and drug abuse. The bill I am introducing will
rearm Federal prosecutors--and it will do so in a way that it will not
be open to reinterpretation by the courts. Congress must leave no doubt
that when a criminal commits a violent crime or completes a drug deal,
and a gun is around, the gun is a part of the offense, and the criminal
will get 5 years added to his prison sentence.
Prior to December 6, 1995, Federal prosecutors used title 18, section
924(c)(1) to impose an additional mandatory 5 years in prison for those
criminals who use or carry a firearm during or in relation to a violent
crime or a drug trafficking crime.
The purpose of this statute was to send violent criminals and drug
traffickers to jail--where they belong. And this provision was an
effective law enforcement tool because the lower courts defined ``use''
very broadly. In fact, if the defendant simply had a gun nearby, it was
sufficient to convict under section 924(c)(1)--because the courts ruled
that the proximity of the gun served to ``embolden'' the defendant.
According to the U.S. Sentencing Commission, in 1994 alone, over
2,000 defendants were sentenced to longer terms under section
924(c)(1).
The Supreme Court's ruling last year ended the effectiveness of this
statute as a crime-fighting tool. The court ruled that, in order to
charge a defendant under section 924(c)(1), the Government must show
that the defendant actively employed a firearm during or in relation to
a violent or drug trafficking crime. Therefore, if a firearm merely
served to embolden a criminal, the court said, it was not being
``used''

[[Page S7765]]

within the meaning of section 924(c)(1), and the criminal would not
receive the additional 5 years in prison.
When Congress passed this statute, it was sending a clear message to
drug dealers and violent criminals--Guns and drugs are a recipe for
disaster. And, if you mix them, you are going to pay a price. I believe
that this Congress should act to restore this crime fighting tool, and
we should do it in a way that leaves nothing to the reckoning of the
courts.
My legislation would do just that. It would amend section 924(c)(1)
to cover all circumstances in which a drug dealer or violent criminal
is caught with a firearm that is being used to further his drug
trafficking or violent enterprise. Under this legislation, a drug
dealer, for example, would be subject to a mandatory additional 5-year
prison sentence for drug trafficking, if he ``uses or carries a
firearm, or has a firearm in close proximity to illegal drugs or drug
proceeds, or has a firearm in close proximity at the time of arrest or
at the point of sale of illegal drugs.''
I believe that this legislation will do a great deal to help the law
enforcement officials on the front lines of the war on drugs. It makes
our law stronger--and helps get these felons off the streets, out of
our communities, and into prison.
______

By Mr. DeWINE:
S. 1946. A bill to amend title 18, United States Code, to insert a
general provision for criminal attempt; to the Committee on the
Judiciary.

crime legislation

Mr. DeWINE. Mr. President, a few weeks ago, I spoke on the
floor about the current administration's record on crime. The facts
clearly demonstrate that the administration's actions do not fulfill
its rhetoric on this issue.
I think it is time to give law enforcement officers the tools they
need to do their jobs--protecting American families. Today, I am
introducing legislation aimed at doing just that, in one significant
way.
The bill I am introducing today would establish, for the first time
in the Federal Criminal Code, a general attempt provision. Thankfully,
criminals do not succeed every time they set out to commit a crime. We
need to take advantage of these failed crimes to get criminals off the
streets.
Mr. President, under current Federal law, there is no general attempt
provision applicable to all Federal offenses. This has forced Congress
to enact separate legislation to cover specific circumstances. This
approach to the law has led to a patchwork of attempt statutes--leaving
gaps in coverage, and failing to adequately define exactly what
constitutes an attempt in all circumstances.
Since statutes include attempt language within the substantive
offense, but don't bother to define exactly what an attempt is. Others
define, as a separate crime, conduct which is only a step toward
commission of a more serious offense. Moreover, there is no offense of
attempt for still other serious crimes, such as disclosing classified
information to an unauthorized person.
This ad hoc approach to attempt statutes is causing problems for law
enforcement officials. At what point is it OK for law enforcement
officials to step in to prevent the completion of a crime? If someone
is seriously dedicated to committing a crime, law enforcement must be
able to intervene and prevent it--without having to worry whether doing
so would cause a criminal to walk. In the absence of a statutory
definition of an attempt, the courts have been called upon to decide
whether specific actions fit within existing statutory language.
When a criminal is attempting to commit a crime where attempt is not
an offense, then law enforcement must wait until the crime is
completed, or find some other charge to fit the criminal's actions. Law
enforcement should never be placed in either of these positions.
The bill that I am introducing today will solve these problems in the
current law. As I mentioned earlier, this legislation will add a
general attempt provision to the U.S. Criminal Code. It provides
congressional direction in defining what constitutes an attempt in all
circumstances. And, it will serve to fill in the irrational gaps in
attempt coverage.
In my view, it is time for the American people--acting through the
Congress--to clarify their intention when it comes to this area of the
law.
Millions of Americans work hard every day to make ends meet and raise
their families and provide a better life for their children.
But, there are some people who choose a different approach to life--a
life of crime. We as Americans need to leave no doubt where we stand on
that choice. If you even try to commit a crime, we're going to
prosecute you and convict you. This bill will make it easier for our
law enforcement officers to protect our families and our
communities.
______

By Mr. DeWINE:
S. 1947. A bill to provide for a process to authorize the use of
clone pagers, and for other purposes; to the Committee on the
Judiciary.

the clone pager authorization act of 1996

Mr. DeWINE. Mr. President, I recently made some remarks on the
Senate floor about the current administration's record on crime. The
facts are clear: The administration's actions on crime do not meet its
rhetoric.
To stop crime, we have to do more. That doesn't mean another
rhetorical assault on crime--or even a flashy 10-point program. Rather,
we have to do more of the little things that--when you put them all
together--make a big difference.
The most important of these is giving law enforcement officials the
tools they need to do their jobs. Today, I am introducing legislation
that will help us do that.
The bill I am introducing today would simply rectify an imbalance in
current Federal law which makes it more difficult for law enforcement
officials to fight drug trafficking. Today, drug traffickers have taken
advantage of technological advances to advance their own criminal
interests.
Drug traffickers--on a regular basis--use digital display paging
devices--better known as beepers--in transacting their business. They
do this because it gives them the freedom to run their criminal
enterprise out of any available phone booth, and to avoid police
surveillance. If law enforcement officials knew from whom they were
receiving the calls to their beepers it would certainly aid efforts in
tracking down drug traffickers.
The technology now exists to allow law enforcement to receive the
digital display message, without intercepting the content of any
conversation or message. It is called a clone pager. This clone pager
is programmed identically to the suspect's pager and allows law
enforcement to receive the digital displays at the same time as the
suspect.
This device functions identically to a pen register. Mr. President,
as you may know, a pen register is a device which law enforcement
attaches to a phone line to decode the numbers which have called a
specific telephone. Like a clone pager, the pen register only
intercepts phone numbers, not the content of any conversation or
message.
Since both devices serve the same purpose, a reasonable person would
conclude that both the system for receiving authorization to use these
devices, and the procedures mandated by the courts once the
authorization was granted would be the same. However, in both cases it
is not.
Under current law, the requirements for obtaining authorization to
use a clone pager are much more stringent than they are for using a pen
register. I would like to briefly outline the differences.
In order to obtain authorization to use a pen register, a Federal
prosecutor must certify to a district court judge the phone number to
which the pen register will be attached, the phone company that
delivers service to that number, and that the pen register serves a
legitimate law enforcement purpose. In other words, the prosecutor must
show only that the use of the pen register is based on an ongoing
investigation. The district court judge may then grant the
authorization on a mere finding that the prosecutor has made the
required certification. The pen register can then be used for a period
of 60 days--with no requirement that law enforcement report pen
register activity to the court.
In contrast, the U.S. attorney for a particular district must sign
off on a request for clone pager authorization. Once this occurs, a
prosecutor may

[[Page S7766]]

then go before a district court judge where he must show that there is
probable cause to suspect an individual has committed a crime--a much
higher standard than what is required for a pen register authorization.
He must also detail what other investigative techniques have been used,
why they have not been successful, and why they will continue to be
unsuccessful. Moreover, the prosecutor must disclose other available
investigative techniques and why they are unlikely to be successful.
Only after all of this is done can authorization to use a clone pager
be granted.
But these are not the only differences in treatment. After the
authorization is granted, it can only be used for 30 days. During that
30 days, the prosecutor must report activity from the clone pager to
the issuing judge at least once every 2 weeks.
I do not believe that the authorization disparity in authorization
for these two devices is warranted.
The legislation that I am introducing today would simply amend the
Federal code to end this disparity. This bill would give law
enforcement agents ready access, with warranted limitations, to the
tools they need to do their jobs. This bill will bring Federal law
enforcement into the 21st century. The drug traffickers are already
there. It's time for law and order to catch up with them.
______

By Mr. D'AMATO (for himself and Mr. Kerry):
S. 1948. A bill to amend section 2241 of title 18, United States
Code, to provide for Federal jurisdiction over sexual predators; to the
Committee on the Judiciary.

Crime Legislation

Mr. D'AMATO. Mr. President, I offer a bill, originally
sponsored in the House by my colleague from New York, Representative
Slaughter. The bill will allow local district attorneys the option to
federally prosecute repeat sexual offenders. Authorizing local district
attorneys the opportunity to pursue Federal prosecution of habitual
sexual offenders ensures that the toughest penalties will be imposed on
these predators. They deserve nothing less.
It is horrendous that a rapist's average sentence is only 10\1/2\
years, with even less time being served. The sentence for child sex
offenders is no better. Too often, these monsters are on the street
ready to prey on their next victim.
In addition, repeat offenders convicted under this section of the
bill will be sentenced to life for their second offense. Criminals
repeatedly convicted of rape and serious sexual assaults must be taken
off our streets and removed from our communities forever.
I urge my colleagues to review the merits of this bill, join as
cosponsors and urge its immediate passage.
______

By Mr. DASCHLE (for himself, Mr. Leahy, Mr. Baucus, Mr. Harkin,
Mr. Wellstone, Mr. Feingold, Mr. Dorgan, Mr. Conrad, Mr.
Kerrey, Mr. Exon, Mr. Bingaman and Mr. Heflin):
S. 1949. A bill to ensure the continued viability of livestock
producers and the livestock industry in the United States; to the
Committee on Agriculture, Nutrition, and Forestry.

The Cattle Industry Improvement Act of 1996

Mr. DASCHLE. Mr. President, today several colleagues and I are
introducing the Cattle Industry Improvement Act of 1996. This
legislation addresses the deep concern of cattle, hog, and sheep
producers across the Nation that the livestock industry does not
operate in a free and open market. Livestock producers, especially
cattle producers, are receiving the lowest prices in recent memory.
Producers can barely make ends meet, let alone make a profit. The
Cattle Industry Improvement Act is a fair, substantive bill which
offers commonsense solutions to problems that have plagued the
livestock industry for a long time.
For the last 2 years the issue of livestock concentration has been
the No. 1 agricultural issue in South Dakota, even exceeding interest
in the farm bill. Livestock concentration and low cattle prices do not
just affect farmers and ranchers in my State. The impact is felt by the
entire economy of South Dakota, affecting people who live in cities,
towns, and rural communities alike. A recession in the cattle industry
has a ripple effect throughout the entire State the consequences of
which are potentially devastating. Farm foreclosures, job layoffs by
agriculture related businesses and bank failures are all likely if
cattle prices do not rebound in the immediate future.
I began the effort to address the issue of livestock concentration
last year with the introduction of legislation creating a livestock
commission to review the impact of packer concentration. This bill was
a bipartisan effort that passed the Senate but was blocked in the
House.
Fortunately, Secretary Glickman rescued the effort by creating the
USDA Advisory Committee on Agricultural Concentration. This advisory
committee, which included livestock producers, has served a vital role
in addressing concentration in agriculture. The advisory committee
submitted its findings and recommendations to Secretary Glickman on
June 6. Some of its recommendations can be implemented administratively
and are currently under review by Department of Agriculture officials
to determine their feasibility. Others require legislative action. The
conclusion the committee reached is unequivocal: the status quo is
unacceptable. Modern livestock production has changed, the USDA must
keep pace, and Congress must give the Department of Agriculture the
tools necessary to respond to these changes in a way that gives
producers a chance to make an honest living and compete fairly in the
marketplace.
The Cattle Industry Improvement Act of 1996 gives the Department
those tools. The bill requires the Secretary to define and prohibit
noncompetitive practices. It mandates price reporting for all sales
transactions conducted by any entity who has greater than 5 percent of
the national slaughter business, and requires timely reporting of
quantity and price of all imports and exports of meat and meat by
products. Livestock producers will be able to count on Federal
protection against packers and buyers who retaliate against them for
public comments made regarding industry practices. Federal agriculture
credit policies will be reviewed to determine if they are adequate to
address the cyclical nature of modern livestock production.
The bill also calls for the review of Federal lending practices to
determine if the Government is contributing to packer concentration,
and directs the President and the Secretaries of Agriculture and Health
and Human Services to formulate a plan consolidating and streamlining
the entire food inspection system.
Finally the bill requires the USDA to develop a system for labeling
U.S. meat and meat products. Companies will be encouraged to
voluntarily participate in labeling their products as originating from
U.S. livestock producers.
Swift congressional action is crucial for our Nation's livestock
producers. Free and open markets are one of the foundations of our
Nation and our economy. We as consumers all suffer if markets,
especially food markets, do not operate freely. The Cattle Industry
Improvement Act is critical to ensuring a fair shake for hard-working
livestock producers and the Nation's consumers
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1949

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Cattle
Industry Improvement Act of 1996''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Expedited implementation of Fund for Rural America.
Sec. 3. Prohibition on noncompetitive practices.
Sec. 4. Domestic market reporting.
Sec. 5. Import and export reporting.
Sec. 6. Protection of livestock producers against retaliation by
packers.
Sec. 7. Review of Federal agriculture credit policies.
Sec. 8. Streamlining and consolidating the United States food
inspection system.
Sec. 9. Labeling system for meat and meat food products produced in the
United States.

[[Page S7767]]

Sec. 10. Spot transactions involving bulk cheese.

SEC. 2. EXPEDITED IMPLEMENTATION OF FUND FOR RURAL AMERICA.

Section 793(b)(1) of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 2204f(b)(1)) is amended by
striking ``January 1, 1997,'' and all that follows through
``October 1, 1999,'' and inserting ``November 10, 1996,
October 1, 1997, and October 1, 1998,''.

SEC. 3. PROHIBITION ON NONCOMPETITIVE PRACTICES.

Section 202 of the Packers and Stockyards Act, 1921 (7
U.S.C. 192), is amended--
(1) in subsection (g), by striking the period at the end
and inserting ``; or''; and
(2) by adding at the end the following:
``(h) Engage in any practice or device that the Secretary
by regulation, after consultation with producers of cattle,
lamb, and hogs, and other persons in the cattle, lamb, and
hog industries, determines is a detrimental noncompetitive
practice or device relating to the price or a term of sale
for the procurement of livestock or the sale of meat or other
byproduct of slaughter.''.

SEC. 4. DOMESTIC MARKET REPORTING.

(a) Persons in Slaughter Business.--Section 203(g) of the
Agricultural Marketing Act of 1946 (7 U.S.C. 1622(g)) is
amended--
(1) by inserting ``(1)'' before ``To collect''; and
(2) by adding at the end the following:
``(2) Each person engaged in the business of slaughtering
livestock who carries out more than 5 percent of the national
slaughter for a given species shall report to the Secretary
in such manner as the Secretary shall require, as soon as
practicable but not later than 24 hours after a transaction
takes place, such information relating to prices and the
terms of sale for the procurement of livestock and the sale
of meat food products and livestock products as the Secretary
determines is necessary to carry out this subsection.
``(3) Whoever knowingly fails or refuses to provide to the
Secretary information required to be reported by paragraph
(2) shall be fined under title 18, United States Code, or
imprisoned for not more than 5 years, or both.
``(4) The Secretary shall encourage voluntary reporting by
any person engaged in the business of slaughtering livestock
who carries out 5 percent or less of the national slaughter
for a given species.
``(5) The Secretary shall make information received under
this subsection available to the public only in the aggregate
and shall ensure the confidentiality of persons providing the
information.''.
(b) Elimination of Outmoded Reports.--The Secretary of
Agriculture, after consultation with producers and other
affected parties, shall periodically--
(1) eliminate obsolete reports; and
(2) streamline the collection and reporting of data related
to livestock and meat and livestock products, using modern
data communications technology, to provide information to the
public on as close to a real-time basis as practicable.
(c) Definition of ``Captive Supply''.--For the purpose of
regulations issued by the Secretary of Agriculture relating
to reporting under the Agricultural Marketing Act of 1946 (7
U.S.C. 1621 et seq.) and the Packers and Stockyards Act, 1921
(7 U.S.C. 181 et seq.), the term ``captive supply'' means
livestock obligated to a packer in any form of transaction in
which more than 7 days elapses from the date of obligation to
the date of delivery of the livestock.

SEC. 5. IMPORT AND EXPORT REPORTING.

(a) Exports.--Section 602(a)(1) of the Agricultural Trade
Act of 1978 (7 U.S.C. 5712(a)(1)) is amended by inserting
after ``products thereof,'' the following: ``and meat food
products and livestock products (as the terms are defined in
section 2 of the Packers and Stockyards Act, 1921 (7 U.S.C.
182)),''.
(b) Imports.--
(1) In general.--The Secretary of Agriculture and the
Secretary of Commerce shall, using modern data communications
technology to provide the information to the public on as
close to a real-time basis as practicable, jointly make
available to the public aggregate price and quantity
information on imported meat food products, livestock
products, and livestock (as the terms are defined in section
2 of the Packers and Stockyards Act, 1921 (7 U.S.C. 182)).
(2) First report.--The Secretaries shall release to the
public the first report under paragraph (1) not later than 60
days after the date of enactment of this Act.

SEC. 6. PROTECTION OF LIVESTOCK PRODUCERS AGAINST RETALIATION
BY PACKERS.

(a) Retaliation Prohibited.--Section 202(b) of the Packers
and Stockyards Act, 1921 (7 U.S.C. 192(b)), is amended--
(1) by striking ``or subject'' and inserting ``subject'';
and
(2) by inserting before the semicolon at the end the
following: ``, or retaliate against any livestock producer on
account of any statement made by the producer (whether made
to the Secretary or a law enforcement agency or in a public
forum) regarding an action of any packer''.
(b) Special Requirements Regarding Allegations of
Retaliation.--Section 203 of the Packers and Stockyards Act,
1921 (7 U.S.C. 193), is amended by adding at the end the
following:
``(e) Special Procedures Regarding Allegations of
Retaliation.--
``(1) Consideration by special panel.--The President shall
appoint a special panel consisting of 3 members to receive
and initially consider a complaint submitted by any person
that alleges prohibited packer retaliation under section
202(b) directed against a livestock producer.
``(2) Complaint; hearing.--If the panel has reason to
believe from the complaint or resulting investigation that a
packer has violated or is violating the retaliation
prohibition under section 202(b), the panel shall notify the
Secretary who shall cause a complaint to be issued against
the packer, and a hearing conducted, under subsection (a).
``(3) Evidentiary standard.--In the case of a complaint
regarding retaliation prohibited under section 202(b), the
Secretary shall find that the packer involved has violated or
is violating section 202(b) if the finding is supported by a
preponderance of the evidence.''.
(c) Damages for Producers Suffering Retaliation.--Section
203 of the Packers and Stockyards Act, 1921 (7 U.S.C. 193)
(as amended by subsection (b)), is amended by adding at the
end the following:
``(f) Damages for Producers Suffering Retaliation.--
``(1) In general.--If a packer violates the retaliation
prohibition under section 202(b), the packer shall be liable
to the livestock producer injured by the retaliation for not
more than 3 times the amount of damages sustained as a result
of the violation.
``(2) Enforcement.--The liability may be enforced either by
complaint to the Secretary, as provided in subsection (e), or
by suit in any court of competent jurisdiction.
``(3) Other remedies.--This subsection shall not abridge or
alter a remedy existing at common law or by statute. The
remedy provided by this subsection shall be in addition to
any other remedy.''.

SEC. 7. REVIEW OF FEDERAL AGRICULTURE CREDIT POLICIES.

The Secretary of Agriculture, in consultation with the
Secretary of the Treasury, the Chairman of the Board of
Governors of the Federal Reserve System, and the Chairman of
the Board of the Farm Credit Administration, shall establish
an interagency working group to study--
(1) the extent to which Federal lending practices and
policies have contributed, or are contributing, to market
concentration in the livestock and dairy sectors of the
national economy; and
(2) whether Federal policies regarding the financial system
of the United States adequately take account of the weather
and price volatility risks inherent in livestock and dairy
enterprises.

SEC. 8. STREAMLINING AND CONSOLIDATING THE UNITED STATES FOOD
INSPECTION SYSTEM.

(a) Preparation.--In consultation with the Secretary of
Agriculture, the Secretary of Health and Human Services, and
all other interested parties, the President shall prepare a
plan to consolidate the United States food inspection system
that ensures the best use of available resources to improve
the consistency, coordination, and effectiveness of the
United States food inspection system, taking into account
food safety risks.
(b) Submission.--Not later than 1 year after the date of
enactment of this Act, the President shall submit to Congress
the plan prepared under subsection (a).

SEC. 9. LABELING SYSTEM FOR MEAT AND MEAT FOOD PRODUCTS
PRODUCED IN THE UNITED STATES.

(a) Labeling.--Section 7 of the Federal Meat Inspection Act
(21 U.S.C. 607) is amended by adding at the end the
following:
``(g) Labeling of Meat of United States Origin.--
``(1) In general.--The Secretary shall develop a system for
the labeling of carcasses, parts of carcasses, and meat
produced in the United States from livestock raised in the
United States, and meat food products produced in the United
States from the carcasses, parts of carcasses, and meat, to
indicate the United States origin of the carcasses, parts of
carcasses, meat, and meat food products.
``(2) Assistance.--The Secretary shall provide technical
and financial assistance to establishments subject to
inspection under this title to implement the labeling system.
``(3) Authorization of appropriations.--There are
authorized to be appropriated such sums as are necessary to
carry out this subsection.''.

SEC. 10. SPOT TRANSACTIONS INVOLVING BULK CHEESE.

(a) In General.--The Secretary of Agriculture shall collect
and publicize, on a weekly basis, statistically reliable
information, obtained from all cheese manufacturing areas in
the United States, on prices and terms of trade for spot
transactions involving bulk cheese, including information on
the national average price, and regional average prices, for
bulk cheese sold through spot transactions.
(b) Confidentiality.--All information provided to, or
acquired by, the Secretary under this section shall be kept
confidential by each officer and employee of the Department
of Agriculture, except that general weekly statements may be
issued that are based on the reports of a number of spot
transactions and that do not identify the information
provided by any person.
(c) Funding.--The Secretary may use funds that are
available for dairy market data collection to carry out this
section.

Mr. FEINGOLD. Mr. President, I am pleased to be an original cosponsor
of the Cattle Industry Improvement Act, which addresses an issue that
is critical to our livestock and dairy industries--the concentration of
economic

[[Page S7768]]

power. I want to applaud the Minority Leader [Senator Daschle] for his
extraordinary leadership on this issue. Last year he led the effort to
establish a commission to investigate concentration in meat packing and
processing, introducing legislation that passed in the Senate. That
legislation ultimately led to the report Concentration in Agriculture--
A Report of the USDA Advisory Committee on Agricultural Concentration--
issued this June, which confirmed the extensive concentration occurring
through the entire livestock marketing chain. The report warned that
concentration in processing and manufacturing is likely to harm farmers
more than anyone else in the marketing chain given their already low
market power in the face of a few large corporate buyers. That report
made a number of recommendations to Congress, the administration and
the livestock industry for steps that could be taken to address these
problems. The legislation Senator Daschle is introducing today takes
action on a number of those recommendations.
The trend towards concentration in the livestock industry is
particularly disturbing in light of the current record low prices in
cattle markets and record high prices for feed--the most important and
costly input to livestock production. In Wisconsin, low cattle prices
have hit our dairy farmers hard as they obtain a substantial portion of
their income from the sale of cull cows and veal calves. When beef
prices are low, Wisconsin's 27,000 dairy farmers are equally hard hit.
According to the USDA report, while prices are distressingly low for
producers, returns for meat packers are still quite high. As some of my
colleagues have pointed out, with four firms slaughtering 80 percent of
the cattle in this country, it is no wonder that producers in Wisconsin
and elsewhere are concerned about the disparate economic health of
livestock producers and livestock packing and processing industry.
While it isn't clear that concentration has caused the low prices, the
USDA report confirmed that given the circumstances in the livestock
industry, market manipulation for large packers and processors is
certainly possible.
The Cattle Industry Improvement Act includes provisions designed to
improve market information in the cattle industry which suffers from
inadequate market information. Less than 2 percent of fed cattle are
sold through an open ``price discovery'' process, providing producers
with very little information about what other cattle producers are
receiving for their cattle and what buyers are paying for cattle. The
market information provisions of this bill will allow producers to deal
with their buyers on a more level playing field.
In addition, this bill provides additional flexibility and authority
for the Secretary of Agriculture to aggressively target noncompetitive
activities in livestock markets under the Packers and Stockyards Act.
Another extremely important provision in this bill is the mandated
review of Federal agriculture credit policies to determine whether or
not our lending practices are facilitating the growth of larger
livestock and dairy operations. Many dairy farmers have complained to
me that they have a difficult time getting credit for both operating
purposes and for capital investments because lenders insist that
farmers greatly expanding their herd size in order to be credit worthy.
Many small farmers simply cannot get credit for minor herd expansion.
That is neither fair to our family sized farmers nor is it sound
policy. Such practices create self-fulfilling prophecies--forcing small
farms to grow significantly larger or to exit the industry. I am
looking forward to reviewing the results of the study required by this
legislation.

Finally, Mr. President, I want to thank Senator Daschle for his
cooperation in including a provision in this bill which I proposed to
address concentration concerns and market information inadequacies in
dairy markets. The cheese industry operates in a market that suffers
from a lack of pricing information that is even more extreme than in
the cattle industry. While less than 2 percent of the cattle in the
United States are sold on markets with open and competitive bidding,
less than one-half of one percent of the cheese in the United States is
sold on an open cash market--the National Cheese Exchange in Green Bay,
WI.
Even so, the price opinion of the National Cheese Exchange directly
and decisively affects the price that farmers throughout the nation
receive for their milk. Milk prices are tied directly to that price
through the Basic Formula Price, calculated by USDA. The BFP determines
the class III price for milk under the Federal milk marketing order
system. Even if that linkage did not exist, however, milk prices would
still be dramatically affected by the exchange opinion because it is
used as the benchmark in virtually all forward contracts for bulk
cheese. Ninety to ninety-five percent of bulk cheese in the United
States is sold through forward contracts. In other words, virtually all
cheese sold in the country is priced based on the opinion price at the
cheese exchange. Additionally, concentration in cheese processing is
high and increasing. The top four manufacturers and marketers of
processed cheese market 69 percent of the tonnage of processed cheese
nationally. Most if not all of those manufacturers are traders on the
exchange.
The National Cheese exchange has been the subject of great
controversy among dairy farmers because the small amount of trading on
the exchange has such a substantial impact on farmers. A recently
released report by the University of Wisconsin-Madison and the
Wisconsin Department of Agriculture, Trade and Consumer Protection
concluded that characteristics of the Green Bay cheese exchange make it
vulnerable to price manipulation by the most powerful member-firms of
the exchange. While such behavior may or may not violate antitrust
laws, it is certainly not good policy to rely solely on this type of
thin cash market to determine milk prices or cheese prices for the
Nation.
Like cattle producers, dairy farmers suspect that the price they
receive for their product may be controlled by a few large processors
that trade on the National Cheese Exchange. A one cent change in the
opinion price at the exchange translates into a 10 cent change in the
price of milk to farmers. When prices on the exchange drop suddenly and
precipitously, dairy farmers nationally lose millions of dollars in
producer receipts and begin to wonder whether the price decline was
truly reflective of market conditions. Others suspect that in times of
rising milk prices, such as today, traders on the exchange are able to
prevent prices from rising as high as they might given the market
conditions.

Unfortunately, no alternative to the National Cheese Exchange exist
for cheese price discovery. It is the only cash market in the country
for bulk cheese. While there is a futures market for cheese and other
dairy products, trading of futures contracts have been weak making the
futures prices unreliable benchmarks. Furthermore, there is little or
no market information on prices for spot transactions of cheese
collected by the Department of Agriculture. What little information
that is collected is not considered extensive enough to be reliable.
Section 4 of the Cattle Industry Improvement Act includes a provision
requiring the Secretary of Agriculture to collect and report weekly
statistically reliable prices and terms of trade for spot transactions
of bulk cheese from all cheese manufacturing areas of the country. The
intent of this provision is straight forward--to increase the amount of
market information on cheese prices that is available to producers and
processors.
This provision is not the end solution to the policy challenges
imposed by the National Cheese Exchange. Those solutions will be
considered by the Department of Agriculture through their Federal milk
marketing order reform process and by the regulators of the exchange.
This provision is a first step towards solving a complicated and multi-
faceted problem. This market data collection effort may only collect 5-
10 percent of bulk cheese transactions nationally. However, even if the
data captures only 5 percent of the transactions, it will still
represent a 10-fold increase in the amount of market information
available to producers and processors today.
As the USDA advisory report concluded ``It is of the utmost
importance that information about market conditions and trends be
widely available to sellers and buyers at all levels of the

[[Page S7769]]

industry. . . It is widely agreed that equal and accurate market
information improves the price discovery and determination process.''
While that report was referring to cattle, not cheese, the principle
that more market information is always better holds true for cheese as
well.
USDA collection of prices for spot transaction of bulk cheese was
recommended by the joint UW-Madison/Wisconsin Department of Agriculture
report as a possible solution to the thin market problem at the Cheese
Exchange. During a recent House Livestock, Dairy and Poultry
Subcommittee hearing on the National Cheese Exchange, the Department of
Agriculture also suggested an approach similar to that described in
Section 4 of this legislation as a way to improve cheese market
information. Other witnesses, such as the National Farmers Union and
Kraft General Foods, also suggested increased reporting of spot
transactions of cheese as a method of improving price discovery in
cheese markets.
Mr. President, this is a very modest data collection effort. This is
a first step towards improving market information in the dairy industry
and lessening the influence of the exchange. It will not and is not
intended to replace the National Cheese Exchange. The data collection
required in the bill will merely supplement existing market information
and hopefully, improve price discovery.
There is much more work to be done at both the State and Federal
level to address the challenges posed by the National Cheese Exchange.
But I think this is a logical first step forward.
Once again, I thank the minority leader for his recognition of the
importance of the cheese price reporting provision in addressing
concentration and market information concerns in the dairy industry and
for his cooperation in including this provision in his important
legislation.

____________________