[Congressional Record Volume 142, Number 108 (Monday, July 22, 1996)]
[Senate]
[Pages S8468-S8477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DORGAN (for himself and Mr. Byrd):
  S. 1978. A bill to establish an Emergency Commission To End the Trade 
Deficit; to the Committee on Finance.


                     THE END THE TRADE DEFICIT ACT

  Mr. DORGAN. Mr. President, I am pleased today to come to the floor 
with my colleague and friend, Senator Byrd from West Virginia, to 
introduce a piece of legislation that we feel is important and timely. 
It is a piece of legislation that we have discussed for many months and 
are now prepared to introduce in the hope that we would be able to do 
the things necessary to allow it to become law between now and the end 
of this legislative session.
  Simply put, this piece of legislation deals with a deficit. There has 
been a great deal of discussion in the Congress in recent years about 
deficits, almost all of it dealing with the question of budget 
deficits. Those deficits are a problem and have been a problem, and we 
have tried in a number of ways, both on the Democratic side and on the 
Republican side, in different kinds of approaches, to bring down the 
budget deficit.
  I am pleased to say a substantial amount has been accomplished. The 
budget deficit has been reduced almost in half in the last 3 to 4 
years. The budget deficit is down and is coming down. In fact, a report 
just last week by the Congressional Budget Office was an 
extraordinarily optimistic report about further reductions in the 
budget deficit.
  However, there is another deficit that almost no one speaks about. It 
is called the merchandise trade deficit, and it is growing and getting 
larger. We are going to introduce a piece of legislation today that 
establishes a commission. It asks that an emergency commission to end 
the trade deficit be impaneled to review economic and trade policies, 
tax and investment laws and other incentive and restrictions that 
affect trade, with the hope that recommendations can be made that 
Congress will be able to embrace to not only reduce this trade deficit 
but also to end the trade deficit.
  I will offer a couple of charts to show my colleagues what has 
happened with respect to the trade deficit. We have had 20 consecutive 
years of trade deficits, totaling $1.8 trillion. Last year, we had the 
largest negative trade balance in history. This chart shows, and the 
red demonstrates, the merchandise trade deficit.
  These are troublesome because trade deficits must be repaid with a 
lower standard of living in the United States. You can make a more 
direct case on national budget deficits. That is money people owe to 
themselves, and except for the maldistribution of the debt, it is not 
such a big deal. I do not make that case on the trade deficit, but some 
economists might. Nobody can make a case with respect to the trade 
deficit, except this: Trade deficits must be and will be repaid by a 
lower standard of living in this country. And they must be repaid 
someday.
  This chart shows what has happened to the trade deficits. There has 
been very little discussion in the Congress about what is causing the 
trade deficit, in what direction it is headed, and how to begin to 
develop some policies to address it.
  The trade deficit also represents some other underlying problems. 
These deficits mean that we are buying more from abroad than we are 
selling to other countries. It means that jobs that normally would have 
been created in our country are created elsewhere. It means jobs are 
moving from our country to foreign countries. Less opportunity here, 
more opportunity abroad.
  When you see these kinds of policies that inherently weaken our 
manufacturing base and sap our economic strength, you have to be 
prepared to say that this is a serious problem for this country. We 
must address it. Just as we have been addressing the other deficit, the 
budget deficit, so, too, we must address this issue of 20 years of 
growing merchandise trade deficits.
  The next chart is a chart that shows that projections by econometric 
firms and forecasting firms tell us that the trend line by Data 
Resources indicates that the merchandise trade deficit will reach over 
$330 billion by the year 2006, 10 years from now. Wharton Econometrics 
projects a doubling of the trade deficit by the year 2010.
  These are the forecasting groups who say, ``Here is what we think 
will happen to the merchandise trade deficit.'' They see a doubling of 
the trade deficit. This is Data Resources: $331 billion by the year 
2006. Clearly, that is a course that this country should not accept. 
Clearly, we ought to do something about it.
  The next chart. The United States, in a very few short years, has 
moved from being in the position of the world's largest creditor Nation 
to being the world's largest debtor Nation. That has happened in a very 
short period of time. This is an astounding change in our country's 
economic position.
  Now, think of this as a neighborhood, and you look at one house over 
near a driveway with very nice shutters, a manicured lawn, a pretty 
home, with five or six cars sitting outside in the driveway. You think 
to yourself, gee, that person is really doing well--except the person 
is very close to going under, because it is all borrowed money. That is 
what is happening with our merchandise trade deficit, and why we are 
going from the largest creditor Nation in the world to being the 
largest debtor Nation in the world.
  The next chart I want to show describes our trade deficit by country. 
You will see the largest trade deficit, by far, is with Japan. We have 
had this for a long while. It is continuing and abiding and does not 
seem to change. It was nearly $60 billion last year. China was $34 
billion. Canada and Mexico together were about $33 billion. A very 
substantial problem. Six countries make up 94 percent of our country's 
trade deficit.
  Now, part of the problem is that these countries have not completely 
opened up their borders to our goods. Yet, they ship their goods to our 
country in wholesale quantities. When we want to move goods into their 
countries, we are told that we are doing better. But we are not doing 
good enough

[[Page S8469]]

because our manufacturers, businesses, and workers cannot get our 
products into those countries on nearly the same basis as they move 
their products into our country.
  One common myth with respect to this trade issue is that what we are 
importing into this country is really the product of cheap labor, and 
that low-skill, cheap labor products are being sent into this country. 
Not true. Not true at all. Seventy-five percent of what the U.S. 
imports are high-tech and value-added manufactured goods: Automobiles, 
automobile parts, electronics, office machines, telecommunications. 
That is what is coming into our country. It is not trinkets produced 
with low-wage labor. Rather, it is high-tech, value-added manufactured 
goods.

  I want to show one additional chart that describes that in the past 
25 years the imports of manufactured goods into our country has risen 
and risen and risen. Today it is at the point where imports now equal 
56 percent of our manufacturing capacity. That means imports today are 
equal to over one-half of our domestic manufacturing capacity.
  No wonder the purchasing power of hourly and weekly wages in this 
country for the vast majority of working Americans are back down to 
levels, in some cases, in constant dollars, to the 1950's and 1960's. 
That kind of downward pressure means fewer jobs in this country, and 
the jobs that exist in the manufacturing sector pay less and have less 
security.
  Now, if you take this trade deficit and calculate it with respect to 
the common calculations about jobs, they talk about 20,000 jobs per $1 
billion in exports. If we export $1 billion worth of American goods, 
they say that means we created 20,000 additional jobs. If you would use 
the same formula, it should be equally true that, for $1 billion worth 
of imports, someone else had the 20,000 jobs and we did not. That means 
that last year's trade deficit represents a loss of somewhere around 
3.5 million good jobs. Just the increase in that trade deficit from 
1994 to 1995 would mean a loss of 166,000 jobs.
  What we propose today--Senator Byrd and myself, and, hopefully, 
others who will join us--would be an emergency commission to end the 
trade deficit. We would propose that this commission review five broad 
areas of trade policy concerns: The manner in which the Government 
establishes and administers our fundamental trade policies and 
objectives, No. 1; No. 2, the causes and consequences of the 
persistence and the growth of the overall trade deficit, as well as the 
bilateral trade deficits; No. 3, the relationship of U.S. trade 
deficits to the competitive and comparative advantages within the 
global economy; No. 4, the relationship between the growth of direct 
investment both into and out of the United States and the trade 
deficit; finally, No. 5, the development of policies and alternative 
strategies to achieve a systematic reduction of the trade deficit and, 
hopefully, an end to the trade deficit.
  This would be an 11-member commission. It would have 16 months to 
present its report to Congress and the President. We do this today 
because we think it is time--probably past the time--to be thinking of 
what these trade deficits and what the projections of where the trade 
deficits are going to go will mean to this country.
  As I conclude, Mr. President, I want to make a point. I am honored to 
have Senator Byrd join me in this endeavor, and I hope very much that, 
by the end of this year, this will be law and we will have a commission 
to evaluate this and make recommendations to the Congress.
  The minute someone comes to the floor of the Senate and begins 
talking about trade and talking about trade deficits, two things 
happen: One, people start to yawn. They say, ``Well, this is so boring. 
It is uninteresting.'' They do not want to talk about it. Or, two, they 
immediately rise on their haunches, and say, ``Well, what you are is 
someone who wants to close America's borders; you are some kind of a 
isolationist; a xenophobic stooge who doesn't understand the 
complexities of international trade.''
  I do not want to close America's borders. I want more trade--not less 
trade. I want expanded opportunity for American products and workers. 
But I want to finally make sure that we reduce and finally eliminate 
the trade deficit, and have some balance in trade by deciding that it 
is important that America shall not be taken advantage of in 
international trade.
  For 50 years our trade policy was our foreign policy. And we would do 
this and that and the other thing to help various countries as a matter 
of foreign policy. Lets look at the first 25 of those 50 years. Let's 
look at income in this country for workers. After all, that is what 
really matters. At the end of the day have we increased the standard of 
living for the American worker and the American family. If you look at 
the first 25 of those 50 years their incomes went steadily upward 
because we had a trade policy that was really just foreign policy and 
we still beat everybody else in the world with one hand tied behind our 
back. In the first 25 years, incomes went steadily upward with an 
increasing standard of living. What about the second 25 years. Look at 
the graph. What you will see is a steady diminution of income and 
security for American workers.
  Often people sit around their supper table talking about their lot in 
life. They are working harder and working more hours. More people in 
the family are working. And, adjusted for inflation, they are making 
the same or less than they were 20 years ago.
  The fact is we must do something to try to strengthen and maintain a 
strong manufacturing base in this country. And the circumstances that 
relate to this chronic and growing trade deficit tend to undermine 
America's manufacturing capability. No country--none--will ever remain 
a world economic power unless it retains its manufacturing base. That 
is what is slowly eroding and being washed away by these chronic, 
troublesome trade deficits.
  Senator Byrd and I do not propose solutions or strategies that would 
have us withdraw from the global economy, or have us retreat from the 
world trade system. But we do insist it is in this country's best 
interest to achieve a balance of trade and to end these chronic trade 
deficits that injure our country's well-being and lead to a decreased 
standard of living in America.
  Mr. President, the future of our Nation is being undermined by a 
problem that simply is not getting adequate attention or concern. There 
are those who do not even acknowledge that it is a problem, despite the 
fact it has reached record proportions.
  Our Nation's trade deficit is one of the twin deficits that this 
country must address. Today the trade deficit is the larger twin, yet 
most of our attention is still focused on the Federal budget deficit. 
We need to solve these twin deficit problems, because together and 
individually they are threatening the economic security of Americans.
  Today I am introducing legislation to address this crucial problem. 
The End the Trade Deficit Act will establish a commission to develop 
plans to end the trade deficit in the next 10 years, and establish a 
competitive trade policy for the 21st century which will not only 
increase production and manufacturing in our country, but also job 
opportunities, and wages.
  Just as balancing the budget has come to represent the need to take a 
more disciplined approach to deciding our national priorities, our goal 
in ending the trade deficit must be to develop a more disciplined 
approach in deciding and carrying out our Nation's trade policies.
  Our trade deficit is symptomatic of larger economic conditions and 
questions that must be addressed. My purpose in this legislation is not 
simply to get rid of the red figures at the bottom of our trade ledger. 
Instead, it is to help develop the national economic and trade 
strategies which will rebuild the American economy and the American 
dream.


                        Growth of Trade Deficit

  Many economists predicted that our trade deficit would disappear as 
we reduced our Nation's budget deficit. That is not what is happening. 
The fact is that in the past few years we are bringing down our budget 
deficit. Yet, we have recorded back to back record merchandise trade 
deficits during the past 2 years. Our budget deficit is going down 
while our trade deficit continues to grow.
  Last year, the United States experienced its 20th consecutive annual 
merchandise trade deficit. During these

[[Page S8470]]

past two decades we have piled up a total merchandise trade deficit of 
$1.8 trillion.
  The trend line in the growth of this deficit should be of great 
concern to the American people. Last year we had the largest negative 
merchandise trade balance in the history of the United States. The $175 
billion merchandise trade deficit was larger than the $164 billion 
federal budget deficit.
  An econometric forecasting firm, Data Resources, Inc., is projecting 
that our Nation's merchandise trade deficit will continue to grow 
reaching new records in the next few years. Based on long-term trends, 
Data Resources is forecasting that the merchandise trade deficit can be 
expected to almost double during the next 10 years to $331 billion. 
Wharton Econometrics is forecasting that the U.S. merchandise trade 
deficit will double by the year 2010.
  As a result of our twin deficits, the United States has shifted from 
being the world's largest creditor nation to the world's largest debtor 
nation. Our country has gone from a net creditor position of over $250 
billion in the early 1980's to a net debtor position of over three-
quarters of a trillion dollars by the mid-1990's. The positive net 
international asset position that we had built up over the past 100 
years was eliminated in a short 6-year period during the 1980's.
  We used to earn $30 billion annually on our international assets. Now 
we are paying something in the neighborhood of $11 billion to service 
this international debt.


                      Importance of Trade Deficit

  The persistence and growth of our trade deficit is not just a concern 
of academics and ivory tower economists. It is a question of fair trade 
and fair competition. It is an issue of American jobs and the 
purchasing power of American wage earners. It is a matter of what 
opportunities we will have for our future.
  Today the bulk of the products that we import are not labor-intensive 
goods. Instead our merchandise trade deficit consists primarily of 
high-technology, manufactured items. Autos, office equipment, 
electronic goods, and telecommunications equipment make up three-
fourths of the imports.
  Imports of manufactured goods have increased from 11 percent of the 
total U.S. manufacturing gross product to over 50 percent. This means 
that rather than expanding our own manufacturing base in this country, 
we are importing more of our manufactured goods from abroad. It means 
that we are shipping jobs overseas.
  The bottom line is that we are shifting from a manufacturing, 
production-based economy with high wages, to a service-based economy 
with low wages. No wonder the purchasing power of hourly and weekly 
wages of the vast majority of working Americans are back down to levels 
we haven't seen since the 1950's and 1960's.

  Together with the record merchandise trade deficit this past year, 
the value of the U.S. dollar fell to its weakest level in history. Yet, 
despite the weakening dollar, our trade deficit has continued to mount.
  Neither the American consumer nor the American economy is making any 
long-term gains by the continuing trade deficit and the devaluation of 
the dollar. Instead, they represent an erosion of both our sovereignty 
and our economy.


                        Causes of Trade Deficits

  Our merchandise trade deficit is a result of a serious trade 
imbalances with a handful of countries. Six countries comprise 94 
percent of the U.S. merchandise trade deficit. This includes Japan, 
China, Canada, Mexico, Germany, and Taiwan. Over one-half this trade 
deficit is with only two countries: Japan and China.
  Our trade relationships are most accurately described as unilateral 
free trade. As a nation we have opened our borders wide open to almost 
anything and everything that can be produced anywhere. Unfortunately we 
pay little attention to the conditions under which these goods have 
been produced or if the competition is fair.
  At the same while the United States has one of the most open borders 
and open economies in the world, this Nation faces significant barriers 
in shipping American goods abroad. As a result, these negative trade 
balances do not reflect the actual competitiveness or the productivity 
of the American economy. Yet, there is no question that we are one of 
the most competitive economies in the world.
  Instead most of our bilateral trade deficits effectively illustrate 
the barriers that continue to exist despite hundreds of new trade 
agreements in recent years. As documented annually in the reports of 
the Office of the U.S. Trade Representative reciprocal market access 
remains an elusive goal.


                        Ending the Trade Deficit

  As a nation we need to bring the same attention and the same 
commitment to working on the trade deficit that we are giving to 
reducing our budget deficit.
  It has been a quarter of a century since the last comprehensive 
review of national trade and investment policies was conducted by a 
Presidential commission. In these past 25 years we have had only 3 
years in which the United States has had trade surpluses.
  We have witnessed massive worldwide economic and political changes in 
the past 25 years. These changes have profoundly affected world trading 
relationships.
  The cold war has ended. It is no longer necessary or even prudent for 
U.S. trade policy to take a back seat to our foreign policy objectives.
  Regional trade relationships including the European Union and the 
North American Free Trade Agreement are redefining political, economic, 
and trading geography. The Uruguay round of negotiations under the 
General Agreement on Tariffs and Trade has resulted in the creation of 
the World Trade Organization.
  Globalization is part and parcel of the increased mobility of capital 
and technology that is reshaping comparative and competitive advantages 
among nations of the world.
  While other nations and many multinational companies are enjoying the 
fruits of globalization, the United States is not realizing the full 
opportunities or benefits of its competitive capacity and productivity.
  Unilateral free trade no longer serves the interests of the American 
people, if it ever did. We need fair rules and reciprocal market access 
if our competitive economy is to thrive within a global system. I am 
not calling for trade restrictions. Rather I am calling for expanded 
trade, but with rules that are fair.


                          Emergency Commission

  The United States is once again at a critical juncture in trade 
policy development. The persistence and growth of the trade deficit 
must be reversed. We must identify the causes and consequences of our 
trade deficit.
  Rather than allowing our trade deficit to double during the next 10 
years, we need to develop a plan which would end the trade deficit in 
that time period. That is why I am introducing a bill with Senator Byrd 
today to establish an Emergency Commission To End the Trade Deficit.
  The purpose of this Commission is to develop a comprehensive trade 
strategy to eliminate the merchandise trade deficit by the year 2006 
and to develop a competitive trade policy for the 21st century.
  The bill directs the Commission to develop the necessary strategies 
to achieve a trade balance that fully reflects the competitiveness and 
productivity of the U.S. economy while improving the standard of living 
for the people of this country.
  It would require the Commission to examine our national economic 
policies, trade laws, tax laws, investment policies, and all the other 
legal incentives and restrictions that are relevant to the trading 
position of this country.
  The Commission would look at five broad areas:
  First, the manner in which the Government of the United States 
establishes and administers the Nation's fundamental trade policies and 
objectives.
  Second, the causes and consequences of the persistence and growth of 
the overall trade deficit, as well as our bilateral trade deficits.
  Third, the relationship of U.S. trade deficits to the competitive and 
comparative advantages within the global economy.
  Fourth, the relationship between investment flows, both into and out 
of the United States, and the trade deficit.
  Fifth, the identification and evaluation of policies and alternative 
strategies by which the United States can

[[Page S8471]]

achieve the systematic reduction of the trade deficit and the 
improvement of the economic well being of its people.
  This Commission would consist of a blue-ribbon panel of leaders from 
a broad spectrum of the economic life of our Nation. The members would 
be appointed by the President and the leadership of Congress. They 
would be given the responsibility to study the situation, gather 
necessary data, conduct at least seven public hearings, and evaluate 
strategies to end the trade deficit.
  The Commission would be required to present its final report not 
later than 16 months following the enactment of this bill. The final 
report would outline its findings and conclusions, and provide a 
detailed plan for reducing our Nation's trade deficits together with 
recommendations on administrative and legislative actions that may be 
required to achieve that goal.
  The Commission's report would be submitted to the President and the 
Congress for review, consideration, and implementation. To facilitate 
the Commission's report through Congress, this bill would have the 
House Ways and Means Committee and the Senate Finance Committee conduct 
hearings on the report within 6 months after it is submitted to 
Congress.


                            Time for Change

  Today it is apparent that we do not have a consensus about where we 
should go with our national trade policies. We are not even sure 
whether we have the necessary tools to effectively achieve our trade 
goals.
  Most importantly, we do not have a good set of alternatives and 
strategies to place before the American people so that they can 
effectively participate in making the decisions that are shaping their 
future.
  It is time to develop a new trade strategy for the twenty-first 
century. We can get started on this path by making our first goal to 
end the trade deficit. Once we have set that goal, then we need the 
strategies to get there. That is why I believe it is time for such a 
commission.
  I am pleased that Senator Robert Byrd is cosponsoring this 
legislation. I hope others will join us in this effort and look forward 
to working with them in moving forward on this critically important 
agenda for our future.
  Mr. President, let me now yield the floor. The Senator from West 
Virginia under the unanimous-consent agreement would also like to 
address the piece of legislation that we will introduce in the Senate 
today.
  Mr. BYRD. Mr. President, how much of the 30 minutes are remaining?
  The PRESIDING OFFICER. The Senator has 18 minutes remaining.
  Mr. BYRD. Mr. President, I ask unanimous consent that should I need 
an additional 5 minutes under the same terms and conditions that I be 
allowed to have that time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. Mr. President, I am pleased to join with the very 
distinguished Senator from North Dakota in introducing an ambitious new 
effort on the matter of our nation's persistent and growing trade 
deficit. This legislation--as the distinguished Senator has already 
explained--would establish a Commission to take a broad, thorough look 
at all important aspects of trends involving, and solutions to, the 
growing U.S. trade deficit, with particular attention to the 
manufacturing sector.
  The trade deficit, as my colleagues know, is a recent phenomenon, 
with large annual deficits only occurring within the last 15 years, or 
so, as my colleague has explained. Between 1970 and 1995, the U.S. 
merchandise trade balance shifted from a surplus of $3.2 billion to a 
deficit of $159.6 billion. It did not reach sizeable levels until it 
jumped up to $52 billion in 1983. As my colleague has suggested, 
projections by econometric forecasting firms indicate long term trends 
will bring this figure to $300 billion or more within the next 10 
years. No one is predicting a decline in the near future. And this is 
bad news. Thus, unless we act, our trade deficit will soon exceed our 
annual appropriations for the Department of Defense.
  This legislation is committed to a goal of reversing that 10-year 
trend. The goal of the commission is to ``develop a national economic 
plan to systematically reduce the U.S. trade deficit and to achieve a 
merchandise trade balance by the year 2006.''
  While it is not clear what the particular reasons for this growing 
trade deficit may be, nor what the long term impacts of a persistently 
growing deficit may be, the time is overdue for a detailed examination 
of the factors causing the deficit. We need to understand the impacts 
of it on specific industrial and manufacturing sectors. Furthermore, we 
need to identify the gaps that exist in our data bases and economic 
measurements to adequately understand the specific nature of the 
impacts of the deficit on such important things as our manufacturing 
capacity and the integrity of our industrial base, on productivity, 
jobs and wages in specific sectors.
  We debate the trade deficits frequently. Both Senator Dorgan and I 
have participated in these debates. I voted against NAFTA. I voted 
against GATT, and for good reasons which are becoming clearer.

  So we debate these deficits frequently. We moan about them. We groan 
about them. We complain about them. But if we do not understand the 
nature, impacts and long term vulnerabilities that such manufacturing 
imbalances create in our economy and standard of living, we are in the 
dark. It appears to me that debate over trade matters too often takes 
on the form of lofty rhetorical bombast of so-called ``protectionists'' 
versus so-called ``free traders.'' But I would suggest that neither 
side knows enough about what is really transpiring in our economy, 
given the very recent nature of these annual persistent deficits.
  Certainly we know that the deficit reflects on the ability of 
American business to compete abroad. We want to be competitive. 
Certainly we know that specific deficits with specific trading partners 
causes frictions between the United States and those friends and 
allies. This is particularly the case with Japanese, as we are well 
aware, and is becoming quickly the case with China. It is clear that 
the trade deficit has contributed to the depreciation of the dollar and 
the ability of Americans to afford foreign products and American 
products as well. Less clear, but of vital importance, is the 
relationship of the trade deficit to other important policy questions 
on the table between the United States and our foreign trading 
partners. Attempts by the United States to reduce tariff and non-tariff 
barriers in the Japan and China markets, which clearly restrict access 
of U.S. goods to those markets, have been crippled by the intervention 
of other, more important policy goals.
  During the cold war, the U.S.-Japan security relationship had a 
severe dampening effect on our efforts to reduce the myriad barriers in 
Japan to U.S. exports. The same effect appears to have resulted from 
our need for the Japanese to participate in our treasury bill auctions. 
This becomes a closed cycle--the need to finance the trade deficit with 
foreign capital, resulting in regular involvement of the Japanese 
government in our treasury bill auctions, seems to dampen our efforts 
to push the Japanese on market opening arrangements. Naturally, without 
reciprocal open markets, the trade imbalance remains exaggerated 
between the U.S. and Japan, prompting further need for Japanese 
financial support to fund our national debt. Thus, some argue that the 
need for Japanese involvement in financing our national debt hurts the 
ability of our trade negotiators to get stronger provisions in the 
dispute settled last year over the Japanese market for auto parts.

  Similar considerations appear to prevail in negotiating market access 
with the Chinese in the area of Intellectual Property rights. While our 
Trade Negotiator managed a laudable, very specific agreement with the 
Chinese last year in this area, the Chinese were derelict in 
implementing it, leading to another high-wire negotiation this year to 
avoid $2 billion of trade sanctions on the Chinese, and to get the 
Chinese to implement the accord as they had promised. Again, it is 
unclear whether the Chinese will now follow through in a consistent 
manner with the implementing mechanisms for the Intellectual Property 
agreement belatedly agreed to in the latest negotiation. Intellectual 
Property is an area of great potential for U.S. exports to China. The 
Chinese have promised major action against piracy of CD's, movies, and 
other products, and to permit co-

[[Page S8472]]

production of audiovisual products and joint ventures regarding 
artists. This is a major test case of our ability to obtain appropriate 
access to the great Chinese market. We need to monitor it carefully. 
The highly trumpeted mantra about how the U.S.-China relationship will 
be one of the most important, if not the most important, U.S. bilateral 
relationship for the next half century, has a chilling effect on 
insisting on fair, reciprocal treatment, and good faith implementation 
of agreements signed with the Chinese government.
  It will only be when we truly understand the specific impacts of this 
large deficit on our economy, particularly our industrial and 
manufacturing base, that the importance of insisting on fair play on 
the trade account will become clear.
  Finally, the legislation being introduced by the distinguished 
Senator from North Dakota, [Mr. Dorgan], requires the Commission to 
examine alternative strategies which we can pursue to achieve the 
systematic reduction of the deficit, particularly how to retard the 
migration of our manufacturing base abroad, and the changes that might 
be needed to our basic trade agreements and practices.
  These are the purposes of the Commission that Senator Dorgan and I 
are proposing in this legislation. And I join with him in welcoming 
other Senators to cosponsor this legislation.
  We can either continue to blunder along without a clear sense of the 
importance of the U.S. manufacturing base or of how to protect and 
enlarge upon that base or we can begin now to gather the data that will 
lead us in the right direction for the future of U.S. trade policy.
  In other words, we can put up the right fences now or deal with a 
very sick economy and an ever-spiraling trade deficit which may take 
our economy right over a very dangerous cliff in the years ahead.
  Mr. President, there is an old poem that was written by Joseph Malins 
many years ago which I think aptly describes the situation we are in.

                         Fence or an Ambulance

     `Twas a dangerous cliff, as they freely confessed,
     Though to walk near its crest was so pleasant;
     But over its terrible edge there had slipped
     A duke and full many a peasant.
     So the people said something would have to be done,
     But their projects did not at all tally;
     Some said, ``Put a fence around the edge of the cliff,''
     Some, ``An ambulance down in the valley.''

     But the cry for the ambulance carried the day,
     For it spread through the neighboring city;
     A fence may be useful or not, it is true,
     But each heart became brimful of pity
     For those who slipped over that dangerous cliff;
     And the dwellers in highway and alley
     Gave pounds or gave pence, not to put up a fence,
     But an ambulance down in the valley.

     ``For the cliff is all right, if you're careful,'' they said,
     ``And, if folks even slip and are dropping,
     It isn't the slipping that hurts them so much,
     As the shock down below when they're stopping.''
     So day after day, as these mishaps occurred,
     Quick forth would these rescuers sally
     To pick up the victims who fell off the cliff,
     With their ambulance down in the valley.
     Then an old sage remarked: ``It's a marvel to me
     That people give far more attention
     To repairing results than to stopping the cause,
     When they'd much better aim at prevention.
     Let us stop at its source all this mischief,'' cried he,
     ``Come, neighbors and friends, let us rally;
     If the cliff we will fence we might almost dispense
     With the ambulance down in the valley.''

     ``Oh, he's a fanatic,'' the others rejoined,
     ``Dispense with the ambulance? Never!
     He'd dispense with all charities, too, if he could;
     No! No! We'll support them forever.
     Aren't we picking up folks just as fast as they fall?
     And shall this man dictate to us? Shall he?
     Why should people of sense stop to put up a fence,
     While the ambulance works in the valley''

     But a sensible few, who are practical too,
     Will not bear with such nonsense much longer;
     They believe that prevention is better than cure,
     And their party will soon be the stronger.
     Encourage them then, with your purse, voice, and pen,
     And while other philanthropists dally,
     They will scorn all pretense and put up a stout fence
     On the cliff that hangs over the valley.
     Better guide well the young than reclaim them when old,
     For the voice of true wisdom is calling,
     ``To rescue the fallen is good, but `tis best
     To prevent other people from falling.''
     Better close up the source of temptation and crime
     Than deliver from dungeon or galley;
     Better put a strong fence round the top of the cliff
     Than an ambulance down in the valley.

  I commend the Senator from North Dakota for his studious approach to 
this question and for choosing the route of prevention over the 
ambulance down in the valley. I am pleased to join him in offering this 
proposal for the consideration of the Senate, and I hope that many of 
our colleagues will join us, and that we can secure passage of the 
proposal before the 104th Congress adjourns sine die this fall.
  Mr. President, I thank my colleague for his courtesy in allowing me 
to join in cosponsoring this very important legislation. I thank him 
for his courtesy in securing the time on this day and for his yielding 
to me that I might add to the record. I yield the floor.
  I yield back such time as I may have.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 1979. A bill to amend the Social Security Act to help disabled 
individuals become economically self-sufficient and eligible for health 
care coverage through work incentives and a medicare buy-in program, 
and for other purposes; to the Committee on Finance.


          THE WORK INCENTIVE AND SELF-SUFFICIENCY ACT OF 1996

 Mr. JEFFORDS. Mr. President, I introduce the Work Incentive 
and Self-Sufficiency Act of 1996. I believe that few people are 
returning to work after becoming eligible for Social Security 
disability income [SSDI] not because they can no longer find gainful 
employment, but because of a greater systemic problem we face as a 
nation. What I am referring to is this country's current schizophrenic 
national disability policy.
  The laudable policy we set forth in the Americans With Disabilities 
Act of 1990 [ADA] which requires that resources be provided to promote 
functioning and work for people with disabilities, as well as, income 
support for those who cannot work or whose ability to work is very 
limited, are not well integrated into our current SSDI and SSI 
programs. This is a very complex problem that we must deal with if we 
ever expect to get our Federal deficit under control.
  I remember when we reported the ADA out of the Labor and Human 
Resources Committee, the committee made explicit that the goals of this 
law were to provide people with disabilities with: equality of 
opportunity, full participation, independent living, and economic self-
sufficiency. Disability is not just a characteristic of individuals, 
but is a description of how well someone is able to fit into our 
society which includes his or her capacity to work. To provide for a 
clear and consistent national disability policy we must make sure that 
the incentives, and goals of our public programs, SSDI, SSI, Medicare, 
and Medicaid work in conjunction with the private sector.
  Many disabled individuals would like to return to work, but they are 
heavily penalized for there efforts to do so. For example, some courts 
have determined that if a person qualifies for SSDI, but then wants to 
try to go back to work and can't find a job, they have no cause of 
action under the ADA. I believe that the greatest disincentive for 
disabled individuals to return to work is the fear of losing their 
health care coverage. These individuals literally may not survive 
without health care coverage. Their condition often requires immediate 
utilization of health services and they cannot go, for, even for a 
short period of time, without the security of knowing they have 
guaranteed health coverage. It is understandable that they would prefer 
not to work if it will jeopardize this lifeline.
  Also in the labor market, despite the ADA, there is a disincentive to 
hire or maintain the disabled employee. The disabled employee will 
likely have a chronic high cost illness and if the employer offered a 
health plan they would be covered under this plan. It is important to 
keep in mind that all employer group health plans, both insured and 
self-insured, are covered under ERISA.

[[Page S8473]]

Under ERISA, the employer currently has substantial flexibility in not 
only the benefits it chooses to cover, but also the types of plan 
design features it uses. Some employers have used plan design features 
which will carve out any high cost individual from coverage under the 
employee benefit health plan.
  With no where else to turn, disabled individuals once again become 
dependent upon public sector health care plans. This cost-shift from 
the employer health plans to the public health plans was the main 
argument I made during debate on the Health Insurance Reform Act when I 
brought my amendment on the lifetime caps to the floor. Employers, by 
limiting the maximum benefits they will pay for employees in a 
lifetime, actually set the point where their costs will end and 
Government expenditures begin. In the private market, health plans 
usually decide how much risk they will assume and then they reinsure 
the rest. In this case, the private market uses the Government-run 
health plans as the reinsurer of last resort.
  According to previous testimony by the General Accounting Office 
[GAO] no more than 1 of every 1,000 SSI and DI leave the rolls for work 
as a result of the Social Security Administration's assistance. These 
programs need to place a greater focus on the rule the employer can 
play in getting people rehabilitated and back to work. Once an 
individual becomes disabled the link with their current employer is 
disrupted and often terminated. If there were incentives, particularly 
early in the process, for the employer to remain involved the chances 
of returning to work would go up markedly.
  The employer could focus on accommodating a valuable employee rather 
than on replacing him. Employers could assist their workers in getting 
assessed for rehabilitation services immediately instead of waiting for 
the SSI or SSDI programs to first complete the application process and 
then making a referral for such services. If the employer were to keep 
in closer contact it would have better opportunity to prepare for any 
unique assistance the individual might ultimately need like a personal 
assistant or other assistance technology.
  The Work Incentive and Self-Sufficiency Act of 1996, is designed to 
address two significant problems in the Social Security Disability 
Income [SSDI] Program: If individuals with significant disabilities 
cannot keep their health coverage when they return to work, and if that 
work does not leave them financially better off, they cannot afford to 
go back and work, and leave the cash assistance they receive under SSDI 
or SSI. It is not only the cash assistance they receive from benefits 
that is critical, it is the health coverage they obtain through 
becoming Medicare eligible.
  Let us look at the numbers. The average monthly SSDI check is $630; 
some who were in the work force longer at higher earnings receive more 
while many others receive less. At the current minimum wage of $4.25 
per hour, a person working full time--176 hours per month, or 8 hours 
per day for a standard 22 days--will earn $748. This is not much money, 
but if you assume a slightly better than minimum wage or some overtime 
at 1.5 times regular wages, then take home pay from work replaces the 
cash assistance that is lost.
  However, that cash assistance brings with it several noncash 
supports. The most well-known of these is health coverage, which comes 
through Medicare for SSDI beneficiaries and through Medicaid for SSI 
recipients. Other noncash supports include long-term supports under 
Medicaid, vocational rehab, or other programs, food stamps, rental 
assistance, home heating assistance, and a variety of discounts and 
reduced fares on public services, among other supports. The cost of 
replacing these noncash benefits for individuals with significant 
disabilities is often double or even triple the value of the cash 
assistance that is lost.
  The major assumptions are that individuals with significant 
disabilities can qualify for health coverage, much less afford to pay 
for it themselves, and private providers for long term supports can be 
located and afforded. The reality is that individuals with disabilities 
are often not able to locate health coverage that meets their needs, or 
if they can find coverage, it comes with either high deductibles and 
premiums, services exclusions, preexisting conditions limits, and/or 
yearly or lifetime caps on benefits.
  The same is true for the long term supports required by some 
individuals with significant disabilities such as quadriplegia or 
cerebral palsy. Many individuals with disabilities can work if they 
have the assistance of another person to perform activities of daily 
living that are required to prepare for work such as bathing, dressing, 
eating, transferring from bed to chair or using the bathroom. The 
difficulty is not with necessarily with working, but with locating and 
paying the support workers needed to prepare for and to perform work.
  Currently, when an SSDI beneficiary earns $500 monthly, that person 
demonstrates the capacity to work at the substantial gainful activity 
[SGA] level. If this work is sustained for 9 consecutive months, the 
individual no longer meets the first criteria for work disability 
eligibility: the incapacity to perform substantial gainful work in the 
national economy. Thus, proceedings are begun to end cash assistance. 
But, since take home pay equals or exceeds cash assistance, there is no 
problem.
  Or is there? One month individuals with significant disabilities are 
earning $748 from wages, less taxes, $630 from cash assistance, and 
receiving noncash benefits ranging in value from $1,200 to $1,800. The 
next month these individuals with significant disabilities are earning 
$748 from wages, less taxes, and from this amount now are expected to 
purchase up to $1,800 in medical coverage, long term supports, food, 
rent, and other necessities. It does not require sophisticated cost/
benefit calculations here to draw the conclusion that individuals with 
significant disabilities are being punished if they attempt to work.
  There are some basic solutions to this problem. First, continue 
health coverage for those who are on SSDI after they return to work. 
Second, make work pay by allowing low income former SSDI beneficiaries 
to receive benefits that gradually reduce as their take home pay 
increases. The Work Incentive and Self-Sufficiency Act of 1996 is 
designed to implement both of these solutions. First, it allows SSDI 
beneficiaries to keep their Medicare coverage if they return to work. 
If they take a job that does not offer health coverage, Medicare 
remains their primary insurance. If they find a position that does 
offer health insurance, they have the option to purchase Medicare 
coverage to use as supplementary coverage. Working beneficiaries would 
purchase this coverage on their own through premiums that rise on a 
sliding scale.
  Second, it allows SSDI beneficiaries to keep part of their cash 
assistance after they return to work. Rather than losing the entire 
amount once they earn $500 a month, they would lose $1 of cash benefits 
for every $2 in wages they earn that is above $500 a month. This is 
similar to, but not the same as, the rule that allows individuals over 
65 who are retired on Social Security to earn wages and continue to 
receive retirement income and Medicare.
  Third, it allows some individuals to apply only for Medicare coverage 
but not cash assistance. This would offer some workers who acquire a 
disability during their working years the option to purchase Medicare 
coverage and continue working. The Medicare coverage could be either 
their primary or supplemental coverage.
  At this point some will ask, ``Won't that increase already rising 
costs of benefits?'' Actually, no. Extending health coverage to those 
who return to work will not increase costs essentially because so few 
people are leaving the disability program for work. In fact, enabling 
people who were former beneficiaries or recipients to keep this health 
coverage would lead to some of them eventually being covered by private 
health insurance, thus reducing costs. It will also lead to a reduction 
in the amount of SSDI and SSI cash assistance paid as reentering 
workers replace benefits with wages, and pay taxes on those wages.
  Employers would not be required to purchase any additional insurance 
or to report any additional information to the Government. Individuals 
with disabilities would assume the responsibility to exercise the 
option to purchase

[[Page S8474]]

Medicare and pay the Medicare premiums. Considering the very important 
role employers have in assuring our Nation's policy goal to self-
sufficiency for individuals with disabilities I am especially pleased 
to have a letter from Michael R. Losey, president and CEO of the 
Society for Human Resource Management [SHRM]. SHRM is and I quote, 
``fascinated by your proposal that would provide employment incentives 
to individuals with disabilities * * * SHRM looks forward to working 
with you and your staff to promote employment and reemployment 
incentives for those with disabilities.'' I would also like to thank 
both Fred Grandy, president and CEO of Goodwill Industries 
International, Inc., and the Consortium for Citizens with Disabilities 
Task Force on Social Security, especially the cochairs, Tony Young, 
Marty Ford and Rhonda Schulzinger, for their letters of support for 
this bill. Mr. President, I asked unanimous consent that these three 
letters be inserted into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                 Society for Human


                                          Resource Management,

                                    Alexandria, VA, July 18, 1996.
     Senator James M. Jeffords,
     Hart Building,
     Washington, DC.
       Dear Senator Jeffords: On behalf of the Society for Human 
     Resource Management (SHRM), I am writing to commend you for 
     your efforts to address the employment and reemployment needs 
     of individuals with disabilities. SHRM is the leading voice 
     of the human resource profession, representing the interests 
     of more than 70,000 professional and student members from 
     around the world.
       SHRM is committed to equal employment opportunity in all 
     employment practices, including hiring, training, 
     compensation, benefits, promotion transfer, termination, and 
     reduction in force, for all individuals without regard to 
     disability. SHRM is committed to these policies because of 
     our firm conviction that adherence to these principles is 
     sound management practice and contributes significantly to 
     the success of our membership and our members' organizations.
       As a result, SHRM is fascinated by your proposal that would 
     provide employment incentives to individuals with 
     disabilities. Faced with the loss of much-needed health care 
     coverage or minimal financial support, many individuals who 
     could continue making contributions as employees, are 
     actually discouraged from going back to work. It is clear 
     that the private and public sectors should work together to 
     increase opportunities for all Americans.
       SHRM looks forward to working with you and your staff to 
     promote employment and reemployment incentives for those with 
     disabilities.
           Sincerely,
                                           Michael R. Losey, SPHR,
     President & CEO.
                                                                    ____

         Consortium for Citizens With Disabilities Task Force on 
           Social Security,
                                                    July 18, 1996.
     Hon. James Jeffords,
     U.S. Senate,
     Washington, DC.
       Dear Senator Jeffords: The undersigned members of the Task 
     Force on Social Security of the Consortium for Citizens with 
     Disabilities support the principles set forth in the Work 
     Incentive and Self-Support Act of 1996 to enable individuals 
     on Social Security Disability Insurance to return to work.
       The Consortium for Citizens With Disabilities (CCD) is a 
     working coalition of more than 100 national consumer, service 
     provider, parent and professional organizations that advocate 
     on behalf of people with disabilities and their families. The 
     work of the Consortium in conducted by Task Forces in various 
     policy areas such as health care, education, employment, 
     technology, housing, civil rights, social security, and 
     budget and appropriations.
       The Work Incentive and Self-Sufficiency Act of 1996 is 
     designed to address two significant problems in the SSDI 
     program: If individuals with significant disabilities 1) 
     cannot keep their health coverage when they return to work 
     and 2) if that work does not leave them financially better 
     off, they can not risk or afford to go back to work, and 
     leave the cash assistance they receive under SSDI.
       There are some basic solutions to this problem. First, 
     continue health coverage for those who are on SSDI after they 
     return to work. Second, make work pay by allowing low income 
     former SSDI beneficiaries to receive benefits that gradually 
     reduce as their take home pay increases. The Work Incentive 
     and Self-Sufficiency Act of 1996 is designed to implement 
     both of these solutions.
       First, it allows SSDI beneficiaries to keep their Medicare 
     coverage if they return to work. If they take a job that does 
     not offer health coverage, Medicare remains their primary 
     insurance. If they find a position that does offer health 
     insurance, they have the option to purchase Medicare coverage 
     to use a supplementary coverage. Working beneficiaries would 
     purchase this coverage on their own through premiums that 
     rise on a sliding scale.
       Second, it allows SSDI beneficiaries to keep part of their 
     cash assistance after they return to work. Rather than losing 
     the entire amount once they earn $500 a month, they would 
     lose $1 of cash benefits for every $2 in wages they earn that 
     is above $500 a month. This is similar to (but not the same 
     as) the rule that allows individuals over 65 who are retired 
     on Social Security to earn wages and continue to receive 
     retirement income and Medicare.
       Third, it allows some individuals to apply only for 
     Medicare coverage but not cash assistance. This offers some 
     workers who acquire a disability during their working years 
     the option to purchase Medicare coverage and continue 
     working. The Medicare coverage could be either primary 
     or supplemental coverage.
       We thank you and your lead staff person on this issue, 
     Elaina Goldstein, for the outstanding leadership demonstrated 
     toward enhancing the employment of individuals with 
     disabilities through this bill. This is extremely important 
     legislation for individuals with disabilies. The CCD is eager 
     to work with you and your staff to enact this legislation.
       If you have any questions regarding this subject, please 
     call one of the Co-Chairs shown at the bottom of this letter.
           Sincerely,
     Tony Young,
       American Rehabilita-
       tion Association,
       Co-Chair.
     Rhoda Schulzinger,
       Bazelon Center for
       Mental Health Law,
       Co-Chair.
     Marty Ford,
       The Arc,
       Co-Chair.


                        Cosigning Organizations

       American Rehabilitation Association.
       Bazelon Center for Mental Health Law.
       Goodwill Industries International.
       International Association of Psychosocial Rehabilitation 
     Services.
       National Association of Protection & Advocacy Systems.
       National Community Mental Health Care Council.
       National Easter Seal Society.
       National Mental Health Association.
       National Multiple Sclerosis Society.
       The Arc of the United States.
       United Cerebral Palsy Association, Inc.
                                                                    ____

                                               Goodwill Industries


                                          International, Inc.,

                                                    July 16, 1996.
     Hon. James M. Jeffords,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Jim: On behalf of the Goodwill Industries network, I 
     congratulate you on the introduction of the Work Incentive 
     and Self-Support Act of 1996.
       This important legislation incorporates two reforms long 
     advocated by Goodwill Industries to assist Social Security 
     Disability Insurance (SSDI) beneficiaries to return to work. 
     First, we believe that no individual should suffer a loss of 
     income when leaving the SSDI rolls. By allowing a SSDI 
     beneficiary to retain a portion of cash benefits when they 
     re-enter the work force, your legislation will remove this 
     major disincentive. Secondly, Goodwill Industries recognizes 
     that loss of medical insurance is a significant impediment 
     confronting SSDI recipients who want to work. Again, the Work 
     Incentive and Self-Support Act of 1996 addresses this 
     disincentive by permitting an individual to apply for 
     Medicare coverage while working, or to purchase medical 
     coverage with premiums based on income level.
       Enclosed is a copy of testimony presented last year to the 
     House Ways and Means Subcommittee on Social Security that 
     discusses Goodwill Industries' recommendations for reforming 
     the SSDI program in greater detail.
       Please let me know how Goodwill Industries can assist you 
     in securing enactment of the Work Incentive and Self-Support 
     Act of 1996.
           Sincerely,
                                                      Fred Grandy,
                              President & Chief Executive Officer.
       Enclosure--Social Security Testimony.

  Work Incentive and Self-Sufficiency Act of 1996--Section-by-Section 
                                Analysis

       Intent of Legislation: To Create a Consistent Disability 
     Work Incentive Policy for Social Security Disability 
     Insurance Beneficiaries and Conform with the National 
     Disability Policy Established with the Passage of the 
     Americans with Disabilities Act (ADA).


                                Overview

       The intent of this bill is to create a work incentive 
     policy for Social Security Disability Income (SSDI) 
     beneficiaries. The model that has been used is the 1619(a)(b) 
     SSI/Medicaid provisions. SSDI and Medicare are amended to 
     provide the same incentive as the 1619 model which is to make 
     sure a person who goes off the DI roles will not be worse 
     off. The key reason, according to the GAO in their report to 
     Senate Select Committee on Aging issued this past April, why 
     many people who can work but do not is because they can not 
     obtain health care coverage because of their disability. 
     Therefore, a buy-in to the Medicare program is paramount in 
     this bill. Although a Medicare buy-

[[Page S8475]]

     in program currently exists it has not been a success.
       This bill repeals the current trial work period and 
     extended period of eligibility and replaces them with the 
     1619(a)(b) model provisions. Second, we allow people to 
     purchase Medicare if they meet the current medical listing 
     test in SSDI. The buy-in is on a sliding scale.
       Lastly, the bill also includes the Medicare-Medicaid 
     Integration demonstration project was that was included in 
     the 1995 reconciliation bill and repeals the Medicare/
     Medicaid Data Bank.


Section 2: Return-to-Work Program for Social Security Disability Income 
                             Beneficiaries

                 (A) Benefit reductions based on income

       Current law: An allowed SSDI/Medicare beneficiary who 
     returns to work loses eligibility for DI cash assistance when 
     achieving Substantial Gainful Activity (SGA). SGA is defined 
     as earnings from wages or salaries that equal or surpass $500 
     monthly (for non bind disabled beneficiaries) that are earned 
     continuously for nine months or longer. Beneficiaries can 
     shelter some income from the SGA calculation by using work 
     incentives such as the Impairment Related Work Expense 
     offset.
       Revision: An allowed SSDI/Medicare beneficiary who returns 
     to work has their DI cash assistance reduced by $1 for every 
     $2 earned beginning when achieving Substantial Gainful 
     Activity (SGA). SGA is defined as earnings from wages or 
     salaries that equal or surpass $500 monthly (for non blind 
     disabled beneficiaries) that are earned continuously for nine 
     months or longer. Beneficiaries can shelter some income from 
     the SGA calculation by using work incentives such as the 
     Impairment Related Work Expense offset. This creates an 
     incentive similar to the cash continuation provisions for 
     1619(a).

        (B) Benefit reductions for those who are dually eligible

       Current law: An individual who is dually eligible for SSDI 
     and SSI and who returns to work loses eligibility for both DI 
     cash assistance and Medicare when achieving Substantial 
     Gainful Activity (SSA). SGA is defined as earnings from wages 
     or salaries that equal or surpass $500 monthly (for non blind 
     disabled beneficiaries) continuously for nine months or 
     longer. Beneficiaries can shelter some income from the SGA 
     calculation by using work incentives such as the Impairment 
     Related Work Expense offset. This individual would have their 
     SSI cash assistance and Medicaid coverage continued under the 
     1619(a) and (b) program.
       Revision: An individual who is dually eligible for SSDI and 
     SSI and who returns to work would have their SSI cash 
     assistance and Medicaid coverage continued under the 1619(a) 
     and (b) program, and, when achieving SGA the individual has 
     their DI cash assistance reduced by $1 for every $2 earned. 
     Reductions in cash assistance are taken first from SSI and 
     secondly from SSDI.

                (C) Required continued disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE = 3 years), Medical Improvement Possible (MIP = 5 years) 
     or Medical Improvement Not Expected (MINE = 7 years). The 
     individual must continue to meet criteria of: 1) earning less 
     than $500 per month in wages or salaries; 2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; 3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE = 3 years), Medical Improvement Possible (MIP = 5 years) 
     or Medical Improvement Not Expected (MINE = 7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations of impairments which meets or 
     equals the requirements of the Listings, including functional 
     equivalents, who, except for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.

                    (D) Repeal of trial work period

       Current law: An individual who is an allowed SSDI/Medical 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     cash assistance and no cost Medicare continues through a nine 
     month Trial Work Period and a three month transition period.
       Revision: Continuing disability status, gradual decline of 
     cash assistance, and a sliding scale buy-in to Medicare make 
     the Trial Work Period unnecessary.

              (E) Repeal of extended period of eligibility

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, an Extended Period of eligibility continues 
     Medicare for 36 months if the beneficiary elects to pay the 
     full cost of both the Part A and Part B premiums.
       Revision: Continuing disability status, gradual decline of 
     cash assistance, and a sliding scale buy-in to Medicare make 
     the Extended Period of Eligibility unnecessary.

                 (F) Reaffirmation of disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of: (1) earning 
     less than $500 per month in wages or salaries; (2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; (3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is as allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations or impairments which meets or 
     equals the requirements of the Listing, including functional 
     equivalents, who, expect for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.


   section 3: continued eligibility for Medicare buy-in benefits for 
                          disabled individuals

            (A) Continuation of Medicare and Medicare buy-in

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial 
     Work Period and a Three month transition period. Beginning 
     in month 13, Medicare continues if the beneficiary elects 
     to pay the full cost of both the Part A and Part B 
     premiums.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary who returns to work and earns $500 or more per 
     month (SGA), is in a continuing disability status unless 
     medical recovery is determined as described in paragraph 3 
     above and receives no cost Medicare until Adjusted Gross 
     Income (AGI) reached $15,000; after this point beneficiaries 
     would pay Medicare premiums of 10% of AGI beyond $15,000. 
     This incentive is similar to the continuation of Medicaid 
     under 1619(b). [The exact Formula is to be determined pending 
     additional research].

              (B) Defining the Medicare buy-in conditions

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives SSDI cash assistance after a five month 
     waiting period and receives Medicare coverage after a two 
     year waiting period. If the individual returns to work and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, Medicare continues if the beneficiary elects to pay 
     the full cost of both the Part A and Part B premiums.
       Revision: An individual who is an allowed Medicare Buy-In 
     beneficiary receives no SSDI cash assistance month, but 
     receives Medicare coverage without a two year waiting period. 
     If the individual returns to work (or remains at work) and 
     earns $500 or more per month (Substantial Gainful Activity), 
     no cost Medicare continues through a nine month Trial Work 
     Period and a Three month transition period. Beginning in 
     month 13, Medicare continues if the beneficiary elects to pay 
     the cost of both the Part A and Part B premiums on a sliding 
     income scale. The beneficiary would receive free Medicare 
     until Adjusted Gross Income (AGI) reached $15,000; after this 
     point beneficiaries would pay a premium of 10% of AGI beyond 
     $15,000. [The exact Formula is to be determined pending 
     additional research].


 section 4: medicare buy-in provision for disabled individuals who can 
work but remain on ssdi because they cannot obtain health care adequate 
                     coverage in the private market

      (A) Creating a new allowed beneficiary class to promote work

       Current law: An individual qualifies for SSDI/Medicare if 
     they meet a series of stringent criteria. This criteria 
     includes: 1) earning less than $500 per month in wages or 
     salaries; 2) having a medically determinable physical or 
     mental condition that has lasted or is expected to last 12 or 
     more months; 3) being unable to perform any job in the 
     national economy. In order to meet the criteria of having a 
     medically determinable condition, an applicant must either a) 
     have a condition which meets or exceeds the requirements of 
     the Listings, b) have two or more

[[Page S8476]]

     conditions which meets or exceeds the requirements of the 
     Listings, or c) meet strict functional criteria for not being 
     capable of performing any job in the national economy, given 
     their condition, age, and education. If these criteria are 
     met, an applicant is an allowed beneficiary and receives SSDI 
     cash assistance after a five month waiting period. Medicare 
     begins after a two year waiting period.
       Revision: An individual qualifies for Medicare Buy-In, but 
     not for SSDI cash assistance, if they meet a slightly less 
     stringent test of disability. The applicant would be required 
     to meet criteria that demonstrates having a medically 
     determinable physical or mental condition that has lasted or 
     is expected to last 12 or more months. In order to meet the 
     criteria of having a medically determinable condition, an 
     applicant must either a) have a condition which meets or 
     exceeds the requirements of the Listings, or b) have two or 
     more conditions which meets or exceeds the requirements of 
     the Listings. If these criteria are met, an applicant is an 
     allowed beneficiary and receives Medicare, but without a two 
     year waiting period.

                 (B) Reaffirmation of disability status

       Current law: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of: 1) earning less 
     than $500 per month in wages or salaries; 2) having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months; 3) being 
     unable to perform any job in the national economy.
       Revision: An individual who is an allowed SSDI/Medicare 
     beneficiary receives a Continuing Disability Review (CDR) at 
     intervals of either three, five, or seven years depending on 
     whether their allowed class is Medical Improvement Expected 
     (MIE=3 years), Medical Improvement Possible (MIP=5 years) or 
     Medical Improvement Not Expected (MINE=7 years). The 
     individual must continue to meet criteria of having a 
     medically determinable physical or mental condition that has 
     lasted or is expected to last 12 or more months through a 
     condition or combinations of impairments which meets or 
     equals the requirements of the Listings, including functional 
     equivalents, who, except for earned income meets the 
     disability definition. This incentive is similar to 1619(a) 
     provisions regarding Medicaid.


     section 5: medicare/medicaid integration demonstration project

 section 6: repeal of medicare and medicaid coverage data bank

                                 ______
                                 
      By Mr. LAUTENBERG:
  S. 1980. A bill to prohibit the public carrying of a handgun, with 
appropriate exceptions for law enforcement officials and others; to the 
Committee on the Judiciary.


             THE CONCEALED WEAPONS PROHIBITION ACT OF 1996

  Mr. LAUTENBERG. Mr. President, today I am introducing legislation 
that would prohibit individuals from carrying a handgun, concealed or 
in the open, in public. The bill includes exceptions for certain people 
authorized to carry handguns under State law, such as law enforcement 
personnel and duly authorized security officers. Additionally, States 
could choose to exempt persons whose employment involves the transport 
of substantial amounts of cash or other valuables.
  Also, Mr. President, States could provide exemptions in individual 
cases, based on credible evidence, that a person should be allowed to 
carry a handgun because of compelling circumstances warranting an 
exemption, such as a woman being stalked by someone who is threatening 
her. However, a simple claim of concern about generalized risks would 
not be sufficient. It would have to be a specified, credible threat.
  Mr. President, common sense tells you that there are more than enough 
dangerous weapons on America's streets. Yet, incredibly, some seem to 
think that there should be more. They want to turn our States and 
cities into the wild, wild west, where everyone carries a gun on his or 
her own hip, taking the law into their own hands. This is a foolhardy, 
and dangerous, trend.
  The statistics are clear, Mr. President. This country is already 
drowning in a sea of gun violence. Every 2 minutes, someone somewhere 
in the United States is shot. Every 14 minutes someone in this country 
dies from a gunshot wound. In 1994 alone, over 15 thousand people in 
our country were killed by handguns. Compare that to countries like 
Canada, where 90 people were killed by handguns that year, or Great 
Britain, which had 68 handgun fatalities.
  Mr. President, the Federal Centers for Disease Control and Prevention 
estimates that by the year 2003, gunfire will have surpassed auto 
accidents as the leading cause of injury-related deaths in the United 
States. In fact, this is already the case in seven States.
  It is because we already suffer from an epidemic of gun violence that 
I have introduced this legislation. The fact is, Mr. President, 
concealed weapons make people less, not more, secure, You don't have to 
take it from me. Listen to the real experts: The police officers on the 
street. There is near-unanimous agreement in the law enforcement 
community that concealed weapons laws are bad policy.
  Arming more people is not the way to make the streets safer. It is a 
way to get more people killed. Mr. President, the National Rifle 
Association and its allies may believe that the presence of concealed 
weapons will scare criminals from committing crimes. To me, just the 
opposite is true. More likely, criminals will just get more violent.
  Think about it, Mr. President. If a criminal thinks that you might be 
carrying a concealed weapon, common sense tells you that he is much 
more likely to simply shoot first, and ask questions later.
  Perhaps more importantly, concealed weapons will mean that many 
routine conflicts will escalate into deadly violence. Every day, people 
get into everything from traffic accidents to domestic disputes. Maybe 
these arguments lead to yelling, or even fisticuffs. But if more people 
are carrying guns, those conflicts are much more likely to end in a 
shooting, and death.
  Mr. President, the bottom line is that more guns equals more death. 
This legislation will help in our struggle to reduce the number of guns 
on our streets, and help prevent our society from becoming even more 
violent and dangerous.
  I hope my colleagues will support the bill, and ask unanimous consent 
that a copy of the legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows;

                                S. 1980

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

     SECTION. 1. SHORT TITLE.

       This Act may be cited as the ``Concealed Weapons 
     Prohibition Act of 1996''.

     SEC. 2. FINDINGS.

       The Congress finds and declares that--
       (1) crimes committed with handguns threaten the peace and 
     domestic tranquility of the United States and reduce the 
     security and general welfare of the Nation and its people;
       (2) crimes committed with handguns impose a substantial 
     burden on interstate commerce and lead to a reduction in 
     productivity and profitability for businesses around the 
     Nation whose workers, suppliers, and customers are adversely 
     affected by gun violence;
       (3) the public carrying of handguns increases the level of 
     gun violence by enabling the rapid escalation of otherwise 
     minor conflicts into deadly shootings;
       (4) the public carrying of handguns increases the 
     likelihood that incompetent or careless handgun users will 
     accidently injure or kill innocent bystanders;
       (5) the public carrying of handguns poses a danger to 
     citizens of the United States who travel across State lines 
     for business or other purposes; and
       (6) all Americans have a right to be protected from the 
     dangers posed by the carrying of concealed handguns, 
     regardless of their State of residence.

     SEC. 3. UNLAWFUL ACT.

       Section 922 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(y)(1) Except as provided in paragraph (2), it shall be 
     unlawful for a person to carry a handgun on his or her person 
     in public.
       ``(2) Paragraph (1) shall not apply to the following:
       ``(A) A person authorized to carry a handgun pursuant to 
     State law who is--
       ``(i) a law enforcement official;
       ``(ii) a retired law enforcement official;
       ``(iii) a duly authorized private security officer;
       ``(iv) a person whose employment involves the transport of 
     substantial amounts of cash or other valuable items; or
       ``(v) any other person that the Attorney General determines 
     should be allowed to carry a handgun because of compelling 
     circumstances warranting an exception, pursuant to 
     regulations that the Attorney General may promulgate.
       ``(B) A person authorized to carry a handgun pursuant to a 
     State law that grants a person an exemption to carry a 
     handgun

[[Page S8477]]

     based on an individualized determination and a review of 
     credible evidence that the person should be allowed to carry 
     a handgun because of compelling circumstances warranting an 
     exemption. A claim of concern about generalized or 
     unspecified risks shall not be sufficient to justify an 
     exemption.
       ``(C) A person authorized to carry a handgun on his or her 
     person under Federal law.''.
                                 ______
                                 
      By Mr. CRAIG:
  S. 1981. A bill to establish a Joint United States-Canada Commission 
on Cattle and Beef to identify, and recommend means of resolving, 
national, regional, and provincial trade-distorting differences between 
the countries with respect to the production, processing, and sale of 
cattle and beef, and for other purposes; to the Committee on Finance.


     THE JOINT UNITED STATES-CANADA COMMISSION ON CATTLE AND BEEF 
                       ESTABLISHMENT ACT OF 1996

 Mr. CRAIG. Mr. President, I introduce a bill of critical 
importance to our Nation's cattle producers. The Joint United States-
Canada Commission on Cattle and Beef is designed to resolve some of the 
existing differences in trade practices between the two countries.
  As a former rancher, I have a firsthand understanding of the 
challenges that face the cattle industry. The prolonged down cycle is 
especially troubling because it affects the livelihoods of thousands of 
ranching families in Idaho and across the country.
  These beef producers are the largest sector of Idaho and American 
agriculture. Over 1 million families raise over 100 million head of 
beef cattle every year. This contributes over $36 billion to local 
economies. Even with the extended cycle of low prices, direct cash 
receipts from the Idaho cattle industry were almost $620 million in 
1995. These totals only represent direct sales; they do not capture the 
multiplier effect that cattle ranches have in their local economies 
from expenditures on labor, feed, fuel, property taxes, and other 
inputs.
  Over the years, cattle operations have provided a decent living and 
good way of life in exchange for long days, hard work, and dedication. 
While the investment continues to be high, the returns have been low in 
recent years.
  The problems facing the cattle industry in recent years are complex. 
The nature of the market dictates that stable consumption combined with 
increased productivity and growing herd size yield lower prices to 
producers. This, combined with high feed prices and limited export 
opportunities, has caused a near crisis.
  Many Idahoans have contacted me on this issue. Some suggest the 
Federal Government intervene in the market to help producers. However, 
many others have expressed fear that Federal intervention, if 
experience is any indication, will only complicate matters and may also 
create a number of unintended results. I tend to agree with the latter. 
Time and again, I have seen lawmakers and bureaucrats in Washington, 
DC, albeit well-intentioned, take a difficult situation and make it 
worse. This does not mean that I believe Government has no role to 
play. I have supported and will continue to support measures of proven 
value. However, I will continue to follow this situation closely with 
the hope that free market forces will, in the long run, aid in making 
cattle producers more efficient, productive, and profitable.
  The cattle industry is part of a complex, long-term cycle; however, 
there are producers who might not survive the short-term consequences. 
The Beef Industry Assistance Resolution addresses a number of these 
short term issues. These are issues that were raised at a hearing of 
the Agriculture Committee that I chaired a few weeks ago.

  The resolution has five sections--antitrust monitoring, market 
reporting, private sector self-regulation, recognition of barriers to 
international trade, and emergency loan guarantees.
  Section 1 encourages the Secretary of Agriculture and Department of 
Justice to increase the monitoring of mergers and acquisitions in the 
beef industry. Investigation of possible barriers in the beef packing 
sector for new firms and with other commodities is encouraged.
  Section 2 directs the Secretary of Agriculture to expedite the 
reporting of existing beef categories and add additional categories. 
These categories include contract, formula and live cash cattle prices, 
and boxed beef prices. The Secretary is also encouraged to increase the 
frequency of captive supply cattle from every 14 to 7 days. I am 
especially interested in the improved reporting of all beef and live 
cattle exports and imports. The second section also directs the 
Secretary to capture data on a previously unrecorded segment of the 
market--away from home consumption. While this market consumes 
approximately half of the Nation's beef production, very little is 
known about it.
  Section 3 encourages two very important measures within the private 
sector. First, meat packing companies are encouraged to fully utilize a 
grid pricing structure which will provide producers with a more 
complete picture for the particular type of the cattle they produce. 
Second, agricultural lenders are encouraged to consider the total asset 
portfolio, not just cash flow, when evaluating this year's beef loans. 
Even the best operators will have great difficulty cash-flowing a 
cattle outfit because of the prolonged period of low prices.
  Section 4 recognizes a number of barriers to international trade that 
adversely affect American beef producers. The section is meant to 
elevate the importance of all trade issues and specifically references 
the elimination of the European Union hormone ban and animal health 
barriers between the United States and Canada.
  Section 5 recommends that emergency loan guarantees be made available 
to agricultural lenders with cattle industry loans. I am disappointed 
that the President zeroed out funding for this program in his fiscal 
year 1997 proposal. I have heard from a number of lenders that a high 
number of loans are questionable for this fall.
  The Beef Industry Assistance Resolution is a measure designed to 
provide immediate, short-term solutions to some of the serious problems 
facing the cattle industry. I know that a number of my colleagues have 
legislation pending in regards to the cattle market. I would comment 
that I see this resolution as a starting point, not an ending point for 
cattle industry issues.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1981

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

     SECTION 1. JOINT UNITED STATES-CANADA COMMISSION ON CATTLE 
                   AND BEEF.

       (a) Establishment.--There is established a Joint United 
     States-Canada Commission on Cattle and Beef to identify, and 
     recommend means of resolving, national, regional, and 
     provincial trade-distorting differences between the United 
     States and Canada with respect to the production, processing, 
     and sale of cattle and beef, with particular emphasis on--
       (1) animal health requirements;
       (2) transportation differences;
       (3) the availability of feed grains; and
       (4) other market-distorting direct and indirect subsidies.
       (b) Composition.--
       (1) In general.--The Commission shall be composed of--
       (A) 3 members representing the United States, including--
       (i) 1 member appointed by the Majority Leader of the 
     Senate;
       (ii) 1 member appointed by the Speaker of the House of 
     Representatives; and
       (iii) 1 member appointed by the Secretary of Agriculture;
       (B) 3 members representing Canada, appointed by the 
     Government of Canada; and
       (C) nonvoting members appointed by the Commission to serve 
     as advisers to the Commission, including university faculty, 
     State veterinarians, trade experts, and other members.
       (2) Appointment.--Members of the Commission shall be 
     appointed not later than 30 days after the date of enactment 
     of this Act.
       (c) Report.--Not later than 180 days after the first 
     meeting of the Commission, the Commission shall submit a 
     report to Congress and the Government of Canada that 
     identifies, and recommends means of resolving, differences 
     between the United States and Canada with respect to the 
     production, processing, and sale of cattle and beef.

                          ____________________