[Congressional Record Volume 142, Number 124 (Wednesday, September 11, 1996)]
[Senate]
[Pages S10245-S10279]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 
                                  1997

  The PRESIDING OFFICER (Mr. Brown). Under the previous order, the 
Senate will resume consideration of H.R. 3756, which the clerk will 
report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 3756) making appropriations for the Treasury 
     Department, the United States Postal Service, the Executive 
     Office of the President, and certain Independent Agencies for 
     the fiscal year ending September 30, 1997, and for other 
     purposes.

  The Senate resumed consideration of the bill.

       Pending:
       Wyden/Kennedy amendment No. 5206 (to committee amendment 
     beginning on page 16, line 16, through page 17, line 2) to 
     prohibit the restriction of certain types of medical 
     communications between a health care provider and a patient.
       Dorgan amendment No. 5223 (to committee amendment beginning 
     on page 16, line 16, through page 17, line 2) to amend the 
     Internal Revenue Code of 1986 to end deferral for

[[Page S10246]]

     United States shareholders on income of controlled foreign 
     corporations attributable to property imported into the 
     United States.

  Mr. SHELBY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.


                           Amendment No. 5206

  Mr. SHELBY. Mr. President, I ask for the yeas and nays on the Wyden 
amendment.
  The PRESIDING OFFICER. Is there objection to the request? Without 
objection, it is so ordered.
  Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  Mr. SHELBY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SHELBY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                         Privilege of the Floor

  Mr. SHELBY. Mr. President, I ask unanimous consent that privilege of 
the floor be granted to Paul Irving, staff of Treasury, Post Office.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. SHELBY. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 5223

  Mr. DORGAN. Mr. President, I believe that the amendment which I 
offered yesterday is the pending business before the Senate. Is that 
correct?
  The PRESIDING OFFICER. The Senator is correct. The pending question 
is the Dorgan amendment No. 5223.
  Mr. DORGAN. Mr. President, it is kind of an upside-down world out 
there. You look at the news from day to day. A few weeks ago we all 
listened to the news and discovered that, if you were roughly 7 feet 
tall and had basketball skills, you could sign a contract for $100 
million. One 7-foot-2-inch athlete signed a contract for $115 million 
to play basketball for 7 years. That would employ, by the way, about 
4,000 elementary school teachers for a year, that $115 million; but in 
our economy it is one very good basketball player. Sounds a little 
confusing to me that that represents the value system, but that is the 
system.
  This morning in the paper there is an article that says credit card 
companies are going to end the free ride. They are going to start 
charging a fee for those who pay off their credit card bills. Isn't 
that interesting? They are going to charge a fee for those who pay 
their credit card bills off in full every month. Why? Because if you 
are paying off your credit card bill and settling your balance, they 
are not making money off you. So the result is they will charge a fee 
for that. Sound kind of like a screwball idea? It does to me.
  Or how about this screwball idea. Have a provision in America's Tax 
Code that says to a corporation, we will give you a special little 
deal. We know that you are here in America. We know that you built a 
plant here. You hired a bunch of workers. You have made a product here 
for 30 years. You make profits here. But we will give you a special 
little deal. If you will simply shut your American plant down, fire all 
those workers, get rid of all that in America, and move the whole 
system to a foreign tax haven, open a new factory overseas, hire new 
foreign workers, make exactly the same product you were making in 
America, and then ship the product from that foreign tax haven country 
into America and make your profit that way, we will give you a deal. We 
will give you a tax break if you will do that. Close your American 
plant, produce overseas instead, and we will give you a tax break. 
Sound like a screwball idea? It is current tax law.
  I have an amendment that is pending before the Senate that will lose 
today. We voted on this before, 52-47. I lost a year ago. We are going 
to vote again today, and no doubt I will lose again today. Why? Because 
anyone standing in this Chamber feels comfortable going home telling 
their folks who sent them here that it was ``my priority to decide to 
keep a tax provision that says let's reward people who move American 
jobs overseas''? No. That is not why. There is not one person who can 
find one good reason to have this in current tax law. Not one.
  I do not stand here asking for 10 reasons why this ought to be 
repealed. I would like to find one sober American who can explain to me 
one reason why this ought to be kept in American tax law. At the very 
least our tax law ought to be export-neutral with respect to jobs.
  Mr. KERREY. I wonder if the Senator will yield?
  Mr. DORGAN. I am glad to yield.
  Mr. KERREY. The Senator and I, I guess a month ago, discussed a long 
article that was in the New York Times, in the business section of the 
New York Times, describing a U.S. corporation, actually a multinational 
corporation, described by the operator, with $9 billion for the revenue 
total as reported in the paper, and $2 billion for net income as 
reported by the paper. And the tax rate was down to 3 or 4 percent.
  One particular transaction that was under examination was shipping 
all the income to the Dutch Antilles so they would not have to pay any 
capital gains tax. When the CEO of the company, the owner of the 
company, was asked the question, ``Well, don't you feel bad about not 
paying any taxes in the United States of America?'' his answer was, 
``That's what multinational corporations are for.''
  Is that the sort of thing that the Senator believes that the U.S. 
taxpayers, basically the taxpayers of the United States are 
subsidizing, because they are paying the taxes? If somebody does not 
pay tax--if I forgive you all of your taxes and say, ``Senator Dorgan, 
you don't have to pay any taxes at all, somebody else is going to pick 
up the tax for it, somebody else is going to be subsidizing your 
reduction in tax''--in this case, what you are describing is a 
situation where not only am I subsidizing the fact that you are not 
paying any taxes, not only am I paying more and you are paying less, 
but I am paying more and you are paying less and you are moving 
operations abroad.
  Mr. DORGAN. What I have not mentioned in discussion, because it is 
slightly different but probably an even more important discussion, is 
that 73 percent of foreign corporations doing business in America pay 
zero in Federal income taxes to this country--not a little, or not 
much, they pay zero. Mr. President, 73 percent of foreign corporations 
doing business in America--and those names everyone would understand 
and recognize instantly; they are the names on the products people are 
buying in this country--they do hundreds of billions of dollars of 
business in this country every year, and 73 percent of them pay zero in 
taxes to our country.

  A slightly different issue but in the same general family of tax 
problems, in addition to the strainer through which all of this flows 
and through which these corporations can come in, earn billions of 
dollars and pay zero taxes in our country, in addition to that, we 
actually have a provision in this Tax Code that says, by the way, if 
you are an American company and you are having to compete against a 
foreign corporation coming into our country--what is the solution? Move 
your jobs, leave our country, produce in Sri Lanka, Bangladesh, 
Malaysia, Singapore, produce elsewhere. Hire foreign workers. Not only 
can you get a tax break, you can get lower wages over there. You can 
hire somebody for 14 cents an hour, a quarter an hour, 50 cents an 
hour, $1 an hour. You do not have to worry about pumping effluents into 
the air, dumping chemicals into the water. You can hire kids and work 
them 14 hours a day. Move your jobs and go overseas, our Tax Code says 
to companies, and then ship the product back here and compete with 
someone who stayed here.
  I represent a State not unlike the Senator from Nebraska. North 
Dakota is slightly smaller in population. I toured a little 
manufacturing facility recently with 55 workers. They are wonderful 
workers who love their jobs. It is a great little company, struggling 
and not making a lot of money, but making it in a small community in

[[Page S10247]]

North Dakota. They do not have the opportunity to decide, ``I think we 
will move our production, we will move our manufacturing to 
Singapore.'' They do not have that opportunity. They do not have that 
luxury. They are just working every day, doing the best they can, 
trying to make a profit.
  Assume that some other company makes the same products that compete 
with this little company. One of them was an arrowhead on arrows used 
in archery that are sold in stores around this country, little steel 
arrowheads for hunting and target practice. Assume another company 
makes that same product to compete with this little North Dakota 
company and they decide, ``I think we will make them overseas.'' Our 
Tax Code says, ``Well, good for you, good decision.'' In fact, we will 
reward you for making that decision. Any money you make, any income you 
make, as long as you do not repatriate it, keep it over there, invest 
it over there, you never have to pay American income taxes. Our Tax 
Code says, ``Yes, jump on the bandwagon. Move jobs overseas.''
  The fact is, our manufacturing job base is diminished. It used to be 
24 percent in 1979. Now it is down close to a 15 percent manufacturing 
job base.
  The Senator from South Carolina said yesterday, and I agree with him, 
no country will long remain a strong world economic power unless it 
retains a strong manufacturing base. The Senator from South Carolina 
went far afield yesterday talking about a wide range of trade issues. 
There is nothing wrong with that because that is also part of the 
global discussion. But this is a very simple, modest amendment. We are 
not talking rocket science here. I am not talking about global 
strategies, the global economy, or international trade. I am talking 
about a simple proposition: Should this country, under any condition, 
decide that in its Tax Code it should subsidize moving U.S. jobs 
overseas? If this Congress cannot stand up and take the first small 
baby step in deciding that we should no longer subsidize moving jobs 
overseas, then Lord help a legislative body that cannot make that 
fundamental, small decision on behalf of a country.

  The Senator from South Carolina, in discussing trade yesterday, 
talked about protectionist, and ``protectionist'' has a very specific 
meeting for a lot of people debating the global economy. Should anyone 
in this Chamber, at least when it comes to this issue, this simple 
little tax provision that now rewards those who move American jobs 
overseas, should anyone in this Chamber deny they are interested in 
protecting America's jobs, deny their interest in standing up for this 
country's manufacturing base? No, I am not suggesting putting up 
barriers, but I am suggesting deciding we will put an end to an 
insidious, perverse tax provision that rewards those who do the wrong 
things moving American jobs overseas.
  Mr. KERREY. Will the Senator yield?
  Mr. DORGAN. I am happy to yield to the Senator.
  Mr. KERREY. The opponents are not up here to engage in a discussion.
  One of the arguments I have heard against the Senator's amendment is 
that it is effectively a tariff. I wonder if the Senator could pretend 
I am an opponent of the amendment and talk to the American people a bit 
about this issue of whether or not the change in Tax Code that you are 
proposing would result in a tariff?
  Mr. DORGAN. That is an absolutely absurd contention. It makes no 
sense at all for someone to say, ``Well, this is a tariff.'' This has 
nothing to do with tariffs, nothing to do with international trade.
  I would love to offer, incidentally, some amendments on trade, but I 
shall not. This has to do, simply, with a tax subsidy that now tilts 
the playing field and says to a company, ``If you move those jobs from 
Akron, from Toledo, from Bismarck, from Lincoln, to some tax-haven 
company, we will reward you.'' How much is the reward? Well, I come 
from a town, as I said yesterday, of 300 people, a high school class of 
nine, a wonderful community in southwestern North Dakota. The reward 
here is not giant in the context of our Federal budget. It is $2.2 
billion in 7 years.
  Now, that may not sound like much to people here who would chair a 
Budget Committee, for example. Go to my hometown and talk about $2.2 
billion that the Federal Government asks other Americans to pay 
effectively as a subsidy to companies who would move their jobs 
overseas, and then see what kind of reaction you get from people who 
think with a bit of common sense.
  Now, how does this perversity occur in the Tax Code? This is called 
deferral, a fairly common concept in tax law. It has been there a long 
while. There also are many antideferral provisions in the Tax Code. In 
fact, the Senate voted a couple of decades ago to eliminate all 
deferral altogether. Deferral means a U.S. company does business 
overseas, makes profits and, therefore, does not have to pay tax on 
their profits because they can defer it indefinitely--in fact, until 
and unless they bring the money back to the United States.
  The Senate at one point voted to eliminate all deferral. The House of 
Representatives, when I served in the House, voted to eliminate a 
narrow portion of deferral, which is exactly what I am proposing we do. 
Eliminate deferral when a company moves their jobs to tax havens 
overseas, produces a product with those jobs and ships the products 
back into our country to compete against other companies whose jobs and 
production are here.

  Again, this is not rocket science. I am not proposing something that 
is hard to understand. I expect in the next couple of hours I will 
lose. I expect those who are now concerned about this and who do not 
want to debate it apparently on the floor of the Senate are 
strategizing how they will offer something that prevents an up-or-down 
vote on this. They will either offer to table it, or they will offer 
some other device, and they will try to ricochet the vote because the 
last thing in the world they want to do is deal with this.
  We have organizations in this town formed and financed by the largest 
corporations in America and the world whose job it is to protect this 
tax subsidy--2.2 billion dollars' worth. So you have all kinds of 
lobbyists across this town who have done an enormous amount of work 
here in the Senate to make sure that this will not pass. That is the 
way the system works.
  However, in my judgment, it is not much of a system that allows us to 
ever make an excuse for a Tax Code that on behalf of the American 
people says our interest is served by paying those who diminish 
America's economic strength, who move America's economic production 
abroad.
  Let me make a couple of other brief points. I do not propose to 
object if a U.S. corporation decides that it is going to compete in 
Japan or Korea or Europe, and in order to do that, because Japan is 
locating its production facilities in Thailand or Indonesia, the U.S. 
corporation says, ``Well, I will open up a plant in Indonesia to 
produce products to be sold in Korea.'' I would prefer they not do 
that. I prefer they put those jobs in North Dakota, as a matter of 
fact, or in Colorado. But if they decide they have to have offshore 
production to compete with others with offshore production, fine, I am 
not interrupting that. My amendment says, however, if you are going to 
create offshore production facilities to create products to ship back 
into America to compete against American firms, then you are going to 
obey the same tax laws. You can't defer anything. If you make a profit, 
you pay taxes on the profit. You made the profit by making a product 
and selling it in the American marketplace. So you pay the same tax 
that the American producer pays, who stayed here and produced here. 
That is all my amendment says. It is very narrow.

  Now, the second point I want to make is this: Some say--and they will 
say it with gusto, if only they will come out and debate this 
amendment--and I fully understand why they don't want to debate this 
amendment--but they would say, ``You don't understand; we are dealing 
with a global economy. You don't have the foggiest understanding of 
what on Earth is going on in this world. If you did, you would not 
offer this nonsense and you would not talk the way you do about the 
trade deficit.''
  Well, the global economy has changed. Our economy in the United 
States has changed our economic circumstances. That is certainly true. 
We for 75 years fought in this country about some fundamental issues--
minimum wage, safe workplaces, pollution,

[[Page S10248]]

environmental standards, issues with respect to child labor--and we 
came to some conclusions on all of them. Then some economic 
enterprises--the largest in the world, in fact--found a way to pole 
vault over all of those issues and say: You don't understand. Those 
fights did not mean anything. We can hire kids--oh, not in America, but 
we can hire kids and we can go to other countries and hire 14-year-
olds, and we can work them 14 hours a day and pay them 14 cents an 
hour, and they can make whatever they make, and we can ship that back 
to the United States, and we can sell it in supermarkets and in the 
discount stores. We can do that in the name of profit because it is 
part of the global economy.
  Well, that might be the way they have described the global economy, 
but it is not fair competition. Free trade ought to mean fair trade. 
This is not fair competition. Those who describe the global economy as 
working in that way are describing a system that is now being discussed 
in the Philadelphia Inquirer. I think they are doing 10 or so segments 
that are wonderful segments on this entire issue. The one in Monday's 
newspaper deals with exporting jobs again. It describes a couple--Lynn 
and Ed Tevis--who worked for a company for 20 years and were discarded 
like a wrench that was used up. Human capital now is like a wrench or a 
hammer or a pair of pliers. When they are done with it, they throw it 
away. They are told: We are sorry. You worked for us 20 years. This job 
is now in Singapore, or this job is now in Bangladesh. Your job with us 
is over.
  That is what is happening in this country.
  My suggestion is not that we decide that we are not part of the 
global economy. We are. My suggestion is that we decide, as a country, 
what the rules are for access to our marketplace. Is there a rule about 
accessing America's marketplace with labor from 14-year-olds who are 
paid 14 cents an hour? Is there or isn't there? If there is, let's 
start enforcing it. Should there be a rule that at least the American 
taxpayers should be assured that the Tax Code is not subsidizing the 
movement overseas of American jobs? Should there be that assurance made 
to the American taxpayer? The only way we will give them that assurance 
is to step up now and vote.

  The desk I sit at in the U.S. Senate was a desk that was occupied at 
one point by a man named La Follette from Wisconsin, Senator La 
Follette. For those that don't know the tradition of the Senate, the 
tradition has always been to carve your name inside the desk drawer of 
the Senate desk. It has been a longstanding tradition in the Senate. If 
you pull out the desk drawer, the bottom drawer--the only drawer in the 
desk--you will find a list of names of Senators who sat in that desk.
  I was told a story by Senator Byrd, who is the preeminent historian 
of the U.S. Senate, about Senator La Follette. He was once speaking 
from this desk many, many decades ago, I believe he said, in a 
filibuster. He ordered down for a turkey sandwich and a glass of 
eggnog. Senator Byrd, as he told the story, said that the eggnog was 
delivered at this desk to Senator La Follette, and he was trying to 
take a sip of eggnog as he was speaking. He took a mouth full of this 
eggnog and spit it out and hollered, ``It's poison, it's poison.'' Some 
days later, back then, they got the analysis of the eggnog and 
discovered, indeed, there had been poison put in that poor Senator's 
eggnog. So I have not had an urge to filibuster from this desk since 
the recitation of that wonderful story about another occupant of this 
desk, Senator La Follette. I did not ever hear the conclusion of that 
story, whether they found out who laced the eggnog. But I am not 
ordering eggnog today, and I am not intending to filibuster. I do 
expect that there are a whole lot of folks in this town--hired by 
enterprises that will benefit from this $2.2 billion--who think this is 
real poison. Oh, they think this is awful. God forbid that we should 
pass something like this amendment. What an awful thing to do. Senator 
Dorgan just doesn't understand.
  Well, the point is, I do understand. What we are doing is 
fundamentally wrong. What we are doing weakens this country. What we 
are doing in our Tax Code says to multinational corporations that you 
can make a choice about where to put your jobs, and you can put them 
elsewhere, move them out of America, because jobs are not the issue. 
Well, jobs are the issue. Good jobs that pay well and provide real 
security for American workers are the issue. American workers are not 
tools. They are part of a group of people who help make these companies 
the great companies they are.
  I am going to finish with one short story. Just after Christmas this 
past year, I was on an airplane, Northwest Airlines, traveling from 
North Dakota back to Washington, DC. I read a story in the Minneapolis 
Star Tribune that brought tears to my eyes. It was a story about a 
businessman and his wife. I believe his name was Mr. Nagle. He was a 
fellow who started a company in the early 1980's and was incredibly 
successful, made an enormous amount of money. It was a very simple 
idea. The company's name is Rollerblade, which many Americans will 
recognize. He began, as I recall, in a circumstance where hockey 
players wanted something to practice skating on when it wasn't 
wintertime up in our part of the country, Minnesota and North Dakota. 
So there was invented something that was the early version of what we 
now know as ``Rollerblades.'' The Rollerblade company, I believe, was 
probably the pioneering company. This fellow ran the company and he 
turned this tiny little company into something extraordinary. It grew 
and blossomed and prospered and made enormous profits. What a wonderful 
success story for this fellow and his workers and his corporation. Then 
he sold Rollerblade Corp. He and his wife moved to Florida. I was on 
the plane that morning after the Christmas season, and I read the story 
about what this fellow had done. Just before Christmas, this company, 
that had some nearly 300 employees in the company out in the 
manufacturing plants making rollerblades and in the production, 
control, finance, and various places, these employees began to receive 
Christmas greetings from this fellow and his wife, who used to own 
their company but who had sold it a couple of months previous. As these 
employees opened up their Christmas greetings at home, they discovered 
a Christmas card and a check from this man and his wife.
  The check equaled a certain amount of money multiplied times the 
months that each of those employees had worked for that company. Some 
checks were as much as $20,000 to the people out on the manufacturing 
line.
  But there is more. This fellow not only sent them a check, but he 
told them that he had prepaid the taxes on the checks. So this was 
theirs. The taxes were paid, and he was sending this money to them 
because he ran a very successful company, sold it, made an enormous 
amount of money. And he said, ``I know that part of the reason, a major 
reason, this company succeeded was because you people worked for it. 
You people that made those rollerblades, those skates out on the 
manufacturing line, made this company what it was. I made a lot of 
money as a result, and I want to share some of that with you now that I 
have left this company.''
  Out of the blue, a check for $20,000 with the tax prepaid. I got back 
to Washington, DC, after I read that story. I called him down in 
Florida. I said, ``You know, at a time when so many in American 
business believe that workers have no value, they are just wrenches and 
tools and things that you either hire or throw away at will, it is so 
nice to see someone who once again believes that part of what made that 
company successful were the men and women who worked for that 
company.''
  It was such a wonderful story. That ought not to be the exception. 
One would hope that would be the rule in our country. But this man is 
such an exceptional man. Everyone else does it differently. Everyone 
else now says people do not matter; they are expendable; get rid of 
them. For the jobs in Kansas City, ``If you can put more money in 
Bangladesh, move it to Bangladesh. It does not matter.''
  Here is a picture of two people. And I have lots and lots of pictures 
that I will not show today. Lynn and Ed Tevis moved 1,200 miles for a 
company they had worked 12 to 14 years for already. They downsized and 
moved 1,200 miles. Two years later they downsized again,

[[Page S10249]]

and said, ``You are done. It is all over; nothing more.'' It is just 
human capital that is expendable.
  My point is this: I do not believe the U.S. Senate can make decisions 
about jobs for international businesses and for U.S. corporations. But 
I believe that this Senate can make decisions about whether our Tax 
Code rewards those people who do the wrong things about jobs. I do 
believe our Tax Code could stand on the side of American businesses who 
stay here and have jobs here and compete here. When we find that our 
Tax Code says to others, ``Go away, ship your products back, and we 
will give you a competitive advantage over the people who stayed 
here,'' I believe that our Tax Code can be changed to decide that is 
unfair, and that we will not allow that to happen anymore.
  I offered this yesterday. The Senator from South Carolina spoke. I 
assume that we will have someone come and procedurally offer a motion 
to try to avoid the debate on this. I would love to have the debate. I 
would love to find one person who will give me one reason that we ought 
to reward anyone with tax breaks that move jobs overseas; just one. I 
am not asking for a dozen. I am not asking for the impossible. One 
person give me one reason; just come, stand, and give me one reason. 
The last time we had someone come and say, ``Well, we will hold 
hearings on this. This is not the place. This is not the time. This is 
not the way.'' They will come today again. They will say, ``This is not 
the place. This is not the time. This is not the way to hold 
hearings.''
  I have heard all of that before. Just give me one reason that this 
country ought to have a Tax Code that says we encourage moving American 
jobs abroad. If anyone can do that, alert me that you are coming so we 
can spend a little time visiting about it, and I would love to have the 
American people hear the other side of this debate.
  I have spoken twice now at some length. The American people have not 
had the advantage of having someone else come, and stand up and say, 
``Count me in. My name is X, Y, and Z, and I believe we ought to have 
in our Tax Code an incentive to move jobs overseas.'' Is there anyone 
who will do that? Anyone?
  Well, I doubt it. But it is now in current law, and we must take it 
out at some point. A lot of folks don't want it taken out. Those are 
the folks who will benefit by the $2.2 billion. That is the way the 
political system works. But if we keep prodding, agitating, one of 
these days we are going to get this Congress to do the right thing.
  I tried to break the cement in the driveway one day, and it reminded 
me that it is a lot like legislating. If you take a 16-pound mallet and 
try to break cement in a driveway, you wind up hitting the driveway as 
hard as you can with this giant mallet, and nothing happens. You hit it 
again, and nothing happens. You hit it again, and nothing happens. 
About the 15th time you hit this big slab of cement, the whole darned 
thing collapses.
  That is the way legislative activity is as well. You don't always get 
it the first time. You don't always see a discernible result. But one 
of these days we will change this provision in the tax law. It is not 
the biggest issue in the world. But it is something that ought to be 
changed, and something this Congress ought to remedy. This will not be 
the end of the debate.
  But I appreciate the indulgence of the Presiding Officer, and I 
appreciate also the patience of the Senator from South Carolina.
  I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. HOLLINGS. Mr. President, let me try to answer why there will not 
be one come and join the debate. It is easily understood. It is the 
result, of course, of our affirmative action policy after World War II 
of trying to rebuild the industrialized nations. It spread capitalism 
in Europe, and out into the Pacific rim. And our affirmative action 
policy called for various things to induce American investment 
overseas. We put in, as you can find in the early morning news now on 
the front of the business page, the Overseas Private Investment 
Corporation, subject to assault because it is no longer needed. It was 
needed at that time. Industry had to be ensured against expropriation 
and the loss of their investment overseas.
  So we passed the Overseas Private Investment Corporation [OPIC]. Then 
we found that we could subsidize, give inducements by way of actual 
subsidy for export overseas, with the Export-Import Bank. And we put in 
various tax deferrals.
  The reason the distinguished Senator from North Dakota in our 
amendment is not going to win, as he says, today as you can only look 
at the Republican screen at Channel 2. And it says new taxes. Once it 
is labeled as new taxes, that crowd will run in the other direction 
because we live in this symbolic poster world of true-false, up-down, 
``I am for the families, and against taxes; I am for jobs, and against 
crime.'' And that is all you get out of them--is symbolic nonsense. So 
they will not really get to the guts of the issue.

  It is not a new tax. It just says those who are paying taxes for 
production here should be on an equal footing and not penalized with 
American investment and corporations overseas for producing overseas. 
We are trying to cut out that deferral.
  As a result of our affirmative action policy and spreading capitalism 
after World War II--I am not debunking it, or regretting it. It has 
worked. The Marshall plan is one of the great success stories of all 
history by way of people taxing themselves. They think. They didn't 
have pollsters running around loose in the late 1940's to get these 
children to come to the U.S. Senate--true-false. Just look at the 
polls. I will go back home, and, ``I am against taxes.'' In fact, only 
17 percent of the people in one poll taken at that time, Gallop, said 
at that particular time--that only 17 percent favored the Marshall 
plan. But we had division as they all talked to. Everybody wants to use 
the buzzwords, and they come on with their little 20-second sound bite, 
and said, ``we have the vision.'' There is not any vision in any of 
this stuff going on about gay marriages and everything else. They are 
not national problems whatever. When you get to a real national 
problem, as it is about the economic security--and I emphasize 
``economic security''--you can find the Senators want it.
  I would amend the idea of just jobs because jobs appeals to the 
polls. You are for jobs, or against jobs. And it makes it just a little 
political nuance of a campaign. The truth is the security of the United 
States of America is an issue here with respect to this particular 
amendment. The passage of the amendment is not going to ensure the 
security. It is going to begin as a wake-up call, and a trend backward.
  I have described that the success of the United States, the strengths 
that we have as a nation, the security that we have as a nation, rests, 
as it were, on the three-legged stool: The one leg, the values of a 
nation. That leg is strong, and unchallenged. We sacrificed to feed the 
hungry in Somalia.
  We sacrificed to build democracy in Haiti. We sacrificed to build 
peace in Bosnia. Everyone the world around as we travel knows the great 
contributions and sacrifices made by American taxpayers for its values.
  The second leg is that, Mr. President, of course, of our military 
strength. That is unquestioned.
  But that third leg, that economic leg, without which we cannot foster 
values or protect ourselves militarily--and I emphasize in World War II 
we won on account of Rosie the Riveter; our industrial might 
overwhelmed Hitler; there is not any question about that--has become 
somewhat fractured and enfeebled, if you might, as a result of the 
affirmative action.
  Now, what was the affirmative action? As I said, not only the 
subsidies, the insurance, the deferrals, but get out of here, just 
scatter, let us get industry, get American investment abroad and spread 
capitalism. As I say, it has not only been successful but it has become 
unfairly competitive.
  When I say unfairly competitive, I mean that the other competitors in 
the Pacific rim do not practice free trade. Oh, they use the rhetoric 
of free trade, but I can tell you here and now, try to get into some of 
the markets. Our textile industry tried to get into Korea. They have 
got to get a vote of the Korean textile folks before they can come into 
Korea. Try to get into Japan. Oh, they talk a little here about 
Motorola is doing a little bit; Intel will come in a little bit. But 
really in trying to open

[[Page S10250]]

up the markets, we have had a dismal record over some 50 years trying 
to get into the country that we saved that does not practice free 
trade. Come on. Everybody knows that.
  (Mr. ASHCROFT assumed the chair.)
  Mr. HOLLINGS. What happens is that now we are confronted--and that is 
why you do not find them in the Chamber--with the opposition. You might 
call them the enemy here, the fifth column in this economic war. Let us 
start and list the soldiers in that particular opposition or enemy, 
that fifth column.
  The soldiers in that fifth column begin, of course, with the State 
Department. The State Department had an affirmative action of 
sacrificing the industrial might for friends. Fortunately, Secretary 
Christopher has changed that. Secretary Brown changed that to some 
extent. And we are beginning to change that. But that is the way it 
started. That was the best of diplomacy: ``Oh, don't worry; we are fat, 
rich and happy back in America.'' We have seen it over the 30 years I 
have served in the Senate.
  We started with these corporations that we induced overseas as 
nationals that became multinationals. They found out that they could 
produce more economically, make a profit for their stockholders, and as 
a natural development the nationals became multinationals.
  And the banks--Chase Manhattan, First Citicorp, all the big banks as 
of 1973--I remember back in the 1970's we found out that our large 
American banks were making the majority of their profits outside of the 
United States, so they were not really American banks. They were 
multinationals or had their, let us say, loyalty and nationalism, 
profitwise at least, outside of the United States, certainly not in the 
United States of America.
  So you have the State Department; you have the multinationals; you 
have the banks, and then, of course, with that money they developed the 
consultants and academia. All the consultants are not paid by those who 
are coming along talking about jobs and the economic security. You go 
to any of these conferences, these particular institutes all over this 
city are just rampant with these consultants who are talking, ``Free 
trade, free trade, free trade,'' shouting, ``Smoot-Hawley, Smoot-
Hawley. We are going to end the world and go into a global 
depression.''

  And otherwise academia. I do not have that booklet with me. There was 
a very sharp economist, Miss Jacobsen, who put out the booklet here 
some 10 years ago showing how academia had been taken over by the 
foreign entities and the multinationals. You go up east to the Ivy 
League and find out their investments up there to bring about the 
thought and get a free ride into dumping their goods back here in the 
United States and they will not allow us into their markets.
  So you have academia; you have consultants; you have the 
multinationals; you have the multinational banks and, of course, the 
State Department. Then when we debated back when I first came here--I 
will never forget it--and we passed the textile bill--it did not get 
past the House but we passed one here in the late 1960's, early 
1970's--at that particular time we found out the real opposition that 
gears up the votes in this Chamber. And that is the retailers. In order 
to bring it to the attention of our colleagues, we went down into the 
stores here in Washington, DC, and we got a shirt that was manufactured 
in Taiwan--well, a ladies blouse, I remember correctly, one made in 
Taiwan for $32 and the one made in New Jersey was also $32. We found a 
catching glove made in Korea at $42 and one made in Michigan at $42.
  We went down the list. We piled the desk up to show that the 
retailers were not by way of global competition reducing the price. 
They were making a bigger profit. So the retailers are really geared up 
and they call their stores around and everything else of that kind and 
they intimate to us as politicians, U.S. Senators, and they come in and 
zoom in on us and we have to be for ``free trade, free trade. Let's 
don't Smoot-Hawley, start a worldwide depression.''
  So you have then the retailers. Then, of course, you have the 
Washington lawyers, and none other than now the Reform Party Vice-
Presidential nominee, Dr. Pat Choate. In his book ``The Agents of 
Influence,'' he took one country, the country of Japan, and listed out 
how they had over 100 Washington firms, lawyers, consultants, paid over 
$113 million to represent the people of Japan here in the Capitol, 
where the 100 Senators, the 435 congressmen, the cumulative salaries of 
the 535 is $73.1 million. By way of pay, the people of Japan are better 
represented here in Washington, DC, than the people of the United 
States of America. You have a powerful force.
  Chair the Commerce Committee, which I have for years and am now the 
ranking member, and get these trade measures and others to come up, and 
they zoom in immediately with the Washington lawyers, and I mean 
powerful ones, Mr. President. They are no more powerful than the 
Special Trade Representative. Heavens above. We saw my good friend, Bob 
Strauss, we saw my good friend Bill Brock, all representing the 
foreigners after they had been the Special Trade Representative. It was 
like Colin Powell going over to represent Saddam. And what did we have 
to do? Put a rider in the bill of the Special Trade Representative; 
they could not do that after 5 years. It caught Mickey Kantor--he was 
the first one--now Secretary Kantor, the Secretary of Commerce, when he 
was Special Ambassador Kantor, but we had to finally put it in there to 
stop that. But we had the best of the best trained, the best of the 
best friends and influence, ambassadorial rank, coming around, and 
after you are talking ``free trade, free trade, Smoot-Hawley.''
  I will be glad to yield for a question.
  Mr. BROWN. I notice the Senator is the No. 2 sponsor on the bill. 
Perhaps he might respond to a few questions that I have with regard to 
it?
  Mr. HOLLINGS. Yes, sir.
  Mr. BROWN. I notice, reading through the amendment, it gives a 
special exemption for oil. Everybody is subject to this special tax 
except the oil companies. Why was the decision made? What is the 
reasoning for giving the special treatment to oil?
  Mr. HOLLINGS. The principal author could respond more accurately, but 
I am convinced we did that to try to get votes. I hope agriculture----
  Mr. BROWN. That is without precedent.
  Mr. HOLLINGS. Yes. Agriculture, that crowd there, I will never forget 
when I went out campaigning in the Presidential race, ``Dutch'' 
Reagan's special station in Des Moines, IA, you get on there at 5 
o'clock for questions. They said no Democrat would appear. So, you 
know, if it was for free--I did not have any money--I got on there, and 
they said, ``Senator, you come from a textile State and you want all 
this protectionism and subsidies and everything else. How do you expect 
to get a vote out here in agricultural Iowa?''
  I said, wait a minute, let me correct the record. No. 1, I happen to 
be for subsidies. I happen to be for the quotas and the protectionism 
for agricultural quotas. We have wonderful farm folks, growing 
soybeans, wheat, corn, everything else in South Carolina. But let me 
get the record clear. We do not ask for a subsidy for textiles. We do 
not ask for Export-Import Bank financing. We do not ask for tax 
deferrals. When I get to that Nebraska corn, when I get to Colorado and 
these agricultural States, that is the crowd that runs around 
hollering, ``Free trade, free trade, keep subsidizing me, keep 
financing me, keep deferring me.'' Because why? Our friend Wayne Andrus 
has all the news on Sunday. He has ``Meet the Press,'' he has ``This 
Week With David Brinkley,'' he has even the public television and 
everything else. All he talks is, ``exports, exports, exports,'' and we 
come in here like monkeys on a string hollering, ``exports, exports, 
exports.'' I mean, we have a regular drumbeat.
  I would ask the Senator from North Dakota who drafted our amendment, 
I am sure oil is a matter of national security, and we put in special 
provisions, as we well know, for oil.
  Mr. BROWN. The other question I had--there were several others, as I 
went through it. I notice the distinguished Senator from North Dakota 
said, ``We encourage moving jobs abroad, and we ought to take that 
language out of the code.''
  I have looked through the amendment. I do not find ``striking'' 
language, other than striking the end of the period and adding 
additional language. Is there a section of the code

[[Page S10251]]

where we ``encourage moving jobs abroad?''
  Mr. HOLLINGS. The tax deferral itself, obviously. Oh, yes, that 
encourages it.
  Mr. BROWN. What section is that?
  Mr. HOLLINGS. The cost and everything. IBM moved all their research 
overseas. We are losing not only our jobs in manufacturing, we are 
losing our research centers and everything else of that kind.
  Mr. BROWN. The Senator talked about repealing something out of the 
law, yet there is nothing repealed in the amendment.
  Mr. HOLLINGS. Modifying the deferral itself.
  Mr. BROWN. The deferral?
  Mr. HOLLINGS. Tax, income made from production overseas. There is a 
tax deferral for that, and this does away, partially, with that by the 
amount of products shipped back in and jobs lost. That is the way the 
amendment is worded.
  Mr. BROWN. If I can put this in my own words, and maybe the Senator 
will correct me, we are not saying there is a section in the code that 
does that, we are saying it is simply not covered in the code?
  Mr. HOLLINGS. We are referring to the tax deferral section.
  Mr. BROWN. I do not find any repeal of that tax deferral section in 
here.
  Mr. HOLLINGS. It is a modification of it.
  Mr. BROWN. I wonder if there are other countries that have provisions 
like this. This, in effect, is that it taxes profits on activity 
outside of the United States, I take it?
  Mr. HOLLINGS. Right.
  Mr. BROWN. Are there other countries that do a similar thing?
  Mr. HOLLINGS. Do they do it? They make sure that they do not make a 
profit. You ought to come and see how they highball the cost of the 
parts that they ship through the Port of Charleston, SC, and send up 
to, let us say, Nissan-Tennessee to make automobiles up there. They get 
a high cost for the part so Nissan-Tennessee is not even making a 
profit in Tennessee.
  We have tried to correct that one. Oh, they have every gimmick in the 
book. When you get with these tax lawyers, they know how to get around 
anything and everything.
  Incidentally, I have an article here about Nissan, and Nissan is 
moving to Mexico. We will get into that on NAFTA. We love to get these 
foreign investments, but they are just passthroughs now. An expansion 
of BMW that had come to Spartanburg, SC, is going into Mexico. They 
will follow the market, which is fine. It is a matter of taking care of 
your stockholders and profits and that kind of thing. Business is 
business.
  But we have to understand that the business of the U.S. Senate is to 
look at the overall economy, and when we have these deficits in the 
balance of trade, over $1.5 trillion in the past 12 years, come, we 
have to do something about it.
  You will get some who come here, like my distinguished friend from 
New York, he will get up, ``Why, America has always been a great nation 
on account of commerce. We are a trading nation. Are we going back on 
our history?''
  We were a trading nation of a plus balance of trade, not a minus. Not 
a minus. What does the record show, heavens above? That thing goes up, 
up, and away. I think it was in 1992 we finally got it under $100 
billion, only to a $96.1 billion deficit; in 1993, it was $132.6 
billion; 1994, a $166.1 billion deficit in the balance of trade--more 
imports than exports. Not what my friend, Wayne Andrus from Archer-
Daniels-Midland--``exports, exports, exports.'' We have to look at the 
overall picture.
  In 1995, $174 billion? We are going up, up, and away. We are losing 
our shirt and enjoying it. We, as Senators, are telling the American 
people, ``We are fat, rich, and happy. Don't worry about your economy. 
All you have to do is worry about gay marriages. The States are taking 
care of it.''
  We come up on the silliest thing. Instead of balancing the budget, we 
will give you a constitutional amendment so we can run on it. Come on.

  Mr. BROWN. The Senator referred to the phenomenon. I think it is the 
game played sometimes with automobile manufacturers, where they take 
their profit overseas and overprice the automobile as it comes in here 
so they do not show any profit in the United States.
  Mr. HOLLINGS. They overprice the parts and assemble them here. That 
is what they are doing.
  Mr. BROWN. So, by manipulating the prices, they are avoiding 
recognizing profit in this country and thus avoid paying taxes in this 
country?
  Mr. HOLLINGS. Oh, yes, that is right.
  Mr. BROWN. Doesn't our tax law now give us the tools to go after them 
when they play those games with prices?
  Mr. HOLLINGS. I think our tax law does. But there are some----
  Mr. BROWN. It simply does not get done.
  Mr. HOLLINGS. In the Treasury Department, it just does not get done. 
You and I know we need, for example, hundreds more Customs agents. They 
have told us down at Treasury there are billions of transshipments. We 
just got China, and there is a case right now of over $5 billion. It is 
really a sad case.
  In the textile debate, I said, ``Wait a minute, I will withdraw this 
textile bill entirely if we just enforce the law.'' So you are right. 
If we enforced our tax laws, if we enforced our trade laws, our customs 
law, our import duties, we would do a lot to solve this.
  If I were king for a day, I would start by abolishing the 
International Trade Commission. Every time they find injury, a 
violation of our trade laws, dumping, over at the International Trade 
Administration, in Commerce, then they have to buck it over to the 
International Trade Commission, and that crowd constantly bubbles, 
``free trade, free trade, free trade,'' and finds against us.
  So, the business folks in America say, ``Why even bring the case? It 
takes you 3 or 4 years. You go through all that gauntlet with 
Washington lawyers and costs, and when you finally get it, you are not 
going to win anyway''? So they say, ``We will just move our production 
overseas.'' That is the good reason for the production moving overseas 
and the loss of jobs here.
  But, Mr. President, let me sum up that particular matter of the fifth 
column, so we will understand it. I would no longer include our State 
Department, but I could certainly start off with our multinationals, 
our multinational banks, the consultants, academia, the retailers, the 
Washington lawyers, and, of course, the Special Trade Representatives, 
all representing them and heading up these particular entities. When 
you get all of those coming in giving you a false history--free trade, 
free trade, Smoot-Hawley, Smoot-Hawley--that is the reason for this 
particular bill.

  The distinguished Senator from North Dakota, I think, used the 
expression ``go far afield.'' That is my intent, to bring 
understanding. Unless we can get a grasp of our history and how we 
built this strong America and what is really the opposition, the fifth 
column that confronts us, we are not going to get a competitive 
economic society. We are going to just service the economy and take in 
wash and serve hamburgers to each other. We will have no manufacturing 
capabilities. When war comes, we will have no military production. We 
will have to depend, like Japan, on the gulf war, and that is why you 
panic. They say, ``No, we are going to cut it off to the United States 
and say no to her and she won't be able to do these things of 
protecting freedom the world around.''
  So it is not far afield. This is to break open the door. This 
particular amendment is a wake-up call, and it is not a spurious one 
whatsoever. It is current.
  I refer, Mr. President, to the article, once again, of our 
distinguished friend, William Grieder, former editor at the Washington 
Post and now the editor of Rolling Stone.
  I ask unanimous consent the ``Ex-Im Files,'' an article dated August 
5, 1996, be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                            The Ex-Im Files


  how the taxpayer-funded export-import bank helps ship jobs overseas

                          (By William Greider)

       Washington, DC.--As the Nation's salesman in chief, Bill 
     Clinton looks like a smashing success. When Clinton came to 
     office, his long-term strategy for restoring

[[Page S10252]]

     American prosperity had many facets, but the core of the plan 
     could be summarized in one word: exports. The U.S. economy 
     would boom or stagnate, it was assumed, depending on how 
     American goods fared in global markets. So the president 
     mobilized the government in pursuit of sales.
       Flying squads of Cabinet officers, sometimes accompanied by 
     corporate CEOs, were dispatched to forage for buyers in 
     foreign capitals from Beijing to Jakarta. The Commerce 
     Department targeted 10 nations--India, Mexico and Brazil 
     among them--as the ``big emerging markets.'' Trade 
     negotiators hammered on Japan and China to buy more American 
     stuff. And two new agreements were completed--GATT and 
     NAFTA--to reduce foreign tariffs.
       U.S. industrial exports have soared in the Clinton years, 
     from $396 billion during the recessionary trough of 1992 to 
     around $520 billion last year. And as this administration has 
     said time and again, more exports means more jobs--usually 
     good jobs with higher wages. In his fierce commitment to 
     trade, Clinton is not much different from Ronald Reagan, who 
     (notwithstanding his laissez faire pretensions) also played 
     hardball on trade deals and, in some cases, intervened with 
     more effective results. George Bush, too, bargained on behalf 
     of corporate interests and played globe-trotting salesman. 
     Promoting exports and foreign investment is not a new idea; 
     it has enjoyed a bipartisan political consensus for decades.
       What does seem to be new in American politics are the 
     thickening doubts among citizens and a rising chorus of 
     critics, informed and uninformed, who question Washington's 
     assumptions about exports. The conventional strategy, the 
     critics argue, may help the multinational companies turn 
     profits, but does it really serve American workers and the 
     broad public interest? The new realities of globalized 
     production play havoc with the old logic of exports-equal-
     jobs. Sometimes it is the jobs that are exported, too.
       This contradiction, usually covered up with platitudes and 
     doublespeak in political debate, becomes powerfully clear 
     when you look closely at the dealings of an obscure federal 
     agency located just across Lafayette Park from the White 
     House: the U.S. Export-Import Bank with only 440 civil 
     servants and a budget of less than $1 billion--small change 
     as Washington bureaucracies go.
       Yet America's most important multinational corporations 
     devote solicitous attention to the Ex-Im Bank. Their 
     lobbyists shepherd its appropriation through Congress every 
     year and defend the agency against occasional attacks. Why? 
     The Ex-Im Bank provides U.S. corporations with hundreds of 
     millions of dollars each year in financial grease that 
     smooths their trade deals in the new global economy.
       This year, Ex-Im will pump our $744 million in taxpayer 
     subsidies to America's export producers, financing the below-
     market loans and loan guarantees that help U.S. companies 
     sell aircraft, telecommunications equipment, electric power 
     turbines and other products--sometimes even entire 
     factories--to foreign markets. Since the biggest subsidies 
     always go to the largest corporations, skeptics in Congress 
     sometimes refer to Ex-Im as the Bank of Boeing. It might as 
     well be called the Bank of General Electric--or AT&T, IBM, 
     Caterpillar or other leading producers. Ex-Im's senior 
     officers call these firms ``the customers.''
       But the banker-bureaucrats at Ex-Im see their main mission 
     as fostering American employment. ``Our motto is, Jobs 
     through exports,'' says James C. Cruse, vice president for 
     policy planning, ``Exports are not the end in itself, so we 
     don't care about the company and the company profits.'' That 
     was indeed the purpose when the bank was chartered as a 
     federal agency back in 1945 and the reason it has always 
     enjoyed broad support, including that of organized labor.
       At this moment, the tiny agency is under intense pressure 
     from influential U.S. multinationals to change the rules of 
     the game. Specifically, the companies want taxpayer money to 
     subsidize the sale of products that aren't actually 
     manufactured in America. They want subsidies for products 
     that are not really U.S. exports, since companies ship them 
     from their factories abroad to buyers in other foreign 
     countries. If the rules aren't changed, the exporters warn, 
     they will lose major deals in the fierce global competition 
     and may be compelled to move still more of their production 
     offshore.
       ``Global competitiveness, multinational sourcing and the 
     deindustrialization of the U.S.'' wrote Cruse in a policy 
     memo for the bank, ``were the three most common factors that 
     exporters cited as reasons to revise Ex-Im Bank's foreign 
     content policy. . . . U.S. companies need multisourcing to be 
     able to compete with foreign companies. Foreign buyers are 
     becoming more sophisticated and they are expressing certain 
     preferences for a particular item to be sourced foreign . . . 
     [and] U.S. suppliers may not always exist for a particular 
     good.''
       In plainer language, foreign is usually cheaper--often 
     because the wages are much lower--and sometimes better. As 
     U.S. producers have begun to buy more hardware and machinery 
     overseas, the capacity to make the same components in the 
     United States has diminished or even disappeared. What the 
     companies want in Cruse's bureaucratic parlance, is ``broadly 
     based support for foreign-sourced components.''
       As the complaints from American firms swelled in the last 
     few years, Ex-Im officials agreed to convene the Foreign 
     Content Policy Review Group to explore how the U.S. financing 
     rules might be relaxed. The review group's members include 11 
     major exporters (General Electric, AT&T, Boeing, Caterpillar, 
     Raytheon, McDonnell Douglas and others) plus several labor 
     representatives from the AFL-CIO and the machinists' and 
     textile-workers' unions.
       The Ex-Im Bank must decide who wins and who loses--a 
     fundamental argument over what is in the national interest, 
     give globalized business. The review group discussions are 
     couched in polite police talk, but they speak directly to the 
     economic anxieties of Americans. If young workers worried 
     about their livelihood could hear what these powerful 
     American companies are saying in private, there would be many 
     more sleepless nights in manufacturing towns across this 
     Nation. The information below is taken from confidential Ex-
     Im Bank members that were recently leaked to me. What these 
     executives have to say is not reassuring, but it's at least a 
     more accurate vision of the future than anything you are 
     likely to hear from this year's political candidates.
       A decade ago the rule was simple: Ex-Im would not 
     underwrite any trade package that was not 100 percent U.S.-
     made. Then and now Ex-Im scrutinizes the content of very 
     large export projects, item by item. to establish the 
     national origin of subcomponents. Any subcomponents produced 
     offshore must be shipped back to American factories to be 
     incorporated into the final assembly. If Caterpillar sells 10 
     earthmoving machines to Indonesia all 10 of them have to come 
     out of a U.S. factory to get a U.S. subsidy, even if the 
     axles or engines were made abroad.
       By the late 1980s, however, as major manufacturers pursued 
     globalization strategies that moved more of their production 
     offshore. Ex-Im, with labor approval opened the door. In 1987 
     it agreed to finance deals with 15 percent foreign inside 
     content. Partial financing would also be provided for export 
     deals that involved at least 50 percent U.S. content.
       Now the multinationals are back at the table again, 
     demanding still more latitude. The bank's rules, they 
     complain, have created a bureaucratic snarl that threatens 
     U.S. sales. These regulations are oblivious to the 
     complexities of modern trade which multinationals routinely 
     ``export'' and ``import'' huge volumes of goods internally--
     that is among their own fur-flung subsidiaries or foreign 
     joint ventures.
       The flavor of the company complaints is revealed in Ex-Im 
     Bank minutes of the review group's first meeting last year, 
     where various company managers sounded off about the new 
     global realities. David Wallbaum, from Caterpillar, urged the 
     bank to be ``more flexible in supporting foreign content,'' 
     according to the minutes, General Electric's Selig S. Merber 
     said GE needs ``access [to] worldwide pricing.'' Merber 
     proposed that instead of insisting on American content item 
     by item, Ex-Im look only at the U.S. aggregate.
       Lisa DeSoto of Fluor Daniel, one of America's largest 
     construction engineering firms, suggested in a follow-up memo 
     that Ex-Im subsidize ``procurement from the NAFTA 
     countries,'' Mexico and Canada as if the goods were from the 
     U.S.
       But it was Angel Torres, a representative for AT&T, who 
     spoke more bluntly than the others. AT&T's foreign content 
     has grown in the last 10 years because the U.S. is becoming a 
     ``service-oriented society,'' Torres said, according to the 
     minutes. ``AT&T's priority,'' he declared, ``is to increase 
     the allowable percentage of foreign content.''
       When I rang up these corporate managers and some others to 
     ask them to elaborate on their views, all of them ducked my 
     questions. The one exception was David L. Thornton, a manager 
     from Boeing, whose newest jetliner, the 777, actually 
     involves 30 percent foreign content in the manufacturing 
     process (mostly from Japan). It still qualifies for full Ex-
     Im financing. Thornton explained, because Boeing's original 
     investment in research and development also counts in the 
     sales price. ``Our general view of 75 percent is we can live 
     with it for the time being,'' Thornton said, ``but over time 
     it probably won't be adequate.''
       The labor-union representatives, not surprisingly, choked 
     at the ominous implications of such comments--especially the 
     matter-of-fact references to America's de-industrialization. 
     Corporate leaders and politicians, after all, have been 
     celebrating the ``comeback'' of American manufacturing in the 
     1990s. Exports are booming, and U.S. competitiveness has 
     supposedly been restored, thanks to the corporate 
     restructurings and downsizings. Stock prices are rising, and 
     shareholders are happy again.
       The private corporate view is not so cheery for the 
     employees. A memo from one multinational corporation (its 
     identity whited-out by Ex-Im bureaucrats) made it sound like 
     the demise of American manufacturing is already inevitable. 
     ``We believe the current policy does not reflect the de-
     industrialization of the U.S. economy and the rise of the 
     Western European and Asian capabilities to produce high-tech 
     quality equipment . . .'' the memo states. ``Location is no 
     longer important in the competitive equation, and where the 
     suppliers of components will be [is] wherever the competitive 
     advantage lies.''
       The more that labor heard from the companies, the more 
     hostile it became to any revision. ``We have been presented 
     with no credible evidence that current bank policies have 
     cost companies sales, thereby reducing

[[Page S10253]]

     U.S. employment,'' the labor representatives fired back in a 
     jointly signed letter in April. ``While we understand that 
     global corporations might prefer fewer restrictions--even the 
     provision of financing regardless of the effect on jobs in 
     the United States--that desire simply ignores the very 
     purpose of extending taxpayer-based credit.''
       If Ex-Im agrees to finance more foreign content, the labor 
     reps asked, won't that simply encourage the multinationals to 
     move still more U.S. jobs overseas, thus accelerating 
     deindustrialization? When I put this question to Ex-Im 
     officials and corporate spokesmen, their answer was a limp 
     assurance that this isn't what the bank or the companies have 
     in mind.
       But can anyone trust these assurances? The massive 
     corporate layoffs have sown general suspicions of the 
     companies' national loyalties, and the ``outsourcing'' of 
     high-wage jobs has already boiled up as a strike issue in 
     major labor-management confrontations. The United Auto 
     Workers shut down General Motors earlier this year over that 
     question. The UAW lost a long, bitter strike at Caterpillar 
     when it demanded wage cutbacks, threatening to relocate 
     production if the union didn't yield. The International 
     Association of Machinists and Aerospace Workers closed down 
     Boeing's assembly lines for two months last fall, demanding a 
     stronger guarantee of job security as Boeing globalizes more 
     of its supplier base.
       ``Ex-Im financing is corporate welfare with a fig leaf of 
     U.S. jobs, and now they want to take away the fig leaf,'' 
     says Mark A. Anderson, director of the AFL's task force on 
     trade. ``They want to be able to ship stuff from Indonesia to 
     China and use U.S. financing, I said to them, `You're nuts. 
     If you go ahead with this, you're going to be eaten alive in 
     Congress.'''
       George J. Kourpiss, president of the machinists' union 
     whose members make aircraft at Boeing and McDonnell Douglas, 
     and jet engines at GE and Pratt & Whitney, put it more 
     starkly: ``The American people aren't financing that bank to 
     take work away from us. If the foreign content gets bigger, 
     then we're using the bank to destroy ourselves.''


                             exports--Jobs

       According to the government's dubious rule of thumb, each 
     $1 billion in new exports generates 16,000 jobs. By that 
     measure, Bill Clinton's traveling salesmen brought home 2 
     million good jobs. So why is there not greater celebration? 
     The first, most-obvious explanation is imports. Foreign 
     imports soared, too, albeit at a slower rate of growth, and 
     so America's trade deficit with other nationals actually 
     doubled in size under Clinton, despite his aggressive 
     corporate strategy. Thus a critic might apply the 
     government's own equation to Clinton's trade deficit and 
     argue that there was actually a net loss of 11 million good 
     jobs.
       Bickering over the trade arithmetic, however, does not get 
     to the heart of what's happening and what really bothers 
     people: the specter of continued downsizing among the 
     nation's leading industrial firms. In fact, globalization has 
     created a disturbing anomaly. U.S. exports multiply robustly, 
     yet meanwhile the largest multinationals that do most of the 
     exporting are shrinking dramatically as employers. It's 
     important to note that about half of U.S. manufacturing 
     exports comes from only 100 companies, and 80 percent from 
     some 250 firms, according to Ex-Im's executive vice 
     president, Allan I. Mendelowitz. The top 15 exporters--names 
     like GM, GE, Boeing, IBM--account for nearly one quarter of 
     all U.S. manufactured exports. Yet these same firms are 
     shedding American employers in alarming dimensions. The 15 
     largest export producers with few exceptions have steadily 
     reduced their U.S. work forces during the past 10 years--some 
     of them quite drastically--even though their export sales 
     nearly doubled.
       GE is a prime example because the company is widely 
     emulated in business circles for its tough-minded corporate 
     strategies. In 1985, GE employed 243,000 Americans and 10 
     years later, only 150,000. GE became stronger, then Executive 
     Vice President Frank P. Doyle said. But, he conceded. We did 
     a lot of violence to the expectations of the American work 
     force.
       So, too, did GM, the top U.S. exporter in dollar volume 
     (though the auto companies are not big users of Ex-Im 
     financing). GM has shrunk in U.S. work force from 559,000 to 
     314,000. IBM shed more than half of its U.S. workers during 
     the past decade (about 132,000 people). By 1995, Big Blue had 
     become a truly global firm--with more employees abroad than 
     at home (116,000 to 111,000). Even Intel, a thriving 
     semiconductor maker, shrank U.S. employment last year from 
     22,000 to 17,000. Motorola has grown, but its work force is 
     now only 56 percent American.
       The top exporters that increased their U.S. employment 
     didn't begin to offset the losses. The bottom line tells the 
     story. The government's great substitute for America's major 
     multinational corporations has not been reciprocated, at 
     least not for American workers. The contradiction is not 
     quite as stark as the statistics make it appear, because the 
     job shrinkage is more complicated than simply shipping jobs 
     offshore. Some companies eliminated masses of employees both 
     at home and abroad. Others, like Boeing, reduced payrolls 
     primarily because global demand weakened in their sectors. 
     Some jobs were wiped out by labor-saving technologies and 
     reorganizations. But virtually all of these companies 
     offloaded major elements of production to lower-cost 
     independent suppliers, both in the U.S. and overseas. If the 
     jobs did not disappear, the wages were downsized.
       This dislocation poses an important question, which 
     American politicians have not addressed. Does the success of 
     America's multinationals translate into general prosperity 
     for the country or merely for the companies and their 
     shareholders? The question is a killer for politicians--
     liberals and conservatives alike--because it challenges three 
     generations of conventional wisdom. That's why most Democrats 
     or Republicans never ask it.
       When these facts are mentioned, the exporters retreat to a 
     few trusty justifications. First there is the ``half a loaf'' 
     argument. Yes, it is unfortunately true that companies must 
     disperse an increasing share of the production jobs abroad, 
     either to reduce costs or to appease the foreign customers. 
     But if this were not done, there might be no export sales at 
     all and, thus, no jobs for Americans. Next, there is the 
     ``me, too'' argument. All of the other advanced industrial 
     nations have export banks that provide financing subsidies to 
     their multinationals. The export banks in Europe do allow 
     greater foreign content than the U.S.--but only if the goods 
     originate from an allied nation in the European community. 
     France supports German goods and vice versa, just as Michigan 
     supports California. The U.S. Ex-Im Bank, as Mendelowitz has 
     pointed out, actually provides greater risk protection and 
     generally charges lower premiums.
       Japan's Ex-Im bank is indeed more flexible than America's, 
     but Japan's industrial system also operates on a very 
     different principle; major Japanese corporations take 
     responsibility for their employees. That understanding 
     creates a mutual trust that allows both the government and 
     the firms to pursue more sophisticated globalization 
     strategies. Japanese jobs are regularly eliminated when 
     Japan's manufacturing is relocated offshore in Asia or in 
     Europe (and sometimes in the U.S.), but the companies find 
     new jobs for displaced employees and only rarely, 
     reluctantly, lay off anyone.
       ``The situation that our companies see,'' Ex-Im's Cruse 
     explains, ``is that Japan is willing to finance as much as 50 
     percent foreign content, and [the companies] say to us, 
     `You're not competitive.' But an important difference is that 
     the Japanese government doesn't have to worry about the 
     workers because the Japanese companies worry about them. . . 
     . If GE subcontracts work to Indonesia, it tends to lay off a 
     line of workers back in the U.S.''


                            bait and switch

       In April 1994, AT&T announced a $150 trillion joint venture 
     with China's Qingdao Telecommunications to build two new 
     factories, in the Shandong province and in the city of 
     Chengdu, in the Sichuan province, that will manufacture the 
     high-capacity 5ESS switch, the heart of AT&T's advanced 
     telephone systems. AT&T's chairman, Robert Allen, said that 
     it will more than double its Chinese work force over the next 
     two or three years.
       Five months later, in September, the Ex-Im Bank in 
     Washington approved the first of $87.6 million in loan 
     guarantees to underwrite AT&T's export sales to China--
     switching equipment that will modernize the phone systems in 
     Qingdao and several other cities. AT&T won the contract in 
     head-to-head competition with Canada's Northern Telecom, 
     Germany's Siemens and France's Alcatel Alsthom. The Clinton 
     administration celebrated another big win for the home team.
       But who actually won in this deal? A Telecom Publishing 
     Group article provided a different version of what AT&T's 
     victory meant for the United States. ``While some equipment 
     for AT&T's network projects in China will be built in this 
     country,'' the article reported, ``the Chinese are demanding 
     that eventually the bulk of the equipment in their system be 
     built in their country, the carrier [AT&T] said.''
       An AT&T public-affairs vice president, Christopher Padilla, 
     denies this, but then Padilla also denies that AT&T is 
     prodding the Ex-Im Bank to relax its foreign-content rules. 
     Further, he assures me that despite their proximity, there 
     was no explicit quid pro quo and no connection between the 
     two transactions, the taxpayer-financed export sales and 
     AT&T's agreement to build new factories in China.
       ``It's a reality of the marketplace,'' Padilla says. ``If 
     we tried to pursue a strategy of just making everything in 
     Oklahoma City''--where the 5ESS switch is now manufactured--
     ``we wouldn't have any market share at all.''
       The White House also led cheers for Boeing because Boeing 
     was also stomping its competitors in the Chinese market. In 
     1994 alone, Boeing sold 21 737s and seven 757s to various 
     Chinese airlines and obtained nearly $1 billion in Ex-Im 
     loans to finance the deals. When President Clinton hailed the 
     news, he did not mention that Boeing had agreed to consign 
     selected elements of its production work to Chinese 
     factories. The state-owned aircraft company at Xian, for 
     instance began making tail sections for the 737, work that is 
     normally done at Boeing's plant in Wichita, Kan. The first 
     order for Xian was for 100 sets, but that was just the 
     beginning. In March 1996, a China news agency boasted that 
     Boeing had agreed to buy 1,500 tail sections from Chinese 
     factories, both for the 737 and the 757. The deal was 
     described as ``the biggest contract in the history of China's 
     aviation industry.''

[[Page S10254]]

       Unlike AT&T and some others, Boeing is relatively 
     straightforward about acknowledging that it's trading away 
     jobs and technology for foreign sales. China intends to build 
     its own world-class aircraft industry, and Boeing helps by 
     giving China a piece of the action, relocating high-wage 
     production jobs from America to low-wage China, as well as 
     relocating some elements of the advanced technology that made 
     Boeing the world leader in commercial aircraft. Boeing has 
     told its suppliers to do the same. Northrop Grumman, in 
     Texas, is sharing production of 757 tail sections with 
     Chengdu Aircraft, in China.
       ``What we've done with China,'' says Lawrence W. Clarkson, 
     Boeing's vice president for international development, 
     ``we've done for the same reason we did it with Japan--to 
     gain market access.'' The two transactions--the export sales 
     and job transfers--are legally separate but typically 
     negotiated in tandem, Clarkson explains. China always insists 
     upon a written acknowledgement of the job commitment in the 
     export sales contract--the same sale to China submitted to 
     the Ex-Im Bank for its financial assistance.
       Until recently, the Ex-Im Bank's operative policy on this 
     issue could be described as ``don't ask, don't tell'': The 
     bank officials didn't ask the companies if they were off-
     loading jobs, and the companies didn't tell them. When I 
     asked various Ex-Im managers if they knew about AT&T's new 
     switch factories in China before they approved AT&T's export 
     financing their answer was no. What about companies like 
     Boeing doing similar deals?
       ``Yes, we're aware of that,'' Cruse says. It's not that the 
     companies tell us, but it's not hard to read the 
     newspapers.''
       After prodding from labor officials, the bank last year 
     began requiring exports to reveal whether they dispersed U.S. 
     jobs or technology in connection with the Ex-Im-financed 
     sales. But the federal agency still approves these deals 
     without weighing the potential impact on future employment. 
     In fact, Ex-Im still pretends that the export sales and 
     corporate decisions to relocate jobs are unrelated 
     transactions, though every company knows otherwise.
       The practice of swapping jobs for sales is widespread in 
     global trade--deals are negotiated in secrecy because such 
     practices ostensibly violate trade rules. But everyone knows 
     the game, and most everyone plays it. If Boeing doesn't swap 
     jobs for Chinese sales, then its European competitor Airbus 
     will. If AT&T doesn't move its switch manufacturing to China, 
     then Siemens or Alcatel will (in fact, Alcatel already has). 
     The cliche at Boeing is ``60 percent of something is better 
     than 100 percent of nothing.''
       The trouble is that nothing may be what many American 
     workers wind up with anyway--especially if China eventually 
     becomes a world-class aircraft producers itself. Officials at 
     the Communications Workers of America, which represents AT&T 
     workers, recall that Ma Bell once made all its home 
     telephones in the U.S. and now makes none here.
       Is the same migration under way now for the high-tech 
     switches? The AT&T spokesman insists not. Anyway, he adds the 
     assurance that the most valuable input in these switches is 
     the software, not the hardware from the factories, and the 
     design work is still American. This may reassure the techies, 
     but it's not much comfort to those who work on the assembly 
     lines. Besides, AT&T plans to open a branch of Bell 
     Laboratories in China.
       The dilemma facing American multinationals is quite real, 
     but the question remains: Why should American taxpayers 
     subsidize export deals contingent on increased foreign 
     production, or even offloading portions of the American 
     industrial base? Americans are told repeatedly that they 
     cannot exercise any influence over these global firms, but 
     that claim is mistaken. The Ex-Im Bank is an important choke 
     point in the bottom line of these multinationals. Americans 
     should demand that the subsidies be turned off, at least for 
     the largest companies, until the multinationals are willing 
     to provide concrete commitments to their work forces.
       The gut issue is not about economics but about national 
     loyalty and mutual trust. ``Every meeting we have in the 
     union, we open it with the pledge of allegiance,'' machinists 
     union president George Kouepias muses, ``Maybe the companies 
     should start doing that at their board meetings.''

  Mr. HOLLINGS. Just referring to the article, if you please, Mr. 
President, and everyone ought to read this article, it says:

       Globalization has created a disturbing anomaly. While U.S. 
     exports grow robustly, the corporations that do most of the 
     exporting are the busiest downsizers.

  When they fire everybody, it is a polite word, that is just 
downsizing so they are becoming more competitive. They are just, by 
gosh, getting rid of the United States worker and employing the 
offshore worker.
  But I quote this particular sentence:

       GE is a prime example because the company is widely 
     emulated in business circles for its tough-minded corporate 
     strategies. In 1985, GE employed 243,000 Americans and 10 
     years later, only 150,000. GE became stronger, then executive 
     Vice President Frank P. Doyle said. But he conceded. We did a 
     lot of violence to the expectations of the American work 
     force.

  Get that sentence, the vice president of GE, when they cut down to 
150,000 jobs, so-called downsizing, fired them. I used to have five 
GE's. I had one at Irmo. I have one still at Greenville which is doing 
well. I have one which was brought into Florence. It made cellular 
radios and now MRI's. It has taken the business away from competitors. 
But the one I had in Charleston has gone to Brazil. We are losing good 
plants down there, and here is why: ``We did a lot of violence to the 
expectations of the American work force.''
  Mr. President, I ask that our colleagues refer to the Philadelphia 
Inquirer of Monday, September 9, Tuesday, September 10, and again 
today: Endangered Label ``Made in the United States.''
  It is a wonderful article of how we are losing our industrial 
backbone, how small businesses lose out to foreign competition.
  I was asked at the Chicago convention, Mr. President, ``Senator, you 
Democrats, why don't you all do something for small business?''
  I said, ``Oh, no, that small business crowd is organized by the 
National Federation of Independent Business.'' I have won recognition 
and awards from that group, but, generally speaking, they are not for 
the small business on this particular score, they are talking about 
free trade, free trade as retailers to make a bigger profit.
  I thank the wonderful Philadelphia Inquirer. This is the headline: 
``Small businesses lose out to foreign competition.'' I want the NFIB 
to read these series of articles.
  Mr. President, referring just to one part, let's start off with the 
first paragraph:

       In early 1980's when stainless steel knives, forks and 
     spoons suddenly surged into the United States from Japan, 
     South Korea and Taiwan in response to lowered tariffs and 
     cutthroat foreign prices, the domestic industry found itself 
     in trouble.
       American producers, contending it was unfair competition, 
     appealed to the United States trade commission to impose 
     higher tariffs on imported flatware. The trade commission is 
     an independent Government agency whose main job is to monitor 
     the impact of the imports on the U.S. industries.
       If the ITC agrees with the complaint, the presidentially 
     appointed commissioners may recommend that duties be imposed. 
     Even so, there is no assurance that the duties will actually 
     be assessed and, in most cases, they are not. The final 
     decision rests with the White House which historically has 
     refused to impose additional duties.
       After 5 months of study, the commission ruled on May 1, 
     1984, that stainless flatware was ``not being imported into 
     the United States in such increased quantities as to be a 
     substantial cause of serious injury or the threat thereof to 
     the domestic industry.''
       On the contrary, the ITC held that the ``economic data on 
     the performance of this industry failed to demonstrate the 
     required degree of serious injury mandated by the statute. 
     Rather, the industry is doing reasonably well.''
       According to ITC findings, nine companies produced flatware 
     in the United States in 1982. Today--

  Now listen, Mr. President--

       Today, most of them are either out of business or 
     purchasing flatware from foreign services. Except for two 
     small plants, Oneida, Ltd., in Oneida, New York, there is 
     virtually no stainless steel flatware production in the 
     United States.

  I could go down the list of commodities after commodities after 
commodities, and you can see, Mr. President, where these companies are 
just moving the strength--it is not just jobs--it is moving the 
strength of the United States. When they get to national defense, 
everybody comes out here on the defense authorization bill and votes 
overwhelmingly on a defense appropriations bill. But right to the 
point, they forget their history and how we got here and how we were 
able to maintain and sustain the strength of the greatest superpower.

  Mr. President, we are the last remaining superpower. Look at them run 
all around. The atom bomb, the nuclear bomb cannot be used--should not 
be used. We do not have the manpower that the People's Republic of 
China has and others have that are coming along now and are going to 
build up their military strength. And they do not care anymore about 
the 6th Fleet coming in to protect them.
  The name of the game is the economic warfare, and the great 
superpower--and if you read Eamonn Fingleton's book--``Blindside'' is 
the title of that book--you will find that within 4 short years, the 
largest economic power in this world will be the

[[Page S10255]]

country of Japan. Already they are a larger manufacturer. Here is a 
little place not bigger than California, with 125 million compared to 
our 260 million, and vast resources, with oil and all the natural 
wealth that we have here, all the talent, all the research and 
everything else, and they produce more in Japan today, manufacturing, 
than the United States of America. Economically, their GNP, their 
productivity, will be greater than that of the United States. Their per 
capita income, right now they are richer than we are. We cannot get 
into their markets. We still, as a result of the fifth column, keep 
saying ``free trade, free trade, Smoot-Hawley, Smoot-Hawley.'' We are 
losing our shirts. We are losing our shirts.
  By the year 2015, the People's Republic of China will come along. 
They are producing economically. I just visited there in April, and I 
think they are going capitalistic. I think it will succeed. I hope. And 
we have our fingers crossed it will succeed.
  What do we need to do? We need to really start enforcing our laws on 
the books. Get rid of the International Trade Commission. You can see 
the political cabal that comes in any time they appoint a member. They 
have to swear on the altar of free trade, almighty allegiance, and 
everything else before they go over there. That is a big part of the 
fifth column. We have to quit financing.
  We have to actually someday repeal that GATT, World Trade 
Organization. We lost our sovereignty. In the Kodak case, we found out, 
Mr. President, we found out that we lost our sovereignty because the 
Japanese said, ``Go to the WTO,'' instead of really enforcing what we 
said on the floor of the Senate. They said, ``Oh, no, we're not going 
to do away with section 301.'' The Japanese have said, ``You have 
already done away with it when you signed up.''
  You get these emerging nations and you see how they vote. Back in 
April we had these particular human rights violations in the People's 
Republic of China. We brought it up at the United Nations. The United 
Nations voted to have a hearing on it. Our friends at the People's 
Republic went down into Africa; they picked up the emerging nations' 
votes, and they said human rights was a nonissue. They have not even 
had a hearing. That is politically how that U.N. crowd works. When are 
we going to wake up in this land of ours and not understand the fifth 
column working against the American industrial worker?
  So we need more customs agents. And, yes, Mr. President, we need the 
Dorgan-Hollings measure to cut out these subsidies of tax deferrals for 
those who are induced with incentives to go abroad and make more money. 
We need to change our tax laws, a value added tax.
  If I manufacturer this desk in the State of South Carolina, I have to 
pay the income tax, the corporate tax, the sales tax involved, and 
everything else, all the taxes, and I ship it to Paris, France. If I 
manufactured this desk in Paris, France, they put on a value added tax 
of 15 percent, but when it leaves the port of Le Havre to come here to 
Washington, they deduct the 15 percent. That is a 15 percent 
disadvantage to a manufacturer in the United States of America, and we 
need the money.
  The Budget Committee, eight of us, bipartisan, in 1987, voted to get 
on top of this monster with a value added tax allocated to the deficit 
and the debt. But these pollster-politicians running around, ``I'm 
against taxes, I'm against taxes, I'm against taxes; I'm going to give 
you a 15 percent tax cut,'' when we are broke in the Government. 
Growth, growth, growth--there is no education in the second kick of a 
mule.
  How do you think this got up to a $5.23 trillion debt? We never got 
to $1 trillion until Ronald Reagan came to town with Kemp-Roth. And he 
debunked it. Senator Bob Dole debunked it. Howard Baker called it a 
``riverboat gamble.'' George Walker Herbert Bush, President Bush, 
called it ``voodoo.'' But now we have a party running for national 
office on voodoo. When are we going to learn and sober up?
  The Dorgan-Hollings amendment is a wakeup call here to the reality of 
the greatness of this Nation. Historically, we had this in the very 
earliest days. David Ricardo in ``The Doctrine of Comparative 
Advantage.'' They came to Alexander Hamilton and James Madison and 
Jefferson, because they all joined in with Hamilton. The Brits said, 
when we won our freedom in this little fledging nation, they said, 
``Look, you trade with what you produce best, and we'll trade back with 
what we produce best''-- ``The Doctrine of Comparative Advantage,'' 
economics 101, David Ricardo.
  Alexander Hamilton wrote a little booklet, ``Reports on 
Manufacturers.'' It is over at the Library of Congress. Do not read the 
entire booklet, but in one word he told the Brits, ``Bug off.'' He 
said, ``We are not going to remain your colony and just ship our 
agricultural products, our iron, our timber, our coal. We are going to 
be a Nation-State, and we are going to manufacture, we are going to 
manufacture and produce our own products.''
  When they talk of tariffs, the second bill--the first bill had to do 
with the seal--the second bill that passed this great Congress that we 
stand in, on July 4, 1789, I say to the Senator from Nebraska, the 
second bill that we ever passed was a tariff bill of 50 percent on 60 
articles going right on down the list. We built the greatness, the 
economic strength, this economic giant, the United States of America, 
with protectionism.
  We did it with Lincoln when we built the steel mills for the 
transcontinental railroad. We came to Nebraska under Roosevelt and 
said, for agriculture, we are going to put in price supports and 
protectionism, protective quotas that I support under Roosevelt to 
rebuild from the darkness of the Depression. With Eisenhower, oil 
import quotas, we have used protectionism. So do not come here and give 
me ``Smoot-Hawley protectionism. Are you for free trade?'' And 
everybody running around like children, hollering, ``There's no free 
lunch. There's no free trade.'' I yield the floor.
  Mr. MOYNIHAN. Mr. President, under the amendment of my friend from 
North Dakota, U.S. corporations or individual investors that own 10 
percent or more of the stock of a U.S.-controlled foreign corporation 
would be taxed currently on the foreign corporation's profits when it 
sells goods back into the United States. Under present law, such 
profits are not taxed by the United States at the time earned. Instead, 
taxation is deferred until the foreign corporation's earnings are 
repatriated, that is, returned to its U.S. shareholders in the form of 
dividends or gains on the sale of their stock. In many cases, the sole 
U.S. shareholder of a foreign corporation is the parent corporation. In 
other cases, several U.S. corporations or investors own the foreign 
corporation.
  The premise underlying this proposal is that plants are being moved 
abroad for tax reasons. While this is a fair topic for examination, I 
do not believe this has been established with any certainty, and before 
the current rules are changed it must be. Investment abroad that is not 
tax driven is good for the United States. It promotes exports and 
enhances the competitiveness of our companies.
  The evidence suggests that the decision to locate production abroad 
primarily depends not on tax considerations, but instead on practical 
business considerations, such as proximity to raw materials, access to 
distribution channels, lower wage rates, prospects for growth, 
regulatory climate and other nontax factors. Taxes are certainly taken 
into account, but they are not the predominant factor, since the bulk 
of U.S. direct investment in foreign countries is in countries with 
effective business tax rates in excess of, or comparable to, the United 
States.
  Over 70 percent of assets held by United States-owned foreign 
manufacturers are held in high-tax jurisdictions, such as Canada, the 
United Kingdom, Japan, Germany, France, Italy, Belgium, and Australia. 
In contrast, the two low-tax jurisdictions most often cited as having 
runaway plants--Ireland and Singapore--have only 4.2 percent of the 
total assets held by United States-owned foreign manufacturers. 
Furthermore, excluding Canada, only 7.2 percent of total sales by 
United States-owned foreign manufacturers were to the United States 
market in 1990, with over 60 percent to local markets and the remainder 
to other foreign countries. Finally, according to the Departments of 
Treasury and Commerce, less than 15 percent

[[Page S10256]]

of total imports from U.S. affiliates came from low-tax countries. 
Thus, the weight of the evidence indicates that, at most, taxes appear 
to affect investment decisions only where the investor is relatively 
indifferent between two locations.
  Would this amendment be effective in keeping production in the U.S.? 
It is hard to imagine that it would alter many decisions to locate 
plants abroad. Those producing goods abroad for the U.S. market would 
continue to do so for practical reasons, and simply face higher taxes. 
For example, the proposal would apply to a U.S.-owned company that 
grows bananas abroad and imports them into the United States, even 
though there are virtually no producers of bananas in the United 
States. As a result, the bill would have a negative impact on many 
businesses that would not be economically viable in the United States, 
or for which locating production in the United States would be 
impractical. At the same time, the vast majority of U.S. businesses 
with foreign subsidiaries would not be greatly affected by the proposal 
because their foreign operations do not produce for the U.S. market. 
Over 90 percent of all sales by United States-owned foreign 
manufacturers located outside of Canada are to foreign markets.

  From the standpoint of competitiveness, other countries typically do 
not require their taxpayers to pay tax currently on the earnings from 
operations conducted abroad by a foreign subsidiary. U.S.-owned 
businesses must compete against foreign-owned businesses that are 
located in low-tax jurisdictions and are not taxed currently by their 
home countries. It is unlikely that many of our major trading partners 
would respond to enactment of this amendment by imposing current 
taxation on their companies.
  Administrability of the amendment of the Senator from North Dakota is 
also a concern. Under the legislation, U.S. shareholders would be taxed 
currently not only on the profits from imports into the United States, 
but on the foreign corporation's income from sales to third parties 
that import the goods into the United States, if it was reasonable to 
expect that such property would be imported into the United States, or 
used as a component in other property which would be imported into the 
United States.
  Staff at the Treasury Department and the Joint Committee on Taxation 
have raised questions about the administrative feasibility of enforcing 
the provision in the case of foreign corporations selling outside the 
United States to a third party importer. It would be very difficult for 
the IRS to identify those sales to third parties triggering taxation 
because the products are destined for the U.S. market, particularly 
given that many taxpayers could be expected to restructure their U.S. 
sales via third parties in an attempt to avoid the provision. Further, 
the recordkeeping required of taxpayers could be onerous.
  Finally, this proposal conflicts with the intent of the Multilateral 
Agreement on Investment of the Organisation for Economic Co-operation 
and Development [OECD]. Since 1991, the United States has been working 
toward a legally binding comprehensive investment agreement in the 
OECD. In May 1995, the OECD Council finally agreed to negotiate a 
Multilateral Agreement on Investment. The objective of the United 
States in those talks is to reach agreement that will set high 
standards for liberalizing investment rules and increasing investment 
protection. The idea is to make foreign investing safer for U.S. 
companies because U.S. investment overseas promotes exports and 
enhances the competitiveness of our companies. Foreign subsidiaries of 
U.S. companies are the primary customers for U.S. exports--over one-
fourth of U.S. exports go to them each year. Those exports account for 
more than 2 million of the 8 million U.S. jobs supported by U.S. 
exports. The proposal before us goes in exactly the opposite direction 
of our efforts in the OECD.
  I am committed to doing everything possible to ensure that the U.S. 
economy remains strong, that decent jobs are available to those that 
seek them, and that American workers dislocated by the increasingly 
global economy are assisted in finding new opportunities. However, I 
believe the opening of production facilities abroad is often good news, 
not bad, and that this amendment would not accomplish its stated 
purpose.
  I hope we will not act improvidently on this important matter, and I 
therefore urge that this amendment not be adopted.
  Mr. HATCH. Mr. President, I rise today in opposition to the amendment 
from the Senator from North Dakota.
  Mr. President, this is another one of those amendments that sounds so 
easy, so simple, and so straightforward, that it seems that every 
member of this body should be immediately jumping up on his or her feet 
and agreeing with what the distinguished Senator from North Dakota is 
saying. I only wish our world were as simple and the problems so easy 
to solve as the proponents of this amendment would have us believe.
  However, today's world is not very simple, especially when we are 
discussing the world of international business and the tax law. 
Unfortunately, the assumptions upon which this amendment are based are 
just plain wrong and the result will be to punish companies for looking 
out for the best interests of their employees and stockholders.
  First, let me make it clear, Mr. President, that I have no doubt that 
the Senator from North Dakota and his supporters are very sincere in 
their beliefs about this issue, and that the amendment is well 
intentioned. However, based on the real world that we live in, the 
amendment is both unnecessary and will prove to be counterproductive.
  As I understand the amendment, it is based on S. 1597, which the 
Senator from North Dakota introduced this past March. This bill would 
deny what my friend from North Dakota calls unwarranted tax breaks to 
U.S. companies that set up manufacturing operations in a foreign 
country and export goods from those operations back into the United 
States.
  In the floor statement that accompanied the introduction of S. 1597, 
the Senator from North Dakota implies that a large number of American 
companies are abandoning U.S. soil and removing their operations, lock, 
stock, and barrel, to other locations on the globe where they can find 
cheaper labor and lower taxes. As a result, goes the argument, American 
jobs are being lost in the process. And, according to the Senator from 
North Dakota, to add insult to injury, our tax code is rewarding such 
behavior with special tax breaks.
  S. 1597, and the amendment before us, is designed to end what he 
calls unwarranted tax breaks and punish those supposedly unscrupulous 
companies that are allegedly taking unfair advantage of the rules to 
gain profit for themselves at the expense of American workers.
  Well, Mr. President, at first blush, who wouldn't be in favor of 
cracking down on such awful practices and unfair tax breaks?
  The only problem is that the scenario set out by the Senator from 
North Dakota does not reflect what is going on in the real world. It is 
an oversimplistic solution to a misidentified problem.
  In the world as oversimplified by the proponents of this amendment, 
U.S. companies are abandoning loyal American workers to save a few 
dollars an hour with cheap overseas labor in tax haven countries. In 
the real world, Mr. President, this is simply not the case. At least 
two-thirds of the investment and sales of foreign subsidiaries of U.S. 
companies are in countries where the average labor cost is higher than 
in the United States. Moreover, the average tax rate paid by U.S. 
multinational companies is lower in the United States than it is 
outside the United States. More than 75 percent of all imports to the 
United States from U.S.-owned foreign subsidiaries is from developed 
nations, where taxes typically are either higher than or similar to the 
U.S. rate.
  While it is true that some U.S. companies have set up manufacturing 
operations in other countries with lower labor costs, they have 
generally done so in order to stay competitive with other companies in 
the same industry that have cheaper labor costs.
  We live in a global economy, Mr. President. Many products, especially 
those in the high technology industries, can be as easily assembled in 
Malaysia as in California. When U.S. companies have taken their low-
skill assembly operations overseas, they have done so as a matter of 
survival. In

[[Page S10257]]

other words, any jobs lost to Americans by a move of an assembly plant 
overseas would most likely have been lost anyway--and probably then 
some.
  Companies that go out of business because they are no longer 
competitive pay no wages and create no new jobs and pay no taxes. 
Companies that can successfully compete in the world marketplace most 
often expand employment, add security to U.S. workers, and contribute 
to the U.S. tax base.
  In the world as oversimplified by the proponents of this amendment, 
U.S. companies are moving their manufacturing operations to other 
countries, only to export the majority of the product back to the 
United States. In the real world, Mr. President, again, this is simply 
not the case. In 1993, 66 percent of the sales of U.S. foreign 
subsidiaries were made to customers in the foreign country, 23 percent 
were made to customers in other foreign countries, and only 11 percent 
were exported back to the United States.
  These data show that one of major real-world answers as to why U.S. 
companies set up manufacturing operations overseas is to be closer to 
their customers. Many customers demand a local presence of their 
supplier. Moreover, as a practical matter, local conditions often 
dictate that the U.S. company manufacture locally in order to be able 
to take advantage of the business opportunity in that country. For 
example, how could U.S. software manufacturers sell their products 
abroad without local operations to customize and service the software? 
We have seen the same thing happen in the United States, where foreign 
automobile manufacturers have moved their operations here in order to 
be closer to their markets.

  Contrary to what the Senator from North Dakota is asserting, there 
are often a number of benefits to the domestic job market when a U.S.-
based multinational company sets up a subsidiary in a foreign country. 
The 1991 Economic Report of the President notes that ``. . . U.S. 
direct investment abroad stimulates U.S. companies to be more 
competitive internationally, which can generate U.S. exports and jobs. 
Equally important, U.S. direct investment abroad allows U.S. firms to 
allocate their resources more efficiently, thus creating healthier 
domestic operations, which, in turn, tend to create jobs.''
  I would also note, Mr. President, that the overseas business 
operations of U.S.-based multinational companies contributed a record 
net surplus of $130 billion in 1990 to our balance of payments. This 
number has very likely gone even higher in the years since 1990. In 
addition, these U.S.-based multinational companies have been 
responsible for significant employment in the United States. Much of 
this employment is generated by the foreign operations of these 
corporations. For example, in most cases, the research and development 
work that leads to the assembly operations overseas is performed right 
here in the United States. Let's look again at the software industry, 
which is very important to my home state of Utah. Additional sales in 
foreign countries, generated by subsidiaries of U.S. software 
companies, lead to increased employment in the United States to support 
those sales and to continue the research necessary to improve those 
products.
  Now, Mr. President, let's discuss just exactly what this amendment 
would do. At the heart of the so-called tax break that the Senator from 
North Dakota is trying to partially eliminate is the long-standing tax 
principle that says a taxpayer doesn't have to pay tax on income until 
that income is received. One example of this concept that individuals 
run into every day is the fact that we do not have to pay taxes on 
unrealized capital gains on property until we sell that property. For 
instance, if a taxpayer holds 100 shares of stock that he or she bought 
20 years ago at $10 per share, and that stock is now worth $100 per 
share, our tax code does not tax that individual until he or she 
actually sells the stock and realizes the gain.
  We have a similar principle in place that applies when a U.S. company 
sets up a subsidiary in another country. Under the tax law, with some 
exceptions, the U.S. company does not have to pay tax on the earnings 
of the foreign subsidiary until the money is actually returned to the 
U.S. parent. This principle is commonly known as deferral because the 
tax is deferred until the earnings are repatriated to the United 
States, much the same as the tax is deferred to an individual on a 
capital gain until the sale is accomplished and the gain is realized.
  What the amendment before us would do is to end deferral to the 
extent that income is earned on goods shipped back into the United 
States. What, one might ask, is wrong with this? Wouldn't this be 
effective in preventing U.S. companies from uprooting their domestic 
manufacturing operations and moving them overseas?
  Mr. President, I submit that there are several major problems with 
this proposal and that it would not be effective. Indeed, I believe 
this proposal would be counterproductive and result in fewer U.S. jobs. 
The amendment goes way beyond the problem being described and applies 
where there is no indication of alleged abuse. For one thing, there is 
no provision in the amendment to limit the loss of deferral to those 
situations where actual U.S. employment has been displaced. Indeed, the 
amendment doesn't even require that there be a showing of increased 
foreign investment or reduced U.S. employment. Thus, any U.S. company 
with existing foreign operations could be penalized, even if no U.S. 
plants closed and even if the U.S. employment actually increased.
  In addition, this amendment would add a great deal of complexity to 
an already mind-numbingly complicated part of the Internal Revenue 
Code. The determination of ``imported property income'' as required by 
the amendment would require a whole new set of assumptions and 
recordkeeping, all of which adds to the huge compliance burden already 
faced by all taxpayers. Moreover, the Internal Revenue Service would 
have to add more trained personnel to audit this provision, and this at 
a time when Congress and the American people are demanding cuts in IRS 
funding. The provisions in the amendment calling for a new foreign tax 
credit basket would also add more complexity and unfairness from 
possible double taxation. The administrative expenses of complying with 
these provisions could easily outweigh the amount of revenue collected 
from this amendment.
  Finally, Mr. President, this provision is not likely to achieve its 
goal of retaining U.S. jobs. Many countries with wages lower than those 
in the United States also have high corporate income tax rates. Loss of 
deferral in these countries would not result in any extra U.S. tax 
liability because the U.S. tax would be offset with the foreign tax 
credit for income taxes paid in the foreign country. Additionally, 
because this amendment does not affect the major reason that U.S. 
companies establish foreign subsidiaries, which as I mentioned is to be 
closer to its customers, this change would only punish companies that 
try to better compete in a world market. These firms will still take 
whatever action is necessary to compete globally. But, if the U.S. 
begins to punish them for being responsive to world competition and for 
taking advantage of international business opportunities, the result 
might be that some companies could move all operations out of the 
United States to reduce the onerous results of this amendment. At the 
very least, the increased cost of complying with these unnecessary 
provisions would leave less money available for companies to expand and 
create more U.S. employment.
  In the real world, Mr. President, multinational companies are making 
business decisions based on a number of economic factors, only one of 
which is the tax consideration. This amendment tries to simplify a 
complex world and solve a problem without realizing the real causes of 
the problem. As a result, the solution doesn't fit and it simply will 
not work.
  As a final note, Mr. President, it is important to note that this 
amendment does not belong on this bill. As my colleague from North 
Dakota well knows, this is a tax provision that can only be considered, 
under the U.S. Constitution, on a revenue measure originating from the 
House of Representatives. The underlying appropriations bill is not 
such a measure. Therefore, if the Senate were to make the mistake of 
passing this measure, the House would undoubtedly exercise its 
prerogative and send this bill back to the

[[Page S10258]]

Senate under the so-called ``blue slip" procedure. This, of course, 
would only delay in getting an important appropriations bill passed.
  I urge my colleagues to oppose this perhaps well-intentioned but 
seriously misguided amendment.
  Mr. SHELBY. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. Mr. President, this amendment is bad policy from top to 
bottom. If enacted, it would hurt U.S. companies and destroy jobs. It 
is, I am afraid, motivated more by political considerations than 
anything else.
  Under generally accepted tax principles in the United States and 
around the world, income is taxed when it is realized by a taxpayer. 
When income is earned but not received until some future date--say, for 
example, income in a pension plan or an individual retirement account--
then taxation is normally deferred.
  Eliminating or even limiting deferrals would put American companies 
at a competitive disadvantage in the global marketplace. This amendment 
does not--as it purports to do--eliminate a privilege; rather, it 
imposes a penalty, and a severe one at that. It will not increase 
revenues for the U.S. Treasury. It will, however, hurt American 
companies that are trying both to run their day-to-day operations and 
to compete with foreign businesses.
  What does this amendment do? It assumes that allowing U.S. 
multinationals to defer taxes on the income of their foreign 
subsidiaries is a tax break. That is a false assumption, because 
deferring only means that taxes are not due until the time that income 
has actually been received, or in the case of multinationals, 
repatriated back to the U.S. parent company. This amendment not only 
taxes income before it is realized, it carries with it the potential to 
tax income that is never realized at all.
  Since none of our trading partners subject their companies to such a 
burden, our companies would suffer. No other country in the world 
denies deferral on active business income as extensively as the United 
States, now, with respect to passive income, for example. According to 
a 1990 white paper submitted by the International Competition 
Subcommittee of the American Bar Association Section of Taxation to 
congressional tax writing committees, France, Germany, Japan, The 
Netherlands, and others, do not tax domestic parent companies on any 
earnings of their foreign marketing subsidiaries until such earnings 
are repatriated. The earnings are deferred without additional tax 
penalties.
  No one can doubt the importance of the global economy to American 
jobs and American economic strength. If we are to provide good jobs for 
our citizens, it is important that we stay competitive. Already, 
current tax rules create a disadvantage for U.S. businesses that 
operate overseas and compete in foreign markets. Recent data 
demonstrate that U.S. multinationals are already taxed more heavily on 
their foreign income than on their domestic income. The current U.S. 
Tax Code has a strong bias against U.S. multinationals. Its sourcing 
rules and strict limitations on foreign tax credits expose the foreign 
investments of U.S. companies to double taxation. It also gives less 
favorable treatment to foreign affiliates by making them ineligible for 
the R&D tax credit or accelerated depreciation, and denies them the 
ability to include losses in the U.S. parent's consolidated income tax 
return. Current law does not, as the sponsors of this amendment assume, 
reward U.S. corporations with offshore operations.

  Clearly, imposing more taxes on American companies weakens U.S. 
international competitiveness, hurts American companies and American 
jobs, and gives our foreign competitors a greater advantage--just the 
opposite of what the amendment's sponsors say they want.
  Not only will this amendment increase direct taxes on U.S. companies, 
it will also increase regulatory costs associated with compliance and 
enforcement. The proposal will add enormous complexity to the already 
onerous and complicated U.S. Tax Code in the area of international 
taxes. The changes will be difficult for businesses to comply with and 
virtually impossible for the IRS to administer and enforce. For 
example, a U.S. multinational may manufacture a component--say, a 
computer chip --that eventually finds its way into a finished product 
that is ultimately imported into the United States by a foreign 
company, without the U.S. multinational's knowledge or consent. The 
IRS, in this case, would have to trace potentially long chains of 
unrelated parties that may alter a product or incorporate it into 
another product in order to enforce the requirements of this proposal. 
Similarly, businesses would have to employ complicated and tedious 
procedures to determine if their products could potentially ever be 
imported back into the United States. That, Mr. President, is just one 
reason that proposals like this need careful study by the Finance 
Committee, not an instant debate on the floor.
  This amendment means more taxes, more regulations, and more power to 
the IRS--powers which, I can assure my colleague, the country hardly 
needs.
  Today, U.S. companies face intense competition in both domestic and 
international markets. Nothing can be worse for our companies 
struggling to compete in the global economy than to burden them with 
more government regulations and taxes.
  There are several mistaken premises in this amendment, and I would 
like briefly to address some of them.

  First of all, the amendment's underlying premise is that when 
American companies open factories, plants and offices overseas, they 
reduce American jobs. That's simply not true. U.S. firms establish 
operations abroad primarily in order to penetrate foreign markets and 
take advantage of foreign business opportunities. In many cases, U.S. 
manufacturers cannot sell to foreign customers unless they have local 
plants in those foreign countries. For example, under the Canadian auto 
pact, United States companies must manufacture in Canada to export into 
the Canadian market. Without United States operations in Canada, the 
United States would lose the current $44 billion of sales in Canada. 
Were that to happen, the consequences to America would be serious 
indeed--not only in terms of economic damage, but in terms of lost jobs 
--American jobs--as well.
  Another misperception is that American companies move their 
operations overseas so that they can procure cheap labor. Again, not 
so. Most multinational companies' foreign investments are in other 
industrialized countries where labor costs are often higher than in the 
United States. In 1993, two-thirds of the assets and sales of United 
States-controlled foreign corporations were in seven countries: the 
United Kingdom, Canada, France, Germany, Japan, the Netherlands, and 
Switzerland. The average annual compensation paid by these corporations 
in 1993 was $49,005, 15 percent higher than the average $42,606 
compensation paid in the United States. U.S. firms do not go abroad for 
cheap labor, they go abroad because their business demands it. For 
example, industries that rely on natural resources must develop them in 
the geographic locations in which those resources are found.
  This amendment also assumes that overseas operations cost U.S. jobs. 
Wrong again. American operations overseas produce American exports. 
Exports support and create American jobs. Consider this: The Department 
of Commerce has calculated that every $1 billion dollars in 
manufactured exports creates--directly--14, 313 manufacturing jobs in 
the United States Clearly, U.S. companies that have operations overseas 
are a benefit to, not a detraction from, American jobs and the American 
economy.
  The amendment incorrectly assumes that U.S. companies invest offshore 
to export back to the U.S. market. But a look at the facts shows the 
reverse. In 1993, 66 percent of U.S. multinational sales were within 
the foreign company of incorporation, 23 percent of sales went to other 
foreign locations, and only 11 percent represented exports to the 
United States. If anything, multinationals are boosting the U.S. trade

[[Page S10259]]

balance. According to 1993 Commerce Department data, U.S. 
multinationals decrease the trade deficit by $11.5 billion per year.

  I must say that it's too bad the sponsors suspect the worst motives 
in our American companies, rather than supporting them as they look for 
new opportunities to boost the American economy and create new jobs in 
the United States.
  While few would disagree with the stated goals of this amendment--
preventing U.S. job loss and encouraging U.S. competitiveness--it is 
clear that in practice this amendment would have exactly the opposite 
effect. Let's call a spade a spade. This is not a proposal to stimulate 
employment or to strengthen America's position in the international 
arena. It is a protectionist, antitrade measure that attempts to 
exploit the fears and insecurities that Americans feel today due to the 
real degree of economic uncertainty. But the American economy is not 
being hurt by U.S. trade or by U.S. businesses expanding their presence 
overseas. Rather, trade and overseas investment strengthen and expand 
our economy.
  When American businesses go overseas, it is a sign of American 
economic strength and expanding opportunities. It means that American 
companies are competitive throughout the world. We should be happy to 
see our companies doing so well, instead of fearing international 
growth. We are the world's economic superpower, and should be 
encouraging international development and promoting trade, not 
discouraging it as this amendment does.
  The entire argument of the Senator from South Carolina can be summed 
up by one of his own lines: ``This country is going out of business.''
  If you believe that statement, then support this amendment and every 
other protectionist idea that comes down the pike. But if you believe, 
as I do, that we are the most successful and competitive economy in the 
world and with the most free and fair competition, vote with me and 
table this amendment.
  And one other point in reflection of the Senator from South Carolina: 
Boeing believes that the Chinese commercial aircraft market over the 
next 20 years will reach $185 billion. Obviously, it will go to those 
suppliers who will allow some of the work to be done in China. As Larry 
Clarkson, Boeing's top official for international development says: 
``If we hadn't moved work to China, we wouldn't have gotten orders.''
  I think he knows more about Boeing's business than the Senator from 
South Carolina--and Boeing is now hiring--in the United States.
  Mr. HOLLINGS. Mr. President, the people of the Republic of China 
characterize me as the ``Senator from Boeing.'' I realize that the 
French airbus was competing with us, and we are proud of Boeing and we 
are proud of its products. I am a competitor and I want to see the 
United States win at all costs.
  However, when we debated our textile bills and I passed one vetoed by 
President Carter, two vetoed by President Reagan, one vetoed by 
President Bush, get them to pass it, keep knocking on the door, I kept 
watching our colleagues from the State of Washington who opposed us 
with the free trade, and how wonderful to have trade overseas, which 
nobody denies. Everybody believes in trade. Instead of abolishing the 
Commerce Department, I am standing on this side of the aisle trying to 
defend commerce and to defend the department and trying to defend 
trade. But what you have to do is emphasize this flow of imports into 
the United States and find out why.
  Let me read from this article one little paragraph about Boeing. In 
the article, ``The Ex-Im Files,'' by William Grieder. It was previously 
printed in the Record:

       The White House also led cheers for Boeing because Boeing 
     was also stomping its competitors in the Chinese market. In 
     1994 alone, Boeing sold 21 737s and seven 757s to various 
     Chinese airlines and obtained nearly $1 billion in Ex-Im 
     loans to finance the deals. When President Clinton hailed the 
     news, he did not mention that Boeing had agreed to consign 
     selected elements of its production work to Chinese 
     factories. The state-owned aircraft company at Xian, for 
     instance began making tail sections for the 737, work that is 
     normally done at Boeing's plant in Wichita, KS. The first 
     order for Xian was for 100 sets, but that was just the 
     beginning. In March 1996, a China news agency boasted that 
     Boeing had agreed to buy 1,500 tail sections from Chinese 
     factories, both for the 737 and the 757. The deal was 
     described as ``the biggest contract in the history of China's 
     aviation industry.''
  Now, Mr. President, one, that is in violation of the Export-Import 
Bank law. So it is not partisan guilt or liability or misunderstanding. 
The President of the United States, hailing it under the Export-Import 
Bank, is for production in the United States, not to finance production 
in China. You ask what to do, how to wake them up. ``Free trade, free 
trade. It is wonderful for trade and you don't lose jobs and it is good 
for the economy.'' Here are the facts. As I warned 25 years ago, or 
almost 30 years ago, in that debate, I said, wait until it hits you.
  Last year, to Mexico we lost 10,000 textile jobs. We said in the 
NAFTA debate that we were going to lose them. Now we know from NAFTA, 
we have gone from a plus balance of $5 billion exports, exports, 
exports--how about the imports?--to a deficit of $15 billion. And those 
who oppose us will admit we have lost at least 300,000 jobs.
  Point: Boeing is having it happen to them. If you are going to lose 
your textiles, you are going to lose your flatware, you are going to 
lose your steel industry, your manufacturers and industrial strength. 
You are going to lose one thing we are preeminent in, airplane 
manufacturing, and finance it in violation of the Export-Import Bank. 
Then if we haven't done anything else, I say to the Senator from North 
Dakota, we have at least awakened them, given them a wakeup call for 
what is going on, because it's going to happen in Washington and in 
Wichita, KS, where they make the wonderful planes we are so proud of. 
But they are going to be losing the jobs. Airbus is taking over. I 
opposed the Ex-Im contract with Japan. Wait until the Japanese and 
Chinese start manufacturing aircraft. Then I want to see this crowd 
here. We will come in coveralls when we can't afford decent clothing, 
hollering ``free trade, free trade, free trade.''
  This country is going out of business. We need to wake up. These are 
the kinds of things to debate. Let's take that Dorgan-Hollings 
amendment and vote it up, and don't say this is an amendment against 
trade. This is just an amendment to put the foreign manufacturer on the 
same basis as American manufacturers for American corporations.
  I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. I will not further delay this, with the exception of 
making two points. I was off the floor. My understanding is that a 
couple of points were made in opposition to this legislation that I 
want to respond to. One is that this would prevent an American company 
from establishing offshore production with which to compete against a 
foreign company that is producing offshore and selling in some foreign 
country. This bill doesn't affect that at all. If you are opposed to 
this bill for that reason, smile; this bill doesn't affect that. This 
bill only affects U.S. producers who move offshore to produce for the 
purpose of sending the production back into our country. That is the 
only purpose.
  Second, this would be enormously complex, we are told. A wonderful 
article was written by Lee Sheppard recently. She says something about 
that. She wrote:
       Complexity never seems to bother corporate tax managers 
     when it flows in their favor, such as in transfer pricing or 
     the design of nonqualified deferred compensation plans. 
     Surely no one wants to add materially to the complexity of 
     America's already complex foreign tax provisions, though no 
     one is seriously suggesting simplifying them in business's 
     favor. The Dorgan bill proposes a destination-based tax 
     liability; other provisions, like the foreign sales 
     corporation provisions, grant destination-based benefits.

  My point is that those who stand up and use the corporate arguments 
being offered around town in ample quantities are using arguments that 
largely don't apply to this. So, as I said previously, if you believe 
our Tax Code ought to be neutral on the question of whether you export 
American jobs, just to make it neutral, then vote for this amendment. 
If you believe we should continue doing what we are doing, subsidizing 
the export of jobs, then vote against the amendment, and then let's

[[Page S10260]]

have a further discussion at some later point. I hope Members of the 
Senate will decide to support this.
  With that, I yield the floor.
  Mr. ROTH. Mr. President, this tax amendment is not appropriate at 
this time.
  This appropriations bill is not a revenue bill. If this amendment 
passes, this appropriations bill will be potentially subject to a blue 
slip by the House. A blue slip would in effect kill this bill and the 
Senate would have to start anew.
  Therefore, a tax amendment at this time would unnecessarily 
jeopardize the appropriations process. Amending an appropriations bill 
is not the proper way to make fundamental changes to international tax 
policy.
  The international area is a very complex section of the Tax Code. No 
one is happy when certain companies move abroad and manufacture 
products that are sold back to the United States.
  At the same time, it is important to understand that American 
companies are players in the global economy and that expansion abroad 
means more jobs back home. In fact, by 1990, manufactured exports of 
American companies with operations overseas created over 5 million jobs 
in the United States.
  If we are to continue to provide good jobs for our citizens, it is 
important that we stay competitive in this emerging global economy by 
expanding our presence abroad.
  American companies with overseas investments have been waging a hard 
fight, but a successful one to keep exports flowing from the United 
States.
  American companies operating overseas also help the balance of trade 
for the United States.
  According to the Department of Commerce, in 1993, American companies 
operating overseas helped reduce our trade deficit by $11.5 billion.
  A study by the National Bureau of Economic Research found that 
manufacturing by foreign affiliates of American companies increases 
exports from the American parent company located in the United States.
  This amendment attacks the tax rule known as deferral and would 
materially increase the cost to many American companies engaged in 
business overseas.
  This increase in costs will make it more difficult for American 
companies to compete with foreign manufacturers that are not subject to 
these additional costs.
  This amendment is based on the assumption that if companies don't 
build plants abroad, they will automatically build plants in the United 
States. In fact, many companies would probably just decide not to 
expand at all.
  If additional production facilities are not added, American companies 
would lose economies of scale that help them compete in the global 
marketplace.
  These economies are particularly crucial in the commodities business 
where price really matters.
  American companies would also be hurt in their efforts to expand in 
foreign markets.
  Our companies are motivated to invest abroad in order to penetrate 
markets otherwise commercially inaccessible to American firms and then 
expand that market share.
  The absence of American companies abroad would limit our ability to 
sell to foreign customers.
  There is a positive relationship between investment abroad and 
domestic expansion.
  Leading American corporations operating in both the United States and 
abroad have expanded their employment and sales in the United States, 
their investments in the United States, and their exports from the 
United States at substantially faster rates than industry generally. 
During the 1980's, American exporting companies had a better record on 
employment than the typical large American manufacturing firm.
  The contention that American manufacturing companies are harming our 
economy by shifting jobs abroad and importing cheaper products into the 
United States simply does not bear up under scrutiny.
  Rather, the exact opposite is true. Investment abroad by American 
exporting companies provides the platform for growth in exports and 
creates jobs in the United States.
  Overall, this amendment would hurt our economy. It would decrease the 
activities of domestic exporters and decrease jobs in the United 
States.
  This misguided amendment would give foreign-owned companies a huge 
competitive advantage and help them provide economic and job benefits 
for their home countries at the expense of the United States.
  We do not need to adopt legislation that hurts companies who go 
abroad for the legitimate purpose of becoming competitive in the 
international market.
  Overall, this area is one of extreme complexity and of greatest 
importance to our economy and the creation of jobs in America.
  The major international tax policy changes which would result from 
this amendment are within the jurisdiction of the Senate Finance 
Committee. It would be inappropriate and dangerous for such significant 
changes to the Tax Code to be made piecemeal on the Senate floor.
  As I have stated in the past, the Finance Committee will be holding 
hearings to look at the international area and the kind of issues that 
are raised by this amendment.
  For these reasons, I must respectfully oppose this amendment.
  Mr. SHELBY. Mr. President, the chairman of the Senate Finance 
Committee is opposed to the amendment of the Senator from North Dakota. 
In his statement, he raises several important points that I want to 
share with you right now. The most important is that this amendment, 
the Dorgan amendment, if accepted, would potentially subject the entire 
bill, including funding for drug enforcement, law enforcement, to a 
blue slip. This would effectively kill the entire bill and, with it, 
funding for critical priorities such as the drug czar, drug 
enforcement, Customs, border guards, ATF, Secret Service, White House, 
IRS, civil service pensions, and so forth.
  The Senator from North Dakota raises an important issue, and it ought 
to be debated and considered by the appropriate committee at the 
appropriate time. I don't believe this is the right time. It is 
misplaced here and it threatens to jeopardize our entire bill today. I 
note that the House, for the record, has blue-slipped less blatant 
attempts to raise revenues and change tax policy. Some of you will 
recall that 2 years ago the Senate adopted an amendment with regard to 
taxes on diesel fuel. It passed overwhelmingly here in this body, and 
it had strong support in the House at that time, including from the 
then-chairman of the Ways and Means Committee. Yet, because of the 
constitutional issue, he chose to utilize the blue-slip procedure over 
there and the Treasury bill was sent back to the Senate. In effect, had 
the Senate not adopted separate legislation striking that provision, 
the House would have had to begin the process of drafting and moving 
the necessary appropriations bill all over again.
  I don't believe that is what we want to happen here. I don't believe 
we can afford such a procedure. Our Nation's law enforcement people, 
Mr. President, cannot afford such a procedure. Our Nation's drug policy 
and funding for that policy cannot afford such a procedure. This 
country's civil servants, who rely on this bill every year to fund 
their pensions and disabilities, cannot afford such a procedure here. I 
cannot stress enough this afternoon the important funding in this bill 
--and most of you are aware of this--which this amendment would 
jeopardize.
  Mr. KERREY. Mr. President, I have cosponsored and voted for this 
amendment in the past, but the fact this is a tax issue put on an 
appropriation bill has caused me some concern. The Senator from 
Alabama, the chairman, is quite right. In this instance, as a 
consequence of the revenue issue, we risk having this whole thing sent 
back over to us. Otherwise, I would be supporting the Senator from 
North Dakota without any reservations. I urge colleagues to consider 
the procedural issue here and, when Senator Shelby of Alabama so moves, 
keep this concern in mind.
  Mr. SHELBY. Mr. President, to reassert this amendment raises 
constitutional questions with regard to raising revenue, which we are 
all familiar with. For these reasons I move to table the amendment, and 
I ask for the yeas and nays.

  The PRESIDING OFFICER. Is there a sufficient second?

[[Page S10261]]

  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion of 
the Senator from Alabama to lay on the table the amendment of the 
Senator from North Dakota. On this question, the yeas and nays were 
ordered, and the clerk will call the roll.
  The bill clerk called the roll.
  Mr. FORD. I announce that the Senator from Arkansas [Mr. Pryor] is 
absent because of illness in the family.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The result was announced--yeas 58, nays 41, as follows:

                      [Rollcall Vote No. 282 Leg.]

                                YEAS--58

     Abraham
     Ashcroft
     Baucus
     Bennett
     Bond
     Breaux
     Brown
     Burns
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     DeWine
     Domenici
     Faircloth
     Feinstein
     Frahm
     Frist
     Glenn
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Helms
     Hutchison
     Inhofe
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kyl
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond

                                NAYS--41

     Akaka
     Biden
     Bingaman
     Boxer
     Bradley
     Bryan
     Bumpers
     Byrd
     Campbell
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Ford
     Graham
     Harkin
     Heflin
     Hollings
     Inouye
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     McConnell
     Mikulski
     Moseley-Braun
     Pell
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Smith
     Warner
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Pryor
       
  The motion to lay on the table amendment No. 5223 was agreed to.
  Mr. SHELBY. Mr. President, I move to reconsider the vote.
  Mr. KERREY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. KERREY. I ask unanimous concept to add Senators Snowe and 
Pressler as cosponsors to Amendment 5232 regarding IRS reorganization.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Alabama.


                           Amendment No. 5206

  Mr. SHELBY. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The pending business is amendment No. 5206, 
the Wyden amendment.
  Mr. SHELBY. Mr. President, the Wyden amendment contains direct 
spending and revenue legislation which would increase the deficit by 
$85 million for the period 2002 through 2006.
  At this point, I raise a point of order, pursuant to section 202 of 
House Concurrent Resolution 67, the concurrent resolution of the budget 
for the fiscal year 1996. I raise the budget point of order.
  Mr. WYDEN. I move to waive the point of order and ask for the yeas 
and nays on the motion.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. WYDEN. Mr. President, I ask unanimous consent to speak on my 
amendment at this time.
  The PRESIDING OFFICER. The motion is debatable.
  Mr. WYDEN. Mr. President, the Senator from Alabama is raising a point 
of order on a revenue issue that simply does not apply to this 
amendment. I believe the Senator from Alabama is talking about a 
Congressional Budget Office report that was done on the House 
legislation on this matter, and I would just like to inform my 
colleagues that this amendment contains a change from the House 
legislation, a change that was added at the direct request of a number 
of managed care organizations, that deals with this question of 
revenue.
  If I could briefly engage the Senator from Alabama on this matter? 
The Senator from Alabama, I know, is trying to juggle a number of 
matters, but I would like to ask the Senator from Alabama, does he have 
a Congressional Budget Office report at this time that specifically 
cites this revenue projection on my amendment which is pending before 
the Senate?
  Mr. SHELBY. If the Senator from Oregon will yield?
  Mr. WYDEN. I am happy to yield.
  Mr. SHELBY. We have an oral statement from the Budget Committee staff 
that this violates the concurrent resolution and will cost $85 million. 
They scored it that way.
  Mr. WYDEN. Mr. President, the Senator from Alabama told me that he 
does not have an official report from the Congressional Budget Office 
with respect to revenue on it. The Senator has said that the majority 
staff projects that it will cost $85 million.
  Mr. SHELBY. If the Senator from Oregon will yield for a correction?
  Mr. WYDEN. I am happy to yield.
  Mr. SHELBY. The CBO, not the majority staff, is where this number 
comes from, $85 million that is a violation of the rule. Not the 
majority staff but the Congressional Budget Office itself.
  Mr. WYDEN. If the chairman of the subcommittee would provide me a 
copy of that, I would very much like to see that. Because the fact is, 
and let us go to the discussion of this matter, this has nothing to do 
with the Federal budget. What I am seeking to do is to make sure that 
managed care plans, the fastest growing part of American health care 
today, are not allowed to impose gag rules that impede patients from 
getting all the information that they need with respect to medical 
services and medical treatments.
  I come, Mr. President, from a part of the country that has pioneered 
managed care. The Portland metropolitan area that I represented, first 
in the House and now as a Senator, has the highest concentration of 
managed care in our country. We have seen good managed care, and there 
is plenty of it in Oregon.
  Unfortunately, there are managed care plans that have cut corners and 
that have kept a patient from a full range of those who provide 
necessary services. There are plans in the country where there have 
been oral communications where a plan says to a particular provider: 
``We're watching the number of referrals that you are making out of the 
network. We don't want you to refer to that particular specialist.''
  This is going on in our country. It is not right, and that is what 
this issue is all about. This is not a budget issue, I say to my 
colleagues. This is a matter of right and wrong. This is a matter of 
whether you are going to stand up for consumers, stand on the side of 
patients, or whether you are going to see those gag rules that keep 
patients from getting the information that they need and deserve.
  Mr. President, the preamble of the Hippocratic oath, which guides so 
much of American health care, is a statement to physicians: ``First, do 
no harm.''
  The message of these gag restrictions, these gag clauses that we are 
seeing in managed care plans all across the country is not ``First, do 
no harm.'' Their message is, ``First, support the bottom line.'' That 
is the issue that we are debating. That is not good health care. That 
is certainly not good managed care.
  Several months ago, the Washington Post cited a startling example 
involving the Mid-Atlantic Medical Services health plan, a large 
Washington metro area provider. This plan wrote a letter to network 
practitioners informing them that ``effective immediately, all 
referrals from (the plan) to specialists may be for only one visit.'' 
And in bold type, the letter stated: ``We are terminating the contracts 
of physicians and affiliates who fail to meet the performance patterns 
for their speciality.''
  That is the kind of gag rule, that is the kind of constraint that is 
being imposed on patients in the American health care system today by 
some managed care plans. Certainly, not all the managed care plans, and 
it is certainly not representative of what we are seeing in Oregon, but 
it is happening across the country. We have even seen it in a State 
like mine that has good managed care, and this is a bad deal for 
patients all around.
  First, patients end up not getting the kind of health care that they 
need.
  Second, the plan may restrict the provider, the physician, from 
informing

[[Page S10262]]

the patient about referral restrictions so that the patient doesn't 
even know that they are being medically shortchanged via the plan's 
policy.
  So what you have, stemming from the gag clauses, is a situation where 
our patients are in the dark in the fastest growing sector of American 
health care. These gag clauses keep the patients from even knowing, 
from even being in a position to understand that they are being 
medically shortchanged via a plan's policy.
  Let me mention a couple of providers who have brought this to my 
attention in Oregon.
  One orthopedic surgeon faced a situation where his managed care plan 
demanded he diagnose problems in patients apart from the ones for which 
they were referred. He, in effect, was told he had to keep his mouth 
shut and instead re-refer those folks back to their primary care 
physician.

  This physician wrote me: ``This is extremely disappointing to 
patients, as you might imagine. This requires more visits on their part 
to their primary care physician and then back to me, which is extremely 
inefficient.''
  Another physician, a family practitioner in a rural part of the 
State, wrote that antigag legislation was needed because ``when a 
physician recommends medical treatment for a patient and a plan denies 
coverage for that treatment, patients and physicians need an effective 
mechanism to challenge the plan.''
  So what we find is that these kinds of communications, communication 
between a plan and a provider, such as an oral communication, are 
getting in the way of the doctor-patient relationship, and that is why 
consumer groups and provider groups all across this country are up in 
arms and have weighed in on behalf of this particular amendment.
  There are some protections. A handful of States do offer some 
protections for the patient, but they vary widely from State to State. 
So that is why I bring this matter to the Senate's attention.
  Senator Kennedy joins me in this effort to set a national standard 
for what has become a national problem, but I would like to emphasize 
how bipartisan this effort is. Senators need to understand that if they 
vote against my amendment, they are essentially voting against the 
amendment that Senator Helms has also filed. It is a little bit 
different. It has not been formally addressed in the Senate, but it is 
essentially what Senator Helms has sought.
  In the House, Dr. Greg Ganske, a Republican, a physician, has done 
yeoman work on this matter, with Congressman Ed Markey of 
Massachusetts, a Democrat. They have held voluminous hearings in the 
House where this has been a problem documented on the record.
  The Commerce Committee dealt with this issue--I would like all my 
colleagues to know this, as we move to a vote on this matter--the House 
Commerce Committee dealt with this on a unanimous basis, on a 
bipartisan unanimous basis, and I simply want my colleagues to know 
that while Senator Kennedy joins me formally in this effort, Senator 
Helms has filed what amounts to almost an identical amendment to what I 
offer today.
  Dr. Ganske and Ed Markey, on a bipartisan basis in the House, have 
engineered committee approval of it, so this is not a partisan issue 
that comes before the Senate today.
  This amendment is rifle-shot legislation prohibiting only gag 
provisions in contracts or in a pattern of oral communications between 
plans and practitioners which would limit discussion of a patient's 
physical or mental condition or treatment options.
  I want to emphasize that health plans would still be able to protect 
and enforce provisions involving all other aspects of their 
relationships with practitioners, including confidentiality and 
proprietary business information. The reason that is important, Mr. 
President, is obviously it is not in the interest of the American 
people or this body to have the U.S. Senate fishing about in the 
proprietary records of health plans.
  What this is all about is making sure that patients get information 
about health services, about their physical or mental condition, about 
treatment options. They deserve the right to information about health 
services and not face these gag clauses that keep them from getting the 
information that they deserve.

  I want my colleagues to know that I have worked hard with leaders in 
the managed care community, as well as practitioners and consumer 
advocates in crafting this legislation. The amendment specifies that 
State laws which meet or exceed the Federal standard set out here would 
not be preempted by Federal law.
  The bill has been endorsed by a wide variety of provider groups, 
physician groups, as well as by consumer organizations. The 
endorsements for this particular amendment include the Association of 
American Physicians and Surgeons, the American Association of Retired 
Persons, the Center for Patient Advocacy, Citizen Action, the Consumers 
Union, the American College of Emergency Physicians, and a number of 
other organizations.
  Here is what the Association of American Physicians had to say with 
respect to this amendment. They said:

       Restrictions on communication with our patients not only 
     undermine quality of care, but are a blatant violation of the 
     Hippocratic oath. Prohibition of gag rules is a crucial step 
     toward protecting patients.

  The Center for Patient Advocacy said:

       It has become common for insurers to incorporate clauses or 
     policies into providers' contracts that restrict their 
     ability to communicate with their patients. Such gag clauses 
     seriously threaten the quality of care for American patients.

  So what we have, Mr. President, and colleagues, is essentially a 
pattern across the country with these gag rules that turns the 
Hippocratic oath on its head. A Hippocratic oath that tells physicians, 
``First, do no harm,'' has become all too often, ``First, think about 
the bottom line.''
  So I am very hopeful that on a bipartisan basis the Senate will pass, 
hopefully without opposition, my amendment. As I say, a vote against my 
amendment is essentially a vote against what Senator Helms has filed in 
this body. It is a vote against what Dr. Ganske has sought to do in the 
House. And most importantly, it is a vote against patients and 
consumers all across the country.
  If you vote against this amendment today, which will undoubtedly be 
the only chance the Senate gets to go on record on it in this session, 
then you are sending a message to managed care plans across the country 
that if you want to stiff the patients, if you want to stiff those who 
are vulnerable and those who need health care in America, it is all 
right. You can keep from them information about their physical and 
mental options and alternatives. You can keep information from them 
about treatment and kinds of services. I cannot believe that is what 
the U.S. Senate would want to do.
  I think what the U.S. Senate would want to do is what Senator Helms 
has sought to do, what Dr. Ganske has sought to do, what Congressman 
Markey and Senator Kennedy and I have sought to do, and that is to 
stand up for the rights of the patients.
  So I am hopeful that this will be supported widely by Senators today. 
We should not let these gag rules between plans and an individual 
physician get in the way of the sacred doctor-patient relationship. 
These plans are the fastest growing part of American health care today. 
And we ought to go on record as being on the side of patients, as being 
on the side of the vast majority of doctors and providers in this 
country who want their patients to know all their treatment options, 
all the services that are available to them. I hope that Senators on a 
bipartisan basis will support this effort.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts [Mr. Kennedy] 
is recognized.
  Mr. KENNEDY. Mr. President, first of all, I want to commend Senator 
Wyden for providing leadership in this very, very important area of 
health policy. I welcome the opportunity to join with him on an issue 
that really affects, in a very significant and important way, the 
quality of health care that is being practiced in this country. I 
commend him and others who have been involved with this legislation.
  I would like to address the Senate just very briefly on this issue 
and also make a comment about the procedural situation that we find 
ourselves in at the present time.
  As Senator Wyden has pointed out, one of the most dramatic changes in

[[Page S10263]]

the health care system in recent years has been the growth of managed 
care programs. In many ways, this is a positive development. Managed 
care offers the opportunity to extend the best medical practices to all 
medical practice, to emphasize health maintenance and to provide more 
coordinated care. Numerous studies have found that managed care 
compares favorably with the fee-for-service medicine on a variety of 
different quality measures.
  Many HMO's have made vigorous efforts to improve the quality of care, 
to gather and use systematic data to improve clinical decisionmaking 
and assure an appropriate mix of primary and specialty care. But the 
same financial incentives that can lead HMO's and other managed care 
providers to practice more cost-effective medicine also can lead to 
undertreatment or inappropriate restrictions on specialty care, 
expensive treatments, and new treatments.
  In recent months, the spate of critical articles in the press has 
suggested that too many managed care plans place the bottom line ahead 
of their patients' well-being--and are pressuring physicians in their 
networks to do the same. So these abuses include failure to inform the 
patients of particular treatment options; excessive barriers to reduce 
referrals to specialists for evaluation and treatment; unwillingness to 
order appropriate diagnostic tests; and reluctance to pay for 
potentially life-saving treatment. In some cases, these failures have 
had tragic consequences.
  In the long run, the most effective means of assuring quality in 
managed care is for the industry itself to make sure that quality is 
always a top priority. I am encouraged by the industry's recent 
development of a philosophy of care that sets out ethical principles 
for its members, by the growing trend toward accreditation, and by 
increasingly widespread use of standardized quality assessment 
measures. But I also believe that basic Federal regulations to assure 
that every plan meets at least minimum standards is necessary.
  So, with this amendment, the Senate has a chance to go firmly on 
record against a truly flagrant practice--the use of gag rules to keep 
physicians from informing patients of all their treatment options in 
making their best professional recommendations.
  Gag rules take a number of forms. This amendment targets the most 
abusive and most inappropriate type of gag rule: gag rules that forbid 
physicians to discuss all treatment options with the patient and make 
the best possible professional recommendation, even if that 
recommendation is for a non-covered service or could be construed to 
disparage the plan for not covering it.
  Our amendment forbids plans from prohibiting or restricting any 
medical communication with a patient with respect to the patient's 
physical or mental condition or treatment options. This is a basic rule 
which everyone endorses in theory but which has been violated in 
practice. The standards of the Joint Commission on Accreditation of 
Health Care Organizations requires that ``Physicians cannot be 
restricted from sharing treatment options with their patients, whether 
or not the options are covered by the plan.''
  Dr. John Ludden of the Harvard Community Health Plan, testifying for 
the American Association of Health Plans, has said: ``The AAHP firmly 
believes that there should be open communications between health 
professionals and their patients about health status, medical 
conditions, and treatment options.''
  Legislation similar to this amendment passed the House Commerce 
Committee on a unanimous bipartisan vote. President Clinton has 
strongly endorsed the proposal.
  The congressional session is drawing to a close. Today the Senate has 
the opportunity to act to protect patients across the country from 
these abusive gag rules, and I urge the Senate to approve the 
amendment.
  Mr. President, I just want to make a very brief comment about this 
point of order. Mr. President, this making of a point of order is an 
abuse of the budget system. Basically, what we are talking about, for 
those that are trying to hide behind the point of order, is that the 
costs that are affected come from the most egregious abuses in the 
health care system by systems which are shortchanging and endangering 
the health of the American people.
  You cannot hide behind this procedural vote on this issue, Mr. 
President. You just cannot hide. This is not about involving additional 
burdens or costs to the Federal Government. What you are basically 
talking about is providing protections to the sleaziest operators in 
this country that are endangering the health of the American people, 
and every consumer will know it.
  Make no mistake about it. Make no mistake about it. We are talking 
about trying to get the best health care. That means that the best 
information that the best doctors in this country can provide ought to 
be provided to patients. Patients deserve to have that information.
  We are seeing an abuse of the budgetary system by raising the point 
of order on this particular measure. Make no mistake about it, every 
consumer is going to know what this is about. This is not about 
procedure; this is about substance. This is about substance. You can 
have a technical point of order, but it is about substance, about 
quality of health.

  We only have the opportunity to offer it on this particular measure. 
I commend Senator Wyden for providing the initiative. We all ought to 
be very clear about what is involved in a technical point of order. It 
is an abuse of the budget system in every sense of the word. It 
involves the most important issue regarding health and that is the 
quality of health for American consumers.
  The idea that the Senate, after we have had unanimous and bipartisan 
support over in the House of Representatives, is going to try and hide 
under a technical amendment, will be a shameful day here in the U.S. 
Senate.
  Mrs. KASSEBAUM. Mr. President, I say, first, this is not an effort to 
hide behind a technical point of order. I care just as much as the 
Senator from Massachusetts or the Senator from Oregon about the quality 
of health care. We all do in this Chamber. There is a process, 
unfortunately--or fortunately--under which we operate around. That 
process requires us to do some things to assure that issues are 
considered with some thoroughness, and I believe that is appropriate.
  I agree in many ways, in all ways, actually, on the principle to 
which the Senator from Oregon and the Senator from Massachusetts are 
speaking. Patients should have access to complete and accurate 
information regarding their health care. None of us here in this 
Chamber disagree with that concept, or with the concept that doctors 
should be allowed to share that information with their patients. 
Patients' communications with their doctor should be protected. I think 
we would all feel this is a prime concern. It is a vital part of the 
health care process.
  I have a great deal of sympathy for the motivations behind the 
amendment that is offered by Senators Wyden and Kennedy. However, I 
believe it would simply be irresponsible to approve it in the absence 
of any review or discussion of its provisions at any level in the U.S. 
Senate. The legislation upon which the amendment is based was 
introduced barely a month ago on July 31 and no committee hearings have 
been held.
  I have visited with Senator Wyden because, as chairman of the Labor 
and Human Resources Committee, I have wanted to hold hearings on this 
legislation since we came back from the August recess. It has not been 
possible to find a time that we were able to put a hearing together. 
That does not mean that it is not going to happen, and certainly it 
should be a priority of the next Congress. However, just as so often 
happens here when we begin to run out of time, we want to add 
everything that we can to the appropriations bills that are moving.
  In this instance, as has been pointed out, a similar proposal was 
approved by the Commerce Committee in the House of Representatives. It 
is a bipartisan measure. There is nothing partisan about this. It 
passed unanimously in committee. It has not been considered by the full 
House of Representatives. I believe that, when we are looking at 
aspects of a very important and yet complex piece of legislation, we do 
have to go through the procedures and processes that are part of our 
operation here, whether we want to or not.
  It certainly is not unprecedented to have extraneous amendments 
offered at the last minute. However, the Senate's being asked to decide 
a highly

[[Page S10264]]

complex issue without the benefit of any review at all is, I suggest, 
Mr. President, a mistake. It is a mistake. Our procedures may delay 
consideration of legislation we support, but it protects us from 
legislation that we do not support as well. We need to be able to 
understand what a piece of legislation is all about. For example, we 
are not sure what CBO's scoring of this amendment is. It might not be 
important, but it is a requirement we have scoring around here. We have 
that requirement so we can better understand the budgetary consequences 
of our actions, and--generally--we are required to provide offsets for 
spending increases.
  As I mentioned earlier and as Senator Wyden pointed out, the House 
Commerce Committee has considered this issue and has held extensive 
hearings. I have visited with Congressman Ganske myself, and I have 
high regard for the dedication that he has given to this issue and for 
the time that he has spent with it. His being a doctor, I have high 
regard for his understanding of the issue. I have great interest in his 
work and feel that he is to be commended for moving forward the 
discussion to the point that it has progressed.
  However, I point out that even the authors of the amendment before 
the Senate acknowledge that the work of the House committee is not the 
final word, as several provisions of the amendment depart from the 
language approved by the House committee. The reason that we have 
committees in the Senate and the reason that each one of us spends, or 
should spend, so many hours in committee work is to lend some degree of 
thought and expertise to public policy issues.
  It can be very frustrating when legislation does not move forward at 
the pace we would like to see. Nevertheless, the committee system is 
one of the processes, and perhaps breaks, that we have here, Mr. 
President. That system enables us to turn out, one would hope, a 
finished product where we understand what the language means and which 
avoids the unintended consequences of the initial language proposed.
  In the course of this work, I think we find that very little is as 
simple as it may seem at first glance. We also find our initial 
solutions can spawn problems just as serious as those we set out to 
address. Such solutions are inevitably refined and improved as 
additional information is gathered.
  In an area as complex and dynamic as managed care, we need to give 
serious thought and deliberation before launching the Federal 
Government into the middle of private contractual arrangements. The 
amendment is intended to address an important issue regarding quality 
health care, and it is an important issue. But good intentions are not 
sufficient; we need to understand the consequences of the language we 
use and the actions we take.
  In fact, President Clinton himself has acknowledged the need for a 
closer examination of managed care issues with his recent announcement 
of his plans to establish the National Commission on Health Care 
Quality.
  As I stated when I began speaking, I am not arguing that this issue 
should be ignored. In fact, I think it is a very important issue for us 
to look at and one of the next important steps in any of our health 
care debates. It is a legitimate concern.
  It is for this reason I intend to propose an amendment calling for 
action in this area early next year after there has been an opportunity 
to review the full ramifications of the solution proposed by the 
Senator from Oregon. A vote ``no'' on this motion, Mr. President, does 
not mean that we do not care. A vote ``no'' is not hiding behind some 
procedural arrangement. A vote ``no'' is simply saying we have a 
process that we should make work as intended in order to give us the 
best end result on an issue that we all care deeply about and that I 
believe should be of prime concern.
  I yield the floor.
  Mr. CONRAD. Mr. President, I think this is a fundamental issue and 
that we ought to address it now.
  Mr. President, I come from a long medical tradition on my mother's 
side of the family. My grandfather and virtually all of his relatives 
were doctors. My grandfather was a pioneer surgeon in North Dakota and 
was the chief of staff of our local hospital. In many ways, I grew up 
in a medical family.
  The notion that we would have a gag rule on doctors and what they can 
tell their patients is anathema to those who are medical professionals. 
It is not limited to medical professionals. I think it is anathema to 
any American. The notion that a doctor, by contract, is precluded from 
sharing certain information with a patient about that patient's illness 
is unconscionable--unconscionable.
  What kind of system do we have when a doctor can be precluded from 
telling a patient about treatment options, about referral options in 
America?
  Mr. President, I met yesterday with medical professionals from my 
State. I do not use the English language lightly. I said that I believe 
these gag rules are immoral, and I do believe it is immoral, Mr. 
President, to say to a doctor, ``You are restricted and limited in what 
you can say about what you know about a patient's options.'' You know, 
it sounds to me like another country and another time. Maybe that would 
go over in the Soviet Union. Maybe that would have gone over in Germany 
in the thirties. This is America in the nineties. No doctor should be 
precluded from discussing with a patient the treatment options of that 
patient. That is outrageous.
  Mr. President, we may not be able to solve this matter completely in 
the days that remain in this session, but we can start, and we should 
start, and we have the opportunity in this amendment. This amendment 
has been carefully crafted. The House has gone over it, the medical 
community has gone over it, some of the best minds of the U.S. Senate 
have gone over it, and they have crafted an amendment that is a rifle 
shot. It says very clearly what cannot be gagged, what communications 
ought to be able to freely flow between a patient and the person who is 
responsible for that patient's care.
  Mr. President, we ought to pass this amendment. We ought to pass this 
amendment. I can't think of a single good reason why this amendment 
ought to be stopped. I can just say that I have discussed this with 
people in my home State on my most recent trip home. They are just 
mystified how, in America, you can have a circumstance in which a 
doctor is precluded and prevented from talking to their patients about 
treatment options that are available to them. Well, that is just beyond 
description in terms of the morality of the circumstance.
  Mr. President, I want to commend Senator Wyden for coming forward 
with this amendment at this time. I would commend anybody on the other 
side of the aisle--and I would do it publicly--if they came forward 
with this amendment, because I feel that strongly about it. This is 
something we ought to pass. It ought to be bipartisan. There ought not 
to be a whiff of partisanship about it. I thank my colleague from 
Oregon, Senator Wyden, for doing, I think, a superb job in bringing 
this amendment to the attention of the body. This ought to pass 100-0. 
I don't care about points of order and all the rest. I don't know 
whether people are hiding behind it or not. Frankly, I just think it is 
inappropriate in this circumstance to be talking about a point of order 
with respect to an amendment that is so totally and fully justified.
  Again, I want to thank my colleague, Senator Wyden, for authoring 
this amendment and bringing it to our attention. I hope this amendment 
passes 100-0 on the floor of the U.S. Senate. That would send a very 
good message across this country about what is acceptable and what is 
not acceptable.
  I will just add this final point. If this is the direction that we 
are going to go in with health care in America, there is going to be an 
enormous reaction in this country. I predict that today. If this is the 
direction we are going to go in, in which patients are denied 
information about their coverage options, then we have big trouble in 
this country. We can address it right here today and pass this 
amendment, and we should.
  I thank the Chair and yield the floor.
  Mr. SHELBY. Mr. President, I will speak to this in a second.
  Mr. President, I ask unanimous consent that during the consideration 
of the committee amendment on page 80 regarding abortion funding there 
be 1 hour of debate prior to a motion to table, to be equally divided 
between

[[Page S10265]]

Senators Nickles and Boxer, and that no other action occur prior to the 
motion to table. This has been cleared with Senator Kerrey.
  The PRESIDING OFFICER (Mr. Gregg). Without objection, it is so 
ordered.
  Mr. SHELBY. Mr. President, CBO has told staff from both sides of the 
aisle, Republicans and Democrats, that the scoring of this amendment is 
the same as the scoring of the Ganske bill in the House, and they will 
be providing a written confirmation on this scoring to both of our 
staffs immediately. It could be imminent. We will present it and insert 
it into the Record as soon as we get it from CBO. It is going to be the 
same thing. CBO says to us that it is going to cost $85 million and it 
violates the Budget Act.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts, Mr. Kennedy, 
is recognized.
  Mr. KENNEDY. Mr. President, I will just respond very briefly to two 
points. One is about the consideration of this amendment. I say to my 
friend and colleague from Kansas, Senator Kassebaum, with all respect, 
we did not have any hearings on the mental health provision that we 
just passed here 82 to 15, the Domenici-Wellstone amendment. We didn't 
have any hearings in our committee on that particular issue. We did not 
have any on the Lodine patent extension, which was added by some of our 
majority Members to the Kassebaum-Kennedy bill. That would have been 
something we should have had a good deal of hearings on. We did not 
have any on the Mediguide amendment that was added in the agricultural 
appropriations bill. Hearings would have been useful. Those affect 
consumer information as well. So the fact of the matter is, on this 
issue, it has been reviewed in detail in hearings in the House of 
Representatives. It is a simple concept, and there is absolutely 
adequate justification.
  Finally, Mr. President, on the budget item--and we all have the 
budget items here--it is my understanding that, for 1997, 1998, 1999, 
2000, and 2001, the items which are listed in the budget, that may be 
the potential cost, can be assumed within the range of differences and 
estimates within the Budget Committee. What it is not is in the year 
2002. Do you know what that figure is that we are going to risk denying 
American consumers and patients information that is vital to their 
health? It is $15 million. It is $15 million. Do you know how the 
Budget Committee gets that? They say, well, when patients actually find 
out that there is a better treatment for their illness, what they are 
going to do is get the better treatment for their illness, which means 
that they may very well get less wages because if they increase the 
cost of their health insurance, they are going to get less wages. That 
is the estimate. That is going to be the result--$15 million in the 
year 2002.
  We are being asked now to allow the gag rule on doctors in this 
country to continue. This is a result of the pressure of the insurance 
company, and you are trying to tell us that this is a budget item, that 
this is a matter of budget process and procedure, in order to maintain 
the integrity of the Federal budget? It is an excuse, and it is an 
abuse of the budget process. It is the worst kind of abuse, because by 
denying this kind of information to patients, what we are doing is 
using the budget process as a way to provide an out for the sleaziest 
operators and at the same time, endangering the health of the American 
people. That is absolutely wrong. It was never intended in any debate 
or discussion of the Budget rules. This is a matter of substance.
  I look forward to supporting the Wyden amendment and, again, I 
commend him for his leadership in bringing this extremely important 
measure to the Senate floor.
  Mr. WYDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, first, I express my thanks to Senator 
Kennedy. He has done yeoman work on so many health issues over the 
years. He has just been so helpful to me as a new Member of the Senate. 
I thank him for all of his help and that of his staff in preparing this 
amendment.
  I think it is clear, Mr. President, that this amendment is not some 
sort of exotic animal that has just wandered onto the floor of the U.S. 
Senate to be considered, as if the Members have no awareness of what 
this issue is all about.
  This issue has been the subject of extensive hearings in the House of 
Representatives. This issue has been all over the news media across the 
country. Suffice it to say that virtually every Member of this body has 
heard from constituents and from providers at home about this 
particular issue. I know that virtually every time I am home--I come 
from a part of the country which has some of the very best managed care 
in the Nation--that I hear from patients and consumers about this 
particular issue.
  It really comes down to a question of whether we are going to keep 
faith with the Hippocratic oath of doing no harm to patients, making 
sure they have information about the various treatments and services 
that are essential to them, or to turn that Hippocratic oath on its 
head and in effect say the first obligations are to the bottom line.
  This amendment is rifle-shot legislation. It prohibits only gag 
provisions in contracts that relate to patient care. It goes only to 
the question of whether or not patients are going to be able to get 
full and complete information about their physical and mental condition 
and about the treatment options that are available to them. It is not 
going to interfere with proprietary matters. It is not going to allow 
fishing expeditions into proprietary business information that ought to 
be the property of the health maintenance organizations. It goes just 
to the question of whether patients have a right to know.
  Some may say now is not the time; that maybe next session it can be 
taken up. I would ask that one not substitute this kind of discussion 
of maybe tomorrow or maybe next year for what is simple justice and 
common sense for medical patients in the fastest growing sector of 
American health care. This has not been a partisan issue. Dr. Ganske, a 
Republican, a physician on the House side, has done superb work along 
with Congressman Markey, a Democrat.
  I have noted that Senator Helms has filed an amendment which is very 
similar to the one that I will be seeking a vote on in a few moments. 
But there is a question, it seems to me, of consumer justice, of the 
patient's right to know, and we should not ask those patients to wait 
any longer given the documented record of abuses and problems.
  We know that our health care system involving billions and billions 
of dollars is now being driven by managed care. One plan after another 
in the U.S. Senate has looked to managed care as the centerpiece of 
American health care as we look into the next century.
  My view is--I come from a part of the country where there are many 
good managed care plans--that managed care will play a big role, a 
significant role in delivering quality care in a cost-effective way to 
the patients and consumers of our country. But let us not let a small 
number of plans--plans that have been cutting corners and have been 
found to be cutting corners from hearings that have been held in the 
Capitol--in effect continue those consumer abuses that take a toll on 
patients across this country.
  This is not a vote about an arcane kind of issue with respect to the 
budget. This is a question of justice for patients, of the patient's 
right to know, and of patients needing information about the various 
treatment options available to them.
  I hope my colleagues will in the spirit that this has been addressed 
in the House pass this with a bipartisan and significant vote. That is 
the way it was tackled in the House Commerce Committee. I hope we will 
send a message today to the vast majority of patients, doctors, and 
others who offer good medical care that we are on your side, that we 
are going to isolate those gag rules, that we are going to say that is 
not what we want American health care to look like in the 21st century, 
and that we would vote today to ban these insidious, unconscionable gag 
rules that restrict the right of medical patients in our country to 
know about essential services.
  Mr. President, I ask for the yeas and nays on my amendment.
  The PRESIDING OFFICER. The yeas and nays have already been ordered, 
the Chair notes.

[[Page S10266]]

  Mrs. KASSEBAUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mrs. KASSEBAUM. Mr. President, I wish to speak briefly in order to 
mention to the Senator from Oregon that he has talked a couple of times 
about the language of the Senator from North Carolina, Senator Helms. I 
just visited with Senator Helms to ask him what he thought of the 
provision before us. He pointed out that his language is much more 
narrowly drawn. It applies only to the Federal Employees Health 
Benefits Plan and includes some specific criteria. He has some 
difficulty believing that we should expand it further without 
understanding more of the ramifications.
  I, like everyone else, have great sympathy for what Senator Wyden has 
been wanting to accomplish, and what Congressman Ganske wants to do in 
the House. I just have to say, however, it may not be as easily done as 
we would like to believe that it could be. That is all the more reason, 
I think, that we ought to at least have a hearing in the Senate and 
take the legislation through the committee.
  As I said, and as Senator Kennedy pointed out, we have considered 
some major legislation which has not gone through the full committee 
process. But, in general, those have been instances in which we have 
had some fairly extensive debate.
  This proposal came to us without advance warning and without benefit 
of prior discussion in the committee or in the Senate. We are simply 
not prepared to look at language regarding contractual arrangements in 
the private sector and make wise decisions about it overnight.
  I yield the floor.
  Mr. SHELBY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, we have debated this for quite awhile 
today, and also, as some of you recall, fairly extensively last night.
  Mr. President, this is not a Treasury appropriations issue that is 
before us. This debate has addressed the issue, and adopted an 
amendment. The amendment would cause the committee to find $85 million 
in the conference to stay within our allocation. We would have to take 
funds from the accounts that I spoke about earlier. The bill funds law 
enforcement, the IRS, and other basic Government functions, such as the 
Secret Service, and GSA. This bill does not come close to the 
President's budget request. The administration would like more money in 
this bill for law enforcement and others, not less.
  This amendment would further reduce those programs, if it were 
adopted, $85 million. The Senator's amendment may be a worthy one, and 
probably is a worthy one, but the committee has an obligation, I 
believe, to fund the basic Government functions before the committee 
that we have jurisdiction over, and the Wyden amendment undermines the 
committee's ability to do so.
  I hope that the Senate will not waive the Budget Act.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, the Senator from Indiana asked me if he 
could speak. We are moving to a vote. He has a clarification question. 
I was seeking the floor to give him an opportunity to be recognized.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. COATS. Mr. President, I thank the Senator from Nebraska for 
yielding for the purposes of a question.
  I would like to ask the sponsor of the amendment, Senator Wyden from 
Oregon, a question and see if I can get a clarification. I have just 
been advised that the amendment that he has offered preempts current 
State law; our current law. Is that correct?
  Mr. WYDEN. No, that is not correct. In fact, we specifically protect 
the rights of States to go further.
  Mr. COATS. What if States decide to go a little more narrow?
  Mr. WYDEN. This is in fact a national standard. Yes, we do say--
because managed care plans, many of them, operate in more than one 
State, we have said, you bet, we have a national problem. It is a 
national standard. But there are a small number of States that have 
dealt with this in a thoughtful kind of way. We specifically protect 
those States.
  Mr. COATS. That is my dilemma because Indiana has, in my opinion, 
dealt with it in a thoughtful way. In some instances, the statute that 
we have is broader than the amendment offered by the Senator from 
Oregon and therefore I would think would be acceptable. But in other 
instances it is narrower. In other words, it is crafted to how Indiana 
best sees the need to provide information to consumers to protect them.
  So that I assume then the answer is that that portion of the Indiana 
consumer protection and consumer information statute, which does not 
conform to the amendment, is preempted.
  Mr. WYDEN. Well, the parts that protect the patient and protect 
Indiana physicians, those parts are in fact protected under my 
amendment. But if there are parts of the Indiana statute that do not 
adequately protect Indiana physicians and do not adequately protect 
Indiana consumers, yes, there would be a Federal standard.
  Mr. COATS. If the Senator will yield further, that was not directly 
my question. Indiana has made a determination through its legislature, 
through its Governor, through consultation with consumer groups, 
patient groups, provider groups, about the best means of providing 
information and protecting consumers. And so my question is, does the 
Senator's amendment preempt those decisions on the part of Indiana 
citizens and the Indiana legislature that do not happen to conform, 
that would be construed by the Senator as being more narrow? In other 
words, they might not meet all of the Senator's criteria but they 
certainly meet the criteria that the people in our State believe 
appropriate to provide protection to patients.
  Mr. WYDEN. If the Senator will let me respond, as the Senator knows--
and both of us are veterans of the House Commerce Committee--not very 
much goes through the House Commerce Committee unanimously. Dr. Ganske 
is not known as a poster child for the anti-States rights movement. 
This is a bill that has been worked on so as to be sensitive to the 
rights of States. What it does essentially is bring the same kind of 
consumer protections at the Federal level that we do in a number of 
Medicare areas. The Senator and I worked, for example, in the House on 
Medicare risk contracts and the like. This does say that on certain 
matters up to what amounts to a floor of consumer protection there 
ought to be a national standard. And that is how we deal with it here. 
That is how Dr. Ganske dealt with it in the House.
  Mr. COATS. I think I have the Senator's answer. The Senator's 
amendment does preempt those portions of Indiana law that do not 
conform with his definition of a floor or minimum standard. I believe 
our State has taken adequate steps to provide protections and 
information for consumers and therefore I will have to oppose the 
amendment. The Senator answered my question. I do not need to know the 
history of what happened in the committee or whether Mr. Ganske is 
right or wrong. I am just looking out for my State of Indiana which 
made a determination of what is best for our consumers, and we are 
very happy in Indiana. I cannot support an amendment that preempts what 
we have done.

  Mr. WYDEN. If the Senator will let me respond once more, I cannot 
imagine that Indiana State law allows these plans to gag Indiana 
doctors. I have not reviewed the Indiana law, but I just cannot believe 
that Indiana law does permit these kinds of gag rules. That is all we 
do in this legislation. If the Senator is looking for a way to vote 
against what physician groups and patients all across this country have 
been calling for, so be it. I know the Senator has done a lot of good 
work in health care. But I cannot believe that Indiana law is coming 
out in favor of these kinds of gag provisions. All we are seeking to do 
in this legislation is prevent them as well.
  Mr. COATS. That is my last word here. I know that the Senator is very 
familiar with what the State of Oregon has done. The constituents of 
Oregon have elected him because they feel he knows what is going on in 
that State. It does not sound to me as if the Senator from Oregon knows 
what the State of Indiana has done. They elected this Senator because 
they know I know

[[Page S10267]]

what is going on in that State. So I think it is presumptuous for the 
Senator from Oregon to say what Indiana has done is incorrect when he 
does not even know what it is.
  All I am saying is I want to protect Indiana's right to make a 
determination of what is in the best interests of their citizens, and 
the Senator has answered my question. He preempts that part of our law 
which does not conform to what he thinks is right, but obviously it has 
to reflect what we in Indiana think is right. So I thank the Senator 
for his responses.
  Mrs. BOXER. Will the Senator yield to me for a question?
  The PRESIDING OFFICER. The Senator from Nebraska has the floor.
  Mr. KERREY. Mr. President, we have an hour of deliberation following 
this vote on an abortion amendment and Members on both sides that are 
anxious for that vote to occur have asked me to expedite it in order to 
be able to do other things. And so I think we have debated this. I will 
be pleased to allow it to go on if I have something additionally 
constructive, but I think people pretty well have this thing laid down.
  Mr. President, I have not made a statement on this. I hope that 
Members actually will vote to waive in this case. We are trying to move 
in the direction of managed care, particularly those of us who are 
trying to work both sides of the aisle and get some agreement on 
providing incentives in Medicare to control costs, to increase choice, 
and allow people to purchase into managed care. The CBO does not 
calculate any savings that occur as a consequence of people liking 
managed care as a result of knowing that they are going to get all the 
information to purchase it and reduce taxpayer exposure as a 
consequence. All they do is calculate some marginal increase in costs 
that might occur as a result of more expensive treatments being done. 
They offer no savings as a result of people saying we now like managed 
care better because of what occurs.
  This is eventually going to become law. Later on, we are going to 
pass an amendment with a big vote that gives Federal employees the same 
right. They are going to have the same right that the Senator from 
Oregon is now asking for all other people, especially for Medicare 
patients that are out there who are trying to ascertain whether or not 
they want to purchase into a managed care environment. So I think 
especially for budget reasons, CBO, with all due respect, has not 
calculated the increased savings that will occur as a consequence of 
seniors in particular saying we now have more confidence in managed 
care as a result of getting all the information.
  The PRESIDING OFFICER. The question now is on agreeing to the motion 
to waive the Budget Act. The yeas and nays have been ordered. The clerk 
will call the roll.
  The legislative clerk called the roll.
  Mr. FORD. I announce that the Senator from Arkansas [Mr. Pryor] is 
absent because of illness in the family.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
who desire to vote?
  The yeas and nays resulted--yeas 51, nays 48, as follows:

                      [Rollcall Vote No. 283 Leg.]

                                YEAS--51

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Bradley
     Breaux
     Bryan
     Bumpers
     Byrd
     Campbell
     Conrad
     Daschle
     Dodd
     Dorgan
     Exon
     Feingold
     Feinstein
     Ford
     Glenn
     Graham
     Grassley
     Harkin
     Hollings
     Inouye
     Johnston
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Nunn
     Pell
     Reid
     Robb
     Rockefeller
     Sarbanes
     Simon
     Smith
     Snowe
     Specter
     Wellstone
     Wyden

                                NAYS--48

     Abraham
     Ashcroft
     Bennett
     Bond
     Brown
     Burns
     Chafee
     Coats
     Cochran
     Cohen
     Coverdell
     Craig
     D'Amato
     DeWine
     Domenici
     Faircloth
     Frahm
     Frist
     Gorton
     Gramm
     Grams
     Gregg
     Hatch
     Hatfield
     Heflin
     Helms
     Hutchison
     Inhofe
     Jeffords
     Kassebaum
     Kempthorne
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Pressler
     Roth
     Santorum
     Shelby
     Simpson
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                             NOT VOTING--1

       
     Pryor
       
  The PRESIDING OFFICER. On this vote the ayes are 51, the nays are 48. 
Three-fifths of the Senators duly chosen and sworn not having voted in 
the affirmative, the motion is not agreed to. The point of order is 
sustained.
  Mr. SHELBY. I move to reconsider the vote.
  Mr. NICKLES. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mrs. KASSEBAUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kansas.


     Amendment No. 5235 To Committee Amendment On Page 16, Line 16

 (Purpose: To express the sense of the Senate regarding communications 
                 between physicians and their patients)

  Mrs. KASSEBAUM. Mr. President, I send to the desk an amendment to the 
committee amendment and ask that it be considered.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Kansas [Mrs. Kassebaum] proposes an 
     amendment numbered 5235 to committee amendment on page 16, 
     line 16.

  Mrs. KASSEBAUM. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the end of the committee amendment, insert the following 
     new section:

     SEC.   . PROTECTION OF PATIENT COMMUNICATIONS.

       (a) Findings.--Congress finds that--
       (1) the health care market is dynamic, and the rapid 
     changes seen in recent years can be expected to continue;
       (2) the transformation of the health care market has 
     promoted the development of innovative new treatments and 
     more efficient delivery systems, but has also raised new and 
     complex health policy challenges, touching on issues such as 
     access, affordability, cost containment, and quality;
       (3) appropriately addressing these challenges and the 
     trade-offs they involve will require thoughtful and 
     deliberate consideration by lawmakers, providers, consumers, 
     and third-party payers; and
       (4) the Patient Communications Protection Act of 1996 (S. 
     2005, 104th Congress) was first introduced in the Senate on 
     July 31, 1996, and has not been subject to hearings or other 
     review by the Senate or any of its committees.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Committee on Labor and Human Resources of the 
     Senate, taking into account any relevant findings of the 
     National Commission on Health Care Quality and other public 
     and private entities with expertise in quality health care 
     service delivery, should act expeditiously in the first 
     session of the 105th Congress to schedule hearings and 
     executive session consideration of legislation designed to 
     ensure that patients be given access to all relevant 
     information concerning their health care so as to permit such 
     patients, in consultation with their physicians, to make 
     appropriate decisions regarding their health care, and that 
     the Senate should promptly consider that legislation.

  Mrs. KASSEBAUM. Mr. President, this amendment is very brief, if I may 
just explain it. It expresses the sense of the Senate regarding 
communications between physicians and their patients. It addresses the 
same issue that we have just been debating. I think we have had a good 
and extensive debate. My concern with the amendment on which we just 
voted was that its provisions had not been fully considered and had not 
been the subject of any hearings in the Senate. We needed to approach 
the issue, I thought, in a more cautious way--even though there was 
strong support for the concept behind that amendment.
  My amendment is just saying that:

       It is the sense of the Senate that the Committee on Labor 
     and Human Resources of the Senate, taking into account any 
     relevant findings of the National Commission on Health Care 
     Quality and other public and private entities with expertise 
     and quality health care service delivery, should act 
     expeditiously in the first session of the 105th Congress to 
     schedule hearings and executive session consideration of 
     legislation designed to ensure that patients be given access 
     to all relevant information concerning their health care so 
     as to permit such patients, in consultation with their 
     physicians, to make appropriate decisions regarding their 
     health care, and that the Senate should promptly consider 
     that legislation.

  This amendment is consistent with the intent of the legislation 
offered by the Senator from Oregon and the Senator from Massachusetts, 
but puts the

[[Page S10268]]

Senate on record as supporting the use of the standard and proper 
procedures that I think are needed to give this issue the full and 
careful consideration it deserves.
  Since we have had, I think, a full debate, I ask for the yeas and 
nays and for the immediate consideration of this measure.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The yeas and nays were ordered.
  Mr. WYDEN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I have not seen the sense of the Senate, 
offered by Senator Kassebaum, but I would like to discuss this further 
with her. I also might say that as a new Member of the Senate, she has 
been especially helpful to me. We have worked on a variety of things, 
Food and Drug Administration issues and the like. I want her to 
understand that it has not been particularly pleasant to spend the 
afternoon taking different positions with somebody I admire. I want her 
to understand that.
  Again, I have not seen a copy of the sense of the Senate offered by 
the chair of the committee. She seeks to offer a study of this issue 
involving gag rules on medical patients; is that correct?
  We have my amendment which passed 51 to 48, but did not get 60 votes, 
on a proposal that keeps these health maintenance plans from imposing 
gag rules that keep their patients from getting a full range of 
information about medical services and treatments and their health care 
options.
  My amendment does not deal with the abortion issue. Perhaps some may 
have thought it did. It simply deals with all of those physical and 
mental health services and the treatment options that patients need to 
make decisions.
  The Senate passed my amendment 51 to 48. Of course, it needed 60 
votes. I gather now that the Chair of the committee seeks a study of 
this particular issue. I yield to her to find out whether this, in 
fact, is a study, or is this legislation with some teeth in it that 
actually does ban these gag rules, these insidious, offensive, 
anticonsumer gag rules that keep patients from knowing about their 
rights?
  Mrs. KASSEBAUM. Mr. President, no, this is not another study. It is a 
sense-of-the-Senate resolution. So it does not have statutory authority 
as the language of the Senator from Oregon would have had.
  However, it does not call for another study. It simply says that the 
Senate should take into account any relevant findings of the National 
Commission on Health Care Quality which President Clinton has said he 
would appoint and other public and private entities with expertise in 
this issue and in the quality of health care service delivery. We would 
consider the views of those entities at a hearing before the Labor and 
Human Resources Committee, the committee of jurisdiction over this 
legislation.
  I do not think another study is important so much as gaining 
understanding through a hearing about what facts are known and what 
points of view would be expressed from different aspects of the health 
care service delivery industry, and then acting expeditiously.
  So I assume the bill of the Senator from Oregon would be the vehicle 
in the next Congress. Hopefully, the bill would be introduced right at 
the beginning of the Congress, so that there would be time to look at 
it. I think that the interest in this issue is indicative of the fact 
there is going to be a great deal of interest in legislation regarding 
this subject.
  So I am not calling for a study. My amendment says we should act 
expeditiously, but we should review all of the pertinent information 
that is available.
  Mr. WYDEN. Mr. President and colleagues, I hope that it is understood 
that while I think that the Chair of the committee means well and is 
sincere in this effort, I think that the sense of the Senate that she 
offers today is very risky business.
  This is September of 1996. The Senator from Kansas essentially is 
saying September, October, November, December, January, February, as 
the next Senate gets into business, that sometime 6 to 8 months from 
now we can talk again about the rights of patients in the fastest 
growing sector of American health care. I think this is risky business.
  It is one thing to study an issue when it is abstract, when it may 
not have direct and immediate consequences, but what the Senator from 
Kansas is saying is that when you have patients being hurt today, being 
subjected to risk today when they do not have access to all the 
information about the physical and mental health services that may be 
available to them when they need that information to make decisions 
about their treatment, the Senator from Kansas is saying they cannot 
have it. I know that the Senator from Kansas does not intend it that 
way--putting patients at risk.
  It means that today in Oregon and in Kansas and all across the 
country where there are gag rules that keep patients from knowing of 
their rights, they will not be able to have that information. It is not 
available to them. The U.S. Senate is saying, instead of voting for 
legislation or allowing me to get 60 votes on my amendment, what we 
will do is not give those patients the rights they need, not make sure 
that they can know of all the physical and mental health services that 
they deserve, and instead tell them that sometime next year, sometime 
in the future, we will go on.
  I think it is a mistake. It puts patients at risk. This Member of the 
U.S. Senate is not willing to play that kind of Russian roulette with 
the well-being of patients in the fastest growing sector of American 
health care.

  I am happy to yield to the Senator.
  The PRESIDING OFFICER (Mr. Kempthorne). The Senator from Kansas.
  Mrs. KASSEBAUM. Mr. President, I suggest that we have been in the 
104th Congress for 2 years. This legislation was introduced in the 
House some time ago. It would have been useful to us here in the U.S. 
Senate if this legislation had been before us prior to July 31. We 
would then have had time to hold committee hearings, which I think 
would have enabled us to make some corrections or additions or changes 
and to understand better the consequences of all the steps toward the 
goals we do support. I think it is not fair to say all of a sudden 
that, because a bill introduced right before the August recess has not 
yet been considered, that means it is something we do not care about. 
There was time in which the process could have moved forward, had the 
bill been introduced earlier.
  Mr. WYDEN. Mr. President and colleagues, there is no question in my 
mind about the sincerity and good will of the Senator from Kansas. She, 
along with Senator Kennedy, have done, I think, an especially valuable 
service this session with the insurance involving portability. For the 
first time in America, because of the work of the Senator from Kansas, 
we are going to make sure that workers are not going to be locked into 
their jobs. They are going to have a chance to enjoy the American dream 
because of their hard work. No one questions the sincerity and the 
desire of the Senator from Kansas to tackle these very real and very 
human kinds of problems that affect so many of our families.
  I feel very strongly--and looking at the sense of the Senate, it 
calls for consulting public and private entities with expertise and 
quality health care service delivery. The fact is that the House, in 
hearings that were public, shown on C-SPAN and the like, did exactly 
that. They had extensive discussions with the very people that this 
sense-of-the-Senate resolution suggests we talk with.
  It would be one thing if there had been no discussions with these 
distinguished people in the private sector. Those discussions have 
taken place. They have been held. That is why Dr. Ganske, a Republican, 
and Congressman Markey, a Democrat, came together and got a unanimous 
vote to go forward and protect the rights of health care patients in 
the fastest growing part of American health care.
  We have done, it seems to me, the essence of this sense-of-the-Senate 
resolution, No. 1.
  No. 2, I think it puts patients at risk because it allows gag rules 
to go forward unimpeded in the months after this Congress adjourns.
  I hope my colleagues and the Senate understand just how pernicious 
these

[[Page S10269]]

gag rules are. What these gag rules are all about is that a plan may 
say to a physician, ``You are making too many referrals outside the 
network, outside the health maintenance plan.'' The plan may say, ``I 
do not want to have a referral to an ophthalmologist or a cardiologist 
or another specialist.'' These are very anticonsumer provisions that 
are becoming a part of American health care. They have been documented. 
They are a matter of public record. I just think it is very risky 
business to say that instead of protecting the rights of the patients, 
instead of protecting the rights of the consumer, what we will do is 
study it a bit and talk to some of the same people that we already 
talked to, rather than protecting those rights of the patients.

  So this Senator believes that we should not have another study, 
should not have yet another analysis. If I could just briefly engage 
the chair of the committee, Senator Kassebaum, who I know is having 
some discussions on several matters. But I wanted to see if it might be 
possible to have the distinguished chair of the committee lay aside her 
sense-of-the-Senate resolution at this time, and perhaps we can have 
some more discussion toward seeing if, on a bipartisan basis, we can 
come up with some piece of legislation that has some teeth in it before 
we conclude with this bill, and that we recognize that a majority of 
Senators voted to put some real teeth into this issue. It wasn't 60; it 
was 51. But a majority of Senators said that they didn't think these 
gag clauses were in the interest of American patients. They said this 
was anticonsumer. I would like to see--like we have done with FDA and 
other matters--whether the distinguished chair of the committee and I 
could work a bit further on this between now and the end of the day and 
perhaps come back to the Senate with a bipartisan proposal that really 
would provide a measure of relief to patients at this time.
  Now, to do that, the Senator from Kansas would have to lay aside her 
sense-of-the-Senate proposal. I just ask if she would be willing to do 
that at this point, and during the interim, I ask that she and I and 
Senator Kennedy and our respective staffs, on a bipartisan basis, see 
if we can come up with a bipartisan proposal that would really have 
teeth in it and protect the rights of the patients.
  I yield to the Senator from Kansas.
  Mrs. KASSEBAUM. Mr. President, I have no objection to setting aside 
the underlying committee amendment, if that is the wish of the Senator. 
I thought, actually, we could voice vote the sense of the Senate. There 
are many other amendments that will require lengthy debate. If we want 
to set aside the entire amendment, that is fine. I am happy to do so, 
so the debate can proceed on other amendments.
  Mr. WYDEN. If I might say further, I was asking the chair of the 
committee to lay aside, for the moment, her sense-of-the-Senate 
resolution so that, hopefully, the next time this comes up in the 
Senate--hopefully, later today--we would have a bipartisan proposal 
that would have some real teeth in it that would protect the rights of 
patients. Is that acceptable to the chair of the committee?
  Mrs. KASSEBAUM. Mr. President, no. As I stated, I am happy to lay 
aside the underlying amendment. Otherwise, my sense of the Senate is 
open to being amended. I feel that would not be a good position in 
which to be placed at this point. I am happy to do so and proceed with 
other amendments to the bill and see what we can work out. That is the 
position I take.
  Mr. WYDEN. Reluctantly, I will have to oppose the sense-of-the-Senate 
resolution. I want to take a few more minutes to tell the Senate why I 
am going to oppose the sense-of-the-Senate resolution.
  You pass the sense-of-the-Senate resolution and you are playing 
Russian roulette with consumers in our health care system. We have 
patients and consumers who are being denied the information they need 
with respect to medical services for their physical and mental problems 
and the treatment options that are available to them. You pass this 
sense-of-the-Senate resolution and what you say to those patients, in 
the fastest growing sector of American health care, is, ``We are not on 
your side. We don't want you to have any rights now. We are not going 
to do anything about these pernicious, offensive gag rules that exist 
today. Instead, what we will do is go out and talk to a whole bunch of 
the same people that the U.S. Congress has already talked to.''
  I think that is unfortunate. I think it is risky business. I think 
that when you have patients who are in jeopardy--and make no mistake 
about it, that is what happens when you have these gag rules. These 
patients are in jeopardy. They are not being told what they need to 
know as it relates to essential health services and the information 
they need.
  I will tell you, I am just absolutely baffled at how the U.S. Senate 
can say, at a time when patients hunger for information about health 
care services, at a time when they want to get it on the Internet, at a 
time when they can go to special programs offered by health care 
providers, just to know about new treatments and options, I can't 
understand how the U.S. Senate would then say that we are going to 
stiff those patients, we are not going to give them the information 
they need, we are not going to tell them what they need to know to make 
the essential decisions about the treatment and the services that they 
think are best for them.
  So I think that this sense-of-the-Senate resolution puts patients at 
risk. It means that we are not going to get any help for patients who 
need it now, who can't wait 6, 8, 10 months, or whenever it might be 
until the Senate might take this up again. It is not completely clear 
to me what the timetable of this might possibly be. But I think that 
this sense-of-the-Senate resolution puts patients at risk. I think it 
jeopardizes the well-being of vulnerable people. I think it is the 
antithesis of sensible health care policy, which ought to be built on 
the patient's right to know--the right to know everything, not just 
those things that might be in a planned financial interest. I just 
can't believe that this Senate wants to wrap up the discussion of this 
topic by telling patients that we are going to be on the side of the 
gag rules, we are going to be on the side of those who want to keep you 
from having information. But that is what this sense-of-the-Senate 
resolution does.
  Unfortunately, it says we won't protect patients now. We are not 
going to stand up for them when they face these gag rules that limit 
their right to know. I want it understood that this Senator is going to 
oppose this sense-of-the-Senate resolution, because it puts patients at 
risk. It sends the message--and perhaps some may desire to do this--
that the U.S. Senate is doing something to help patients when, in fact, 
it is not. The earlier amendment, the amendment that banned these gag 
clauses, helped patients. It helped them now, because it made sure that 
they could have access to all the information they need to make 
informed and thoughtful choices.
  I can tell my colleagues that I come from a part of the country that 
has managed care, that has had managed care perhaps longer than any 
other. We pioneered it. We have good managed care. We still have some 
of these abuses. But I can assure you that your communities and your 
States have a whole lot more of these problems than we do.
  I think it is going to be very, very hard to go home and explain to 
patients, explain to doctors--because doctors have endorsed this effort 
to eliminate the gag rules--how it is in the public interest. I cannot 
possibly believe that you can stand up at a community meeting of 
physicians, patients, or citizens and say we are not going to give you 
the information you need about medical services and medical 
treatments. But instead of giving you the information that you need we 
are going to have a gag rule, and you can't find out about your rights.

  Mrs. BOXER. Will the Senator yield to me for a question?
  Mr. WYDEN. I will, and I want to yield to Senator Kerrey who has been 
helping me for the better part of 24 hours.
  Mrs. BOXER. I will be very brief. I wonder if the Senator knows that 
before he happily came to this body we made an incredible contribution 
to the whole country when we passed a Sense of the Senate on this 
subject. That happened to be a Boxer amendment that was endorsed by 
Senator Kennedy

[[Page S10270]]

which put the Senate on record as saying that patients have a right to 
know the treatment options that are available to them. It was very 
straight forward. Unfortunately, what happened as a result of some of 
the games that are played around here is that Sense of the Senate was 
dropped from the conference after everybody voted for it.
  I think the time has come to do what the Senator from Oregon has 
suggested, and I think the fact that the Senator from Oregon got 51 
votes shows that the Senate is ready to move forward on his amendment 
and not study this to death. Because frankly, if you study this to 
death people are going to die. We heard stories in California where 
people did not know their treatment options, and tragedies flowed from 
that.
  I want to underscore what the Senator is saying. I say to my friend 
from Oregon that I am glad that he is being tough on this. I think 
there are a lot of people around here that want to vote for meaningless 
things so they can go home and say, ``Yes, I didn't vote for the Wyden 
amendment but I voted for the sense of the Senate.'' And I think what 
the Senator is doing by being, I would say, very strong although very 
respectful and very aware of the way he has presented. He is saying 
that the time for these meaningless studies has come and gone, and we 
need to get to the business of saving lives.
  I wanted to thank the Senator. I again repeat my question: Was the 
Senator aware that we did go on record several months ago on this 
issue?
  Mr. WYDEN. I very much appreciate the Senator from California making 
me aware of this. I was not. It just seems to me, as the Senator has 
indicated, that it is time to act. Before I came to the Congress and 
served in the House where we served together, I was head of a senior 
citizens group, a great panel. I had not run for public office before. 
I had never been involved in public office. When we started that senior 
citizens group we said we are going to focus on the good ideas that 
help people. We do not care whether they are Democrat. We do not care 
whether they are Republican. We are just going to focus on the ideas 
that help people. I think that is what Dr. Ganske did when he took this 
up in the House, a Republican physician, who said that what we need to 
do is help people. We certainly are not helping people by having these 
gag rules that keep people from knowing about their rights much.
  So the House, as we have discussed, and in the committee on a 
unanimous basis, said we are going to stand up for the patients, we are 
going to stand up for the providers, the vast majority of doctors who 
are honest and ethical, and want to tell their patients about their 
rights. And it made great bipartisan progress.
  That is what I want to do here. I know the Senator from Nebraska has 
been trying to help me for the better part of 24 hours. I want to yield 
to him.
  Mr. KERREY. Mr. President, I wanted to ask the Senator from Oregon if 
he would be willing to allow the underlying amendment to be set aside 
so we can proceed to the next item of business under the unanimous 
consent agreement and come back to the amendment. We have an hour 
agreement for the next amendment, and we can come back to it.
  Mr. WYDEN. The Senator from Nebraska has been very helpful. I 
appreciate it. That is acceptable to me.
  Mr. SHELBY. Parliamentary inquiry. We set aside the committee 
amendment, and then the Kassebaum amendment which is the second degree, 
then we go under the UC to the pending committee amendment, as I 
understand it. Is it the committee amendment, and then the Kassebaum 
amendment in the second degree. Is that correct?

  The PRESIDING OFFICER. That is correct.
  Mr. SHELBY. If we set aside the committee amendment and the Kassebaum 
second degree, at the end of the hour of debate, which we have already 
gotten a UC on, we would automatically come back to the committee 
amendment and the Kassebaum amendment. Is that correct?
  The PRESIDING OFFICER. That is correct. Once the next committee 
amendment is disposed of, then we would return to the underlying 
committee amendment which also has the Kassebaum amendment on it.
  Mr. SHELBY. I ask unanimous consent to set aside the committee 
amendment and the second-degree amendment to it, the Kassebaum 
amendment, so we can go forward.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.


Excepted Committee Amendment Beginning on Page 80, Line 20 Through Page 
                               81, Line 4

  The PRESIDING OFFICER. The clerk will report the next committee 
amendment.
  The bill clerk read as follows:

       Beginning on page 80, strike line 20 through page 81, line 
     4.

  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California.
  Who yields time?
  Mrs. BOXER. I wonder if we could hear what the unanimous consent 
exactly was.
  The PRESIDING OFFICER. The unanimous-consent agreement would be to 
set aside the underlying committee amendment, which is the second 
committee amendment which also contains the Kassebaum second-degree 
amendment. We would then go to the third committee amendment. With that 
amendment, 30 minutes are under the control of the Senator from 
California, and 30 minutes under the control of the Senator from 
Oklahoma at which time the motion to table would be in order.
  Mrs. BOXER. Mr. President, I think it would be appropriate for the 
opposing side, the side that wishes to strike the committee language, 
to go first. Clearly the Senator from California and the Senator from 
Nebraska are very pleased with the action of the committee and support 
the committee. I think it is most appropriate for those wishing to 
strike the committee language to proceed at this time. Then we can 
respond.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. DeWINE. Mr. President, I yield myself such time as I need.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeWINE. Mr. President, let me first say that this very same issue 
was debated by this body last year in our consideration of the 
Treasury-Postal Service appropriations bill.
  Mr. President, at that time this body voted 50 to 44 to accept the 
very language that the amendment before us asked us to strike. So this 
Senate has already voted in this same context to restrict Federal funds 
for abortion, specifically to restrict the use of Federal funds for 
abortion coverage of the Federal health care plans to cases of rape, 
incest, or the life of the mother.
  Mr. President, I wanted that noted out front so that we all realize 
that we are not covering any new ground. This is something that should 
not take, frankly, very much of the Senate's time.
  Mr. President, the issue of abortion is an important matter of 
conscience to millions of Americans. We tried to promote our views in 
the democratic arena. We seek to embody these views in our Nation's 
laws. As someone who is pro-life I worked, obviously, to promote the 
value of and protect the innocent human life. But, Mr. President, the 
discussion of this amendment is much more narrow. The discussion of 
this amendment does not need to reach that moral level of debate. The 
key question in regard to this amendment that we have to answer simply 
is this: Should taxpayers pay for these abortions?
  Again, I emphasize the Senate spoke last year by a vote of 50 to 44 
and said no.
  I believe that we should not ask the taxpayers to promote a policy of 
abortion on demand. This amendment that I am going to move to table 
after we conclude our debate would strike the House language on this 
subject and would change current law. Our position, my position is to 
retain current law, to retain what the Senate did last year by a vote 
of 50 to 44, and to retain the current House language. I believe we 
should retain this language that permits Federal employee health plans 
to cover abortion only in the cases of rape, incest, and threats to the 
life of the mother. In essence, this is a Hyde amendment-type debate.
  The vast majority of Americans, 69 percent, in a 1992 ABC-Washington 
Post poll said they opposed taxpayer

[[Page S10271]]

funding for abortions for low-income individuals.
  If that many people oppose subsidizing abortions for poor people, I 
think there would be even more opposition to subsidizing abortions for 
higher income Government workers. The reality is that in every single 
poll I have ever seen done, the vast majority of Americans, whatever 
their position on the issue of abortion, say no taxpayers funding.
  We should make no mistake about it. This is a taxpayers subsidy. In 
1995, the Federal Government paid an average of 74 percent of the cost 
of a Federal employee's health premium. That is taxpayer money. I 
suggest it is wrong. I think we should leave the taxpayers out of the 
whole debate and out of the whole issue. Therefore, I believe we should 
support the House language, that we should support current law, and 
that would mean tabling this amendment.
  In summary, then, this matter has been debated time and time again on 
this floor. The issue is a narrow one, a very narrow one, and it is 
simply this: Should taxpayers' dollars, all taxpayers in this country, 
be taken by the Federal Government and used to subsidize and fund 
abortions? Current law says no. Current law limits abortion 
availability in Federal employee health care plans to cases of rape, 
incest, and to save the life of the mother. That is current law. That 
is what the Senate voted for last year. That is the House position, as 
well.
  I might add that when we went through this debate last year, 
ultimately the House acquiesced in the Senate's three exceptions. These 
were our exceptions from the Senate. They acquiesced, and that is where 
we are today. My motion to table would simply restore current law.
  At this point, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. I yield myself 7 minutes.
  The issue as presented by my friend and colleague from Ohio is quite 
different, in my view, from the way he put it forward to the American 
people. To me, the question is clear: Should women Federal employees or 
their dependents be treated the same as other women in the work force 
or should they be singled out, punished, have their rights taken away 
from them and be treated differently?
  We get into a lot of debate in the Senate on very important issues. 
None could be more important than this, regardless of the way you view 
the issue on abortion. And we know in the Republican platform, the 
platform committee adopted a platform which would criminalize abortion, 
urging adoption of a constitutional amendment which would deny women 
the right to choose even in matters of rape or incest, and we know that 
many here who speak out on this issue and that is really their whole 
desire.
  The fact is, abortion is legal in this great land.
  My friend and colleague says we are trying to stop abortion on 
demand. There is no such thing as abortion on demand in this country. 
There is a Supreme Court case called Roe versus Wade. Yes, a woman has 
the right to make this personal, private decision without a U.S. 
Senator telling her what to do in the first 3 months of her pregnancy. 
She has the right to make that decision with her doctor and her God 
without the Senator from Ohio or another State who holds an opposite 
view essentially saying, no, we do not think that is right.

  She can make that choice under Roe versus Wade. After that, the State 
has an interest, and rules apply to that abortion. So there is no such 
thing as abortion on demand.
  The bottom line is, this is a tough, personal, private matter, and I 
really think it is about time we trusted women to make that choice. Why 
should we say that a woman who happens to work for the Federal 
Government or her dependents should not have this right?
  My friend says we disposed of this matter on a vote before. Yes, we 
did. As a matter of fact, in 1993, in this Senate, before my friend got 
here, we restored the rights of women in the Federal Government to be 
treated equally. I really do not think women are asking for much here 
other than to have equal treatment, to be respected for the choices 
that they make, and, unfortunately, what this amendment will do by 
disagreeing with the committee of the Senate is to tell a woman who 
happens to work for her Government, she cannot use her own insurance to 
exercise a perfectly legal right.
  My friends in the Senate, I have to say, if there was an amendment to 
stop a man who happens to work in the Federal Government from getting a 
perfectly legal medical procedure, one that might protect his health, 
there would be an uproar around here. They would say, how could you do 
that to the men of this country? Why not treat the men who work for the 
Federal Government the same way we treat men who work in the private 
sector?
  The answer, in this particular case, with this particular amendment, 
is you cannot win your point with the American people. You do not have 
the votes in this country to put Government in the middle of this 
personal, private decision. And so what do you do? Every chance you 
get, I say to my colleagues on the other side of this issue, you chip 
away and you chip away and you chip away at the right of women to 
choose.
  If you are a woman today, what this Congress has done in its 
extremism, I say, is to tell a woman who is willing to die for her 
country by serving in the military that she cannot go to a hospital, a 
military hospital, and have a safe and legal abortion which could 
potentially save her life--that right has been taken away. This 
Congress has been chipping away at a woman's right to choose.
  I am so proud of this committee which took a stand against the 
extremism of the House of Representatives and restored the rights of 
women who are Federal employees to use their own insurance for which 
they pay a percentage, to exercise a perfectly legal right.
  Mr. President, I should like to reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. DeWINE. I yield myself 1 minute.
  Let me just briefly respond. This is not an issue of equal treatment. 
This is not an issue of that at all. It does not tell anyone what to 
do. I think we need to keep our eye on the ball and discuss not the 
whole issue of abortion here today. I think it is important we discuss 
what is in front of us. What is in front of us is a very narrow issue, 
and that simply is, are we going to use Federal tax dollars to 
subsidize, pay for abortions?
  The vast majority of the American people say, no, we see absolutely 
no reason to do this. On an issue as contentious as this is and where 
there are good people on both sides of the battle, why in the world we 
would say, this Congress would say we are going to take Federal tax 
dollars to subsidize abortions makes absolutely no sense.
  Let me at this point yield to my colleague from Indiana 10 minutes.
  Mr. COATS. Less than that, 5 minutes.
  Mr. DeWINE. I yield 5 minutes.
  The PRESIDING OFFICER. The Senator from Indiana is recognized for up 
to 5 minutes.
  Mr. COATS. Mr. President, the Senator from Ohio essentially made the 
points I was going to make in response to the Senator from California, 
who I think has mischaracterized the issue before us. The issue before 
us has nothing to do with a woman's right to have an abortion. It has 
nothing to do with an amendment that, in her words, denies the choice 
of women, takes away a woman's right to choose. It is not an amendment 
to stop anyone from getting a perfectly legal procedure accomplished. 
So I think it is important for our colleagues to understand what the 
amendment does and what it does not do.
  This is not a debate on whether or not a woman has a right to an 
abortion. I have suggested for a number of years, ever since I have 
been in the Senate, that we ought to have that debate. We have had that 
debate on occasion. But this is not the debate we are having today. The 
debate we are having today is on the amendment offered by the Senator 
from Ohio, which simply restores to the Senate bill the language that 
was incorporated in the

[[Page S10272]]

House, that says, except in the cases where the life of the mother is 
in jeopardy or in cases of rape or incest, the taxpayer will not be 
asked to fund abortions chosen by a woman under the Federal Employees 
Health Benefits plan.
  There are a number of perfectly legal procedures, medical procedures, 
that are not covered by the health insurance plan. Not every health 
insurance plan covers every procedure. I do not know what percent of 
private insurance policies cover the cost of abortion, but that is not 
an issue either. The question is whether or not the Federal Employees 
Health Benefits plan, which every Federal employee participates in, 
will cover abortion. There are, as I said, a number of procedures that 
are not covered. That is a matter of determination by the organization 
that provides the insurance. We have the ability to select from a 
number of different insurance plans. But the issue is whether or not 
the taxpayer will be asked to pay for it.
  This is not just another medical procedure. This is a procedure that 
is extraordinarily controversial, where American opinion is divided, 
where taxpayers, for religious reasons, moral conscience reasons, and 
other reasons feel they should not have to use their tax dollars to pay 
for something they believe fundamentally violates their religious 
beliefs, their moral convictions.
  This is a debate we have had now for 20 years, and pretty 
consistently over the last 20 years, with a couple of exceptions, the 
Congress, whether it has been a Democrat-controlled Congress or a 
Republican-controlled Congress, has pretty consistently supported the 
proposition that taxpayers should not be coerced into paying for a 
procedure which many of them feel violates some of their most deeply 
held beliefs. That has been, as I said, supported by both Democrats and 
Republicans. Democrats controlled the House throughout the decade of 
the 1980's and the early 1990's, and the Hyde amendment, which is 
essentially what the Senator from Ohio was offering, was supported by 
both parties. It has been supported here in the U.S. Senate. It says 
that, except in those instances of rape, incest, and protecting the 
life of the mother, we will not ask the taxpayer to pay for it.
  Since the Federal Government subsidizes our insurance costs--up to 
about 74 percent, I think is the latest figure--clearly, the cost of an 
abortion would be subsidized and paid for, at least three-fourths of it 
would be subsidized and paid for, by the Federal taxpayer. That is why 
the amendment is being offered.
  So I think it is important we focus on the amendment that is here. We 
can reserve time--I am sure both sides would be willing to accommodate 
it at some point--to discuss the larger issue of abortion: the meaning 
of life, when life begins, what restrictions if any should be placed on 
abortions, the whole idea of Roe versus Wade, the Supreme Court 
decision. Those are all issues that are legitimate issues but have 
nothing to do with this amendment.
  So let us make sure that we focus on what the amendment seeks to do 
and what the amendment does not seek to do. I have more I can say in 
this regard, but I think in the interests of time here, since my 5 
minutes is up, I will cease at this point and then we will talk about 
it, but let us keep the discussion focused on what the amendment is all 
about.

  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. I will take 1 minute and then I will yield 5 minutes to 
one of the leaders on this issue, Senator Mikulski. Let me just respond 
briefly.
  To hear Senators say this has nothing to do with a woman's right to 
choose, makes me think sometime that we are in never-never land around 
here. Of course it has something to do with a woman's right to choose. 
You are telling more than a million women, more than 1 million women, 
who happen to work for the Federal Government or rely on the FEHBP for 
health insurance that they should be treated differently when it comes 
to their right to choose. They work hard. They ought to be trusted. So, 
it is all fine to stand here and say it is being mischaracterized, it 
has nothing to do with the right to choose, but if you are a Federal 
employee and, let us say, you earn $20,000 a year and you pay for a 
percentage of your health insurance and you cannot get an abortion with 
that health insurance, even if your doctor says you might be paralyzed 
for life--because there is no exception for that--I assure you we are 
talking reality. We are not talking something that does not really 
exist. This is a real threat to a woman's right to choose if she is a 
Federal employee.
  Mr. COATS. Will the Senator yield on that point for a question?
  Mrs. BOXER. I cannot yield on my time, but if you use your time I 
will be glad to, because I do not have enough time.
  Mr. DeWINE. I yield my colleague 1 minute.
  Mr. COATS. I understand. We will use our time. I would like to ask a 
question.
  The Senator from California said we are denying women who work for 
the Federal Government the same rights that all other women have.
  Are you saying that every insurance policy in America has coverage 
for abortion and therefore every other woman in America has the right 
to have an abortion paid for under her insurance policy? Or, are there 
different policies, some that offer it, some that do not offer it?
  Mrs. BOXER. The vast majority of plans do offer abortion, and in the 
private sector most women have the opportunity to find a plan that 
would, in fact, cover that if they so chose. Whereas in this particular 
amendment we are saying no one, no one who works for the Federal 
Government, through the Federal Employees Health Benefits plan, can get 
such a policy. We are restricting the freedom of the women who work for 
the Federal Government.
  Mr. COATS. We checked with Planned Parenthood and asked them that 
question. They disagreed with what you just said. They said there is no 
way, they do not have specific information about the availability of 
abortion coverage, how many insurance policies cover it, how many do 
not.
  The point is, it is not an accurate statement to say we are denying 
women who work for the Federal Government the opportunity that all 
women have. That is not an accurate statement.
  Mrs. BOXER. Maybe my friend would appreciate we know that 78 million 
women----
  The PRESIDING OFFICER. The Senator's time has expired.
  Mrs. BOXER. On my time, if I might respond, we know for sure that 78 
million women in the private sector do affirmatively have this choice. 
So we have 78 million women that we know of who have this choice but 
the 1.2 million women who work for the Federal Government or are 
dependents of Federal employees do not have the choice and cannot have 
the choice if the Senators on that side of the aisle prevail.
  Mr. President, I yield 5 minutes to our leader on this committee, 
along with Senator Kerrey, Senator Mikulski.
  The PRESIDING OFFICER. The Senator from Maryland is recognized for 5 
minutes.
  Ms. MIKULSKI. Mr. President, I rise in very strong support of the 
committee amendment and in opposition to the Nickles amendment.
  As a member of the Senate Appropriations Committee and a member of 
the Subcommittee on Treasury and Postal Services, we made very clear in 
the committee the dominant view in the committee is that we wanted the 
women of the United States of America to be able to have abortions 
where medically appropriate in their health insurance legislation. This 
bill was reported by the Senate Appropriations Committee, and it would 
enable Federal employees whose health insurance is provided under the 
Federal Employees Health Benefits plan to receive coverage for abortion 
services, subject to all the traditional laws of the land.
  The Nickles amendment would reinstate the language from the House 
bill which prohibits coverage for abortion except in the case of life 
endangerment, rape, or incest. It would continue a ban which has 
prevented Federal employees from receiving the health care service 
which is widely, if not totally, available for private sector 
employees.
  We think limiting it to life of the mother, rape, or incest is 
medically

[[Page S10273]]

dangerous. We believe the decision should be made by the mother, with 
the consulting physician, using whatever is her religious conviction to 
be able to proceed with something that is deemed by the physician as 
medically appropriate. We leave that decision to be made not on the 
floor of the Congress but in a doctor's office.
  The 104th Congress has been a tough one to support a woman's right to 
choose in that most private of matters not to have a child. Bill after 
bill after bill after bill, we have faced votes on women's reproductive 
rights.
  In the 104th Congress, between the House and the Senate, this 
Congress has voted 51 times on this issue. The 104th Congress has been 
unprecedented in its assault also on Federal employees--their pay, 
their benefits and their livelihoods. What we have with this amendment 
is a vote on abortion and also on the basic benefit package for Federal 
employees.
  I represent over 280,000 Federal employees in the State of Maryland, 
the Social Security Administration that makes sure the checks go out on 
time, the National Institutes of Health that right now are doing 
research to ensure the saving of lives.
  We want the very people who are able to do research on fertility and 
reproduction to be able to have access to what is medically necessary 
in terms of the relationship of abortion.
  Federal employees have faced assault after assault in these last 2 
years. They face tremendous employment insecurity, downsizing, and so 
on. I view this amendment as yet another assault on these public 
servants. It goes directly after the benefits of Federal employees.
  Health insurance is part of the compensation package to which they 
are entitled. The cost of insurance coverage is shared by the Federal 
Government and by the employee. I know that the proponents of 
continuing the ban on abortion coverage for Federal employees say they 
are only trying to prevent taxpayer funding of abortion, but that is 
not what this debate is about. This is about prohibiting the 
compensation package of Federal employees from being used for a legal 
and sometimes vital medical service. Health insurance is part of the 
Federal employee's pay. The decisions related to health care should be 
made between the patient and the physician.
  If we were to extend the logic of those who favor the ban, we might 
next prohibit Federal employees from using their own paychecks to pay 
for an abortion. No one is seriously suggesting that Federal employees 
ought not to have the right to do what they want with their own money. 
We should not be also placing unfair restrictions on the type of health 
insurance that Federal employees can purchase under their own Federal 
Employees Health Benefits plan.
  Over 1.2 million women of reproductive age depend on the FEHB for 
their medical care. We know that access to reproductive health services 
is essential to women's health. We know that restrictions that make it 
more difficult for women to obtain early abortions where medically 
appropriate increase the likelihood that women will put their health at 
risk by being forced to continue a high-risk pregnancy. If we continue 
to ban the abortion services and leave only these very narrow 
exemptions, these 1.2 million women of reproductive health age who 
depend on FEHB will not have access to abortion even when their health 
is seriously threatened. We are going to be replacing the informed 
judgment of medical practitioners with that of politicians.
  Let me conclude by reiterating that decisions on abortion should be 
made by the woman in close consultation with her physician. Only a 
woman and her physician can weigh her unique circumstances and make the 
decision as to what is medically necessary and medically appropriate. 
It is wrong for Congress to try to issue a blanket prohibition.

  I will vote ``no'' on Nickles and up on the committee amendment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. DeWINE. Mr. President, I yield myself such time as I may consume.
  Very briefly, let me say, again, this is not a debate about abortion. 
This is not a debate to determine what a person can do or cannot do. 
That is not what is at issue here. What is at issue here is what will 
be covered. What is at issue is whether or not Federal tax dollars 
taken from all Americans, many of whom find this procedure to be 
abhorrent, whether or not we will involuntarily take their money to pay 
for abortions.
  Congress has voted time and time again not to do that. The vast 
majority of the American people in every public opinion poll anyone has 
seen indicate they do not want that done. It is a very, very narrow 
issue.
  Let me read the current law. Our position is the current law simply 
should be sustained:

       No funds appropriated by this act shall be available to pay 
     for an abortion or administrative expenses in connection with 
     any health plan under the Federal Employees Health Benefits 
     program which provides any benefits or coverage for 
     abortions. The provision of this section shall not apply 
     where the life of the mother will be in danger if the fetus 
     were carried to term, or the pregnancy is the result of an 
     act of rape or incest.

  Mr. President, let me yield to my colleague from Oklahoma.
  Mrs. BOXER. Will the Senator yield for a question? I will be happy to 
do it on my time.
  Mr. DeWINE. On your time, fine.
  Mrs. BOXER. My colleague keeps reiterating, as do my other colleagues 
on the other side, that this is about Federal funds and people oppose 
spending Federal funds.
  Would my friend support an amendment that said that women Federal 
employees who do, in fact, exercise their right to choose and use their 
insurance could be reimbursed for the portion of the premium which they 
paid themselves which, in this case, is about 28 percent? Would my 
colleague work with me on such an approach so at least they can get 
reimbursed for the portion of their share of the premium?
  Mr. DeWINE. I am not sure how that will function, how that will work 
or how to mechanically get that done. The bottom line is, in fact, you 
can buy riders, you can, in fact, buy separate policies.
  All we are saying is, when the latest study shows 74 percent of the 
premiums are paid by other taxpayers, it is a legitimate issue.
  Mrs. BOXER. I say thank you to my friend and take back my time. I 
think this points out for all the American people to see that this is 
not about Federal funds, because I just made a very reasonable proposal 
that since women pay approximately 28 percent of their premiums out of 
their own pocket, why not allow them to get this coverage and reimburse 
them for 28 percent of the cost of the procedure? My friend says he 
doesn't know how it would work. We figure out a lot tougher things 
around here.
  Mr. President, I yield 5 minutes to my friend----
  The PRESIDING OFFICER. The Senator from Ohio had not relinquished the 
floor. He responded to a question from the Senator from California.
  Mrs. BOXER. I am sorry. I reserve the remainder of my time.
  Mr. DeWINE. I yield to my colleague from Indiana.
  Mr. COATS. Mr. President, I would like to address the question just 
asked by the Senator from California.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.
  Mr. COATS. I say to the Senator from California, who asked would we 
be willing to accept an amendment which would allow reimbursement for 
an abortion for that portion of the premium which is paid for by the 
Federal employee, again, I think the Senator misses the point here.
  From one standpoint, she is saying these women have no other place to 
go, they can't get an abortion. One-fourth the premium is $62, if it is 
a $250 abortion. I have been told that is the going rate for an 
abortion. So are you telling me that an employee of the Federal 
Government who has a job, a full-time job, who is working for the 
Federal Government is unable to come up with $62 in order to pay for an 
abortion?
  Mrs. BOXER. May I respond on my friend's time? I will be brief.
  Mr. COATS. I would like you to respond on my time, but you did not 
let me respond on your time.
  Mrs. BOXER. I will tell you what I will do for my friend, I will 
respond on my time.

[[Page S10274]]

  Mr. COATS. That is what you asked me to do. That is appropriate.
  Mrs. BOXER. The Senator is right. I should respond to him on my own 
time. He is perfectly correct.
  I say to my friend from Indiana, he says I miss the point. I say, 
those on the other side of the aisle, who are trying to deny Federal 
employees their equal rights, miss the point. If your argument is that 
taxpayers do not want their funds used, I am giving you a way out of 
this, in fairness. If my friend thinks $62 is not a lot of money, let 
me point out to him a fact. Twenty-five percent of the Federal 
employees earn less than $25,000, and 18,000 Federal employees are at 
or below the Federal poverty level.
  I say to my friend, $62 is a lot of money for those people. But let 
us face the fact, you do not even want to go that far and allow them to 
get that reimbursement. My question, I think, really smoked out the 
true attitude on the other side of the aisle. This is not about Federal 
taxpayers' dollars; this is about chipping away at a woman's right to 
choose. It is very clear. You know, at the convention in San Diego, we 
saw what the goal is. This is chipping away wherever you can.
  I yield 5 minutes to my friend from Illinois.
  The PRESIDING OFFICER. The Senator from Illinois is recognized for 5 
minutes.
  Ms. MOSELEY-BRAUN. Thank you very much, Mr. President. I thank the 
Senator from California.
  In spite of the fact that the majority of the American people embrace 
the freedom of reproductive choice, the efforts to use Government 
intervention as a bar to the right to choose continues. Every year that 
I have been in the Congress, and 9 years before that, we have had to 
consider whether or not female Federal employees should be able to 
choose a health plan that includes abortion as part of its reproductive 
health services.
  We have not been considering whether or not these women have the 
right to abortion. The Supreme Court affirmed they do over 20 years 
ago. This issue, the one we are considering, is whether or not we 
should prevent their insurance from covering the procedure.
  In reality, we are considering whether or not we should put barriers 
in the way of our own employees exercising their constitutionally 
protected rights. I do not--and this is a matter of public record--I do 
not personally favor abortion. My own religious beliefs hold life dear, 
and I would prefer that every potential child have a chance to be born.
  I do, however, believe fundamentally in the right of every woman to 
make her own private decision concerning her pregnancy. I cannot fathom 
telling my employees, or any employee in the Federal Government, that 
they cannot fully exercise their constitutionally protected right to 
choose because Congress was playing politics with their health 
insurance plans.
  We are debating whether or not Congress will, for yet another year, 
deny Federal employees a benefit available to most women who work in 
the private sector. It is common practice in the health insurance 
industry for private health care plans to cover complete reproductive 
services, including pregnancy, childbirth, and abortion. This is 
because most women want the right to choose. It is also because it is 
better medicine, as Senator Mikulski pointed out in her statement.
  In addition, this motion would restrict access to earned benefits. I 
think this is a very important point. Federal employees pay a portion 
of the cost of their health care benefits. A Federal employee chooses a 
Federal health benefits package and then pays a monthly fee to their 
chosen health care plan. Employees are free to choose from some 342 
plans, 178 of which would not cover abortion even if they could. The 
employee chooses a plan and then pays for part of it.

  The balance of the premium is an earned benefit, which is 
compensation. It is part of their pay, their compensation. Let me 
repeat for those who may not understand this point. It is not a gift 
from the Federal Government to its employees. It is earned by those 
employees, including women employees.
  Approximately 9 million Federal employees, their dependents, and 
Federal retirees depend on Federal benefits for their health insurance. 
This includes 1.2 million women of reproductive age who rely on the 
Federal Employee Health Benefits program. The restrictions that this 
amendment would renew would prevent 1.2 million women from receiving 
the full reproductive health services that their doctors might want to 
provide for them.
  Since 1983, Mr. President, Congress has changed the rules in this 
area not once, not twice, but four times. We have literally been 
playing political ping pong with women's reproductive health. I urge my 
colleagues to just put this issue to rest and allow women full access 
to health benefits and full access to the constitutionally protected 
right to choose.
  Most women who choose to have an abortion do not use their insurance 
coverage to pay for it. Most women want to keep the matter private. But 
even if most women do not use the benefits, there is a matter of 
principle that the benefits should not be denied to them. We should 
remove the intrusion of politics from earned Federal employee benefits 
and from the private health decisions of our employees. This Congress 
should not continue to play politics with women's lives and women's 
health.
  In conclusion, Mr. President, I would say, as I mentioned in another 
debate, for those who urge smaller Government, I would point out that 
here is another instance in which those who tell us that the issue and 
the objective is smaller Government, only say so when it does not 
relate to people's personal liberty and their private lives. This is 
yet another intrusion in the private lives and private liberties of 
women, in terms of the exercise of their Federally constitutionally 
protected rights. I suggest that this amendment ought to be denied. I 
yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. DeWINE. Mr. President, I yield to my colleague from Oklahoma 5 
minutes.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized for 5 
minutes.
  Mr. NICKLES. Mr. President, first, let me compliment my colleague 
from Ohio and also my colleague from Indiana for their statements. Let 
me kind of try to put this in perspective. Senator DeWine raised a 
concern about a committee amendment. At some point he will have a 
motion to strike the committee amendment or to table the committee 
amendment.
  What is he doing? What does this mean? Well, last year the House and 
the Senate agreed to language that said we are not going to use Federal 
taxpayers' money to include abortion as a fringe benefit in health care 
plans except in cases of rape and incest and to protect the life of the 
mother.
  One of my colleagues mentioned, well, we should be consistent. That 
was the policy of the Federal Government, frankly, from 1984 to 1993, 
until Bill Clinton became President. He changed it. That lasted in 1994 
and 1995. We changed it last year. We had a vote. We actually had a 
kind of unusual session. We had a Saturday session. We had three votes 
on it and basically ended up with the policy that the Senator from Ohio 
is trying to maintain.
  What is that policy? That policy is the same thing that was in the 
House language, that being that Federal taxpayers' moneys will not be 
used to provide abortions for Federal employees unless necessary to 
protect the life of the mother or in cases of rape or incest. That was 
last year's policy. That is what the House is trying to maintain. That 
is what the Senator from Ohio and Indiana and myself are trying to 
maintain, to continue last year's policy.
  The committee had an amendment to strike the House language. That 
would open it up and that would allow Federal employees to receive 
taxpayer subsidies to pay for abortion. We did not agree with that last 
year. We did not agree with it for 10 years, 1984 through 1993. Bill 
Clinton wanted to change it. We changed that back last year. We are 
trying to maintain last year's policy. We had two or three votes on it, 
as I mentioned, in an unusual Saturday session.

  I remember my colleague from Ohio stayed here. He had a very 
important family meeting in Ohio, and he stayed here to vote on this 
because he felt that it was important. I will never forget that, 
because we literally are talking about, do we want abortion to be a

[[Page S10275]]

fringe benefit in health care plans? Some people say, well, you are 
attacking a woman's right to choose. We are saying, no, it should not 
be a standard fringe benefit.
  Abortion is not another standard health procedure. It happens to be 
taking the life of an innocent, unborn child. Do we really want the 
Federal Government to subsidize that? A lot of people think, well, 
maybe that should be a woman's right, but we should not be subsidizing 
it. If this amendment does not pass, we are going to be subsidizing it. 
Taxpayers pay for about three-fourths of it.
  So when I think of that and I think of what kind of protections we 
give to unborn endangered species, thousands of endangered species--we 
have significant protections. As a matter of fact, if you destroy their 
unborn, you can be subjected to prison, you can be subjected to $50,000 
fines--but not for unborn children. We are not even trying to elevate 
unborn children to the protected status of endangered species; but we 
are trying to say: Taxpayers, you should not have to subsidize the 
destruction of innocent, unborn human beings.
  That is what the DeWine amendment or the DeWine resolution is, to 
strike the committee language. I believe the Senator from Ohio is 
exactly right. Abortion should not be a fringe benefit. It should not 
be included as a standard option. If Federal employees want to purchase 
it, they certainly can. The cost is minimal. It is $250 or $300.
  We should not include it as a standard fringe benefit and say, look, 
if the Federal Government does it, why should not all health care plans 
in America? Not all health care plans do. A lot of health care plans do 
not. We should not have an item in our standard health care package for 
Federal employees that actually results in the destruction of an 
innocent human being.
  I compliment my colleague from Ohio. I hope our colleagues will 
support that and remember how they voted last year when we had an 
extraordinary Saturday session and we adopted the present policy. The 
present policy being, again, that for Federal employees, we will not 
include abortion as a standard fringe benefit unless it is necessary to 
save the life of the mother or in cases of rape and incest.
  I thank my colleague. I yield the floor.
  Mrs. BOXER. Mr. President, might I say that the more I listen to this 
debate the more I compliment my friends, the Senator from Nebraska, 
Senator Kerrey, and the Senator from Maryland, Senator Mikulski, who 
argued this eloquently in the committee--to treat Federal employees the 
same way, the way more than 75 million American women are treated in 
the private work force.
  We hear from the Senators from Oklahoma, Ohio and Indiana saying this 
has nothing to do with the right to choose, yet we hear a speech about 
destroying an innocent life. Let me say this is very much about the 
right to choose and the right of a woman to make a private personal 
decision with her own physician, to be able to use her insurance that 
she pays for, and yet when I offer to my friends to talk about a way to 
at least reimburse her for the portion that she pays out of her own 
pocket, he says no, there are excuses and reasons why we could not do 
that.
  This is, frankly, an attack and assault on a woman's right to choose. 
It is aimed at Federal employees. My friends would love to aim it at 
every woman in America. They cannot do it. They do not have the votes 
to do it. So they chip away.
  I yield 4 minutes to the Senator from Rhode Island, Senator Chafee.
  The PRESIDING OFFICER (Mr. Smith). The Senator from Rhode Island is 
recognized for 4 minutes.
  Mr. CHAFEE. Mr. President, I will take a few minutes to speak in 
favor of the committee amendment. What this committee amendment would 
do is allow the Federal employees health program to resume coverage for 
abortion services. Unfortunately, and I believe it was unfortunate, 
last year, Congress voted to prohibit the Federal employees health 
program from covering abortions for our female employees and our female 
dependents.
  If this committee amendment were not adopted--in other words, if it 
were rejected --we will be responsible for continuing a lower standard 
of health insurance for our female employees than they could get if 
they worked in the private sector. In the private sector you can get 
this. What this says is you cannot offer this service.
  Now, there is nothing that says these programs have to include 
coverage for abortion services. Not at all. Indeed, before that 
amendment last year was passed, out of the 345 health plans that are 
all put under the Federal Employees Health Benefits program, 345 of 
them--about half; 178--offered some form of abortion coverage. In other 
words, a woman could choose this if she wanted; if she wanted a plan 
that did not cover it, fine, she could choose that. But it seems to me 
terribly unfair for us to say, no, no, none of those programs can offer 
this benefit to women who might want to have it. Indeed, if they are in 
the private sector, they could get it.
  Now, some say this is a gift of the Federal Government to these 
women. No, it is a benefit. It is a benefit that comes with the health 
package that our Federal Government offers. It is like saying that a 
woman could not use her private funds, her earnings, her salary, her 
wages from the Federal Government to obtain an abortion. Nobody is 
suggesting that, because the Constitution says the woman has a right to 
go out and buy this procedure--it is a legal procedure, a medical 
procedure--and the right is held up by the Supreme Court.
  Mr. President, I think what is being attempted here is a very, very, 
unfair move against employees of the Federal Government.
  Last, here is a notice that came out last year after this prohibition 
was passed in the Congress.

       Dear Blue-Cross and Blue-Shield benefit plan member:
       On November 19, 1995, public law [so and so] was enacted 
     which limits the Federal Employees Health Benefit plans 
     coverage of legal abortions.

  And then it says to the whole of the plan that they no longer can 
cover that. You are out of luck. If you are in the private sector, as I 
said, you can get this, but you cannot get it any longer if you are a 
Federal employee. There are 345 plans and none of them can be permitted 
to offer it. I think it is very, very unfortunate, Mr. President.
  I hope the attempt to defeat the amendment is not successful.
  Mrs. MURRAY. Mr. President, I rise today in opposition to the motion 
by the Senator from Ohio, and in support of full access to reproductive 
health care, including abortion services, for civil servants.
  Last year, as my colleagues know, this Congress denied women who are 
civil servants from participating in health insurance plans which cover 
abortion services. This overturned previous policy, which allowed these 
women--like millions of women employed in the private sector--access to 
complete reproductive health care.
  Mr. President, major health insurers such as Blue Cross/Blue Shield 
provide this coverage for women in private sector jobs across the 
country. It is approved of by a majority of the American public. By 
denying the same options for Federal employees, we set a different 
standard for millions of women. Nine million Americans are covered by 
the Federal Health Benefits Program, and none of them should be denied 
access to complete reproductive health care services. It sends the 
message that public servants do not have the same rights as private 
sector workers, and that is wrong.
  Civil servants are no different that any other American. They are 
regular people: secretaries, engineers, maintenance workers, and 
caseworkers. Why should they be treated any differently than other 
workers? They pay for their premiums and deductibles like everyone 
else, and they should be allowed the same options as other women in 
this country. Civil servants are being asked to do tougher and tougher 
jobs with the downsizing of our Federal government--and are stepping up 
to the task. They should not be required to make further sacrifices 
simply because they are an easy target for those in Congress who would 
outlaw abortions all together.
  Mr. President, we have all heard the stories of women who were forced 
into very difficult situations as soon as this policy was enacted this 
year. We heard

[[Page S10276]]

about Susan Alexander who wanted to have the child she was carrying, 
but found out gross fetal deformities made her child's development 
``incompatible'' with life, and threatened her life as well. Her 
doctors all recommended terminating her pregnancy for medical reasons. 
Unfortunately, she and her husband were shocked to find that her 
insurance policy no longer covered what turned out to be a very 
complicated and expensive procedure, performed to protect her life.

  Mr. President, we know there are other women out there like Susan 
Alexander who have been directly affected by the decision made in this 
body last year. We know that to continue this policy will have a 
serious and tangible impact on women's health. Therefore, it is 
irresponsible to continue to deny women access to a full range of 
health care services because Congress has turned the health care 
choices of women into a political football.
  Make no mistake about it, we are once again confronted with an 
attempt to deny women the rights they now hold. Women have the legal 
right of choice in this country, and the majority in this country 
support that right. This policy is micro-management of the worst kind, 
and it is wrong. The U.S. Congress should not be making reproductive 
health choices for Federal workers. Nor should it discriminate against 
Federal workers who choose to have an abortion.
  By denying civil servants health coverage for abortion services, 
Congress does just that. It continues to force Federal employees and 
their families to purchase separate insurance to cover reproductive 
health services. It continues to add financial considerations to a very 
time-sensitive, personal decision. And, above all, it reinforces the 
message to civil servants that the same rules do not apply to them. 
Their health is subject to the political winds of Congress.
  Mr. President, this is not reasonable to expect of people who are 
dedicated to serving the public good. I commend Senator Boxer for her 
vigilance and dedication on behalf of women everywhere, and thank her 
for her leadership in protecting the rights of civil servants. Once 
again, I urge my colleagues to reject this motion.
  Mr. ROBB. Mr. President, I rise today to support the committee 
amendment which would strike House provisions prohibiting the Federal 
Employee Health Benefits Program from providing coverage for abortion 
services.
  The vast majority of private health plans provide coverage for 
abortion services. The House bill is telling Federal employees that, 
because of who their employer is, they shouldn't have the ability to 
choose a health plan which covers this legal medical procedure.
  An employee who opposes abortions can choose a health care plan which 
does not cover the service, which I understand was almost half of all 
FEHBP plans prior to last year's prohibition. I don't believe, however, 
that it is appropriate for us to preclude employees who want this 
coverage from choosing it.
  For this reason, I urge my colleagues to support the committee 
amendment and vote against tabling this proposal.
  Ms. SNOWE. Mr. President, I rise in strong opposition to this effort 
to reinstate the ban on abortions in Federal employee health benefits 
plans. It is yet another ripple in a steady stream of attacks on 
women's reproductive rights and health.
  This debate is painfully familiar. One year ago, the Senator from 
Oklahoma, Senator Nickles, offered an amendment, which--regrettably--
passed this body and changed the status-quo of health care for Federal 
employees and their dependents in America. It represented a giant step 
backward for the rights and health of women who are covered by the 
Federal Employees Health Benefits Plan [FEHBP]. It prohibited the FEHBP 
from covering abortions--except when the woman's life is in danger or 
in cases of rape or incest.
  As the result of these restrictions, Federal employees and their 
dependents enrolled in FEHBP's who need abortions must pay for them out 
of their own pocket, except in cases of rape, incest, or to save the 
life of the mother. This may result in significant hardship to a woman 
and her family, especially because many Federal employees have incomes 
at or below the poverty level, which is $12,980 for a family of three.
  In fact, 25 percent of all Federal employees earn less than $25,000--
with nearly 18,000 Federal employees having incomes below or just 
slightly above the Federal poverty level. And while the average cost of 
an early abortion performed in a clinic is $250, the cost rises to 
$1,760 if performed on an outpatient basis in a hospital.
  This means that some Federal employees may be forced to decide 
between paying for an abortion and buying food for their children or 
paying rent. Others may be forced to carry their unintended pregnancies 
to term. It is shameful that our Federal employees have such terrible 
options.
  Denying abortion coverage to Federal employees may also endanger a 
woman's health. Restrictions that delay an abortion make it more likely 
that a woman will continue a potentially health-threatening pregnancy 
to term, or undergo abortion procedures later in a pregnancy when they 
are far more risky to a woman's health.
  Just because we have the power of the purse in Congress does not mean 
we should have the power to penalize women in public service by denying 
them their reproductive freedoms or threatening their health.
  There are currently 1.2 million women of reproductive age who rely on 
their Federal health plan for their medical care--and that's 1.2 
million American women who would be summarily stripped of their 
constitutionally guaranteed right to choose because they or a family 
member work for the Federal Government.
  Federal employees should have no fewer rights than any other American 
worker who earns a health care benefit as part of their compensation 
package.
  Some argue that the Federal Government has a right to dictate which 
medical services will be covered under the FEHBP. They argue that 
Federal tax dollars should not pay for abortions.
  That's what some would like this debate to be about--taxpayer funding 
for abortion. But that's simply not the case. In fact, that argument is 
a red herring.
  Taxpayers would not fund abortions covered by Federal health plans. 
Far from it. The Federal Government, like millions of private employers 
across the country, contributes a portion of its employee's insurance 
premiums, and the employee pays the rest. Thus, FEHBP coverage is not 
pocket money for Federal employees. It is not an allowance or a Federal 
handout. It is direct compensation earned by Federal employees. And I 
would like to note that CBO has determined that coverage of abortions--
a legal medical procedure--does not add to the cost of the premium.
  This anti-choice restriction on Federal employees health benefits 
arbitrarily and unjustifiably reduces their total compensation package. 
The fact is, any service not covered by their health insurance which 
they must pay for out-of-pocket amounts to a pay cut in their hard-
earned wages. It is not for Congress to determine how those hard-earned 
wages should or should not be spent. Wages and benefits belong to the 
employees.
  According to the Office of Personnel Management, which oversees the 
FEHBP, between 1993 and 1995, 178 of the 345 FEHB plans provided 
abortion coverage. Of the ``Big Five'' health plans offered to Federal 
employees, four of the five offered abortion coverage. This range of 
options allows employees who object to abortions to choose any one of 
the hundreds of Federal health plans that would not cover the 
procedure.
  Today, 78 million women in America have abortion coverage in the 
private sector. Two-thirds of private fee-for-service plans provide the 
full range of reproductive health services, including abortions. And 70 
percent of health maintenance organizations [HMO's] provide abortion 
coverage.
  Finally, a majority of people in America believe that abortion should 
be safe, legal and rare. These Americans do not distinguish between 
women who work in the private sector and women who work for the Federal 
Government.
  A person's ability to exercise a constitutional right should not be 
determined by an employer--even when the

[[Page S10277]]

employer is the Federal Government. What we can and must do today is 
ensure that we do not maintain the existing two-tiered system of rights 
for our citizens--one for women who work for or are insured by the 
Federal Government, and another for those women who work in the private 
sector. We must not allow such discrimination to continue. And we must 
stop sending a signal to our Federal employees and their female 
dependents that we do not value their health or their reproductive 
rights. I urge my colleagues to join me in voting to oppose this motion 
to table the committee amendment.
  Mr. KERRY. Mr. President, today once again the radical right has come 
to this Senate floor to impose their will against the wishes of a vast 
majority of Americans. They have come forth again to add an amendment 
to the Treasury, Postal Service, and general Government appropriations 
bill that would limit reproductive health services for 1.2 million 
female Federal employees.
  The Treasury-postal bill provides the funding for the Federal 
Employees Health Benefits Program [FEHBP], our network of insurance 
plans that cover approximately 9 million Federal employees and their 
dependents. Today, there are approximately 1.2 million women of 
reproductive age who rely on the FEHBP for their medical care.
  Mr. President, in the United States we have a Constitution that 
guarantees an extensive list of freedoms upon which the Government 
cannot infringe. Perhaps the sponsors of this amendment do not 
understand the issue at hand. The Supreme Court ruled in Roe versus 
Wade that abortions are constitutional. It is completely legal for a 
woman who wants to have an abortion to obtain the services of a doctor 
who is willing to provide an abortion. Congress should not have the 
ability to decree to a woman that she cannot obtain an insurance policy 
that covers abortion, which is a fully legal procedure. This is not the 
role of Congress. We have no right to impose ourselves and our sense of 
morality in this way upon the women who work for the Federal 
Government.
  Failing to make abortion illegal, antichoice Members of Congress are 
trying to make this right more difficult to exercise. Singling out 
abortion for exclusion from health care plans that cover other 
reproductive health care is harmful to women's health and discriminates 
against women in public service.
  In 1993 and 1994, Congress voted to permit Federal employees, like 
workers in the private sector, to choose a health care plan that 
covered a full range of reproductive health services, including 
abortion. It is my belief that health insurance is part of an 
employees' earned compensation. As is common in private industry, costs 
for insurance coverage for Federal employees are shared by the employer 
and the employee. This is similar to the private sector where 
approximately two-thirds of private fee-for-service plans and 70 
percent of health maintenance organizations provide abortion coverage.
  Despite these facts, last year Congress stripped Federal employees of 
this right. This year, some Members are again attempting to restrict 
women's access to reproductive health services. Mr. President, this is 
not right. It is a troublesome manifestation of the Congress' well-
known plantation mentality.
  Mr. President, this amendment is unjustly restrictive and 
discriminatory. Passage of this amendment assigns an inferior status to 
women working in the Federal Government. It is time to stop these 
attempts to chip away at a woman's legal right to choose. I urge my 
colleagues to vote against this amendment.
  Mr. DeWINE. Mr. President, would the Chair advise Members how much 
time remains?
  The PRESIDING OFFICER. The Senator from Ohio has 8 minutes and 18 
seconds under his control, and Senator Boxer has 4 minutes under her 
control.
  Mr. DeWINE. Mr. President, let me yield myself such time as I may 
consume.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. DeWINE. Mr. President, we are concluding this debate and we will 
shortly be voting on my motion to table the amendment.
  Again, I think it is important that we keep our eye focused on the 
ball. We can come down here in the well of the Senate and discuss for 
hours the issue of abortion. That is not what this debate really is 
about. What this debate is about is a very narrow issue, a very narrow 
question, which is simply this: Should this body go against the will of 
the American people? The vast majority of the American people, even 
those who really have mixed feelings on the abortion issue, the vast 
majority of the American people say, no, I do not want my tax dollars 
being used for abortion. That is what this is because 74 percent of the 
premium of the Federal employee is paid for by taxpayers; roughly 
three-fourths of the premium is paid for by taxpayers.
  This is a horribly contentious issue, an issue that divides families. 
It is an issue that friends do not want to talk about. It is an issue, 
quite frankly, that the Federal taxpayers have said time and time again 
that they do not want to be involved in, they do not want to fund.
  We are not debating a woman's right to choose today. We are not 
debating that. We are not debating what a person can do. We are simply 
debating whether taxpayers are going to pay for this very, very, 
controversial procedure. That is what we really are talking about.
  I yield to my colleague from Indiana.
  Mr. COATS. Mr. President, just to summarize so Members know exactly 
what it is we are voting on. This is not, despite what has been said, 
this is not an issue over whether or not a woman has the right to 
choose to have an abortion. We do not change any constitutional 
rulings. We do not change anything in that regard.
  This is simply an issue as to whether the taxpayer will be forced to 
pay for an abortion of a Federal employee's demand for an abortion. Mr. 
President, 70 percent or more of the citizens of the United States, 
whether they are pro-life, pro-choice, or neutral on the question, have 
consistently stated in polls and surveys that, regardless of their 
position, more than 70 percent have said no in an issue that is this 
controversial, which violates the conscience and religious beliefs of 
many people, or that is simply a taxpayer issue. We do not believe the 
taxpayer should be forced to pay for the abortion of someone else.
  This goes one step further because it limits it to just Federal 
employees. The Senator from Ohio wants to retain the policy that has 
effectively been in practice, totally, almost consistently for more 
than 20 years, consistently supported by both Democrats and 
Republicans, whether Democrats have been in control of the Congress or 
whether Republicans have been in control of the Congress.

  So I hope my colleagues will vote to maintain the current law--the 
current law being that we will not force taxpayers to pay for the 
abortions of Federal employees. And we do allow exceptions to that 
rule: If the life of the mother is in jeopardy or in cases of rape or 
incest.
  I think that is a reasonable policy, and it has been consistently 
supported. I hope we retain that law.
  Mr. DeWINE. Mr. President, I reserve the balance of my time.
  The PRESIDING OFFICER. Who yields time?
  Mrs. BOXER. Mr. President, I have 4 minutes left, is that correct?
  The PRESIDING OFFICER. Yes.
  Mrs. BOXER. And the other side has how much?
  The PRESIDING OFFICER. They have 4 minutes 23 seconds.
  Mrs. BOXER. I will yield the remainder of the time to Senator Kerrey, 
who has really worked hard in the committee to do the right thing, to 
give Federal employees equal treatment with the 75 million other women 
that have that choice in the private sector.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. KERREY. Mr. President, first of all, all Members have made up 
their minds on this issue. So it is not a question of trying to 
persuade anybody one way or the other. It is trying to say to the 
American people, those of us who intend to vote for allowing Federal 
employee health programs--as in this bill, their insurance money--to be 
used to pay for reproductive services, including legal abortions.
  I have a great deal of respect for the Senator from Ohio, the Senator 
from

[[Page S10278]]

Indiana, the occupant of the chair, and others who hold a different 
view. But when they come and say this is about using taxpayer money to 
pay for abortions, really, the only way you can prevent taxpayer money 
from being used for abortions by Federal employees would be to actually 
come in and prohibit their salaries to be used in any way at all for 
abortion, because their salaries are paid for with taxpayer money.
  If my salary is paid for with taxpayer money, if I am already 
provided a subsidy in my salary, what good does it do to say that they 
can't have health insurance programs do it? We have two-thirds of the 
health insurance programs in the United States and 70 percent of the 
HMO's in the United States already providing reproductive services, as 
well as legal abortions.
  You are not really preventing taxpayer money from being used, not at 
all. If their salary is used to pay for abortion, that is taxpayer 
money. What you are doing is--you think that is what you are 
accomplishing, but you are not. What you are doing, in fact, is 
changing the rules and saying to women who are Federal employees that 
you are going to be treated differently than 70 percent of the other 
employees that are out in the work force.
  There are 9 million Federal employees, approximately 1.2 million 
women of reproductive age, who rely on the Federal Employee Health 
Benefits program for medical coverage. Until November 19, 1995, Federal 
employees--like workers in the private sector--were permitted to choose 
a health care plan that covered a full range of reproductive health 
benefit services. So I say to citizens out there, who say, ``gee, I 
think we ought to restrict use of the Federal Employee Health Benefits 
Program for something that I don't want to pay for,'' that is not what 
you get done. All you are saying is they can't use health care 
benefits; you are not saying they can't use salary, which is taxpayer 
money as well.

  In 1993 and 1994, Congress voted to permit Federal employees to 
choose the health care plan that covered abortion. And from 1983 until 
that time, Congress prohibited the Federal Employee Health Benefits 
Program from covering abortion services, except in cases where the 
woman's life was in danger.
  Mr. President, one of the problems here--especially for lower income 
Federal employees, of whom we have a considerable number--is if you 
examine what the American Medical Association has said in this case. 
They have indicated, and they say it with evidence to back up the 
claim, that restrictions such as this--that deter and delay women from 
making a legal choice--make it more likely that women will continue a 
potential health-threatening pregnancy to term or undergo abortion 
procedures that would endanger their health. That is what the medical 
community has said that has examined this.
  So I hope the citizens that are listening to this argument will 
understand that this is really not about using taxpayer money. You 
would have to restrict the use of salaries in order to accomplish that 
objective.
  The PRESIDING OFFICER. The time of the Senator has expired. All time 
of Senator Boxer has expired.
  Who yields time?
  Mr. DeWINE. Mr. President, how much time do I have?
  The PRESIDING OFFICER. The Senator has 4 minutes 22 seconds.
  Mr. DeWINE. I yield myself the balance of that time. In just a 
moment--4 minutes, roughly--I will make a motion to table this 
amendment. Let me, again, walk the Members through the procedure of 
exactly where we are.
  The DeWine-Nickles motion to table will result in the following. This 
is what it means. First, that the status quo will remain. The law--as 
previously passed by this Congress, by this Senate, by the House, and 
signed into law by President Clinton--will remain the same. This vote, 
a vote to table, is consistent with what the Senate did a little over a 
year ago, by a vote of 50 to 44.
  Again, Mr. President, we need to focus on the narrow issue before us. 
It is so easy for us--because we all have strong feelings about the 
issue--to get engaged in a debate about a woman's right to choose, pro-
life issues, and even engaged in a debate about all kinds of different 
things connected with the abortion issue. That's not what we are here 
today to debate.
  We are here to debate a very narrow question: Should current law 
prevail, which restricts from Federal coverage, health insurance 
coverage of Federal employees, one procedure--the abortion procedure--
and allows it only in the case of rape, incest, or to save the life of 
the mother? That is the issue. The issue is fundamentally, with all due 
respect to my colleague from Nebraska, whether or not taxpayers are 
going to subsidize this at the rate of 74 percent. That is really what 
the issue is all about.
  The vast majority of the American people, time and time and time 
again, have said ``no.'' The country is very divided on the abortion 
issue, but it is overwhelmingly against using Federal tax dollars for 
abortions.
  Again, the motion to table will simply preserve the status quo, will 
reaffirm what the Senate did a year ago. Frankly, it is consistent with 
what the law was from 1984 to 1993. It was only changed when President 
Clinton took office, for 2 years, and that law then was changed. So 
really going back to 1984, until the current time, this motion to table 
is consistent with what the law has been during that period of time, 
with the exception of 2 years.
  Mr. President, I yield back the balance of my time.
  I move to table the amendment and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table. The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Delaware [Mr. Roth] is 
necessarily absent.
  Mr. FORD. I announce that the Senator from Arkansas [Mr. Pryor] is 
absent due to family illness.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 53, nays 45, as follows:

                      [Rollcall Vote No. 284 Leg.]

                                YEAS--53

     Abraham
     Ashcroft
     Bennett
     Biden
     Bond
     Breaux
     Brown
     Burns
     Coats
     Cochran
     Conrad
     Coverdell
     Craig
     D'Amato
     DeWine
     Domenici
     Dorgan
     Exon
     Faircloth
     Ford
     Frahm
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hatch
     Hatfield
     Heflin
     Helms
     Hutchison
     Inhofe
     Johnston
     Kempthorne
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Nunn
     Pressler
     Reid
     Santorum
     Shelby
     Smith
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--45

     Akaka
     Baucus
     Bingaman
     Boxer
     Bradley
     Bryan
     Bumpers
     Byrd
     Campbell
     Chafee
     Cohen
     Daschle
     Dodd
     Feingold
     Feinstein
     Glenn
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Kassebaum
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Mikulski
     Moseley-Braun
     Moynihan
     Murray
     Pell
     Robb
     Rockefeller
     Sarbanes
     Simon
     Simpson
     Snowe
     Specter
     Stevens
     Wellstone
     Wyden

                             NOT VOTING--2

     Pryor
     Roth
       
  So the motion to lay on the table the committee amendment beginning 
on page 80, line 20 through page 81, line 4 was agreed to.
  Mr. NICKLES. Mr. President, I move to reconsider the vote.
  Mr. COATS. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. FORD. Mr. President, I make a point of order the Senate is not in 
order.
  The PRESIDING OFFICER. The Senator is correct. The Senate will come 
to order.
  The question recurs on the second committee amendment to which is 
pending amendment No. 5235, offered by Mrs. Kassebaum, the Senator from 
Kansas.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, I ask unanimous consent the Senator from

[[Page S10279]]

Arizona be permitted to speak for 5 minutes as in morning business, and 
the Senator from Nebraska for 5 minutes immediately thereafter.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Arizona is recognized for 5 minutes.
  Mr. GRAMM. Could we have order, Mr. President.
  The PRESIDING OFFICER. The Senate will come to order so the Senator 
from Arizona can be heard.
  The Senator from Arizona.

                          ____________________