[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.

                          ____________________