[Congressional Record Volume 143, Number 4 (Tuesday, January 21, 1997)]
[Senate]
[Pages S379-S557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INCREASING COVERAGE
According to the U.S. Bureau of the Census, in 1995, 224 million
Americans derived their health insurance coverage as follows:
approximately 64 percent from employer plans; 14.3 percent from
Medicare and Medicaid; 4 percent from other public sources; and about 7
percent from other private insurance. However, 40.3 million people were
not covered by any type of health insurance.
Statistics from the Employment Benefit Research Institute November
1996 show that small businesses generally provide less health insurance
coverage than larger businesses or the public sector. About 73 percent
of employees in the public sector are provided with health insurance;
while 55.5 percent of employees in the private sector are covered. Both
levels are far higher than businesses with fewer than 10 employees
(25.8%); with 10 to 24 employees (38.8%); or with 25 to 99 employees
(54.4%).
As I mentioned previously, title I of the bill gives federal
subsidies to provide health care coverage for our Nation's children.
Early estimates are that the total cost of these vouchers will be
approximately $24 billion over 5 years. This $24 billion is a
worthwhile investment because it will mean healthier children and
substantially reduced anxiety for millions of parents who cannot afford
to pay for needed medical care for their children.
Title II contains provisions to make it easier for small businesses
to buy health insurance for their workers by establishing voluntary
purchasing groups. It also obligates employers to offer, but not pay
for, at least two health insurance plans that protect individual
freedom of choice and that meet a standard minimum benefits package. It
extends COBRA benefits and coverage options to provide portability and
security of affordable coverage between jobs. While it is not possible
to predict with certainty how many additional Americans will be covered
as a result of the reforms in title II, a reasonable expectation would
be that these reforms will cover approximately 10 million Americans.
This estimate encompasses the provisions included in title II which I
will discuss in further detail.
Specifically, title II extends the COBRA benefit option from 18
months to 24 months. COBRA refers to a measure which was enacted in
1985 as part of the Consolidated Omnibus Budget Reconciliation Act
[COBRA '85] to allow employees who leave their job, either through a
layoff or by choice, to continue receiving their health care benefits
by paying the full cost of such coverage. By extending this option,
such unemployed persons will have enhanced coverage options.
In addition, options under COBRA are expanded to include plans with
lower premiums and higher deductibles of either $1,000 or $3,000. This
provision is incorporated from legislation introduced in the 103d
Congress by Senator Phil Gramm and will provide an extra cushion of
coverage options for people in transition. According to Senator Gramm,
with these options, the typical monthly premium paid for a family of
four would drop by as much as 20 percent when switching to a $1,000
deductible and as much as 52 percent when switching to a $3,000
deductible.
With respect to the uninsured and underinsured, my bill would permit
individuals and families to purchase guaranteed, comprehensive health
coverage through purchasing groups. Health insurance plans offered
through the purchasing groups would be required to meet basic,
comprehensive standards with respect to benefits. Such benefits must
include a variation of benefits permitted among actuarially equivalent
plans to be developed by the National Association of Insurance
Commissioners. The standard plan would consist of the following
services when medically necessary or appropriate: First, Medical and
surgical devices; second, medical equipment; third preventive services;
and fourth, emergency transportation in frontier areas. It is estimated
that for businesses with fewer than 50 employees, voluntary purchasing
cooperatives such as those included in my legislation could cover up to
10 million people who are currently uninsured.
My bill would also create individual health insurance purchasing
groups for individuals wishing to purchase health insurance on their
own. In today's market, such individuals often face a market where
coverage options are not affordable. Purchasing groups will allow small
businesses and individuals to buy coverage by pooling together within
purchasing groups, and choose from among insurance plans that provide
comprehensive benefits, with guaranteed enrollment and renewability,
and equal pricing through community rating adjusted by age and family
size. Community rating will assure that no one small business or
individual will be singularly priced out of being able to buy
comprehensive health coverage because of health status. With community
rating, a small group of individuals and businesses can join together,
spread the risk, and have the same purchasing power that larger
companies have today.
For example, Pennsylvania has the ninth lowest rate of uninsured in
the Nation, with 90 percent of all Pennsylvanians enrolled in some form
of health coverage. Lewin and Associates found that one of the factors
enabling Pennsylvania to achieve this low rate of uninsured persons is
that Pennsylvania's Blue Cross-Blue Shield plans provide guaranteed
enrollment and renewability, an open enrollment period, community
rating, and coverage for persons with preexisting conditions. My
legislation seeks to enact reforms to provide for more of these types
of practices. The purchasing groups, as developed and administered on a
local level, will provide small businesses and all individuals with
affordable health coverage options.
Unique barriers to coverage exist in both rural and urban medically
underserved areas. Within my State of Pennsylvania, such barriers
result from a lack of health care providers in rural areas, and other
problems associated with the lack of coverage for indigent populations
living in inner cities. This bill improves access to health care
services for these populations by: First, Expanding Public Health
Service programs and training more primary care
[[Page S380]]
providers to serve in such areas; second, increasing the utilization of
nonphysician providers, including nurse practitioners, clinical nurse
specialists, and physician assistants, through direct reimbursements
under the Medicare and Medicaid Programs; and third, increasing support
for education and outreach.
Title II of my bill also includes an important provision to give the
self-employed 100-percent deductibility of their health insurance
premiums. The Kassebaum-Kennedy bill extended the deductibility of
health insurance for the self-employed to 80 percent by 2006. My bill
would extend this to 100 percent in 2007. Under current law, all other
employers can deduct 100 percent of the cost of health care insurance
for their workers. It is unfair not to give the self-employed the same
tax benefit as other employers receive. The self-employed are every bit
in need of this benefit and we should be doing everything we can to
support this important group which is the backbone of the American
economy.
While I reiterate the difficulty of making definitive conclusions
regarding the reforms put forth under this legislation and
accomplishing universal health coverage for all Americans, I believe
this is a promising starting point. Admittedly, the figures are
inexact, but by my rough calculations, potentially 17.6 million of the
40.3 million uninsured will be able to obtain affordable health care
coverage under my bill. I arrive at this figure by estimating that at
least 7.6 million children will receive health insurance under the
title I voucher system. In addition, 10 million will be able to
purchase insurance by encouraging individuals and small employers to
purchase insurance through voluntary purchasing cooperatives.
I welcome any and all suggestions that make sense within our current
constraints to increase coverage. I am committed to enacting reforms
this year and would like to determine a time certain when Congress must
revisit this issue. We should act on these reforms and correct problems
related to coverage where they still exist.
COST SAVINGS
It is anticipated that the increased costs to employers electing to
cover their employees as provided under title II in my bill would be
offset by the administrative savings generated by development of the
small employer purchasing groups. Such savings have been estimated at
levels as high as $9 billion annually. In addition, by addressing some
of the areas within the health care system that have exacerbated costs,
significant savings can be achieved and then redirected toward direct
health care services.
While examining the issues that have contributed to our health care
crisis, I was struck by the fact that so much attention has been
focused on treating symptoms and very little attention has been given
to the root causes. Although our existing health care system suffers
from very serious structural problems, commonsense steps can be taken
to head off the remaining problems before they reach crisis
proportions. Title III of my bill includes three initiatives which will
enhance primary and preventive care services aimed at preventing
disease and ill-health.
Each year about 7 percent, or 273,000, of the approximately 3.9
million babies born in the United States are born with a low birth
weight, multiplying their risk of death and disability. Approximately
29,338 of those born die before their first birthday, but about 1,000
of those deaths are preventable. Although the infant mortality rate in
the United States fell to an all-time low in 1989, an increasing
percentage of babies still are born of low birth weight. The Executive
Director of the National Commission To Prevent Infant Mortality put it
this way: ``More babies are being born at risk and all we are doing is
saving them with expensive technology.''
It is a human tragedy for a child to be born weighing 16 ounces with
attendant problems which last a lifetime. I first saw 1-pound babies in
1984 when I was astounded to learn that Pittsburgh, PA, had the highest
infant mortality rate of African-American babies of any city in the
United States. I wondered how that could be true of Pittsburgh, which
has such enormous medical resources. It was an amazing thing for me to
see a 1-pound baby, about as big as my hand.
Beyond the human tragedy of a low birth weight, there are serious
financial consequences which result. Although low birth weight infants
represent only about 7 percent of all births, the National Center for
Health Statistics reports that in 1994, the expenditures for their care
totaled about 57 percent of costs incurred for all newborns. In
addition, the Department of Health and Human Services states that care
for each premature baby costs from $10,000 to $25,000 with a total
national cost estimate of $2 billion a year. Low birth weight children,
those who weigh less than 5.5 pounds, account for 16 percent of all
costs for initial hospitalization, rehospitalization, and special
services up to age 35.
The short- and long-term costs of saving and caring for infants of
low birth weight is staggering. A study issued by the Office of
Technology Assessment in 1988 concluded that $8 billion was expended in
1987 for the care of 262,000 low birth weight infants in excess of that
which would have been spent on an equivalent number of babies born of
normal birth weight, averted by earlier or more frequent prenatal care.
If adequate prenatal care had been provided, especially to women at-
risk for delivering low birth weight babies, the U.S. health care
system could have saved between $14,000 and $30,000 per child in the
first year in addition to the projected savings over the lifetime of
each child. The Department of Health and Human Services has also
estimated that between $1.1 billion and $2.5 billion per year could be
saved if the number of low birth weight children were reduced by 82,000
births.
We know that in most instances, prenatal care is effective in
preventing low birth weight babies. Numerous studies have demonstrated
that low birth weight that does not have a genetic link is most often
associated with inadequate prenatal care or the lack of prenatal care.
To improve pregnancy outcomes for women at risk of delivering babies of
low birth weight, title III of my bill authorizes the Secretary of
Health and Human Services to award grants to States for Healthy Start
projects to reduce infant mortality and the incidence of low birth
weight births, as well as to improve the health and well-being of
mothers and their families, pregnant women and infants. The funds would
be awarded to community-based consortia, made up of State and local
governments, the private sector, religious groups, community health
centers, and hospitals and medical schools, whose goal would be to
develop and coordinate effective health care and social support
services for women and their babies.
I initiated action that led to the creation of the Healthy Start
Program in 1991, working with the Bush administration and Senator
Harkin. As chairman of the Appropriations Subcommittee with
jurisdiction over the Department of Health and Human Services, I have
worked with my colleagues to ensure the continued growth of this
important program. In 1991, we allocated $25 million for the
development of 15 demonstration projects. This number grew to 22 in
1994, and the Health Resources and Services Administration expects the
number of projects to increase again in 1997. For fiscal year 1997, we
secured $96 million for the program, which is currently undergoing a
formal evaluation by Mathematica Policy Research, Inc. However,
preliminary results from the projects themselves suggest these programs
have been enormously successful. In Pennsylvania, our Pittsburgh
Healthy Start project estimates that infant mortality has decreased 20
percent in the overall project area as a result of this program. For
those women in Pittsburgh who have taken advantage of the case
management offered by the program, infant mortality has been reduced by
as much as 61 percent. Similarly, our Philadelphia project reports that
infant mortality has been reduced by 25 percent.
The second initiative under title III involves the provision of
comprehensive health education and prevention initiatives for our
Nation's children. The Carnegie Foundation for the Advancement of
Teaching recently conducted a survey of teachers. More than half of the
respondents said that poor nourishment among students is a serious
problem at their schools; 60 percent cited poor health as a serious
problem. Another study issued in 1992 by the
[[Page S381]]
Children's Defense Fund reported that children deprived of basic health
care and nutrition are ill-prepared to learn. Both studies indicated
that poor health and social habits are carried into adulthood and often
passed on to the next generation.
To interrupt this tragic cycle, our Nation must invest in proven
preventive health education programs. My legislation provides increased
support to local educational agencies to develop and strengthen
comprehensive health education programs, and to Head Start resource
centers to support health education training programs for teachers and
other day care workers.
Title III further expands the authorization of a variety of public
health programs, such as breast and cervical cancer prevention,
childhood immunizations, family planning, and community health centers.
These existing programs are designed to improve the public health and
prevent disease through primary and secondary prevention initiatives.
It is essential that we invest more resources in these programs now if
we are to make any substantial progress in reducing the costs of acute
care in this country.
As chairman of the Appropriations Subcommittee with jurisdiction over
the Department of Health and Human Services, I have greatly encouraged
the development of prevention programs which are essential to keeping
people healthy and lowering the cost of health care in this country. In
my view, no aspect of health care policy is more important.
Accordingly, my prevention efforts have been widespread. Specifically,
I joined my colleagues in efforts to ensure that funding for the
Centers for Disease Control and Prevention [CDC] increased $1.3 billion
or 132 percent since 1989. Fiscal year 1997 funding for the CDC totals
$2.304 billion. We have also worked to elevate funding for CDC's breast
and cervical cancer early detection program to $140 million in fiscal
year 1997, a 40 percent increase in 2 years. In addition, I have
supported providing funding to CDC to improve the detection and
treatment of re-emerging infectious diseases.
I have also supported programs at CDC which help children. CDC's
childhood immunization program seeks to eliminate preventable diseases
through immunization and to ensure that at least 90 percent of 2 year
olds are vaccinated. The CDC also continues to educate parents and care
givers on the importance of immunization for children under 2 years.
Along with my colleagues on the Appropriations Committee, I have helped
to ensure that funding for this important program increased by $172
million, or 58 percent. The CDC's lead poisoning prevention program
annually identifies about 50,000 children with elevated blood levels
and places those children under medical management. The program
prevents children's blood levels from reaching dangerous levels and is
currently funded at over $38 million.
In recent years, we have also strengthened funding for community and
migrant health centers, which provide immunizations, health advice, and
health professions training. For fiscal year 1997, over $800 million
was provided for these centers, an increase of about $44 million over
fiscal year 1996.
As chairman of the Select Committee on Intelligence and Chairman of
the Appropriations Subcommittee with jurisdiction over the Department
of Health and Human Services, I have worked to transfer CIA imaging
technology to the fight against breast cancer. Through the Office of
Women's Health within the Department of Health and Human Services, I
secured a $2 million contract in fiscal year 1996 for the University of
Pennsylvania and a consortium to perform the first clinical trials
testing the use of intelligence community technology for breast cancer
detection. For fiscal year 1997, an additional $2 million was
appropriated to continue the clinical trials.
Finally, I have been a strong supporter of funding for AIDS research,
education, and prevention programs. In fiscal year 1997, AIDS funding
increased 14 percent, $392 million above the fiscal year 1996 level,
for a total of $3.115 billion. Within this amount, $617 million was
allocated for prevention, testing, and counseling at the CDC.
The proposed expansions in preventive health services included in
title III of my bill are conservatively projected to save approximately
$2.5 billion per year or $12.5 billion over 5 years. However, I believe
the savings will be higher. Again, it is impossible to be certain of
such savings--only experience will tell. For example, how do you
quantify today the savings that will surely be achieved tomorrow from
future generations of children that are truly educated in a range of
health-related subjects including hygiene, nutrition, physical and
emotional health, drug and alcohol abuse, and accident prevention and
safety? I have suggested these projections, subject to future
modification, to give a generalized perspective on the potential impact
of this bill.
Title IV of my bill would establish a Federal standard and create
uniform national forms concerning a patient's right to decline medical
treatment. Nothing in my bill mandates the use of uniform forms,
rather, the purpose of this provision is to make it easier for
individuals to make their own choices and determination regarding their
treatment during this vulnerable and highly personal time. Studies have
also indicated that advance directives do not increase health care
costs. According to recent data from the Journal of the American
Medical Association authored by Ezekiel Emmanuel of the Center for
Outcomes and Policy Research of the Dana Farber Cancer Institute, end-
of-life costs account for about 10 percent of total health care
spending and 27 percent of total Medicare expenditures. It has been
projected that a 10 percent savings made in the final days of life
would result in approximately $10 billion of savings in medical costs
per year, and about $4.7 billion in savings for Medicare alone.
However, economic considerations are not and should not be the
primary reasons for using advance directives. They provide a means for
patients to exercise their autonomy over end-of-life decisions. A study
done at the Thomas Jefferson University Medical College in Philadelphia
cited research which found that about 90 percent of the American
population has expressed interest in discussing advance directives, but
only 8 to 15 percent of adults have prepared a living will. My bill
would provide information on an individual's rights regarding living
wills and advanced directives, and would make it easier for people to
have their wishes known and honored. In my view, no one has the right
to decide for anyone else what constitutes appropriate medical
treatment. Encouraging the use of advance directives will ensure that
patients are not needlessly and unlawfully treated against their will.
No health care provider would be permitted to treat an adult contrary
to the adult's wishes as outlined in an advance directive. However, in
no way would the use of advance directives condone assisted suicide or
any affirmative act to end human life.
Incentives to improve the supply of generalist physicians and
increase the utilization of nonphysician providers, such as nurse
practitioners, clinical nurse specialists and physician assistants,
through direct reimbursement under the Medicare and Medicaid Programs
are contained in title V of my bill. I believe these provisions will
also yield substantial savings. A study of the Canadian health system
utilizing nurse practitioners projected savings of 10 to 15 percent of
all medical costs. While our system is dramatically different from that
of Canada, it may not be unreasonable to project annual savings of 5
percent, or $55 billion, from an increased number of primary care
providers in our system. Again, experience will raise or lower this
projection. Assuming these savings, based on an average expenditure for
health care of $3,821 per person in 1995, it seems reasonable that we
could cover over 10 million uninsured persons with these savings.
Outcomes research, included in title VI of my bill, is another area
where we can achieve considerable long term health care savings while
also improving the quality of care. According to most outcomes
management experts, it is estimated that about 25 to 30 percent of
medical care is inappropriate or unnecessary. Dr. Marcia Angell, former
editor-in-chief of the New England Journal of Medicine, also stated
that 20 to 30 percent of health care procedures are either
inappropriate, ineffective or unnecessary. In 1995, health care
expenditures totaled $1.1 trillion annually. A cost of illness model
published in the October 1995 issue of Archives of
[[Page S382]]
Internal Medicine estimated that $76.6 billion annually is for drug-
related morbidity and mortality in the ambulatory setting. It is not
unreasonable to anticipate that with the implementation of medical
practice guidelines and enhanced appropriateness of care, 10 to 20
percent of costs could be eliminated, resulting in savings between $8
and $15 billion in drug-related morbidity and mortality alone. Ideally,
if all inappropriate care could be removed, between $110 and $220
billion in savings could be realized annually for all health care
expenditures. A reasonable estimate is that with the implementation of
medical practice guidelines, we may achieve savings of 20 to 30 percent
of the lower range end--$110 billion--which amounts to $22 to $33
billion in savings annually.
A well-funded program for outcomes research is therefore essential,
and is supported by Dr. C. Everett Koop, former Surgeon General of the
United States. Title V of my bill would establish such a program by
imposing a one-tenth of one cent surcharge on all health insurance
premiums. Based on the Health Care Financing Administration's 1995
health spending review, private health insurance premiums totaled
$325.4 billion. As provided in my bill, a surcharge would generate
$325.4 million for an outcomes research fund, in addition to the $144
million appropriated in this area for fiscal year 1997.
It is also vital to reduce the administrative costs incurred by our
health care system. According to the Health Care Financing
Administration, in 1994, about 6.2 percent of our total national health
care expenditures were for administrative costs--over $58 billion
annually. We can reasonably expect to reduce administrative costs by 5
percent, or $2.9 billion annually. While the development of a national
electronic claims system to handle the billions of dollars in claims is
complex and will take time to implement fully, I believe it is an
essential component in the operation of a more efficient health care
system, and for achieving the necessary savings to provide insurance
for the remaining uninsured Americans. Title VI of my bill is intended
to improve consumer access to health care information. True cost
containment and competition cannot occur if purchasers of health care
services do not have the information available to them to compare cost
and quality.
Title VI also authorizes the Secretary of Health and Human Services
to award grants to States to establish or improve a health care data
information system. Currently, 38 States have a mandate to establish
such a system, and 23 States are in various stages of implementation.
In my own State, the Pennsylvania Health Care Cost Containment Council
has received national recognition for the work it has done to help
control health care costs through the promotion of competition in the
collection, analysis and distribution of uniform cost and quality data
for all hospitals and physicians in the Commonwealth. Consumers,
businesses, labor, insurance companies, health maintenance
organizations, and hospitals have utilized this important information.
Specifically, hospitals have used this information to become more
competitive in the marketplace; businesses and labor have used this
data to lower their health care expenditures; health plans have used
this information when contracting with providers; and consumers have
used this information to compare costs and outcomes of health care
providers and procedures.
The States have not yet produced any figures on statewide savings
resulting from the implementation of health information systems,
however, there are many examples of savings experienced by users of
these systems across the country. For example, the Pennsylvania Health
Care Cost Containment Council [PHC4] has been utilized by the Hershey
Foods Corp., which provides health insurance coverage for its
employees, their dependents, and retirees, totaling roughly 17,000
persons. Hershey has offered a flexible benefits package since 1988,
but saw health care expenditures increase in the late 1980's and early
1990's. The company used the PHC4 data as part of its health care plan
reengineering efforts and created its own Health Maintenance
Organization [HMO] called HealthStyles as another alternative to the
four traditional HMO's already offered to employees and retirees. The
PHC4 data were used to help Hershey define its specialized hospital
network within this new HMO. Hershey states that the company has seen
costs decline for some of the services provided by the other HMO plans
offered to its employees. This is just one example of how health data
information can be used wisely to inform the public and consumers and
allow the market to control costs. There are many other examples of
savings being achieved, and I believe that if these systems were
implemented in every State, the savings could be substantial.
Home nursing care is another significant issue which must be
addressed. The cost of this care is exorbitant. Title VII of my bill
therefore would provide a tax credit for premiums paid to purchase
private long-term care insurance. It also proposes home and community-
based care benefits as less costly alternatives to institutional care.
The Joint Tax Committee estimates that the cost of this long term care
tax credit to the Treasury would be approximately $14 billion over 5
years. Other tax incentives and reforms provided in my bill to make
long term care insurance more affordable include: First, allowing
employees to select long-term care insurance as part of a cafeteria
plan and allowing employers to deduct this expense; second, excluding
from income tax the life insurance savings used to pay for long term
care; and third, setting standards for long term care insurance that
reduce the bias that currently favors institutional care over community
and home-based alternatives.
While precision is again impossible, it is reasonable to project that
my proposal could achieve a net annual savings of between $94 and $105
billion. I arrive at this sum by totaling the projected savings of $101
to $112 billion annually--$9 billion in small employer market reforms
coupled with employer purchasing groups; $2.5 billion for preventive
health services; $22 to $33 billion for reducing inappropriate care
through outcomes research; $10 billion from advanced directives; $55
billion from increasing primary care providers; and $2.9 billion by
reducing administrative costs and netting this against the $2.8 billion
for long term care; and $4.8 billion for increasing childrens'
coverage. I ask unanimous consent that a list of anticipated savings
and costs associated with the bill be included in the Record.
Although there are no precise savings estimates for each of these
areas, I propose this bill as a starting point to address the remaining
problems with our health care system. Experience will require
modification of these projections, and I am prepared to work with my
colleagues to develop implementing legislation and to press for further
action in the important area of health care reform.
conclusion
The provisions which I have outlined today contain the framework for
providing affordable health care for all Americans. I am opposed to
rationing health care. I do not want rationing for myself, for my
family, or for America. The question is whether we have the essential
resources--doctors and other health care providers, hospitals, and
pharmaceutical products--to provide medical care for all Americans. I
am confident that we do. The issue is how to pay for and deliver such
health care.
In my judgment, we should not scrap, but rather we should build on
our current health delivery system. We do not need the overwhelming
bureaucracy that President Clinton and other Democratic leaders
proposed in 1993 to accomplish this. I believe we can provide care for
the 40.3 million Americans who are now not covered and reduce health
care costs for those who are covered within the currently growing $1.1
trillion in health care spending.
With the savings projected in this bill, I believe it is possible to
provide access to comprehensive affordable health care for 17.6 million
Americans. This bill is a significant next step in obtaining that
objective. It is obvious that reforming our health care system will not
be achieved immediately or easily, but the time has come for concerted
action in this arena.
I understand that there are several controversial issues presented in
this bill and I am open to suggestions on possible modifications. I
urge the congressional leadership, including the appropriate committee
chairmen, to
[[Page S383]]
move this legislation and other health care bills forward promptly.
I ask unanimous consent that a summary and other material be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Health Care Assurance Act of 1997
summary of the bill
Title I: Health Care Coverage for Children: Title I ensures
health care coverage for all eligible children in the United
States under the age of 18. States complying with rules
approved by the Secretary shall receive federal funds to
provide vouchers to families with eligible children. This
will enable the states to enroll children in health plans
that provide coverage for preventive, primary care, and acute
care services. Payments to states will be calculated based
upon the average annual cost of enrollment in a health care
plan providing those types of services to children in the
state. Children in families with a combined income of 185% of
poverty level ($28,860 for a family of four) and not eligible
for Medicaid will receive a full subsidy for enrollment in
health plans, and children who are in families with incomes
up to 235% of poverty level ($36,660 for a family of four)
will receive a partial subsidy reduced on a sliding scale
based on poverty level. States will have the flexibility to
design and implement their programs as they see fit.
Title II: Health Care Insurance Coverage: Tax Equity for
the Self-Employed: Provides self-employed individuals and
their families 100 percent tax deductibility for the cost of
health insurance coverage beginning in 2007. Under current
law, beginning in 1997, self-employed persons may deduct 40
percent of cost; 45 percent in 1998 through 2002; 50 percent
in 2003; 60 percent in 2004; 70 percent in 2005; and 80
percent in 2006 and thereafter. However, all other employers
may deduct 100 percent of such costs. Title II corrects this
inequity for the self-employed, 3.9 million of which are
currently uninsured.
Small Employer and Individual Purchasing Groups:
Establishes voluntary small employer and individual
purchasing groups designed to provide affordable,
comprehensive health coverage options for such employers,
their employees, and other uninsured and underinsured
individuals and families. Health plans offering coverage
through such groups will: (1) provide a standard health
benefits package; (2) adjust community rated premiums by age
and family size in order to spread risk and provide price
equity to all; and (3) meet certain other guidelines
involving marketing practices.
Standard Benefits Package: The standard package of benefits
would include a variation of benefits permitted among
actuarially equivalent plans developed through the National
Association of Insurance Commissioners (NAIC). The standard
plan will consist of the following services when medically
necessary or appropriate: (1) medical and surgical services;
(2) medical equipment; (3) preventive services; and (4)
emergency transportation in frontier areas.
COBRA Portability Reform: For those persons who are
uninsured between jobs and for insured persons who fear
losing coverage should they lose their jobs, Title II reforms
the existing COBRA law by: (1) extending to 24 months the
minimum time period in which COBRA covers individuals through
their former employers' plans; and (2) expanding coverage
options to include plans with a lower premium and a $1,000
deductible--saving a typical family of four 20 percent in
monthly premiums--and plans with a lower premium and a $3,000
deductible--saving a family of four 52 percent in monthly
premiums.
Title III: Primary and Preventive Care Services: Authorizes
the Secretary of Health and Human Services to provide grants
to States for projects (healthy start initiatives) to reduce
infant mortality and low weight births and to improve the
health and well-being of mothers and their families, pregnant
women and infants. Title III also would provide assistance
through a grant program to local education agencies and pre-
school programs to provide comprehensive health education. In
addition, Title III increases authorization of several
existing preventive health programs such as, breast and
cervical cancer prevention, childhood immunizations, and
community health centers. In addition, Title II reauthorizes
the Adolescent Family Life program (Title XX) for the first
time since 1984. It has been funded annually in Labor, Health
and Human Services and Education appropriations, but without
authorization or reform. This program provides demonstration
grants and contracts for initiatives focusing directly on
issue of abstinence education.
Title IV: Patient's Right to Decline Medical Treatment:
Improves the effectiveness and portability of advance
directives by strengthening the federal law regarding patient
self-determination and establishing uniform federal forms
with regard to self-determination.
Title V: Primary and Preventive Care Providers: Utilizes
non-physician providers such as nurse practitioners,
physician assistants, and clinical nurse specialists by
providing direct reimbursement without regard to the setting
where services are provided through the Medicare and Medicaid
programs. Title V also seeks to encourage students early on
in their medical training to pursue a career in primary care
and it provides assistance to medical training programs to
recruit such students.
Title VI: Cost Containment: Cost containment provisions
include: Outcomes Research: Expands funding for outcomes
research necessary for the development of medical practice
guidelines and increasing consumers' access to information in
order to reduce the delivery of unnecessary and overpriced
care.
New Drug Clinical Trials Program: Authorizes a program at
the National Institutes of Health to expand support for
clinical trials on promising new drugs and disease treatments
with priority given to the most costly diseases impacting the
greatest number of people.
National Health Insurance Data and Claims System:
Authorizes the development of a National Health Insurance
Data System to curtail the escalating costs associated with
paperwork and bureaucracy. The Secretary of Health and Human
Services is directed to create a system to centralize health
insurance and health outcomes information incorporating
effective privacy protections. Standardizing such information
will reduce the time and expense involved in processing
paperwork, increase efficiency, and reduce costs.
Health Care Cost Containment and Quality Information
Project: Authorizes the Secretary of Health and Human
Services to award grants to States to establish a health
care cost and quality information system or to improve an
existing system. Currently 39 States have State mandates
to establish an information system, and of those 39,
approximately 20 States have information systems in
operation. Information such as hospital charge data and
patient procedure outcomes data, which the State agency or
council collects is used by businesses, labor, health
maintenance organizations, hospitals, researchers,
consumers, States, etc. Such data has enabled hospitals to
become more competitive, businesses to save health care
dollars, and consumers to make informed choices regarding
their care.
Title VII: Tax Incentives for Purchase of Qualified Long-
Term Care Insurance: Increases access to long-term care by:
(1) establishing a tax credit for amounts paid toward long-
term care services of family members; (2) excluding life
insurance savings used to pay for long-term care from income
tax; (3) allowing employees to select long-term care
insurance as part of a cafeteria plan and allowing employers
to deduct this expense; (4) setting standards that require
long-term care to eliminate the current bias that favors
institutional care over community and home-based
alternatives.
Title VIII: National Fund for Health Research: Authorizes
the establishment of a National Fund for Health Research to
supplement biomedical research through the National
Institutes of Health. Funds will be distributed to each of
the member institutes and centers in the same proportion as
the amount of appropriations they receive for the fiscal
year.
NET ANNUAL HEALTH CARE SYSTEM SAVINGS FROM THE HEALTH CARE ASSURANCE ACT
OF 1997
[In billions of dollars]
------------------------------------------------------------------------
Annual Annual
Bill title savings cost
------------------------------------------------------------------------
I--Increase health insurance coverage for children ......... (4.8)
II--Small businesses group purchasing............. 9.0
III--Preventive care services..................... 2.5
IV--Advanced directives........................... 10
V--Increase use of non-physician providers........ 55
VI--Outcomes research............................. 33
--national electronic claims system............... 2.9
VII--Long term care............................... ......... (2.8)
Net Annual Total Savings...................... 104.
------------------------------------------------------------------------
____
[From the Pittsburgh Post Gazette, Oct. 12, 1996]
Ray Attacks New Specter Brain Tumor
(By Steve Twedt)
U.S. Sen. Arlen Specter greeted well-wishers in spirited
fashion yesterday, hours after undergoing a specialized
radiation treatment at the University of Pittsburgh Medical
Center to stop the regrowth of a benign brain tumor.
And, after answering reporters' questions at a hastily
scheduled press conference, Specter, his wife, Joan, and son,
Shanin, left the hospital, declining his doctor's suggestion
that he stay overnight.
``I feel fine,'' he assured everyone. ``I've had a tougher
time when I've gone to the dentist.'''
Specter, 66, revealed yesterday that, during a routine
magnetic resonance imaging scan in June, doctors discovered
that a tumor surgically removed three years earlier had
reappeared at the left front part of his brain. He said he
never felt any symptoms.
The tumor was one-tenth the size of the one found in 1993
and, because it grew slowly, Specter waited until the end of
the congressional session to seek treatment.
He said he came to UPMC because of the experience and
reputation of Dr. L. Dade Lunsford's gamma knife program, the
first of its kind in North America when it began in 1987. The
program has treated more than 2,000 patients during the past
nine years.
The gamma knife is used to treat tumors and malformed blood
vessels in sensitive areas of the brain. Without making a
surgical cut, the machine precisely shoots 201 beams of
cobalt-60 photon radiation at the tumor while the patient
lies on a bed with a special helmet covering his head. Only a
local anesthetic is used.
[[Page S384]]
Specter's procedure took less than four hours. When the
Philadelphia Republican met with reporters a few hours later,
the only evidence of his treatment was a faint red mark on
each side of his forehead from the pins used to hold his head
still.
Lunsford, who is chief of neurosurgery at UPMC, said he saw
no evidence that the tumor in Specter's brain, called a
meningioma, was malignant, nor any indication of other
tumors.
On the basis of his experience with other patients,
Lunsford said, there's a 98 percent chance the gamma knife
will accomplish its goal--halting the tumor's growth. Nearly
half the time, the tumors will even shrink, he said.
Patients undergoing $12,000 gamma knife treatment usually
do not experience nausea or headaches, and typically leave
the hospital within 24 hours.
____
[From the East Penn Press, Nov. 4-10, 1996]
Sometimes Patients Should Be Impatient
I can personally report on the miracles of modern medicine.
Three years ago, an MRI detected a benign tumor
(meningioma) at the outer edge of my brain. It was removed by
conventional surgery with five days of hospitalization and
five more weeks of recuperation.
When a small regrowth was detected by a follow-up MRI this
June, it was treated with high powered radiation from the
``Gamma Knife.'' I entered the hospital in the morning and
left the same afternoon, ready to resume my regular schedule.
Like the MRI, the Gamma Knife is a recent invention, coming
into widespread use in the past decade.
My own experience as a patient has given me deeper insights
into the American health care system beyond the U.S. Senate
hearings where I preside as chairman of the Appropriations
Subcommittee with jurisdiction over health and human
services. I have learned: (1) our health care system, the
best in the world, is worth every cent we pay for it; (2)
patients sometimes have to press their own cases beyond the
doctors' standard advice; (3) greater flexibility must be
provided on testing and treatment; and (4) our system has the
resources to treat the 40 million Americans not now covered,
but we must find the way to pay for it.
Health care in America costs $1 trillion out of our $7
trillion economy. The Senate and House Subcommittees on
Health have taken the lead to raise funding for medical
research for the National Institutes of Health.
Notwithstanding budget cuts generally, we added $820
million this year to bring the total research budget to $12.7
billion.
For that investment, we have seen dramatic breakthroughs in
gene therapy and advances in treatment for heart disease,
cancer, AIDS, diabetes, Alzheimers, etc. Scanning devices
such as satellite imaging used by the CIA are now applied to
detect breast cancer. Complex computerization assists MRIs to
define the scope of treatment.
It isn't enough to have such machines. We have to use them
more extensively.
In the spring of 1993, I complained to many doctors about a
tightness in my collar and light pains running up the sides
of my head. All tests proved negative. The symptoms
persisted.
I asked for an MRI scan. The doctor said it wasn't
indicated. I insisted. I got it. The MRI showed a benign
tumor the size of a golf ball between my brain and skull.
While MRIs are expensive, those costs can be reduced by
around-the-clock use of the machine. The marginal cost of
operating it from midnight to 8 a.m. are small.
The inconvenience to the patient is worth it. The extra
cost to insurance companies would be more than made up by
preventing more serious illness and higher costs later.
While my June 1993 operation was performed by one of the
finest surgeons at one of the best hospitals, I was among the
approximately 15 percent where tiny calls at the margin
apparently caused a small regrowth. The general
recommendation was surgery.
A minority of doctors suggested consideration of a
relatively new procedure known as the Gamma Knife. Since
there was no urgency. I took some time to study the
alternatives.
Most doctors, even some with extensive experience with the
Gamma Knife, insisted on conventional surgery. Why? (1)
Because that was the traditional approach; (2) because there
was more long-term follow-up data on surgery even though
successful Gamma Knife procedures were on record for more
than 20 years; and (8) because the tumor was in a good
location for surgery.
Somehow the Gamma Knife, it was argued, should be reserved
for locations the surgeon's knife could not reach. But my
tumor was also in a good spot for radiation.
My inquiries among doctors in the United States and Sweden
(where the Gamma Knife was invented) disclosed almost
universal agreement that the Gamma Knife, if unsuccessful,
would not make the tumor more difficult to treat. Later
surgery could always be utilized. The non-invasive Gamma
Knife eliminated the risk of anesthesia and infection from
surgery.
With a high success rate from the worldwide experience of
40,000 Gamma Knife procedures and 5,000 meningioma like my
own, it was hard to understand why it was not used more. I
found Dr. Dade Lunsford at the University of Pittsburgh
Presbyterian Hospital had to most experience in the United
States with the Gamma Knife.
Since 1987, his team had used the procedure 2,100 times.
Only one of his 270 memingioma patients had required later
surgery. Dr. Lunsford estimated the overall success rate at
98 percent.
So I checked into the hospital at 6:15 one morning, had a
brace attached to my head and took another MRI. All I
required was local anesthesia before pins were pressed to my
head to make the brace secure.
I then watched the computer calculate how much radiation
should be applied to the tumor and its margins as shown on
the MRI scan.
At about 9:30 a.m., my head was inserted into a 500 pound
helmet with 201 holes which directed cobalt beams from all
directions to focus on the meningioma. Each beam was
relatively minute, but the confluence was high powered.
There were seven bombardments of radiation for three
minutes or less. In between, my position was altered with one
change of the helmet.
At about 10:50 a.m., the radiation was completed and a head
compress was applied for two hours. After lunch and a brief
conversation with Dr. Lunsford, we briefed the news media. I
left the hospital in mid-afternoon to spend the night in a
local hotel and then resume my schedule the next day.
Now, five days later, I feel fine. I am back on the squash
court. I am back to my 14-hour days traveling across
Pennsylvania.
An MRI will be taken in six months. I have some
apprehension as to how it will all work out, but so far, so
good. I feel very lucky!
Nothing is more important than a person's health. We have
done a great job in the United States in producing the
greatest health care system in the world. I am aware that it
is better for some, like myself, than for others. I am
convinced that America has the doctors, nurses, hospitals,
medical equipment, pharmaceuticals, etc. to provide for all
our people. My pending legislation provides a plan to do that
with the current $1 trillion expenditure.
Informed, aggressive patients can do much to help
themselves.
______
By Mr. McCAIN (for himself, Mr. Feingold, Mr. Thompson, Mr.
Wellstone, Mr. Graham, Mr. Kerrey, Mr. Dodd, Mr. Kerry, Mr.
Bingaman, Mr. Glenn, Mrs. Murray, Mr. Kohl, Mr. Wyden, Ms.
Moseley-Braun, Mr. Reid, Mr. Ford, Mr. Leahy, Mr. Cleland, Mr.
Johnson, and Mr. Durbin):
S. 25. A bill to reform the financing of Federal elections; to the
Committee on Rules and Administration.
THE BIPARTISAN CAMPAIGN FINANCE BILL OF 1997
Mr. McCAIN. Mr. President, I am pleased to be joined by Senators
Feingold, Thompson, and Wellstone in introducing the Bipartisan
Campaign Finance Reform bill of 1997. This measure is similar to last
year's bill that we introduced on the same subject. I will not lay out
all the details of the bill at this time, but will submit for the
record a summary of our bill at a later date.
Passage of campaign finance reform is necessary if we are to curb the
public's growing cynicism for politics and Congress in particular. We
can no longer wait to address this issue.
I am under no illusions that this will be an easy fight. No other
issue is felt more personally by Members of this body. No other issue
stirs the emotions of Members of the Senate more. But we were sent here
to make tough decisions and we must address this subject.
The public demands that we achieve three goals: limit the role of
money in politics, make the playing field more level between
challengers and incumbents, and to pass a legislative initiative that
will become law.
To pass a bill will require principled compromise and a great deal of
work. I want the members of my party to know that I am willing to work
with you to address your concerns regarding this legislation. I want to
let my friends know on the other side of the aisle that the offer also
stands for them. The co-sponsors for this bill are willing to negotiate
technical aspects of the bill. The three principals I just outlined,
however, are not negotiable.
Twenty-five years after Watergate, the electoral system is out of
control. Our elections are awash in money which is flowing into the
system at record levels. Some public interest groups estimate that when
all is said and done, that nearly $1 billion will have been spent
during this last election cycle. Something must be done.
Do we have the perfect solution? No. I do not know if a perfect
solution even exists. But our bill, the McCain-Feingold-Thompson bill
is a good first step toward reform. I hope that soon we will be on the
floor debating this measure. I look forward to working
[[Page S385]]
with all my colleagues as we move forward. It is only in a bipartisan
manner, putting parochial interests aside, that we will be able to do
the people's business--that we will pass meaningful campaign finance
reform.
Mr. FEINGOLD. I rise today to join with my colleague from Arizona
[Mr. McCain] in introducing the Bipartisan Campaign Reform Act.
I want to acknowledge the Democratic and Republican Senators who have
agreed to join myself and the Senator from Arizona [Mr. McCain] as
original co-sponsors in introducing this historic legislation. Those
co-sponsors include the Senator from Tennessee [Mr. Thompson], the
Senator from Minnesota [Mr. Wellstone], the Senator from Florida [Mr.
Graham], the Senator from Connecticut [Mr. Dodd], the Senator from
Nebraska [Mr. Kerrey], the Senator from Massachusetts [Mr. Kerry], the
Senator from New Mexico [Mr. Bingaman], the Senator from Washington
[Mrs. Murray], the Senator from Wisconsin [Mr. Kohl], the Senator from
Oregon [Mr. Wyden], the Senator from Illinois [Ms. Moseley-Braun], the
Senator from Kentucky [Mr. Ford], the Senator from Vermont [Mr. Leahy],
the Senator from Nevada [Mr. Reid], the Senator from Georgia [Mr.
Cleland], the Senator from South Dakota [Mr. Johnson] and the Senator
from Illinois [Mr. Durbin].
I think it is clear Mr. President, that the few remaining pillars
holding up our crumbling election system finally collapsed. According
to the latest figures provided by the Federal Election Commission,
congressional candidates spent a total of $742 million in the 1996
elections, a noticeable increase over the 1994 levels despite the
absence of a single Senate contest in any of the largest States
including California, New York, Florida, Pennsylvania, or Ohio. And
that $742 million figure does not even include the record amounts of
so-called ``soft money'' contributions raised and spent by the national
political parties in the last election cycle.
Every campaign year we are hit with these astonishing spending
figures and every year we acknowledge that a new record has been set.
And just when the spending and abuses seem like they cannot get any
worse, they do. Last November, our campaign finance system lurched out
of control, filling the headlines and airwaves with charges and
countercharges about which candidates and parties were abusing our laws
and loopholes the worst. Another cadre of millionaires spent vast sums
of personal wealth on their campaigns, 94 percent of House and Senate
challengers lost their election bids, and the smallest percentage of
Americans went to the ballot box in 72 years.
Coupled with the continued need to reduce the Federal budget deficit,
there may be no more fundamentally important issue than the need to
pass meaningful reform of our campaign finance system.
The bill we are introducing today has several components, but is
centered primarily on what I believe are the two cornerstones of
reform. The first cornerstone is the creation of a voluntary system
that offers qualified candidates an opportunity to participate in the
electoral process without being compelled to raise and spend outrageous
sums of money.
This voluntary system merely says to candidates that if you agree to
follow a set of ground rules, we will provide you with the tools that
will not only reduce the high costs associated with campaigning, but at
the same time enhance your ability to sufficiently convey your message
to the voters of your State.
What are those ground rules and benefits, Mr. President.
First, candidates who elect to voluntarily participate in the system
must agree to limit the overall amount of money they spend on their
campaigns. This spending cap is based on the voting-age population in
each State. For example, in my State of Wisconsin the primary spending
limit would be about $1 million while the general election cap would be
about $1.5 million. In a larger State such as New York, the primary
limit would be about $2.7 million while the general election limit
would be about $4 million.
The second rule candidates must follow is to limit how much of their
personal wealth they contribute to their campaigns. Again, this would
be based on the size of each State. In Wisconsin, it would be about
$150,000 and in no State would it be higher than $250,000.
Finally, candidates must agree to raise 60 percent of their
contributions from individuals within their home States. This rule is
grounded in our belief that anyone wishing to receive the benefits of
the bill should be able to demonstrate a strong base of support from
the people they intend to represent. Moreover, candidates and
officeholders will be compelled to focus their campaign and fundraising
activities on the people who matter most --the voters back home.
If candidates elect to participate in the system and follow these
simple ground rules, they are entitled to certain benefits.
The first benefit is a postage discount. Eligible candidates would be
given a special postage rate, currently only available to non-profit
organizations and political parties, for a number of mailings equal to
two times the voting-age population of the candidate's State.
Second, the bill provides each eligible candidate with up to 30
minutes of free television advertising time from the broadcast stations
in the candidate's State and any adjoining States.
Third, and most importantly, the bill offers eligible candidates a
50-percent discount off of the lowest unit rate for their television
advertising 60 days before their general election and 30 days before
the primary. Current law merely provides Federal candidates with the
lowest unit rate--our bill would cut the costs of television
advertising for eligible candidates almost in half.
That, Mr. President, is the first foundation of meaningful reform,
creating a voluntary system--purely voluntary--that provides candidates
who agree to limit their campaign spending with the means to convey
their ideas and message to the voters and also significantly reduce
their campaign costs, therefore reducing the need to raise millions and
millions of dollars.
The second foundation of reform is to ban so-called ``soft money,''
those contributions to the national parties from corporations, labor
unions and wealthy individuals that are unlimited and unregulated by
federal election law and yet are funneled into federal campaigns around
the country.
It was soft money, Mr. President, that garnered so much outrage in
the last election. To illustrate how expansive of a loophole soft money
has become, consider how much of this unregulated money the national
parties have raised over the last two election cycles in which we had a
presidential election. In 1992, the Republican National Committee
raised $50 million in soft money while the Democratic National
Committee raised $36 million. In 1996, the RNC raised $141 million
while the DNC raised $122 million. Overall, soft money contributions to
the two parties went from $86 million in 1992 to $263 million in 1996.
That is a staggering increase.
In the wake of the countless media reports documenting this abuse,
Americans were left wondering why an individual who is limited to
contributing $1,000 to a federal candidate by federal election law is
somehow able to contribute $100,000 or $1 million to the Democratic or
Republican National Committees. They want to understand why labor
unions and corporations, which are prohibited by law from using their
treasury funds to make contributions or expenditures to advocate for or
against a federal candidate, are able to funnel millions and millions
of their treasury dollars directly into the two national parties and
indirectly into various House and Senate elections. Clearly, a ban on
soft money contributions to the political parties must be a part of a
serious reform proposal.
The Supreme Court has spoken clearly on the constitutionality of
limiting campaign contributions from individuals and organizations.
They have upheld the statutes barring corporate and labor union direct
contributions. They have upheld the statute limiting individuals to
contributing $1,000 to federal candidates per election and $20,000 to
national parties per year. And yet the soft money loophole has allowed
interested parties to blow these limits away, leaving the average
citizen who wishes to contribute $25 to their local congressman
wondering just how much of a voice they have in the electoral process.
The McCain-Feingold proposal simply bans all soft money contributions
[[Page S386]]
to the national parties. Individuals can still contribute to the
national parties, but they will have to abide by the current law
$20,000 ``hard money'' limit. Corporations and labor unions will also
be able to contribute to the national parties, but they too will have
to follow the ``hard money'' limits. That means they will have to
contribute through their separate segregate funds, also known as PAC's,
rather than using their general treasury funds, and their contributions
to the national parties will be limited to $15,000 per party committee
per year.
We heard considerable debate in the last election about foreign
money--both coming from foreign nationals oversees, which is clearly
illegal, and from noncitizens residing in the United States, which is
not. This is a problem and we have a new provision in our legislation
to address this abuse. But I have always said that the problem is
whether anyone should be permitted to contribute $400,000 in our
election system, whether it is from Jakarta or Janesville, WI. And the
soft money ban in our legislation will prohibit any future such
contributions, regardless of their source.
The legislation includes a new proposal that bars anyone who is not
eligible to vote in a federal election from contributing to a federal
candidate. This will affect noncitizens, minors under 18 years of age
and certain convicted felons. Simply put, if our laws and Constitution
do not allow an individual to participate in the political process with
their ballot, there is no reason the same individual should be
permitted to participate with their checkbook.
The McCain-Feingold bill includes a number of other important
provisions as well. For example, we propose a new definition of what
constitutes ``express advocacy'' in a federal election. ``Express
advocacy'' is the standard used to determine to what extent election
activities may be limited and regulated. If a particular activity, such
as an independent expenditure, is deemed to expressly advocate the
election or defeat of a particular federal candidate, then that
activity must be paid for with fully disclosed and limited ``hard
money'' dollars. Labor unions, corporations and other political
organizations would have to fund such activities through a PAC,
comprised of voluntary, limited and disclosed contributions.
If on the other hand, an expenditure is used for an activity that
does not expressly advocate the election or defeat of a particular
candidate, such as a television ad that attempts to raise important
issues without advocating a candidate, then that expenditure may be
funded with ``soft money'' dollars--undisclosed and unlimited monies,
such as corporation's profits or a labor union's member dues.
Unquestionably, the largest abuse in recent elections is the use of
non-party soft money to fund huge electioneering activities under the
guise that there is an absence of express advocacy. Current FEC
regulations defining express advocacy are so weak that these
organizations are able to channel unlimited resources into activities
that are thinly veiled as ``voter education'' or ``issue ads'' when in
truth they seek to directly advocate the election or defeat of a
candidate.
These activities, outside the scope of federal election law, have
come to dominate many House and Senate campaigns. And while political
parties and outside organizations have poured unlimited resources into
these ``issue ads,'' candidates have found their role in their own
elections shockingly diminished.
If we are to have any control of our election process, we must have a
clear standard in the law that defines what sort of activities are an
attempt to influence the outcome of a federal election.
The McCain-Feingold proposal includes a new definition of what
constitutes ``express advocacy.'' Under this proposal, the definition
of ``express advocacy'' will include any general public communication
that advocates the election or defeat of a clearly identified candidate
for federal office by using such expressions as ``vote for'',
``support'' or ``defeat''. Further, any disbursement aggregating
$10,000 or more for a communication that is made within 30 days of a
primary election or 60 days of a general election shall be considered
express advocacy if the communication refers to a clearly identified
candidate and a reasonable person would understand it as advocating the
election or defeat of that candidate.
If such a communication is made outside of the 30 day period before
the primary election or the 60 day period before the general election,
it shall be considered express advocacy if the communication is made
with the purpose of advocating the election or defeat of a candidate as
shown by one or more factors including a statement or action by the
person making the communication, the targeting or placement of the
communication, or the use by the person making the communication of
polling or other similar data relating to the candidate's campaign or
election.
This will ensure that a much larger proportion of the expenditures
made by political parties and independent organizations with the intent
to influence the outcome of a federal election will be covered by
federal law and subject to the appropriate restrictions and disclosure
requirements.
The McCain-Feingold proposal will also protect candidates who are
targeted by independent expenditures. First, the legislation requires
groups who fund independent expenditures to immediately disclose those
expenditures. The FEC would then be required to transmit a copy of that
report to any candidate who has agreed to limit their spending and has
been targeted by such an expenditure. This will give candidates advance
notice that they have been targeted. The legislation also allows
candidates to respond to such expenditures without these ``response
expenditures'' counting against their overall spending limit. This will
ensure that targeted candidates are not bound by the spending caps and
unable to respond. And finally, the bill tightens statutory language to
ensure that independent expenditures made by political parties are
truly independent and not coordinated with campaigns in any way.
The legislation also includes a ban on Political Action Committee
[PAC] contributions to federal candidates. In case such a ban is held
to be unconstitutional by the Supreme Court, the legislation includes a
``back-up'' provision that lowers the PAC contribution limit from
$5,000 to $1,000 and limits Senate candidates to accepting no more than
20% of the applicable overall spending limit in aggregate PAC
contributions.
The bipartisan bill is further helpful to challengers in that it
prohibits Senators from sending out taxpayer-financed, unsolicited
franked mass mailings in the calendar year of an election. Often, these
mass mailings are thinly disguised ``newsletters'' that help to bolster
an incumbent's name recognition and inform constituents of their
accomplishments. Such unsolicited activity by officeholders can be
unfair in an election year.
The final major piece of this reform effort is our enhanced
enforcement provisions. There is legitimate criticism that our federal
election laws are not adequately enforced, and much of this problem can
be directly attributed to Congress' unwillingness to provide adequate
funding to what is supposed to be the government's watchdog agency, the
Federal Election Commission. Regardless, there are reforms we can pass
that will allow the FEC to better enforce the current laws we have on
the books as well as the new laws enacted as part of this legislation.
First and foremost is a provision that will require all federal
campaigns to file their disclosure reports with the FEC electronically.
Currently, this is optional and the result is a disclosure system that
is marginally reliable. We need a disclosure system that is readily
accessible to the public and will allow the American people to know
where from and to whom the money is flowing. The bill also requires
candidates to disclose the name and address of every contributor who
gives more than $50 to a candidate. Currently, that threshold is only
for contributions over $200 and the result is millions of dollars of
undisclosed contributor information.
Second, we allow the FEC to conduct random audits of campaigns. This
will provide a mechanism to make sure candidates are complying with all
of the limitations and restrictions in federal election law.
[[Page S387]]
The bill toughens penalties for ``knowing and willful'' violations of
the law. If such a standard is met, the FEC is permitted to triple the
amount of the civil penalty. We must send a message to candidates and
campaigns that deliberate attempts to evade the law will be met with
serious penalties.
Mr. President, the support the McCain-Feingold proposal garnered last
year was bipartisan and broad based. It was strongly supported by
President Clinton, who first endorsed the McCain-Feingold proposal in
his State of the Union Address almost one year ago and has recently
reaffirmed his strong commitment to the legislation this year. It was
endorsed by Ross Perot, Common Cause, Public Citizen, United We Stand
America, the American Association of Retired Persons and some 30 other
grassroots organizations. It received editorial support from over 60
newspapers nationwide.
This legislation is also bicameral. Republican Representative Chris
Shays, Democratic Representative Marty Meehan and a number of others
will soon be introducing a House version of the McCain-Feingold
proposal in the 105th Congress.
Recently, the Wall Street Journal conducted a poll on this issue.
They found that 92 percent of the American people believe we spend too
much money on political campaigns. This is consistent with numerous
other polls that have found similar results. Coupled with the troubling
fact that the smallest percentage of Americans went to the ballot box
in 72 years, it is clear that the American people want meaningful
reform of our electoral process. It is also clear that they want less
polarization in the Congress, and for Democrats and Republicans to work
together and find effective solutions to our common problems.
For years, campaign finance reform has stalled because of the
inability of the two parties to join together and craft a reform
proposal that was fair to both sides. We believed we have bridged those
differences, and produced a proposal that calls for mutual disarmament
and will lead to fair and competitive elections.
It is my hope that the distinguished majority leader will recognize
how important this issue is to the American people and our democratic
system and will allow this legislation to be considered in the coming
weeks. I want to thank my friend from Arizona [Mr. McCain] for his
dedication to this issue.
Mr. THOMPSON. Mr. President I join my colleagues in reintroducing our
campaign finance reform legislation with mixed emotions. On the one
hand, I am more optimistic about the chances of our being able to enact
reforms than I was when we introduced our bill over a year ago. On the
other hand, I regret that it has taken another round of public
disappointment and anger over the role of money in federal elections to
bring us to this point.
The factors which led us to introduce this legislation in the last
Congress have become even more prominent. Too much money is needed, too
much time must be spent raising it, too much is asked of a limited
number of special interests, and too much is going on outside of the
regulatory system we established--some within the bounds of the law,
some allegedly not.
Most importantly, in my view, the public is increasingly concerned by
what they see happening here. If they have no faith in the system which
put us here, if they are turned off by what we do to get elected, how
are they going to trust us to carry out our work in their best
interests?
Next, money raising consumes an inordinate amount of office-holders'
and candidates' time and effort. Candidates should be reaching out to
as broad a spectrum of people and interests as possible, and not feel
they must concentrate on those who can afford to make a donation.
Last, it is difficult for a challenger to raise sufficient funds to
get his or her message out. Congress needs to move away from
professionalism and more toward a citizen legislature. The process
should be more open, instead of more closed. Because of the role money
plays, unless a candidate has access to large sums of money, he or she
is pretty much cut out of the process.
I believe the revised legislation I am joining my colleagues Senators
McCain and Feingold in introducing provides some solutions to these
problems. It doesn't provide all the solutions, or perfect solutions,
but it is a good faith effort and, in my view, a good place to start.
This legislation reduces the appearance and reality of special
interests buying and selling political favors by prohibiting federal
PACs, restricting contribution ``bundling'', prohibiting so-called
``soft money'', and putting a cap on out-of-state fundraising. I do not
believe PACs are inherently evil. There are other ways special
interests can enhance their financial influence in a campaign.
Contributions are bundled, or the word just goes out that a particular
interest--be it business, or social, or labor--is concentrating
donations on a particular race. PACs are a more formal association of
people with common interests. Our test in legislating reforms should be
whether the public feels they continue to serve an acceptable purpose.
Furthermore, in this revised bill we have tightened up on the
definitions of independent and coordinated expenditures, as well as
those for express advocacy. Today we have a system under which, in many
cases, the majority of the expenditures in an election are outside the
system and the candidate's control. In 1992, ``soft money''
expenditures by the Republican and Democratic parties totaled $86
million. In 1996, they totaled $263 million. It is little wonder that
we are looking at where some of it came from.
I look forward to working with our colleagues on both sides of the
aisle, in the House of Representatives, and with the President to
fashion and pass meaningful reform. I believe a successful effort will
renew the public's faith in our system and in us, and thus in our
ability to do what they sent us here to do.
Mr. WELLSTONE. Mr. President. I am extremely pleased to be an
original cosponsor of the McCain-Feingold-Thompson-Wellstone campaign
finance reform bill. I hope the Senate will bring it to the floor very
early in this Congress--preferably during the first three months of
this year. Campaign finance reform is clearly one of the most crucial
issues we face, and the public is more than ready for fundamental
reform.
I have been working hard with my colleagues on this bipartisan bill,
which we hope becomes the vehicle for genuine reform this year. I hope
that public dissatisfaction with campaign politics-as-usual, especially
as exemplified by the abuses of the campaign season just past, will
push this Congress to act decisively. We should choose the best aspects
of the various bills that will be introduced this year and fix the
problems which have made themselves so apparent. We know there will
opposition to any significant changes in the way we organize and
finance campaigns for federal office, but if there is sufficient
pressure from around the country, we can pass real reform.
So let us bring this bill to the floor and amend it. No reform bill
is perfect. Let Republicans and Democrats offer their changes. As the
only viable, bipartisan campaign finance reform bill, this proposal
represents our best hope for taking a significant step toward genuine
reform.
In some ways this bill does not go as far as I believe will be
necessary in order to repair our damaged campaign finance system. But
it would ban ``soft money'' contributions to parties. It would impose
voluntary spending limits and require greater disclosure of independent
expenditures. It would restrict PAC contributions and ``bundling,'' and
it would place more restrictions on foreign contributions. It is a good
bill. Its enactment would be an excellent start toward restoring
integrity to our political process.
We must enact comprehensive reform. But I am especially committed
this year to addressing the striking abuses in the areas of ``soft
money'' and issue-advocacy ads. A system which invites circumvention
mocks itself.
Mr. President, I intend to speak at greater length in the coming days
on the subject of campaign finance reform. Today, I enthusiastically
endorse this bipartisan effort to move real reform and to begin to
restore Americans' belief in our democratic institutions.
______
By Mr. DASCHLE (for himself, Mr. Johnson, Mr. Dorgan, Mr.
[[Page S388]]
Conrad, Mr. Kerrey, and Mr. Bingaman):
S. 26. A bill to provide a safety net for farmers and consumers and
to promote the development of farmer-owned value added processing
facilities, and for other purposes; to the Committee on Agriculture,
Nutrition, and Forestry.
agricultural safety net act of 1997
Mr. DASCHLE. Mr. President, I ask unanimous consent that
the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 26
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Agricultural Safety Net Act
of 1997''.
SEC. 2. MARKETING ASSISTANCE LOANS.
(a) In General.--Section 132 of the Agricultural Market
Transition Act (7 U.S.C. 7232) is amended--
(1) in subsection (a)(1)--
(A) by striking ``be--'' and all that follows through ``(A)
not'' and inserting ``be not''; and
(B) by striking ``; but'' and all that follows through
``per bushel'';
(2) in subsection (b)(1)--
(A) by striking ``be--'' and all that follows through ``(A)
not'' and inserting ``be not''; and
(B) by striking ``; but'' and all that follows through
``per bushel'';
(3) in subsection (c)(2), by striking ``or more than
$0.5192 per pound'';
(4) in subsection (d)--
(A) by striking ``be--'' and all that follows through ``(1)
not'' and inserting ``be not''; and
(B) by striking ``; but'' and all that follows through
``per pound''; and
(5) in subsection (f)--
(A) in paragraph (1)(B), by striking ``or more than
$5.26''; and
(B) in paragraph (2)(B), by striking ``or more than
$0.093''.
(b) Term of Loan.--Section 133 of the Agricultural Market
Transition Act (7 U.S.C. 7233) is amended by striking
subsection (c) and inserting the following:
``(c) Extensions.--The Secretary may extend the term of a
marketing assistance loan for any loan commodity for a period
not to exceed 6 months.''.
SEC. 3. EXPANSION OF CROP REVENUE INSURANCE.
Section 508 of the Federal Crop Insurance Act (7 U.S.C.
1508) is amended--
(1) in subsection (b)--
(A) by striking paragraph (9); and
(B) by redesignating paragraph (10) as paragraph (9); and
(2) by adding at the end the following:
``(o) Crop Revenue Insurance.--
``(1) In general.--The Secretary shall offer a producer of
wheat, feed grains, soybeans, or such other commodity as the
Secretary considers appropriate insurance against loss of
revenue from prevented or reduced production of the
commodity, as determined by the Secretary.
``(2) Administration.--Revenue insurance under this
subsection shall--
``(A) be offered by the Corporation or through a re-
insurance arrangement with a private insurance company;
``(B) offer at least a minimum level of coverage that is an
alternative to catastrophic crop insurance; and
``(C) be actuarially sound''.
SEC. 4. PRIORITY FOR FARMER-OWNED VALUE-ADDED PROCESSING
FACILITIES.
Section 310B of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1932) is amended by adding at the end the
following:
``(h) Priority for Farmer-Owned Value-Added Processing
Facilities.--In approving applications for loans and grants
authorized under this section, section 306(a)(11), and other
applicable provisions of this title (as determined by the
Secretary), the Secretary shall give a high priority to
applications for projects that encourage farmer-owned value-
added processing facilities.''.
______
By Mr. THURMOND:
S. 27. A bill to amend title 1 of the United States Code to clarify
the effect and application of legislation; to the Committee on the
Judiciary.
an act to clarify the application and effect of legislation
Mr. THURMOND. Mr. President, I rise today to introduce an act to
clarify the application and effect of legislation which the Congress
enacts. My act provides that unless future legislation expressly states
otherwise, new enactments would be applied prospectively, would not
create private rights of action, and would be presumed not to preempt
existing State law. This will significantly reduce unnecessary
litigation and court costs, and will benefit both the public and our
judicial system.
The purpose of this legislation is quite simple. Many congressional
enactments do not indicate whether the legislation is to be applied
retroactively, whether it creates private rights of action, or whether
it preempts existing State law. The failure or inability of the
Congress to address these issues in each piece of legislation results
in unnecessary confusion and litigation. Additionally, this contributes
to the high cost of litigation and the congestion of our courts.
In the absence of action by the Congress on these critical threshold
questions of retroactivity, private rights of action and preemption,
the outcome is left up to the courts. The courts are frequently
required to resolve these matters without any guidance from the
legislation itself. Although these issues are generally raised early in
a lawsuit, a decision that the lawsuit can proceed generally cannot be
appealed until the end of the case. If the appellate court eventually
rules that one of these issues should have prevented the trial, the
litigants have been put to substantial burden and unnecessary expense
which could have been avoided.
Trial courts around the country often reach conflicting and
inconsistent results on these issues, as do appellate courts when the
issues are appealed. As a result, many of these cases eventually make
their way to the Supreme Court. This problem was dramatically
illustrated after the passage of the Civil Rights Act of 1991. District
courts and courts of appeal all over this Nation were required to
resolve whether the 1991 act should be applied retroactively, and the
issue ultimately was considered by the U.S. Supreme Court. However, by
the time the Supreme Court resolved the issue in 1994, well over 100
lower courts had ruled on this question, and their decisions were
split. Countless litigants across the country expended substantial
resources debating this threshold procedural issue.
In the same way, the issues of whether new legislation creates a
private right of action or preempts State law are frequently presented
in courts around the country, yielding expensive litigation and
conflicting results.
The bill I am introducing today eliminates this problem by providing
the rule of construction that, unless future legislation specifies
otherwise, newly enacted laws are not to be applied retroactively, do
not create a private right of action, and are presumed not to preempt
State law. Of course, my bill does not in any way restrict the Congress
on these important issues. The Congress may override this ordinary rule
by simply stating when it wishes legislation to be retroactive, create
new private rights of action or preempt existing State law.
This act will eliminate uncertainty and provide rules which are
applicable when the Congress fails to specify its position on these
important issues in legislation it passes. One U.S. District Judge in
my State informs me that he spends 10 to 15 percent of his time on
these issues. It is clear that this legislation would save litigants
and our judicial system millions and millions of dollars by avoiding
much uncertainty and litigation which currently exists over these
issues.
Mr. President, if we are truly concerned about relieving the backlog
of cases in our courts and reducing the costs of litigation, we should
help our judicial system to focus its limited resources, time and
effort on resolving the merits of disputes, rather than deciding these
preliminary matters.
______
By Mr. LUGAR:
S. 29. A bill to repeal the Federal estate and gift taxes and the tax
on generation-skipping transfers; to the Committee on Finance.
S. 30 A bill to increase the unified estate and gift tax credit to
exempt small businesses and farmers from inheritance taxes; to the
Committee on Finance.
S. 31. A bill to phase out and repeal the Federal estate and gift
taxes and the tax on generation-skipping transfers; to the Committee on
Finance.
estate tax legislation
Mr. LUGAR. Mr. President, I am pleased to introduce three bills aimed
at eliminating the burden that estate and gift taxes place on our
economy. My first bill would repeal the estate and gift taxes outright.
My second bill would phase out the estate tax over 5 years by gradually
raising the unified credit each year until the tax is repealed after
the fifth year. My third bill would immediately raise the effective
unified credit from $600,000 to $5
[[Page S389]]
million in an effort to address the disproportionate burden that the
estate tax places on farmers and small businesses.
I believe the best option is a simple repeal of the estate tax. I am
hopeful that during this Congress, as Members become more aware of the
effects of this tax, we can eliminate it from the Tax Code. However,
even if the estate tax is not repealed, the unified credit must be
raised. The credit has not been increased since 1987 when it was
established at the $600,000 level. Since then, inflation has caused a
growing percentage of estates to be subjected to the estate tax. My
second bill is intended to highlight this point and provide a gradual
path to repeal.
Finally, my third bill focuses on relieving the estate tax burden
that falls disproportionately on farmers and small business owners. By
raising the exemption amount from $600,000 to $5 million, 96 percent of
estates with farm assets and 90 percent of estates with noncorporate
business assets would not have to pay estate taxes, according to the
IRS.
The estate tax began as a temporary tax in 1916, limited to 10
percent of one's inheritance. The tax intended to prevent the
accumulation of wealth in the hands of a few families. Today, however,
the effect is often the opposite. The estate tax forces many family-
owned farms and small businesses to sell to larger corporations,
further concentrating the wealth.
The estate tax has mushroomed into an exorbitant tax on death that
discourages savings, economic growth and job formation by blocking the
accumulation of entrepreneurial capital and by breaking up family
businesses and farms. With the highest marginal rate at 55 percent,
more than half of an estate can go directly to the government. By the
time the inheritance tax is levied on families, their assets have
already been taxed at least once. This form of double taxation violates
perceptions of fairness in our tax system.
In addition to tax liabilities, families often must pay lawyers,
accountants and planners to untangle one of the most complicated areas
of our tax code. In 1996, a Gallup poll estimated that a small family-
owned business spent an average of $33,138 for lawyers and accountants
to settle estates with the IRS. Larger family-owned businesses averaged
$70,000. Families averaged 167 hours complying with the Byzantine rules
of the estate tax, and the IRS estimates that they must audit nearly 40
percent of estate tax returns--a much higher rate than the 1.7 percent
audit rate on incomes taxes.
Let us consider the consequences of the estate tax on the American
economy. The estate tax is counterproductive because it falls so
heavily on our most dynamic job creators--small businesses. About two
out of every three new jobs in this country are created by small
business. From 1989 to 1991, a period of unusually slow economic
growth, virtually all new net jobs were created by firms with fewer
than twenty employees.
Recent economic studies and surveys of small business owners support
the thesis that the estate tax discourages economic growth. A 1994
study by the Tax Foundation concluded that the estate tax may have
roughly the same effect on entrepreneurial incentives as would a
doubling of income tax rates. A 1996 report prepared by Price
Waterhouse found that even more family business owners were concerned
about estate taxes than about capital gains taxes. A Gallup poll found
that one-third of family-owned businesses expect to sell their family's
firm to pay estate tax liability. Sixty-eight percent said the estate
tax makes them less likely to make investments in their business, and
60 percent said that without an estate tax, they would have expanded
their workforce.
If we are sincere about boosting economic growth, we must consider
what effect the estate tax has on a business owner deciding whether to
invest in new capital goods or hire a new employee. We must consider
its affect on a farmer deciding whether to buy new land, additional
livestock or a new tractor. If you know that when you die your children
will probably have to sell the business you build up over your
lifetime, does that make you more likely to take the risk of starting a
new business or enlarging your present business? It is apparent that
the estate tax does discourage business and farm investments.
One might expect that for all the economic disincentives caused by
the estate tax, it must at least provide a sizable contribution to the
U.S. Treasury. But in reality, the estate tax only accounts for about 1
percent of federal taxes. It cannot be justified as an indispensable
revenue raiser. Given the blow delivered to job formation and economic
growth, the estate tax may even cost the Treasury money. Our nation's
ability to create new jobs, new opportunities and wealth is damaged as
a result of our insistence on collecting a tax that earns less than 1
percent of our revenue.
But this tax affects more than just the national economy. It affects
how we as a nation think about community, family and work. Small
businesses and farms represent much more than assets. They represent
years of toil and entrepreneurial risk taking. They also represent the
hopes that families have for their children. Part of the American Dream
has always been to build up a business, farm or ranch so that economic
opportunities and a way of life can be passed on to one's children and
grandchildren.
I have some personal experience in this area. My father died when I
was in my early thirties, leaving his 604-acre farm in Marion County,
Indiana, to his family. I managed the farm, which built up considerable
debts during my father's illness at the end of his life. Fortunately,
after a number of years, we were successful in working out the
financial problems and repaying the money. We were lucky. That farm is
profitable and still in the family. But many of today's farmers and
small business owners are not so fortunate. Only about 30 percent of
businesses are transferred from parent to child, and only about 12
percent of businesses make it to a grandchild.
The strongest negative effects of the estate tax are felt by the
American family farmer. Currently, proprietorships and partnerships
make up about 95 percent of farms and ranches. In the vast majority of
cases, family farms do not produce luxurious lifestyles for their
owners. Farmers have large assets but relatively little income. The
income of a family-run farm depends on modest returns from sizable
amounts of invested capital. Much of what the farmer makes after taxes
in reinvested into the farm, bolstering the estate-tax-derived ``paper
value'' even more.
As happens so often, family farms cannot maintain the cash assets
necessary to pay estate taxes upon the death of the owner. Frequently,
selling part of a farm is not an option, either because there is no
suitable buyer or because reducing acreage would make the operation
inviable. In these cases, a fire-sale of the family farm or business is
required to pay the estate tax. Devastating to any business, such a
forced sale hits farm families particularly hard because they
frequently must sell at a price far below the invested value. Entire
lifetimes of work are liquidated, and the skills of family members
experienced in agriculture are lost to the American economy.
Mr. President, I introduce today a set of bills to repeal the estate
tax in an effort to expand investment incentives and job creation and
to reinvigorate an important part of the American Dream. I am hopeful
that Senators will join me in the effort to free small businesses,
family farms and our economy from this counterproductive tax.
______
By Mr. THURMOND:
S. 32. A bill to amend title 28 of the United States Code to clarify
the remedial jurisdiction of inferior Federal courts; to the Committee
on the Judiciary.
judicial taxation prohibition act
Mr. THURMOND. Mr. President, I rise today to introduce legislation to
prohibit Federal judges from ordering new taxes or ordering increases
in existing tax rates as a judicial remedy.
In 1990, the Supreme Court decided in Missouri versus Jenkins to
allow Federal judges to order new taxes or increases as a judicial
remedy. It is my firm belief that this narrow 5 to 4 decision permits
Federal judges to exceed their proper boundaries of jurisdiction and
authority under the Constitution.
Mr. President, this ruling and congressional response raises two
constitutional issues which warrant discussion. One is whether Federal
courts
[[Page S390]]
have authority under the Constitution to inject themselves into the
legislative area of taxation. The second constitutional issue arises in
light of the Judicial Taxation Prohibition Act which I am now
introducing to restrict the remedial jurisdiction of the Federal
courts. This narrowly drafted legislation would prohibit Federal judges
from ordering new taxes or ordering increases in existing tax rates. I
believe it is clear under article III that the Congress has the
authority to restrict the remedial jurisdiction of the Federal courts
in this fashion.
First, I want to speak on the issue of judicial taxation. Not since
Great Britain's ministry of George Grenville in 1765 have the American
people faced the assault of taxation without representation as now
authorized in the Jenkins decision.
As part of his imperial reforms to tighten British control in the
colonies, Grenville pushed the Stamp Act through the Parliament in
1765. This Act required excise duties to be paid by the colonists in
the forms of revenue stamps affixed to a variety of legal documents.
This action came at a time when the colonies were in an uproar over the
Sugar Act of 1764 which levied duties on certain imports such as sugar,
indigo, coffee, linens and other items.
The ensuing firestorm of debate in America centered on the power of
Britain to tax the colonies. James Otis, a young Boston attorney,
echoed the opinion of most colonists stating that the Parliament did
not have power to tax the colonies because Americans had no
representation in that body. Mr. Otis had been attributed in 1761 with
the statement that ``taxation without representation is tyranny.''
In October, 1765, delegates from nine states were sent to New York as
part of the Stamp Act Congress to protest the new law. It was during
this time that John Adams wrote in opposition to the Stamp Act, ``We
have always understood it to be a grand and fundamental principle . . .
that no freeman shall be subject to any tax to which he has not given
his own consent, in person or by proxy.'' A number of resolutions were
adopted by the Stamp Act Congress protesting the acts of Parliament.
One resolution stated, ``It is inseparably essential to the freedom of
a people . . . that no taxes be imposed on them, but with their own
consent, given personally or by their representatives.'' The
resolutions concluded that the Stamp Act had a ``manifest tendency to
subvert the rights and liberties of the colonists.''
Opposition to the Stamp Act was vehemently continued through the
colonies in pamphlet form. These pamphlets asserted that the basic
premise of a free government included taxation of the people by
themselves or through their representatives.
Other Americans reacted to the Stamp Act by rioting, intimidating tax
collectors, and boycotts directed against England. While Grenville's
successor was determined to repeal the law, the social, economic and
political climate in the colonies brought on the American Revolution.
The principles expressed during the earlier crisis against taxation
without representation became firmly embedded in our Federal
Constitution of 1787.
Yet, the Supreme Court has overlooked this fundamental lesson in
American history. The Jenkins decision extends the power of the
judiciary into an area which has traditionally been reserved as a
legislative function within the Federal, State, and local governments.
In the Federalist No. 48, James Madison explained that in our
democratic system, ``the legislative branch alone has access to the
pockets of the people.''
This idea has remained steadfast in America for over 200 years.
Elected officials with authority to tax are directly accountable to the
people who give their consent to taxation through the ballot box. The
shield of accountability against unwarranted taxes has been removed now
that the Supreme Court has sanctioned judicially imposed taxes. The
American citizenry lacks adequate protection when they are subject to
taxation by unelected, life tenured Federal judges.
There are many programs and projects competing for a finite number of
tax dollars. The public debate surrounding taxation is always intense.
Sensitive discussions are held by elected officials and their
constituents concerning increases and expenditures of scarce tax
dollars. To allow Federal judges to impose taxes is to discount
valuable public debate concerning priorities for expenditures of a
limited public resource.
Mr. President, the dispositive issue presented by the Jenkins
decision is whether the American people want, as a matter of national
policy, to be exposed to taxation without their consent by an
independent and insulated judiciary. I most assuredly believe they do
not.
This brings us to the second Constitutional issue which we must
address in light of this Jenkins decision. That issue is Congressional
authority under the Constitution to limit the remedial jurisdiction of
lower Federal courts established by the Congress. Article III, Section
1, of the Constitution provides jurisdiction to the lower Federal
courts as the ``Congress may from time to time ordain and establish.''
There is no mandate in the Constitution to confer equity jurisdiction
to the inferior Federal courts. Congress has the flexibility under
Article III to ``ordain and establish'' the lower Federal courts as it
deems appropriate. This basic premise has been upheld by the Supreme
Court in a number of cases including Lockerty versus Phillips, Lauf
versus E.G. Skinner and Co., Kline versus Burke Construction Co., and
Sheldon versus Sill.
This legislation would preclude the lower Federal courts from issuing
any order or decree requiring imposition of ``any new tax or to
increase any existing tax or tax rate.'' I firmly believe that this
language is wholly consistent with Congressional authority under
Article III, Section 1 of the Constitution.
There is nothing in this legislation which would restrict the power
of the Federal courts from hearing constitutional claims. It accords
due respect to all provisions of the Constitution and merely limits the
availability of a particular judicial remedy which has traditionally
been a legislative function. The objective of this legislation is
straightforward, to prohibit Federal courts from increasing taxes. The
language in this bill applies to the lower Federal courts and does not
deny claimants judicial access to seek redress of any Federal
constitutional right.
Mr. President, how long will it be before a Federal judge orders tax
increases to build new highways or prisons? I do not believe the
Founding Fathers had this type of activism in mind when they
established the judicial branch of government. The role of the
judiciary is to interpret the law. The power to tax is an exclusive
legislative right belonging to the Congress and governments at the
state level. We are accountable to the citizens and must justify any
new taxes. The American people deserve a timely response to the Jenkins
decision and we must provide protection against the imposition of taxes
by an independent judiciary.
______
By Mr. THURMOND:
S. 33. A bill to provide that a Federal justice or judge convicted of
a felony shall be suspended from office without pay, to amend the
retirement age and service requirements for Federal justices and judges
convicted of a felony, and for other purposes; to the Committee on the
Judiciary.
federal judge legislation
Mr. THURMOND. Mr. President, today I am introducing legislation which
provides that a justice or judge convicted of a felony shall be
suspended from office without pay pending the disposition of
impeachment proceedings.
I believe that the citizens of the United States will agree that
those who have been convicted of felonies should not be allowed to
continue to occupy positions of trust and responsibility in our
Government. Nevertheless, under current constitutional law it is
possible for judges to continue to receive a salary and to still sit on
the bench and hear cases even after being convicted of a felony. If
they are unwilling to resign, the only method which may be used to
remove them from the Federal payroll is impeachment.
Currently, the Congress has the power to impeach officers of the
Government who have committed treason,
[[Page S391]]
bribery, or other high crimes and misdemeanors. Even when a court has
already found an official guilty of a serious crime, Congress must then
essentially retry the official before he or she can be removed from the
Federal payroll. The impeachment process is typically very time
consuming and can occupy a great deal of the resources of Congress.
Mr. President, one way to solve this problem would be to amend the
Constitution. Today, I am also introducing a Senate resolution
proposing a constitutional amendment providing for forfeiture of office
by Government officials and judges convicted of felonies involving
moral turpitude. While I believe that a constitutional amendment may be
the best solution to the problem, I am also introducing this statutory
remedy to address the current situation.
This legislation will provide that a judge convicted of a felony
involving moral turpitude shall be suspended from office without pay.
The legislation specifies that the suspension begins upon conviction
and that no additional time accrues toward retirement from that date.
However, the judge would be reinstated if the criminal conviction is
reversed upon appeal or if articles of impeachment do not result in
conviction by the Senate.
Mr. President, the framers of the Constitution could not have
intended convicted felons to continue to serve on the bench and to
receive compensation once they have seriously violated the law and the
trust of the people. I urge my colleagues to carefully consider this
legislation.
______
By Mr. FEINGOLD:
S. 34. A bill to phase out Federal funding of the Tennessee Valley
Authority; to the Committee on Environment and Public Works.
tennessee valley authority legislation
Mr. FEINGOLD. Mr. President, today I am introducing legislation,
similar to that which I sponsored in the 104th Congress, to terminate
funding for little known activities of the Tennessee Valley Authority
[TVA], the TVA's nonpower programs, that are funded by appropriated
funds. In fiscal year 1997, Congress appropriated a total of $106
million to support these programs.
The TVA was created in 1933 as a government-owned corporation for the
unified development of a river basin comprised of parts of seven
States. Those activities included the construction of an extensive
power system, for which the region is now famous, and regional
development or ``nonpower'' programs. TVA's responsibilities in the
nonpower programs include maintaining its system of dams, reservoirs
and navigation facilities, and managing TVA-held lands. In addition,
TVA provides recreational programs, makes economic development grants
to communities, promotes public use of its land and water resources,
and operates an Environmental Research Center. Only the TVA power
programs are intended to be self-supporting, by relying on TVA utility
customers to foot the bill. The expense of these ``nonpower'' programs,
on the other hand, are covered by appropriated taxpayer funds.
This legislation terminates funding for all appropriated programs of
the TVA after fiscal year 2000. While I understand the role that TVA
has played in our history, I also know that we face tremendous Federal
budget pressure to reduce spending in many areas. I believe that TVA's
discretionary funds should be on the table, and that Congress should
act, in accordance with this legislation, to put the TVA appropriated
programs on a glide path toward dependence on sources of funds other
than appropriated funds. I think that this legislation is a reasonable
phased-in approach to achieve this objective, and explicitly codifies
both the fiscal year 1996 President's Budget and TVA's own
recommendations regarding activities at the TVA's Environmental
Research Center in Alabama.
I am introducing this legislation to terminate TVA'S appropriated
programs because there are lingering concerns, brought to light in a
1993 Congressional Budget Office [CBO] report, that nonpower program
funds subsidize activities that should be paid for by non-Federal
interests. When I ran for the Senate in 1992, I developed an 82+ point
plan to eliminate the Federal deficit and have continued to work on the
implementation of that plan since that time. That plan includes a
number of elements in the natural resource area, including the
termination of TVA's appropriations-funded programs.
In its 1993 report, CBO focused on two programs: The TVA Stewardship
Program and the Environmental Research Center. Stewardship activities
receive the largest share of TVA's appropriated funds. The funds are
used for dam repair and maintenance activities. According to 1995
testimony provided by TVA before the House Subcommittee on Energy and
Water Appropriations, when TVA repairs a dam it pays 70 percent, on
average, of repair costs with appropriated dollars and covers the
remaining 30 percent with funds collected from electricity ratepayers.
This practice of charging a portion of dam repair costs to the
taxpayer, CBO highlighted, amounts to a significant subsidy. If TVA
were a private utility, and it made modifications to a dam or performed
routine dredging, the ratepayers would pay for all of the costs
associated with that activity.
TVA also runs an Environmental Research Center, formerly a Fertilizer
Research Center, that received $15 million in funding in fiscal year
1997. The Center formerly developed and tested about 80 percent of
commercial fertilizers developed in the United States, which CBO
identified as a direct research cost subsidy to fertilizer companies.
The measure I am introducing today phases out Federal funding for the
Center by the year 2000.
In fiscal year 1996, I successfully sponsored an amendment to cap
funding for the TVA Environmental Research Center. The amendment also
required the Center to examine its research program, and evaluate how
it could reduce its dependence on appropriated funds. Though the
funding cap was eliminated in conference on the fiscal year 1996 Energy
and Water Appropriations, TVA did complete an assessment of its
research program. The Center proposes to make a complete transition to
competing for Federal grants by fiscal year 2000. My measure would
codify such a transition.
I have included specific language on the Environmental Research
Center in this legislation because I believe that it is important
certain regions do not receive earmarked preference over others in
receiving scarce environmental research, natural resource management
and economic development dollars from the Federal Government. In this
time of tight budgets, I believe that all opportunities to decrease and
supplement Federal support for projects and leverage additional
private, local and State government funds should be examined and
implemented when feasible.
Again, while I understand the important role that TVA played in the
development of the Tennessee Valley, many other areas of the country
have become more creative in Federal and State financing arrangements
to address regional concerns. Specifically, in those areas where there
may be excesses within TVA, I believe we can do better to curb
subsidies and eliminate the burden on taxpayers without completely
eliminating the TVA, as some in the other body have suggested.
Mr. President, I ask unanimous consent that the full text of this
measure be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 34
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TENNESSEE VALLEY AUTHORITY.
(a) Discontinuance of Appropriations.--Section 27 of the
Tennessee Valley Authority Act of 1933 (16 U.S.C. 831z) is
amended--
(1) by inserting ``for fiscal years through fiscal year
2000'' before the period; and
(2) by adding at the end the following: ``No appropriations
may be made available for the Tennessee Vally Authority
Environmental Research Center for fiscal year 2000.''.
(b) Plan.--No later than January 1, 1998, the Director of
the Office of Management and Budget shall develop and submit
a plan to Congress that--
(1) provides for the Tennessee Valley Authority
Environmental Research Center to make a transition to sources
of funds other than appropriated funds by fiscal year 2000;
and
(2) recommends any legislation that may be appropriate to
carry out the objectives of this Act.
______
By Mr. FEINGOLD:
S. 35. A bill to amend the Reclamation Reform Act of 1982 to clarify
the
[[Page S392]]
acreage limitations and incorporate a means test for certain farm
operations, and for other purposes; to the Committee on Energy and
Natural Resources.
irrigation subsidy reduction act of 1997
Mr. FEINGOLD. Mr. President, I am introducing a measure that I
sponsored in the 104th Congress to reduce the amount of Federal
irrigation subsidies received by large agribusiness interests. I
believe that reforming Federal water pricing policy by reducing
subsidies is an important area to examine as a means to achieve our
deficit reduction objectives. This legislation is also needed to curb
fundamental abuses of reclamation law that cost the taxpayer millions
of dollars every year.
In 1901, President Theodore Roosevelt proposed legislation, which
came to be known as the Reclamation Act of 1902, to encourage
development of family farms throughout the western United States. The
idea was to provide needed water for areas that were otherwise dry and
give small farms--those no larger than 160 acres--a chance, with a
helping hand from the Federal Government, to establish themselves.
According to a 1996 General Accounting Office report, since the passage
of the Reclamation Act, the Federal Government has spent $21.8 billion
to construct 133 water projects in the west which provide water for
irrigation. Irrigators, and other project beneficiaries, are required
under the law to repay to the Federal Government their allocated share
of the costs of constructing these projects.
However, as a result of the subsidized financing provided by the
Federal Government, some of the beneficiaries of Federal water projects
repay considerably less than their full share of these costs. According
to the 1996 GAO report, irrigators generally receive the largest amount
of Federal financial assistance. Since the initiation of the irrigation
program in 1902, construction costs associated with irrigation have
been repaid without interest. The GAO further found, in reviewing the
Bureau of Reclamation's financial reports, that $16.9 billion, or 78
percent, of the $21.8 billion of Federal investment in water projects
is considered to be reimbursable. Of the reimbursable costs, the
largest share--$7.1 billion--is allocated to irrigators. As of
September 30, 1994 irrigators have repaid only $941 million of the $7.1
billion they owe. GAO also found that the Bureau of Reclamation will
likely shift $3.4 billion of the debt owed by irrigators to other users
of the water projects for repayment.
There are several reasons why irrigators continue to receive such
significant subsidies. Under the Reclamation Reform Act of 1982,
Congress acted to expand the size of the farms that could receive
subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly
prohibits farms that exceed 960 acres in size from receiving federally-
subsidized water. These restrictions were added to the reclamation law
to close loopholes through which Federal subsidies were flowing to
large agribusinesses rather than the small family farmers that
reclamation projects were designed to serve. Agribusinesses were
expected to pay full cost for all water received on land in excess of
their 960 acre entitlement. Despite the express mandate of Congress,
regulations promulgated under the Reclamation Reform Act of 1982 have
failed to keep big agricultural water users from receiving federal
subsidies. The General Accounting Office and the Inspector General of
the Department of the Interior continue to find that the acreage limits
established in law are circumvented through the creation of
arrangements such as farming trusts. These trusts, which in total
acreage will exceed the 960 acre limit, are comprised of smaller units
that are not subject to the reclamation acreage cap. These smaller
units are farmed under a single management agreement often through a
combination of leasing and ownership.
In a 1989 GAO report, the activities of six agribusiness trusts were
fully explored. According to GAO, one 12,345 acre cotton farm (roughly
20 square miles), operating under a single partnership, was reorganized
to avoid the 960 acre limitation into 15 separate land holdings through
18 partnerships, 24 corporations, and 11 trusts which were all operated
as one large unit. A seventh very large trust was the sole topic of a
1990 GAO report. The Westhaven Trust is a 23,238 acre farming operation
in California's Central Valley. It was formed for the benefit of 326
salaried employees of the J.G. Boswell Company. Boswell, GAO found, had
taken advantage of section 214 of the RRA, which exempts from its 960
acre limit land held for beneficiaries by a trustee in a fiduciary
capacity, as long as no single beneficiary's interest exceeds the law's
ownership limits. The RRA, as I have mentioned, does not preclude
multiple land holdings from being operated collectively under a trust
as one farm while qualifying individually for federally subsidized
water. Accordingly, the J.G. Boswell Company reorganized 23,238 acres
it held as the Boston Ranch by selling them to the Westhaven Trust,
with the land holdings attributed to each beneficiary being eligible to
receive federally subsidized water.
Before the land was sold to Westhaven Trust, the J.G. Boswell Company
operated the acreage as one large farm and paid full cost for the
Federal irrigation water delivered for the 18-month period ending in
May 1989. When the trust bought the land, due to the loopholes in the
law, the entire acreage became eligible to receive federally subsidized
water because the land holdings attributed to the 326 trust
beneficiaries range from 21 acres to 547 acres--all well under the 960
acre limit.
In the six cases the GAO reviewed in 1989, owners or lessees paid a
total of about $1.3 million less in 1987 for Federal water than they
would have paid if their collective land holdings were considered as
large farms subject to the Reclamation Act acreage limits. Had
Westhaven Trust been required to pay full cost, GAO estimated in 1990,
it would have paid $2 million more for its water. The GAO also found,
in all seven of these cases, that reduced revenues are likely to
continue unless Congress amends the Reclamation Act to close the
loopholes allowing benefits for trusts.
The legislation that I am introducing today combines various elements
of proposals introduced during previous attempts by other Members of
Congress to close loopholes in the 1982 legislation and to impose a
$500,000 means test. This new approach limits the amount of subsidized
irrigation water delivered to any operation in excess of the 960 acre
limit which claimed $500,000 or more in gross income, as reported on
their most recent IRS tax form. If the $500,000 threshold were
exceeded, an income ratio would be used to determine how much of the
water should be delivered to the user at the full-cost rate, and how
much at the below-cost rate. For example, if a 961 acre operation
earned $1 million dollars, a ratio of $500,000 (the means test value)
divided by their gross income would determine the full cost rate, thus
the water user would pay the full cost rate on half of their acreage
and the below cost rate on the remaining half.
This means testing proposal will be featured, for the second year in
a row, in this year's 1997 Green Scissors report which is scheduled for
release next month. This report is compiled by Friends of the Earth and
Taxpayers for Common Sense and supported by a number of environmental
and consumer groups, including the Concord Coalition, and the
Progressive Policy Institute. The premise of the report is that there
are a number of subsidies and projects that could be cut to both reduce
the deficit and benefit the environment. This report underscores what I
and many others in the Senate have long known: we must eliminate
practices that can no longer be justified in light of our enormous
annual deficit and national debt. The Green Scissors recommendation on
means testing water subsidies indicates that if a test is successful in
reducing subsidy payments to the highest grossing 10% of farms, then
the Federal Government would recover between $440 million and $1.1
billion per year, or at least $2.2 billion over 5 years.
When countless Federal programs are subjected to various types of
means tests to limit benefits to those who truly need assistance, it
makes little sense to continue to allow large business interests to dip
into a program intended to help small entities struggling to survive.
Taxpayers have legitimate concerns when they learn that their
[[Page S393]]
hard earned tax dollars are being expended to assist large corporate
interests in select regions of the country who benefit from these
loopholes, particularly in tight budgetary times. Other users of
Federal water projects, such as the power recipients, should also be
concerned when they learn that they will be expected to pick up the tab
for a portion of the funds that irrigators were supposed to pay back.
The Federal water program was simply never intended to benefit these
large interests, and I am hopeful that legislative efforts, such as the
measure I am introducing today, will prompt Congress to fully
reevaluate our Federal water pricing policy.
In conclusion, Mr. President, it is clear that the conflicting
policies of the Federal Government in this area are in need of reform,
and that Congress should act. Large agribusinesses should not be able
to continue to soak the taxpayers, and should make their fair share of
payments to the Federal Government. We should act to close these
loopholes and increase the return to the Treasury from irrigators as
soon as possible.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 35
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Irrigation Subsidy Reduction
Act of 1997''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Federal reclamation program has been in existence
for over 90 years, with an estimated taxpayer investment of
over $70,000,000,000;
(2) the program has had and continues to have an enormous
effect on the water resources and aquatic environments of the
western States;
(3) irrigation water made available from Federal water
projects in the West is a very valuable resource for which
there are increasing and competing demands;
(4) the justification for providing water at less than full
cost was to benefit and promote the development of small
family farms and exclude large corporate farms, but this
purpose has been frustrated over the years by inadequate
implementation of subsidy and acreage limits;
(5) below-cost water prices tend to encourage excessive use
of scarce water supplies in the arid regions of the West, and
reasonable price increases to the wealthiest western farmers
would provide an economic incentive for greater water
conservation;
(6) the Federal Government has increasingly applied
eligibility tests based on income for Federal entitlement and
subsidy programs, measures that are consistent with the
historic approach of the reclamation program's acreage
limitations that seek to limit water subsidies to smaller
farms; and
(7) including a means test based on gross income in the
reclamation program will increase the effectiveness of
carrying out the family farm goals of the Federal reclamation
laws.
SEC. 3. AMENDMENTS.
(a) Definitions.--Section 202 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390bb) is amended--
(1) in paragraph (6), by striking ``owned or operated under
a lease which'' and inserting ``that is owned, leased, or
operated by an individual or legal entity and that'';
(2) by redesignating paragraphs (7), (8), (9), (10), and
(11) as paragraphs (8), (10), (11), (12), and (13),
respectively;
(3) by inserting after paragraph (6) the following:
``(7) Legal entity.--The term `legal entity' includes a
corporation, association, partnership, trust, joint tenancy,
or tenancy in common, or any other entity that owns, leases,
or operates a farm operation for the benefit of more than 1
individual under any form of agreement or arrangement.'';
(4) by inserting after paragraph (8) (as redesignated by
paragraph (2)) the following:
``(9) Operator.--
``(A) In general.--The term `operator'--
``(i) means an individual or legal entity that operates a
single farm operation on a parcel (or parcels) of land that
is owned or leased by another person (or persons) under any
form of agreement or arrangement (or agreements or
arrangements); and
``(ii) if the individual or legal entity--
``(I) is an employee of another individual or legal entity,
includes each such other individual or legal entity; or
``(II) is a legal entity that controls, is controlled by,
or is under common control with another legal entity,
includes each such other legal entity.
``(B) Operation of a farm operation.--For the purposes of
subparagraph (A), an individual or legal entity shall be
considered to operate a farm operation if the individual or
legal entity is the person that performs the greatest
proportion of the decisionmaking for, and supervision of, the
farm operation on land served with irrigation water.''; and
(5) by adding at the end the following:
``(14) Single farm operation.--
``(A) In general.--The term `single farm operation' means
the total acreage of land served with irrigation water for
which an individual or legal entity is the operator.
``(B) Rules for determining whether separate parcels are
operated as a single farm operation.--
``(i) Equipment- and labor-sharing activities.--The conduct
of equipment- and labor-sharing activities on separate
parcels of land by separate individuals or legal entities
shall not by itself serve as a basis for concluding that the
farm operations of the individuals or legal entities
constitute a single farm operation.
``(ii) Performance of certain services.--The performance by
an individual or legal entity of an agricultural chemical
application, pruning, or harvesting for a farm operation on a
parcel of land shall not by itself serve as a basis for
concluding that the farm operation on that parcel of land is
part of a single farm operation operated by the individual or
entity on other parcels of land.''.
(b) Identification of Owners, Lessees, and Operators of
Single Farm Operations.--The Reclamation Reform Act of 1982
(43 U.S.C. 390aa et seq.) is amended by inserting after
section 202 the following:
``SEC. 202A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS
OF SINGLE FARM OPERATIONS.
``(a) In General.--Subject to subsection (b), for each
parcel of land to which irrigation water is delivered or
proposed to be delivered, the Secretary shall identify a
single individual or legal entity as the owner, lessee, or
operator.
``(b) Shared Decisionmaking and Supervision.--If the
Secretary determines that no single individual or legal
entity is the owner, lessee, or other individual that
performs the greatest proportion of decisionmaking for, and
supervision of, the farm operation on a parcel of land--
``(1) all individuals and legal entities that own, lease,
or perform a proportion of decisionmaking and supervision
that is equal as among themselves but greater than the
proportion performed by any other individual or legal entity
shall be considered jointly to be the owner, lessee, or
operator; and
``(2) all parcels of land of which any such individual or
legal entity is the owner, lessee, or operator shall be
considered to be part of the single farm operation of the
owner, lessee, or operator identified under paragraph (1).''.
(c) Pricing.--Section 205 of the Reclamation Reform Act of
1982 (43 U.S.C. 390ee) is amended by adding at the end the
following:
``(d) Single Farm Operations Generating More Than $500,000
in Gross Farm Income.--
``(1) In general.--Notwithstanding subsections (a), (b),
and (c), in the case of--
``(A) a qualified recipient that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year; or
``(B) a limited recipient that received irrigation water on
or before October 1, 1981, and that reports gross farm income
from a single farm operation in excess of $500,000 for a
taxable year;
irrigation water may be delivered to the single farm
operation of the qualified recipient or limited recipient at
less than full cost to a number of acres that does not exceed
the number of acres determined under paragraph (2).
``(2) Maximum number of acres to which irrigation water may
be delivered at less than full cost.--The number of acres
determined under this paragraph is the number equal to the
number of acres of the single farm operation multiplied by a
fraction, the numerator of which is $500,000 and the
denominator of which is the amount of gross farm income
reported by the qualified recipient or limited recipient in
the most recent taxable year.
``(3) Inflation adjustment.--
``(A) In general.--For any taxable year beginning in a
calendar year after 1997, the $500,000 amount under
paragraphs (1) and (2) shall be equal to the product of--
``(i) $500,000; and
``(ii) the inflation adjustment factor for the taxable
year.
``(B) Inflation adjustment factor.--The term `inflation
adjustment factor' means, with respect to any calendar year,
a fraction the numerator of which is the GDP implicit price
deflator for the preceding calendar year and the denominator
of which is the GDP implicit price deflator for 1996. Not
later than April 1 of any calendar year, the Secretary shall
publish the inflation adjustment factor for the preceding
calendar year.
``(C) GDP implicit price deflator.--In subparagraph (B),
the term `GDP implicit price deflator' means the first
revision of the implicit price deflator for the gross
domestic product as computed and published by the Secretary
of Commerce.
``(D) Rounding.--If any adjustment of the $500,000 amount
determined under subparagraph (A) is not a multiple of $100,
the adjustment shall be rounded to the next lowest multiple
of $100.''.
(d) Certification of Compliance.--Section 206 of the
Reclamation Reform Act of 1982 (43 U.S.C. 390ff) is amended
to read as follows:
``SEC. 206. CERTIFICATION OF COMPLIANCE.
``(a) In General.--As a condition to the receipt of
irrigation water for land in a district that has a contract
described in section 203,
[[Page S394]]
each owner, lessee, or operator in the district shall furnish
the district, in a form prescribed by the Secretary, a
certificate that the owner, lessee, or operator is in
compliance with this title, including a statement of the
number of acres owned, leased, or operated, the terms of any
lease or agreement pertaining to the operation of a farm
operation, and, in the case of a lessee or operator, a
certification that the rent or other fees paid reflect the
reasonable value of the irrigation water to the productivity
of the land.
``(b) Documentation.--The Secretary may require a lessee or
operator to submit for the Secretary's examination--
``(1) a complete copy of any lease or other agreement
executed by each of the parties to the lease or other
agreement; and
``(2) a copy of the return of income tax imposed by chapter
1 of the Internal Revenue Code of 1986 for any taxable year
in which the single farm operation of the lessee or operator
received irrigation water at less than full cost.''.
(e) Trusts.--Section 214 of the Reclamation Reform Act of
1982 (43 U.S.C. 390nn) is repealed.
(f) Administrative Provisions.--
(1) Penalties.--Section 224(c) of the Reclamation Reform
Act of 1982 (43 U.S.C. 390ww(c)) is amended--
(A) by striking ``(c) The Secretary'' and inserting the
following:
``(c) Regulations; Data Collection; Penalties.--
``(1) Regulations; data collection.--The Secretary''; and
(B) by adding at the end the following:
``(2) Penalties.--Notwithstanding any other provision of
law, the Secretary shall establish appropriate and effective
penalties for failure to comply with any provision of this
Act or any regulation issued under this Act.''.
(2) Interest.--Section 224(i) of the Reclamation Reform Act
of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last
sentence and inserting the following: ``The interest rate
applicable to underpayments shall be equal to the rate
applicable to expenditures under section 202(3)(C).''.
(g) Reporting.--Section 228 of the Reclamation Reform Act
of 1982 (43 U.S.C. 390zz) is amended by inserting ``operator
or'' before ``contracting entity'' each place it appears.
(h) Memorandum of Understanding.--The Reclamation Reform
Act of 1982 (43 U.S.C. 390aa et seq.) is amended--
(1) by redesignating sections 229 and 230 as sections 230
and 231, respectively; and
(2) by inserting after section 228 the following:
``SEC. 229. MEMORANDUM OF UNDERSTANDING.
``The Secretary, the Secretary of the Treasury, and the
Secretary of Agriculture shall enter into a memorandum of
understanding or other appropriate instrument to permit the
Secretary, notwithstanding section 6103 of the Internal
Revenue Code of 1986, to have access to and use of available
information collected or maintained by the Department of the
Treasury and the Department of Agriculture that would aid
enforcement of the ownership and pricing limitations of
Federal reclamation law.''.
______
By Mr. FEINGOLD:
S. 37. A bill to terminate the Uniformed Services University of the
Health Sciences; to the Committee on Armed Services.
the UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES TERMINATION
AND DEFICIT REDUCTION ACT OF 1997
Mr. FEINGOLD. Mr. President, I am today introducing legislation
terminating the Uniformed Services University of the Health Sciences
[USUHS], a medical school run by the Department of Defense. The measure
is one I proposed when I ran for the U.S. Senate, and was part of a
larger, 82 point plan to reduce the Federal budget deficit. The
Congressional Budget Office [CBO] estimates that terminating the school
would save $369 million over the next six years.
USUHS was created in 1972 to meet an expected shortage of military
medical personnel. Today, however, USUHS accounts for only a small
fraction of the military's new physicians, less than 12 percent in 1994
according to CBO. This contrasts dramatically with the military's
scholarship program which provided over 80 percent of the military's
new physicians in that year.
Mr. President, what is even more troubling is that USUHS is also the
single most costly source of new physicians for the military. CBO
reports that based on figures from 1995, USUHS trained physicians cost
the military $615,000 per person. By comparison, the scholarship
program cost about $125,000 per person, with other sources providing
new physicians at a cost of $60,000. As CBO noted in their Spending and
Revenue Options publication, even adjusting for the lengthier service
commitment required of USUHS trained physicians, the cost of training
them is still higher than that of training physicians from other
sources, an assessment shared by the Pentagon itself. Indeed, CBO's
estimate of the savings generated by this measure also includes the
cost of obtaining physicians from other sources.
The other body has voted to terminate this program on several
occasions, and the Vice President's National Performance Review joined
others, ranging from the Grace Commission to the CBO, in raising the
question of whether this medical school, which graduated its first
class in 1980, should be closed because it is so much more costly than
alternative sources of physicians for the military.
Mr. President, the real issue we must address is whether USUHS is
essential to the needs of today's military structure, or if we can do
without this costly program. The proponents of USUHS frequently cite
the higher retention rates of USUHS graduates over physicians obtained
from other sources as a justification for continuation of this program,
but while a greater percentage of USUHS trained physicians may remain
in the military longer than those from other sources, the Pentagon
indicates that the alternative sources already provide an appropriate
mix of retention rates. Testimony by the Department of Defense before
the Subcommittee on Force Requirements and Personnel noted that the
military's scholarship program meets the retention needs of the
services.
And while USUHS only provides a small fraction of the military's new
physicians, it is important to note that relying primarily on these
other sources has not compromised the ability of military physicians to
meet the needs of the Pentagon. According to the Office of Management
and Budget, of the approximately 2,000 physicians serving in Desert
Storm, only 103, about 5 percent, were USUHS trained.
Mr. President, let me conclude by recognizing that USUHS has some
dedicated supporters in the U.S. Senate, and I realize that there are
legitimate arguments that those supporters have made in defense of this
institution. The problem, however, is that the federal government can
no longer afford to continue every program that provides some useful
function.
In the face of our staggering national debt and annual deficits, we
must prioritize and eliminate programs that can no longer be sustained
with limited Federal dollars, or where a more cost-effective means of
fulfilling those functions can be substituted. The future of USUHS
continues to be debated precisely because in these times of budget
restraint it does not appear to pass the higher threshold tests which
must be applied to all Federal spending programs.
Mr. President, I ask unanimous consent that the text of the
legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 37
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Uniformed Services
University of the Health Sciences Termination and Deficit
Reduction Act of 1997''.
SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF
THE HEALTH SCIENCES.
(a) Termination.--
(1) In general.--The Uniformed Services University of the
Health Sciences is terminated.
(2) Conforming amendments.--
(A) Chapter 104 of title 10, United States Code, is
repealed.
(B) The table of chapters at the beginning of subtitle A of
such title, and at the beginning of part III of such
subtitle, are each amended by striking out the item relating
to chapter 104.
(b) Effective Date.--The termination referred to in
subsection (a), and the amendments made by such subsection,
shall take effect on the date of the graduation from the
Uniformed Services University of the Health Sciences of the
last class of students that enrolled in such university on or
before the date of the enactment of this Act.
______
By Mr. FEINGOLD (for himself and Mr. McCain):
S. 38. A bill to reduce the number of executive branch political
appointees; to the Committee on Governmental Affairs.
[[Page S395]]
presidential appointees legislation
Mr. FEINGOLD. Mr. President, I am pleased to be joined by my good
friend the senior Senator from Arizona [Mr. McCain] in introducing
legislation to reduce the number of presidential political appointees.
Specifically, the bill caps the number of political appointees at
2,000. The Congressional Budget Office [CBO] estimates this measure
would save $392 million over the next 6 years.
The bill is based on the recommendations of a number of distinguished
panels, including most recently, the Twentieth Century Fund Task Force
on the Presidential Appointment Process. The task force findings,
released last fall, are only the latest in a long line of
recommendations that we reduce the number of political appointees in
the executive branch. For many years, the proposal has been included in
CBO's annual publication Reducing the Deficit: Spending and Revenue
Options, and it was one of the central recommendations of the National
Commission on the Public Service, chaired by former Federal Reserve
Board Chairman Paul Volcker.
Mr. President, this proposal is also consistent with the
recommendations of the Vice President's National Performance Review,
which called for reductions in the number of federal managers and
supervisors, arguing that ``over-control and micro management'' not
only ``stifle the creativity of line managers and workers, they consume
billions per year in salary, benefits, and administrative costs.''
Those sentiments were also expressed in the 1989 report of the
Volcker Commission, when it argued the growing number of presidential
appointees may ``actually undermine effective presidential control of
the executive branch.'' The Volcker Commission recommended limiting the
number of political appointees to 2,000, as this legislation does.
Mr. President, it is essential that any administration be able to
implement the policies that brought it into office in the first place.
Government must be responsive to the priorities of the electorate. But
as the Volcker Commission noted, the great increase in the number of
political appointees in recent years has not made government more
effective or more responsive to political leadership.
Between 1980 and 1992, the ranks of political appointees grew 17
percent, over three times as fast as the total number of executive
branch employees and looking back to 1960 their growth is even more
dramatic. In his recently published book Thickening Government: Federal
Government and the Diffusion of Accountability, author Paul Light
reports a startling 430 percent increase in the number of political
appointees and senior executives in Federal Government between 1960 and
1992.
In recommending a cap on political appointees, the Volcker Commission
report noted that the large number of Presidential appointees simply
cannot be managed effectively by any President or White House. This
lack of control is aggravated by the often competing political agendas
and constituencies that some appointees might bring with them to their
new positions. Altogether, the commission argued that this lack of
control and political focus ``may actually dilute the President's
ability to develop and enforce a coherent, coordinated program and to
hold cabinet secretaries accountable.''
The Volcker Commission also reported that the excessive number of
appointees are a barrier to critical expertise, distancing the
President and his principal assistants from the most experienced career
officials. Though bureaucracies can certainly impede needed reforms,
they can also be a source of unbiased analysis. Adding organizational
layers of political appointees can restrict access to important
resources, while doing nothing to reduce bureaucratic impediments.
Author Paul Light says, ``As this sediment has thickened over the
decades, presidents have grown increasingly distant from the lines of
government, and the front lines from them.'' Light adds that
``Presidential leadership, therefore, may reside in stripping
government of the barriers to doing its job effectively* * *''
Finally, the Volcker Commission also asserted that this thickening
barrier of temporary appointees between the President and career
officials can undermine development of a proficient civil service by
discouraging talented individuals from remaining in Government service
or even pursuing a career in Government in the first place.
Mr. President, former Attorney General Elliot Richardson put it well
when he noted:
But a White House personnel assistant sees the position of
deputy assistant secretary as a fourth-echelon slot. In his
eyes that makes it an ideal reward for a fourth-echelon
political type--a campaign advance man, or a regional
political organizer. For a senior civil servant, it's irksome
to see a position one has spent 20 or 30 years preparing for
preempted by an outsider who doesn't know the difference
between an audit exception and an authorizing bill.
Mr. President, the report of the Twentieth Century Fund Task Force on
the Presidential Appointment Process identified another problem
aggravated by the mushrooming number of political appointees, namely
the increasingly lengthy process of filling these thousands of
positions. As the task force reported, both President Bush and
President Clinton were into their presidencies for many months before
their leadership teams were fully in place. The task force noted that
``on average, appointees in both administrations were confirmed more
than eight months after the inauguration--one-sixth of an entire
presidential term.'' By contrast, the report noted that in the
presidential transition of 1960, ``Kennedy appointees were confirmed,
on average, two and a half months after the inauguration.''
In addition to leaving vacancies among key leadership positions in
Government, the appointment process delays can have a detrimental
effect on potential appointees. The Twentieth Century Fund Task Force
reported that appointees can ``wait for months on end in a limbo of
uncertainty and awkward transition from the private to the public
sector.''
Mr. President, a story in the National Journal in November of 1993,
focusing upon the delays in the Clinton administration in filling
political positions, noted that in Great Britain, the transition to a
new government is finished a week after it begins, once 40 or so
political appointments are made. That certainly is not the case in the
United States, recognizing, of course, that we have a quite different
system of government from the British parliament form of government.
Nevertheless, there is little doubt that the vast number of political
appointments that are currently made creates a somewhat cumbersome
process, even in the best of circumstances. The long delays and logjams
created in filling these positions under the Bush and Clinton
administrations simply illustrates another reason why the number of
positions should be cut back.
Mr. President, let me also stress that the problem is not simply the
initial filling of a political appointment, but keeping someone in that
position over time. In a recent report, the General Accounting Office
reviewed a portion of these positions for the period of 1981 to 1991,
and found high levels of turnover--7 appointees in 10 years for one
position--as well as delays, usually of months but sometimes years, in
filling vacancies.
Mr. President, while I recognize that this legislative proposal is
not likely to be popular with some in both parties, I want to stress
that this effort to reduce the number of political appointees is
bipartisan. The sponsorship of this bill reflects this, and the bill
itself applies not only to the current Democratic administration, but
to all future administrations as well, whatever their party
affiliation.
The sacrifices that deficit reduction efforts require must be spread
among all of us. This measure requires us to bite the bullet and impose
limitations upon political appointments that both parties may well wish
to retain. The test of commitment to deficit reduction, however, is not
simply to propose measures that impact someone else.
As we move forward to implement the NPR recommendations to reduce the
number of government employees, streamline agencies, and make
government more responsive, we should also right size the number of
political appointees, ensuring a sufficient number to implement the
policies of any administration without burdening the Federal budget
with unnecessary, possibly counterproductive political jobs.
Mr. President, when I ran for the U.S. Senate in 1992, I developed an
82 point
[[Page S396]]
plan to reduce the Federal deficit and achieve a balanced budget. Since
that time, I have continued to work toward enactment of many of the
provisions of that plan and have added new provisions on a regular
basis.
The legislation I am introducing today reflects one of the points
included on the original 82 point plan calling for streamlining various
Federal agencies and reducing agency overhead costs. I am pleased to
have this opportunity to continue to work toward implementation of the
elements of the deficit reduction plan.
Mr. President, I ask unanimous consent that the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 38
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REDUCTION IN NUMBER OF POLITICAL APPOINTEES.
(a) Definition.--In this section, the term ``political
appointee'' means any individual who--
(1) is employed in a position on the executive schedule
under sections 5312 through 5316 of title 5, United States
Code;
(2) is a limited term appointee, limited emergency
appointee, or noncareer appointee in the senior executive
service as defined under section 3132(a) (5), (6), and (7) of
title 5, United States Code, respectively; or
(3) is employed in a position in the executive branch of
the Government of a confidential or policy-determining
character under Schedule C of subpart C of part 213 of title
5 of the Code of Federal Regulations.
(b) Limitation.--The President, acting through the Office
of Management and Budget and the Office of Personnel
Management, shall take such actions as necessary (including
reduction in force actions under procedures established under
section 3595 of title 5, United States Code) to ensure that
the total number of political appointees shall not exceed
2,000.
(c) Effective Date.--This section shall take effect on
October 1, 1997.
Mr. McCAIN. Mr. President, I am pleased to join with my good friend,
the junior Senator from Wisconsin [Mr. Feingold] to introduce
legislation that will limit the number of political appointees in the
executive branch a total of 2000. This legislation could save an
estimated $400 million over the next five years.
There is no doubt that our Government is bloated. In recent years,
the number of political appointees has grown exponentially. Author Paul
Light, in his book Thickening Government: Federal Government and the
Diffusion of Accountability, reports a 430 percent increase in the
number of political appointees and senior executives in the Federal
Government between 1960 and 1992. The Congressional Research Service
also found that from 1980 to 1992, the number of political appointees
in the executive branch grew 3 times faster than the total number of
executive branch employees 17 percent compared to 5.6 percent.
The Government must continue to tighten its belt, and the executive
branch must not protect itself from needed cuts. Our current $5
trillion debt and our efforts to reach a balance budget by the year
2002 call for immediate action. No area of Government spending should
be overlooked, not the least of which is funding for Government
employees. I am hopeful that this administration will live up to their
rhetoric about reducing the deficit and balancing the budget by
supporting this and other measures that get us closer to a balanced
budget.
Since this measure is consistent with the recommendations of the Vice
President's National Performance Review [NPR], the administration
should not have a problem endorsing this legislation. NPR called for
reducing Federal managers and supervisors, arguing that ``over-control
and micromanagement'' not only ``stifle the creativity of line managers
and workers, they consume billions per year in salary, benefits, and
administrative costs.''
Limiting the number of political appointees to 2000 was recommended
by former Federal Reserve Board Chairman Paul Volcker who chaired The
National Commission on Public Service. His report supported reducing
the number of Presidential appointees, stating that the number of
political appointees may ``actually undermine effective presidential
control of the executive branch.''
Despite all this compelling evidence, Senator Feingold and I have yet
to be successful in actually getting this legislation enacted. Last
year, we passed an amendment to the Treasury-Postal appropriations bill
that would have placed a 2300 cap on political appointees.
Unfortunately, however, the cap was dropped in conference. Given the
new era of bipartisanship and the President's repeated statements that
he wants to balance the budget, I am hopeful that we will be successful
in this Congress.
I look forward to working with my friend from Wisconsin to enact this
important legislation that will streamline Government operations and
save the taxpayers money.
______
By Mr. STEVENS (for himself, Mr. Breaux, Mr. Thurmond, and Mr.
Murkowski):
S. 39. A bill to amend the Marine Mammal Protection Act of 1972 to
support the International Dolphin Conservation Program in the eastern
tropical Pacific Ocean, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
the international dolphin conservation program act
Mr. STEVENS. Mr. President, during the 104th Congress, Senators
Breaux, Chafee, Moseley-Braun, Murkowski, Thurmond, Simpson and I
introduced legislation (S. 1420) to implement the ``Panama
Declaration,'' an agreement under which twelve nations would comply
with a new regime to reduce dolphin mortality and conserve marine
resources in the Eastern Tropical Pacific Ocean (ETP). Our bill was
approved by voice vote in the Senate Commerce Committee, and its
companion (H.R. 2823) was passed overwhelmingly in the House of
Representatives.
Because of our focus in the second session of the 104th Congress on
reauthorizing the Magnuson-Stevens Fishery Conservation and Management
Act, we were not able to turn to the International Dolphin Conservation
Program Act until the closing weeks, and opponents of the measure were
able to prevent its passage simply by objecting on the Senate floor. We
believe the bill would have passed in the Senate by a large majority if
they had not objected.
I am pleased today to be joined by Senators Breaux, Thurmond, and
Murkowski in reintroducing the bill. On September 30, 1996, Majority
Leader Lott committed to us that he will do everything he can to
provide time on the Senate floor if it is necessary to pass this
important measure.
The Panama Declaration would cap dolphin mortality in the ETP at
5,000 dolphin per year and set a goal of eventually eliminating dolphin
mortality altogether in that area. Only twenty years ago, hundreds of
thousands of dolphin were being killed each year in the ETP. The
Declaration presents the opportunity to lock in a maximum of 5,000
dolphin mortalities per year and strengthen other conservation
measures, including measures relating to fishery observers, bycatch
reduction, and the protection of specific stocks of dolphins in the
ETP.
The dolphin mortality cap and new conservation measures under the
Panama Declaration will only take effect if specific changes are made
to U.S. law. The two key changes are: (1) a change to allow tuna caught
in compliance with the Panama Declaration (including through the
encirclement of dolphins) to be imported into the United States; and
(2) a change so that ``dolphin Safe'' in the U.S. will mean tuna caught
in a set in which no dolphin mortality occurred (rather than through
non-encirclement). Our bill would make these changes and allow the new
regime under the Panama Declaration to go forward. If the U.S. does not
make the changes, other nations will move forward without adequate
conservation measures and significant increases in dolphin mortality
may occur.
Our legislation would guarantee U.S. consumers that no dolphin were
killed during the harvest of tuna that is labeled as ``dolphin safe.''
Under existing law, dolphins may have been killed, but as long as the
tuna was not harvested by intentionally encircling dolphins, it can be
labeled as ``dolphin safe.'' To avoid consumer confusion and increase
confidence in the ``dolphin safe'' label, other labels with respect to
marine mammals will not be allowed. Only ETP tuna caught without
killing any dolphins would be labeled as ``dolphin safe.''
The Administration helped negotiate the Panama Declaration, and the
[[Page S397]]
President and Vice President strongly support our legislation to
implement it. The bill is also supported by the U.S. tuna boat owners,
mainstream environmental groups such as Greenpeace, the Center for
Marine Conservation, the Environmental Defense Fund, the National
Wildlife Federation, and the World Wildlife Fund, the American
Sportfishing Association, the National Fisherman's Union, Seafarers
International, and United Industrial Workers, the 12 nations who signed
the Panama Declaration (Belize, Columbia, Costa Rica, Ecuador, France,
Honduras, Mexico, Panama, Spain, Vanuatu, and Venezuela), and the
editorial boards of a number of the major U.S. newspapers.
I ask for unanimous consent that the following material related to
the bill be printed in the Record immediately following my statement:
First, the Panama Declaration; second, letter from President Clinton to
the President to the Mexico supporting the legislation; third, letter
from Vice President Gore supporting the legislation; fourth, article by
State Department Under Secretary Tim Wirth supporting the legislation;
and fifth, editorials, op-eds, and opinion pieces from USA Today, the
Washington Post, the Dallas Morning News, the Houston Chronicle, the
New York Times, and the Christian Science Monitor supporting the
legislation; sixth, letters from numerous environmental, fishing, and
labor organizations supporting the legislation.
I look forward to working with the Chairman and Ranking Member of the
Senate Commerce Committee to secure the expeditious approval of the
Committee of this important bill, and with the majority leader once the
bill has been reported by the Committee.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Declaration of Panama
The Governments of Belize, Colombia, Costa Rica, Ecuador,
France, Honduras, Mexico, Panama, Spain, United States of
America, Vanuatu and Venezuela, meeting in Panama City,
Republic of Panama on October 4, 1995, hereby reaffirm the
commitments and objectives of the La Jolla Agreement of (1)
progressively reducing dolphin mortality in the eastern
Pacific Ocean (EPO) fishery to levels approaching zero
through the setting of annual limits and (2) with a goal of
eliminating dolphin mortality in this fishery, seeking
ecologically sound means of capturing large yellowfin tunas
not in association with dolphins.
Recognizing the strong commitments of nations participating
in the La Jolla Agreement and the substantial successes
realized through multilateral cooperation and supporting
national action under that Agreement, the Governments meeting
in Panama, including those which are, or have announced their
intention to become, members of the Inter-American Tropical
Tuna Commission (IATTC), announce their intention to
formalize by January 31, 1996, the La Jolla Agreement as a
binding legal instrument which shall be open to all nations
with coastlines bordering the EPO or with vessels fishing for
tuna in this region. This shall be accomplished by adoption
of a binding resolution of the IATTC or other legally binding
instrument. The adoption of the IATTC resolution or other
legally binding instrument, that utilizes to the maximum
extent possible the existing structure of the IATTC, is
contingent upon the enactment of changes in United States law
as envisioned in Annex I to this Declaration. The binding
legal instrument shall build upon the strengths and
achievements of the La Jolla Agreement, the working groups
established under it, and the actions of the Governments
participating in that Agreement. This binding legal
instrument shall consist of the La Jolla Agreement, its
appendices, and the decisions of the governments under that
Agreement as modified to achieve the objectives and
commitments contained herein.
The Governments meeting in Panama agree that in concluding,
adopting, and implementing this binding legal instrument,
they will:
Commit to the conservation of ecosystems and the
sustainable use of living marine resources related to the
tuna fishery within the EPO. Adopt conservation and
management measures that ensure the long-term sustainability
of tuna stocks and other stocks of living marine resources in
the EPO. Such measures shall be based on the best scientific
evidence, including that based on a precautionary
methodology, and shall be designed to maintain or restore the
biomass of harvested stocks at or above levels capable of
producing maximum sustainable yield, and with the goal to
maintain or restore the biomass of associated stocks at or
above levels capable of producing maximum sustainable yield.
These measures and methodology should take into
consideration, and account for, natural variation,
recruitment rate, natural mortality rate, population growth
rate, individual growth rate, population parameters K and r,
and scientific uncertainty.
Commit, according to their capacities and in coordination
with the IATTC, to the assessment of the catch and bycatch of
juvenile yellowfin tuna and other stocks of living marine
resources related to the tuna fishery in the EPO and the
establishment of measures to, inter alia, avoid, reduce and
minimize the bycatch of juvenile yellowfin tuna and bycatch
of non-target species, in order to ensure the long-term
sustainability of all these species, taking into
consideration of the interrelationships among species in the
ecosystem.
Commit in the exercise of their national sovereignty to
enact and enforce this instrument through domestic
legislation and/or regulation, as appropriate.
Adopt cooperative measures to ensure compliance with this
instrument, building upon decision IGM 6/93, Appendix IV,
``Guiding Principles Respecting Relationships between Stats
Both Party and Non-Party to the Agreement,'' taken by the
nations participating in the La Jolla Agreement Working Group
in Vanuatu in June 1993, and advance the work of the Working
Group on Compliance, building upon decision IGM 6/93,
Appendix V, ``Options for Action Against Nations Not
Complying With the Agreement.'' (Annex II)
Enhance the practice of reviewing and reporting on
compliance with this instrument, building upon past practices
under the La Jolla Agreement.
Establish a per-stock per-year cap of between 0.2% of the
Minimum Estimated Abundance (Nmin) (as calculated by the U.S.
National Marine Fisheries Service or equivalent calculation
standard) and 0.1% of Nmin, but in no event shall the total
annual mortality exceed 5000 consistent with the commitments
and objectives stated in the preamble above. In the year
2001, the per-stock, per-year cap shall be 0.1% of Nmin.
Conduct in 1998 a scientific review and assessment of
progress toward the year 2001 objective, and consider
recommendations as appropriate. Up to the year 2001, in the
event that annual mortality of 0.2% of Nmin is exceeded for
any stock, all sets on that stock and on any mixed schools
containing members of that stock shall cease for that fishing
year. Beginning in the year 2001, in the event that annual
mortality of 0.1% of Nmin for any stock is exceeded, all sets
on that stock and on any mixed schools containing members of
that stock shall cease for that fishing year. In the event
that annual mortality of 0.1% of Nmin is exceeded for either
Eastern Spinner or Northeastern Spotted dolphin stocks, the
governments commit to conduct a scientific review and
assessment and consider further recommendations.
Establish a per-vessel maximum annual DML consistent with
the established per-year mortality caps.
Establish a system that provides incentives to vessel
captains to continue to reduce dolphin mortality, with the
goal of eliminating dolphin mortality in the EPO.
Establish or strengthen National Scientific Advisory
Committees (NATSAC), or the equivalent, of qualified experts,
operating in their individual capacities, which shall
advise their respective governments on mechanisms to
facilitate research, and on the formulation of
recommendations for achieving the objectives and
commitments contained herein, or strengthen existing
structures in order to conform with the requirements
delineated herein. Membership to NATSACs shall include,
inter alia, qualified scientists from the public and
private sector and NGOs. The NATSACs shall:
1. Receive and review data, including data provided to
national authorities by the LATTC;
2. Advise and recommend to their governments measures and
actions that should be undertaken to conserve and manage the
stocks of living marine resources of the EPO;
3. Make recommendations to their governments regarding
research needs, including ecosystems; fishing practices; and
gear technology research, including the development and use
of selective, environmentally safe and cost-effective fishing
gear; and the coordination and facilitation of such research;
4. Conduct scientific reviews and assessments by the year
1998 regarding progress toward the year 2001 objective stated
above, and make appropriate recommendations to their
governments concerning these reviews and assessments, as well
as additional assessments in the year 2001 as provided above;
5. Consult other experts as needed;
6. Assure the regular and timely full exchange of data
among the parties and the NATSACs on catch of tuna and
associated species and bycatch, including dolphin mortality
data, for the purposes of developing conservation and
management recommendations to their governments as well as
recommendations for enforcement and scientific research while
not violating the confidentiality of business-confidential
data;
7. Establish procedures to, inter alia, hold public
meetings and maintain the confidentiality of business-
confidential data.
Reports of the NATSACs, including of their cooperative
meetings, shall be available to the parties and the public.
The NATSACs shall cooperate, through regular and timely
meetings, including at a minimum in conjunction with the
meetings of the LATTC, in the review of data and the status
of stocks, and in the development of advice for achieving the
objectives and commitments contained herein.
Promote transparency in their implementation of this
Declaration, including through public participation as
appropriate.
[[Page S398]]
As soon as possible, the nations of the Intergovernmental
Group convened under the auspices of the LATTC will initiate
discussions related to formulation of a new, permanent,
binding instrument.
ANNEX I
Envisioned changes in United States law:
1. Primary and Secondary Embargoes. Effectively lifted for
tuna caught in compliance with the La Jolla Agreement as
formalized and modified through the processes set forth in
the Panama Declaration.
2. Market Access. Effectively opened to tuna caught in
compliance with the La Jolla Agreement as formalized and
modified through the processes set forth in the Panama
Declaration with respect to States to include: IATTC Member
States and other States that have initiated steps, in
accordance with Article 5.3 of the IATTC Convention, to
become members of that organization.
3. Labeling. The term ``dolphin safe'' may not be used for
any tuna caught in the EPO by a purse seine vessel in a set
in which a dolphin mortality occurred as documented by
observers by weight calculation and well location.
ANNEX II
Guiding Principles respecting relationships between States
both Party and Non-Party to the Agreement.
The Parties to the Agreement incorporate into the Agreement
a guiding principle that no Party shall act in a manner that
assists non-parties to avoid compliance with the objectives
of the Agreement.
When a coastal state that is a Party issues a license to
engage in fishing in its Exclusive Economic Zone portion of
the eastern Pacific Ocean (EPO), either directly or through a
licensing agreement, to a vessel of a non-party, the license
should be subject to the provisions of the Agreement.
The Parties should consider prohibiting persons under their
jurisdiction from assisting in any way vessels of non-
complying Parties or non-parties operating in the fishery.
Any state whose vessels are conducting purse-seine tuna-
fishing operations in the EPO should be invited to join the
Agreement. The Parties should draw the attention of any state
that is not a party to the Agreement to any activity
undertaken by its nationals or vessels which, in the opinion
of the Parties, affects the implementation of the objectives
of the Agreement.
Options for Action With Respect to Nations Party to the
Agreement
Diplomatic actions:
Collective representation to the non-complying nation. This
would constitute a communication emanating from plenary
meeting of the participating nations after consultation with
the non-complying nation.
Diplomatic communication. Each participating nation, acting
individually or in concert with other nations, would
undertake a diplomatic demarche to the non-complying nation.
Public opinion actions:
Dissemination of information regarding the non-compliance
of the nation to the public through appropriate media, e.g.,
a press conference.
Operational restrictions:
Denial of access to the Exclusive Economic Zones of nations
party to the agreement for fishing operations by tuna fishing
vessels of the non-complying nation. The scope of this action
have to be determined by the International Review Panel (IRP)
by defining what constitutes a tuna-fishing vessel, i.e.,
vessels covered by the Agreement, or other tuna-fishing
vessels as well. This action should not restrict freedom of
navigation or other rights of vessels under international
law.
Restriction of access to ports and port servicing
facilities for tuna fishing vessels of the non-complying
nation. This would not apply to vessels in distress.
Refusal of logistical support and/or supplies to tuna-
fishing vessels of the non-complying nation. Reduction of
Dolphin Mortality Limits (DMLs) to all vessels of the non-
complying Party by specified percentages. DMLs would be
restored immediately upon a determination that the nation is
in compliance.
Economic sanctions:
Trade measures. The Working Group discussed at length trade
measures against non-complying nations. These might include
embargoes or other restrictions on the imports of, for
example, tuna, other fish products, other marine products, or
other products.
The consideration of such measures was recognized to be an
extremely delicate and evolving policy issue for which few
guidelines exist in international law. The Working Group
noted ongoing discussions concerning this issue in other
international fora. In light of these considerations, the
Working Group agreed that trade measures should receive
further review by the Parties prior to making any
recommendation in this respect.
Fines (monetary penalties). The Working Group considered
that the IRP should identify procedures for imposing fines,
including defining the value of the fines (this could be
based on a percentage of the amount of the commercial value
of the catch), and the destination of the fines (e.g., an
international trust fund) as issues that the Parties should
discuss. The Working Group noted that there apparently is no
precedent for such fines.
B. Options for Action With Respect to Nations Not Party to
the Agreement
Diplomatic actions:
Collective representation to the non-party. This would
constitute a communication emanating from a plenary meeting
of the participating nations after consultations with the
non-party.
Diplomatic communication. Each participating nation, acting
individually or in concert with other nations, would
undertake a diplomatic demarche to the non-party.
Public opinion actions:
Dissemination of information regarding the non-compliance
of the non-party to the public through appropriate media,
e.g., a press conference.
Operational restrictions:
Restriction of access to ports and port servicing
facilities for tuna-fishing vessels of the non-party. The
scope of this action would have to be determined by the IRP
by defining what constitutes a tuna-fishing vessel, i.e.,
solely vessels covered by the Agreement, or other tuna-
fishing vessels as well. This action should not restrict
freedom of navigation and other rights of vessels under
international law, and particularly would not apply to
vessels in distress.
Refusal of logistical support and/or supplies to tuna
fishing vessels of the non-party nation.
Prohibiting nationals from assisting in any way vessels of
the non-party operating in the fishery.
Economic sanctions:
The Working Group noted that economic sanctions with
respect to non-parties call into consideration all the issues
raised above with respect to the imposition of such sanctions
on Parties, and noted that the imposition of such sanctions
with respect to non-parties involves additional complex legal
considerations. The Working Group recommends that the Parties
consider whether such sanctions against non-parties are an
appropriate means of promoting compliance with the objectives
of the Agreement and whether they are consistent with
international law.
____
The White House,
Washington, October 7, 1996.
His Excellency, Ernesto Zedillo Ponce de Leon,
President of the United Mexican States, Mexico, D.F.
Dear Mr. President: As you know, our governments have been
working diligently for several years to protect dolphins and
other marine life in the Eastern Tropical Pacific. The
adoption of the Panama Declaration last year brought with it
the promise of further international cooperation in these
efforts.
This year, the United States Congress considered
legislation to implement the Panama Declaration. The House of
Representatives passed such legislation by a large majority.
However, despite the considerable efforts of my
Administration and many others in our country who support the
Panama Declaration, we were unable to secure final passage of
the legislation.
I wanted to express my deep disappointment with the failure
to enact legislation to implement the Panama Declaration this
year. Let me assure you that passing such legislation is a
top priority for my Administration and for me personally. We
will work with members of the bipartisan coalition supporting
the Panama Declaration to introduce implementing legislation
in the first 30 days of the new Congress and to pass such
legislation as soon as possible thereafter.
I believe it is important for us to continue to work
together on this issue.
Sincerely,
Bill Clinton.
____
The Vice President,
Washington, June 3, 1996.
Hon. Ted Stevens,
Chairman, Subcommittee on Oceans and Fisheries, U.S. Senate,
Hart Senate Office Building, Washington, DC.
Dear Ted: I am writing to thank you for your leadership on
the International Dolphin Conservation Program Act, S. 1420.
As you know, the Administration strongly supports this
legislation, which is essential to the protection of dolphins
and other marine life in the Eastern Tropical Pacific.
In recent years, we have reduced dolphin mortality in the
Eastern Tropical Pacific tuna fishery far below historic
levels. Your legislation will codify an international
agreement to lock these gains in place, further reduce
dolphin mortality, and protect other marine life in the
region. This agreement was signed last year by the United
States and 11 other nations, but will not take effect unless
your legislation is enacted into law.
As you know, S. 1420 is supported by major environmental
groups, including Greenpeace, the World Wildlife Fund, the
National Wildlife Federation, the Center for Marine
Conservation, and the Environmental Defense Fund. The
legislation is also supported by the U.S. fishing industry,
which has been barred from the Eastern Tropical Pacific tuna
fishery.
Opponents of this legislation promote alternative fishing
methods, such as ``log fishing'' and ``school fishing,'' but
these are environmentally unsound. These fishing methods
involve unacceptably high by-catch of juvenile tunas,
billfish, sharks, endangered sea turtles and other species,
and pose long-term threats to the marine ecosystem.
I urge your colleagues to support this legislation. Passage
of this legislation this session is integral to ensure
implementation of an important international agreement that
protects dolphins and other marine life in the Eastern
Tropical Pacific.
Sincerely,
Al Gore.
[[Page S399]]
____
[From the Christian Science Monitor]
Take the Final Step to Protect Dolphins
(By Timothy E. Wirth)
One of the sharpest criticisms of the environmental
movement is that it is forever emphasizing major ecological
ailments while refusing to acknowledge even the slightest
environmental progress.
Make no mistake, the magnitude of the world's environmental
challenges is as immense as it is ominous. Yet in only a
flash of human history, we have begun to take on these
challenges. There are successes about which we can be
optimistic; and they demonstrate that reason and resolve,
partnership and passion, can get the better of dangerous
ecologist trends.
Almost 10 years ago, horrific footage of dolphins being
slaughtered in large numbers drove home the need for efforts
to prevent dolphin mortality in the tuna fishing industry.
Having adopted a Marine Mammal Protection Act for domestic
fishing operations, the US began working with international
partners through the Inter-American Tropical Tuna Commission
(IATTC), with the aim of reducing dolphin mortality. Congress
also enacted legislation that included a domestic ban on the
sale of tuna not caught in a manner deemed ``dolphin safe.''
The results: Dolphin mortality has been virtually
eliminated, cut by more than 90 percent in what is known as
the Eastern Tropical Pacific tuna fishery. This dramatic
decline in dolphin mortality is attributable to American
leadership and international cooperation. The IATTC has
evolved into one of the best and most rigorously enforced
conservation regimes in the world.
It's time the United States and all conservationists
recognize the enormous drop in dolphin mortality, strengthen
this international program, and set the stage for further
progress. To do this we must reopen our market to trade in
tuna with cooperative nations in the hemisphere.
Fortunately, last fall a coalition of environmental groups
and Latin American countries reached an agreement in Panama
that will accomplish these goals. The ``Panama Declaration,''
endorsed by Greenpeace, the Center for Marine Conservation,
the Environmental Defense Fund, National Wildlife Federation,
and the World Wildlife Fund, is a model agreement not only
for international cooperation, but also as a way to
acknowledge our accomplishments even as we aim to do better
in the future.
The Panama Declaration sets a goal of eliminating dolphin
mortality altogether, establishes a binding program to
protect a wide variety of species throughout the Eastern
Tropical Pacific ecosystem, and requires that internationally
trained observers are on all tuna vessels, as well as
additional measures to ensure compliance.
The US will enable the Panama agreements to take effect by
reopening the US market to tuna caught in compliance with the
IATTC program, lifting the tuna embargo, and requiring that
labels for ``dolphin safe'' tuna define fish caught without
incidental deaths of dolphins. A bipartisan coalition--led by
Sens. John Breaux (D) of Louisiana and Ted Stevens (R) of
Alaska--has introduced legislation to implement these
agreements, and the Clinton administration is working with
Congress to ensure their immediate passage.
Gains of this magnitude in the conservation of marine
mammals are difficult enough for one nation to achieve.
Brokering resolution to these challenges on an international
scale is far more challenging. It means persuading other
nations, particularly those less fortunate than our own,
to sacrifice short-term political and economic interests
in the name of long-term ecological and economic health.
This is particularly true with dolphin conservation.
Without the Panama Declaration, most observers say, the
IATTC will collapse.
There are some environmental organizations who
understandably say we should aim for an even higher moral
standard, one where no dolphins are killed during tuna
fishing (the Panama agreements would allow incidental deaths
totalling less than one-tenth of 1 percent of all dolphins in
the Eastern Tropical Pacific). Yet the Panama Declaration is
more than a moral victory. It celebrates an environmental
success story and rewards international partners for their
cooperation and commitment in conserving marine mammals. It
aims for no dolphin deaths in the future.
There is little alternative to the agreements signed in
Panama. Countries throughout the hemisphere have made it
clear they are losing patience with what they see as an
unfair trade barrier--particularly in light of the progress
made in reducing dolphin mortalities. If the US fails to take
the steps necessary to implement the Panama Declaration,
these countries intend to return to fishing methods that kill
more dolphins.
At a time when our environmental laws and commitments are
under attack, it is essential that we consolidate gains made
in protecting the global environment. It's time to declare
victory with swift congressional enactment of legislation
that will implement the Panama Declaration.
____
[From USA Today, Jan. 6, 1997]
Help Save Dolphins
I was pleased to see your Dec. 27 editorial supporting
enactment of legislation for the protection of dolphins
accidentally caught during fishing operations for tuna
(``Dolphin law has served its purpose; reform it,'' Our View,
Debate).
This legislation would implement a strong international
agreement among the nations fishing for tuna in the eastern
Pacific--one of the best international marine resource
agreements in the world.
The agreement locks into place the dramatic reduction in
dolphin mortalities, which is highlighted in the editorial,
and includes a commitment by the nations involved in the
fishery to work toward a goal of eliminating all dolphin
deaths. The agreement also provides for comprehensive
monitoring by observers and strict penalties for violations.
Because the tuna fishery in the eastern Pacific Ocean is
conducted almost entirely by foreign vessels on the high seas
or in their own waters, it can be regulated effectively only
by international agreement. Yet, as your editorial
recognizes, the dolphin protection agreement is in jeopardy
because tuna trade embargoes imposed before the agreement was
negotiated continue against those nations participating in
the program. The administration strongly supports your call
for legislative reform to remove the trade embargoes and
implement this important international program.
____
[From USA Today, Jan. 3, 1997]
International Cooperation Needed to Protect Dolphins, Other Ocean Life
The editorial ``Dolphin law has served its purpose; reform
it'' (Our View, Debate, Dec. 27) hit the nail on the head by
pointing out that so-called dolphin-safe fishing methods are
harmful to other wildlife including sharks, billfish and sea
turtles, which are as much a part of the oceans as dolphins.
That is a major reason the Center for Marine Conservation
(CMC), Environmental Defense Fund, Greenpeace, National
Wildlife Federation and World Wildlife Fund all support
legislation in Congress to implement the Panama Declaration,
a binding international agreement signed by the United States
and 11 Latin American nations. The agreement will ensure
continued reduction of dolphin deaths in the Eastern Tropical
Pacific (ETP) tuna fishery and also protect other ocean
wildlife.
As one of the organizations that led the fight for dolphin-
safe labeling, CMC agrees with USA TODAY that we should
benefit from experience and recognize that the current law is
having some unintended and unacceptably harmful impacts on
ocean life.
Our commitment to conserving dolphins and all ocean
creatures leads us to support legislation to implement the
Panama Declaration. The legislation would lock in the
dramatic progress that has been made in reducing dolphin
deaths in the ETP by more than 95 percent. It would reduce
unintended catches of sharks, billfish and sea turtles in
tuna nets and assure U.S. consumers no dolphins died,
regardless of fishing method, in capturing the tuna found on
the shelves.
While those who oppose the agreement might like to live in
a world where the U.S. dictates international environmental
policy, the reality is far different. Increasingly, we are
seeing the need to promote international cooperation, which
can be a tremendous boon to environmental protection.
Failure to adopt this legislation could result in loss of
controls on dolphin deaths. The choice is between the rule of
law and anarchy on the seas.
____
[From the USA Today, Dec. 27, 1996]
Dolphin Law Has Served Its Purpose; Reform It
Last year, fewer than 3,300 dolphins died in the gigantic
nets used to catch yellowfin tuna in the eastern tropical
Pacific Ocean. That sounds like a lot, but it's down from
more than 130,000 in 1986, and it's compelling evidence that
it's time to reform the federal ban on tuna that is not
``dolphin safe.''
For some unknown reason, tuna swim beneath dolphins. So for
years, fishers set their tuna nets around dolphins.
Unfortunately, the dolphins would get tangled in the nets
with the tuna. Hundreds of thousands drowned each year.
That slaughter inspired Congress to begin passing laws to
protect marine mammals as early as 1972. And the tuna
industry has responded, designing dolphin-friendly nets and
developing tactics for herding dolphins out before winching
tuna in. Most recently, in 1992, Congress embargoed all tuna
caught by encircling dolphins and made the ``dolphin-safe''
label a condition for all tuna sold in the country.
The result has been both satisfying and troubling. The
industry has developed safe ways of netting the tuna that run
with dolphins. But the embargo also encourages fishers to set
their nets around ocean debris and schools of smaller tuna.
This is ``dolphin safe,'' but it nets and kills thousands of
tons a year of other creatures--sharks, marlin, even
endangered sea turtles.
That's a fast way to trash an ecosystem. Yet the practice
continues because otherwise--no label. And no label, no
market.
It's time to sing a different tuna. First, lift the
embargo, which applies only to tuna caught by encircling
dolphins, even though other tactics may kill some dolphins,
too. Instead, embargo fish when strict dolphin mortality
rates are exceeded. And redefine ``dolphin safe'' to mean
fish caught without a single dolphin death. This will:
Help ease testy trade relations with countries like Mexico,
which has lost market share because of the embargo.
[[Page S400]]
Give the industry a reason to fish with methods that are
``ocean safe'' as well as dolphin safe.
And help recover some of the American jobs that fled to
Asia when the embargo made it difficult to compete.
Contrary to some claims, the reforms would not put dolphins
in greater peril. In fact, without these changes, nations
that now voluntarily follow dolphin-safe practices have
threatened to stop. That would increase dolphin mortality.
There's another reason to reform the law. To be effective,
the nation's enviroregs need to harness market forces. And to
be credible, they must also acknowledge success. Tuna reform
would satisfy both requirements while proving to skeptics
that Congress can indeed capitalize on and reward compliance.
Doing so should be at the top of the new Congress' fish-list.
dolphins safer
The number of dolphins killed in tuna nets in the eastern
tropical Pacific Ocean has fallen steeply.
1989 96,979
1990 52,531
1991 27,292
1992 15,539
1993 3,601
1994 4,096
1995 \1\ 3,274
\1\ Estimated. Source: Marine Mammal Commission.
____
[From the Washington Post, Dec. 16, 1995]
Saving Dolphins
American law tries to protect dolphins even in
international waters, and the time has come to revise that
law. In its present form, it will be much less effective in
the future. But the opposed revisions now moving through
Congress sharply divide environmentalists.
Tuna have the habit of swimming under the dolphins, and to
get the tuna, fishermen encircle the dolphins with their
nets. In the past this has led to an immense slaughter of
dolphins--three decades ago, more than 700,000 a year died in
those nets in the great fishing grounds of the eastern
Pacific. American law now bans the importation not only of
tuna caught by encirclement but tuna from any country that
permits its fishermen to use those nets. That includes
Mexico, but Mexican fishermen, hoping to regain access to the
U.S. market, have greatly improved their practices. The
dolphin kill last year was under 5,000--a triumph of
conservation.
But it won't last. For one thing, the alternative methods
of catching tuna, while sparing the dolphins, are wasteful of
other valuable and sometimes rare marine life. More
important, admission to the U.S. market is becoming less
effective as an incentive. Other markets are opening up
rapidly in Asian and Latin American countries that have no
rules whatever on the tuna catch.
To lock in the recent progress, the United States has
negotiated a binding agreement among all the countries that
have fishing fleets in the eastern Pacific. It would continue
to press for lower dolphin mortality, but it would permit the
use of the encircling nets. They can be manipulated to spill
out the dolphin before the tuna are hauled aboard, and
international observers are on every tuna boat in the eastern
Pacific. The new agreement would allow into this country tuna
taken in any supervised haul that did not result in the death
of dolphins.
Some environmental organizations object vehemently to
encircling nets on any terms and point out that, while the
number of dolphin deaths would be small, it wouldn't be zero.
They demand zero. Other environmentalists reply that if
Congress doesn't accept this deal, the new international
agreement will come unraveled and old-style fishing, cruder
and cheaper, will reappear along with much higher dolphin
deaths. They're right. This agreement, carried out by the
bill that Sens. Ted Stevens (R-Alaska) and John Breaux (D-
La.) are sponsoring, can provide permanent protection--as
present law does not--to the Pacific's dolphins.
____
[From the Dallas Morning News, July 30, 1996]
Foul Fishing
u.s. should act to make tuna truly ``dolphin-safe''
Congratulations, Flipper!
Your chances of surviving to old age have improved greatly
since the United States began to embargo tuna caught in
dolphin-killing nets and the food industry began to entice
environmentally conscious consumers with ``dolphin-safe''
tuna.
The proof is in the numbers: Dolphin deaths related to tuna
fishing in the eastern Pacific Ocean fell to fewer than 5,000
in 1994 from 600,000 in 1972.
However, you probably think that 5,000 dolphin deaths are
still too many. And you're probably concerned that the
methods used to trap tuna still end up killing hundreds of
thousands of pounds of other species, including sharks,
marlins and endangered sea turtles.
Furthermore, you probably worry that the ``dolphin-safe''
label on tuna cans is misleading. The label means only that
dolphins were not encircled by nets in the eastern Pacific.
It does not mean that no dolphins were killed, or that
dolphin-deadly methods were not used elsewhere in the Pacific
or in other waters.
So, you probably like the new international agreement
designed to drastically reduce the killing. So do we.
Emphatically.
The Panama Declaration, which was signed last year by the
United States and 11 other countries, would allow fleets to
return to the old encirclement method of catching tuna. But
it would require signatories to use techniques that allow
dolphins to escape. Those countries also would investigate
ways to avoid killing other species.
The best thing about the new agreement is that it is
multilateral rather than unilateral. In other words, it
involves many countries rather than just the United States.
Current U.S. law is well meaning, but it puts the heaviest
burden on U.S. fleets by forbidding them alone from using the
ancirclement method. And it puts the United States in the
awkward position of heavy-handedly denying its market to
foreigners to compel good behavior.
Bills to approve the agreement have passed unanimously in
Senate and House committees. They have President Clinton's
support. Despite opposition from some environmental groups,
who cling to the outdated notion that unilateral action by
the United States is best, there is no good reason why both
houses of Congress should not pass the bills and send them to
Mr. Clinton for his signature.
____
[From the Houston Chronicle, July 13, 1996]
Dolphin Safe
Consumers who choose only tuna marked ``dolphin safe''
because they believe it means these highly intelligent
mammals are not being harmed in the tuna fishing process may
not be getting what they are paying for.
A bill now before Congress that has broad support from
environmental groups and the tuna fishing industry will
ensure that ``dolphin safe'' means what it implies. The bill
would also help safeguard the delicate ecosystem of prime
tuna fishing waters, ensuring a healthy tuna fishery to
future generations.
The pending legislation in the House and Senate would undo
damage from a well-intentioned 1988 embargo that banned tuna
from any nation that fished in the Eastern Tropic Pacific
Ocean (ETP) that killed dolphin at rates higher than did the
U.S. fleet, The hope was to stop the annual drowning of
hundreds of thousands of dolphins in nets cast around them
for the tuna that tend to swim with dolphins. It backfired.
Within two years, all foreign nations had been embargoed.
Then, in 1990, Congress said any fishing boats that stopped
using the dangerous encircling net technology in the ETP
could label their product ``dolphin safe.'' This too has been
a disaster because other fishing methods tend to kill great
numbers of other animals, such as endangered sea turtles,
sharks, billfish and juvenile tuna.
Moreover, these attempts to protect dolphins in the ETP
prompted a mass exodus of the U.S. tuna fleet in those
waters, leaving foreign fishing boats, which were embargoed
in the U.S. anyway to continue their harmful fishing
practices in the ETP and the U.S. fleet to continue ensnaring
dolphins elsewhere.
Under the proposal before Congress, only tuna catches that
involved no dolphin kills whatsoever--and that fact must be
certified by an independent inspector aboard ship--could be
labeled ``dolphin safe.'' Such observers are already aboard
many ships as a result of voluntary measures adopted by 12
countries, including the United States and Mexico. The bill
also seeks to lift the tuna embargo to give foreign fishermen
the incentive to continue those voluntary measures.
The voluntary agreement, which induced tuna fishermen to
actually free ensnared dolphins by hand, are set to expire in
1999. Best estimates show only 5,000 dolphins were killed
under the voluntary protection measures. Congress should
continue this progress by passing this vital legislation.
[From the New York Times, July 7, 1996]
The Best Way To Save Dolphins
The environmental community is engaged in a rare and bitter
brawl over competing Congressional bills aimed at protecting
a beloved environmental symbol--the bottle-nosed dolphin.
Each side thinks it has the better scheme to protect dolphins
that are incidentally trapped and killed by the giant nets
used by tuna fleets. This is a complex, emotional issue and
all the disputants are animated by the best of intentions.
But the approach contained in a measure sponsored by
Representative Wayne Gilchrest, a Maryland Republican, and
supported by the Clinton Administration, offers the dolphin a
better chance than the alternatives.
Mr. Gilchrest's bill rubs a lot of people the wrong way
because it seems to endorse the very fishing methods that got
the dolphin in trouble in the first place. For reasons that
are not fully understood by scientists, adult tuna in the
rich fishing grounds of the eastern Pacific tend to
congregate underneath dolphins. Tuna vessels follow a school
of dolphins, cast their mile-long nets and haul in the tuna
below. Until a few years ago, thousands of dolphins routinely
drowned in the nets or were crushed when the boats winched
them in.
In 1990, Congress placed an embargo on all tuna caught by
this method, known as ``encirclement,'' costing big tuna-
fishing countries like Mexico, Ecuador and Costa Rica
hundreds of millions of dollars. In 1992, these countries
convened in La Jolla, Calif., with United States officials
and pledged to adopt safer fishing methods. They did not
abandon the encirclement method, but they vastly
[[Page S401]]
improved it. They installed dolphin ``safety panels'' in
their nets, which acted as escape hatches. They deployed
divers to assist dolphins who could not find their way out.
They learned how to dip their nets deeper into the water to
allow dolphins to escape while retaining the tuna. These new
techniques led to a stunning drop in dolphin mortality in the
eastern Pacific--from 133,000 killed in 1986 to 3,274 last
year, a figure calculated by independent monitors on boats
that used the improved encirclement techniques. Even so,
the tuna caught by encirclement have remained embargoed.
Mr. Gilchrest's bill, which has the endorsement of Vice
President Al Gore, would reward these efforts by lifting the
embargo. The bill would also reward any batch of tuna caught
without a single dolphin death--a fact to be verified by on-
board monitors--with the coveted and commercially important
``dolphin-safe'' label.
The Gilchrest measure has the support of Greenpeace, the
Environmental Defense Fund and several other advocacy groups.
It is opposed by the Sierra Club and the Defenders of
Wildlife, and by the Earth Island Institute in San Francisco,
which has done more than any other group to call attention to
dolphin mortality. Earth Island's champion in the Senate is
Barbara Boxer, the California Democrat, whose bill would
continue to ban all tuna caught by the encirclement method.
Unfortunately, the other methods of trapping tuna carry
serious disadvantages. Under one approach, fishermen cast
their nets around logs and other debris floating near the
shoreline, which often attract tuna. That is safe for
dolphins, but it kills a huge ``by-catch'' of sharks, turtles
and other valuable marine life, not to mention tons of
juvenile tuna whose demise imperils future tuna stocks.
Senator John Chafee, a Republican environmentalist who is
sponsoring a Senate bill comparable to Mr. Gilchrest's,
believes that not just the dolphin but an entire marine
ecosystem is at stake. He has concluded, rightly, that the
best response is the once-reviled but much-improved
encirclement method.
____
[From the Washington Post, July 4, 1996]
Save Most of the Dolphins
For reasons humans have yet to understand, dolphins in the
eastern Pacific Ocean often swim above schools of yellowfin
tuna. This made them for years the unintended victims of tuna
fishermen, innocent bystanders killed at a rate of perhaps
half a million per year. In 1990, when American consumers saw
videotape of dolphins suffering in giant tuna nets, an outcry
led to a movement for ``dolphin-safe'' tuna. The largest
canneries pledged not to buy any fish captured alongside
dolphin, and Congress enacted an embargo against countries
engaging in the kind of fishing that endangers these highly
intelligent animals.
Since then, an international effort led by the United
States has led to a remarkable change in the behavior of the
fishing fleet. Boats in the eastern Pacific still use circle
nets that capture dolphins, but their operators have
developed gear and methods that allow most of the dolphins to
escape. During the past two years, the number of dolphins
killed has fallen to about 4,000 per year. International
observers posted on every boat makes these figures credible.
The dolphin population of 9.5 million is believed to be
stable or increasing.
Now the Clinton administration, with bipartisan backing in
Congress and the support of Greenpeace, the World Wildlife
Fund and other environmental groups, wants the embargo
lifted. The argument is simple: If fleets do not receive some
reward for their changed behavior soon, they will revert to
their old and easier ways of fishing, and dolphin casualties
will rise. Under the proposal, the international monitoring
program would remain in effect.
But opponents in Congress may stall any action. The
opponents are backed by other environmental groups, such as
the Sierra Club and Earth Island Institute. They argue for
zero-tolerance in dolphin-killing, and they also believe that
the chasing and encirclement may harm dolphins without
killing them.
Unfortunately, alternative methods of tuna fishing appear
to produce large ``bycatches'' of immature tuna, thus raising
questions of depletion, and of other species, including
endangered turtles. More to the point, an insistence on zero
dolphin deaths could squander the progress made so far, since
virtually all of the fishing in question takes place in
international waters by foreign fleets. And alternative
markets exist.
Sen. Barbara Boxer (D-Calif.), who helped lead the campaign
for dolphin-free tuna, is right to insist on research on the
effects on the dolphin population of circle-net fishing.
Further studies also should be conducted on the bycatch
dangers of alternative methods. But this is one case where a
quest for perfection could unravel the substantial progress
that has been achieved.
____
Attention Representatives--Open Letter to Representatives on H.R. 2823,
the International Dolphin Conservation Program Act and the Panama
Declaration, January 3, 1996
Dear Representative: Recently, twelve nations, including
the United States, signed the Declaration of Panama, an
historic international agreement to protect dolphins and
biodiversity in the Eastern Tropical Pacific Ocean. The
Panama Declaration, endorsed by the Clinton Administration,
the Center for Marine Conservation, Environmental Defense
Fund, Greenpeace, National Wildlife Federation, and World
Wildlife Fund, will continue progress in reducing dolphin
deaths in these waters and will extend protection to other
marine life as well.
Further, the Center for Marine Conservation, the
Environmental Defense Fund, Greenpeace, National Wildlife
Federation, and World Wildlife Fund support H.R. 2823, the
International Dolphin Conservation Protection Act. H.R. 2823,
if enacted, will implement the Panama Declaration which will:
Achieve a legally binding agreement on all fishing nations,
mandating progressive reductions in dolphin mortality toward
zero through the setting of annual limits;
Build upon recent gains in dolphin protection, accelerate
the current schedule for reducing dolphin mortality by
several years, impose mortality limits that are more
restrictive than those currently in place, and lock in the
goal of eliminating dolphin mortality in the tuna fishery;
Establish mortality limits and protection for individual
dolphin stocks to ensure their growth and recovery;
Preserve and strengthen the existing dolphin conservation
program which makes it illegal to set nets around dolphins
after dark or use explosives to disorient dolphins;
Expand and further develop enforceable on-board observer
programs and tracking systems that guarantee that no dolphins
died to catch ``dolphin-safe'' tuna from the Eastern Tropical
Pacific Ocean;
Prevent the dismantlement of existing international
agreements and the Inter-American Tropical Tuna Commission
which have effectively reduced dolphin mortality and managed
the tuna fishery in the Eastern Tropical Pacific;
Link enforcement of the binding international agreement to
strong embargo provisions;
Protect the ecosystem of the Eastern Tropical Pacific Ocean
by reducing bycatch of other marine species such as juvenile
tuna, sharks, and endangered sea turtles in the tuna fishery;
and
Strengthen the scientific basis for the conservation and
management of the tuna fishery, as well as research into
assessing the impact of chase and encirclement on dolphins
and developing gear and techniques that do not require
setting nets around dolphins to catch tuna.
In short, the current voluntary international regime is not
durable. Accordingly, it is essential that we act now to lock
in long term protections for dolphin populations, rather than
wait until the international commitments for dolphin
conservation unravel. This legislation will resolve the long-
standing tuna/dolphin controversy and establish measures that
will protect dolphins and the ecosystem. We urge you to co-
sponsor H.R. 2823. If you have questions, please contact:
Rodrigo Prudencio, National Wildlife Federation, 202-797-
6603; Nina Young, Center for Marine Conservation, 202-857-
3276; Annie Petsonk, Environmental Defense Fund, 202-387-
3500; Gerry Leape, Greenpeace, 202-462-1177; Scott Burns/
David Schorr, World Wildlife Fund, 202-293-4800.
____
Center for Marine Conservation, Environmental Defense Fund Greenpeace,
National Wildlife Federation, World Wildlife Fund
``green'' points in support of h.r. 2823
From a conservation and environmental perspective, H.R.
2823 (the International Dolphin Conservation Program Act)
merits full House passage because (not prioritized):
1. It's Better for Dolphins:
Locks into place binding international legal protections
for dolphins in the Eastern Tropical Pacific (ETP) Ocean. The
current ETP dolphin protection is entirely voluntary, based
on the 1992 ``La Jolla'' program. In October 1995, all of the
ETP fishing nations signed the ``Panama Declaration.'' That
Declaration strengthens further the ``La Jolla'' program, and
sets in motion a process to make the program legally binding,
contingent on changes in U.S. law that are part and parcel of
H.R. 2823's reforms, including observers and other
monitoring, verification and tracking of catch; research and
enforcement.
Allows dolphin stocks to recover. The remarkable success of
the MMPA and the voluntary La Jolla agreement have resulted
in an almost 99 percent reduction in dolphin mortality in the
ETP. Up until the early 1990s, though, many dolphin species
in the ETP suffered annual mortality rates high enough to
hamper or retard their recovery. But now, those stocks are
stable, with mortality rates (for all stocks) below 0.2% of
the population abundance--a level more than four times lower
than that recommended by the National Research Council to
allow recovery. Moreover, H.R. 2823 requires that these
annual mortality rates be further reduced to less than 0.1%
of the population abundance, with the goal of eliminating
mortality entirely. These new levels of protection for
dolphins have been endorsed by leading scientists.
Addresses effectively the issue of ``chase and
encirclement'' of dolphins, establishing a process for
investigation and further action, as merited, regarding the
health-related impacts of capture stress. Concerns have been
raised that the chase and encirclement
[[Page S402]]
of dolphins causes harm and stress levels that can impede
dolphin reproduction or result in dolphin deaths. While
dolphins that are chased and encircled probably experience
some level of stress, there is no conclusive scientific
evidenced that chase and encirclement reduces reproductive
capacity, causes dolphins to die after release, or develop
stress-related diseases. In fact, there is evidence that some
dolphins have habituated to encirclement and have developed
behaviors that reduce their risks in the net. Nevertheless,
the stress issue should be further investigated, followed by
a report and recommendations to Congress--as called for in
H.R. 2823 (Sec. 302(d)(4)).
2. It's Better for Other Sea Life:
Contains tough provisions that require fishers to protect
not only the dolphins, but also the tuna stocks on which the
fishery depends, as well as other species, like sharks, bill
fish and sea turtles that get caught in the purse seine nets
used in the ETP fishery. One of the MMPA's stated objectives
is to maintain the health and stability of marine ecosystems,
but to date little attention has been given to this
objective. H.R. 2823 requires observers stationed on every
vessel to record bycatch of all species, and requires fishers
to minimize that bycatch.
Recognizes that ``dolphin-safe'' and ``ecosystem-safe''
fishing go hand-in-hand. Recent data indicate that fishing
methods that do not involve setting nets around dolphins,
such as setting nets on schools of tuna or logs, have 10 to
100 times greater bycatch of other sea life. This bycatch is
alarming, especially for species that reproduce slowly, such
as sharks, sea turtles and billfish. In addition, the IATTC
estimates that, if sets on dolphin were replaced by school
and log sets, from 10 to 25 million juvenile tuna would be
discarded. Domestic and international fisheries conservation
efforts have made bycatch reduction a priority. H.R. 2823
provides the best vehicle to develop immediate measures to
avoid, reduce, and minimize bycatch of juvenile yellowfin
tuna and other marine life. In contrast, the Miller
substitute (H.R. 2856) unfortunately promotes a substantial
increase in the waste of immature tuna and other bycatch
species, by encouraging shifts to those non-encirclement
fishing methods.
3. It's Better for Consumers:
Strengthens the popular ``dolphin-safe'' label, assuring
consumers that no dolphins died in the catch of labelled
tuna. Under the current definition (carried forward in the
Miller substitute), consumers are misled into believing the
current ``dolphin-safe'' label has solved the tuna-dolphin
issue, and that dolphins no longer die in tuna sets. Sadly,
this is not the case. Fishers continue to encircle dolphins
at the same rate as prior to the establishment of the
``dolphin-safe'' label. Truth-in-labeling lies in the passage
of H.R. 2823, because it tells the consumer whether or not a
dolphin died, and not just about what fishing technique was
used. It gives consumers the ability to choose tuna caught
without killing dolphins, and that power of choice, in turn,
gives fishers the incentive to reduce dolphin mortality
further toward zero.
4. It's Better for International Environmental Policy:
Raises other countries' environmental performance to the
U.S. level, and to more sustainable levels, by ensuring that
foreign-caught tuna sold in foreign countries will meet the
same strong dolphin and other species/ecosystem protection
requirements that we apply to tuna sold in our country.
Moreover, H.R. 2823 provides that if ETP fishing nations fail
to meet the multilaterally-agreed standards, their tuna will
be banned from import into the United States--a trade
sanction that serves as one of the means of ensuring
compliance with and enforcement of the proposed legally
binding agreement called for in the Panama Declaration.
Makes possible stronger international conservation policy
for dolphins, as well as other marine species impacted in the
ETP fishery. The Panama Declaration, and the resulting
multilateral environmental agreement (MEA) made possible by
H.R. 2823's passage, will result in strengthened conservation
and enforcement measures applicable to all ETP fishing
nations. At the same time, that MEA, once agreed by all ETP
fishing nations, will be far less vulnerable to a WTO-type
trade challenge than have been the unilateral MMPA sanctions
like those challenged by Mexico in 1991.
A Dolphin-Safe Label That Really Means It
What's in a label? Well, if you have eaten tuna in the past
five years, take note: the ``dolphin-safe'' label you have
grown to trust is neither as dolphin-safe nor ecologically-
sound as you may think. Our nation's landmark dolphin
protection and product labeling laws have resulted in
unintended consequences which have actually exacerbated some
marine resource problems, while failing to guarantee that
dolphins were not killed when harvesting your tuna.
The campaign to save dolphins had all the right intentions.
Combined with the 25-year effort to enact and strengthen the
Marine Mammal Protection Act (MMPA), the campaign educated
the public about a serious problem. Since its 1972 passage,
the MMPA went on to spur a reduction in dolphin mortalities
in the Eastern Tropical Pacific ocean (ETP) from as many as
600,000 a year to fewer than 5,000 by 1994.
The effort to continue this success resulted in the
landmark 1992 dolphin-safe laws, which encompassed three key
elements: disallowing the common fishing practice of
encircling dolphins to catch the tuna that migrate with them,
monitoring and reporting of any dolphin deaths that did
occur, and an embargo on imports of non-dolphin-safe tuna.
These principles were the backbone of what American consumers
recognize as the ``dolphin-safe'' label.
More than three years later, however, the failings of the
1992 law are evidenced not only in the continuing deaths of
dolphins, but of the damage to the ocean ecosystem as a
whole. To understand why this destruction of marine life
persists, it is necessary to examine the shortcomings of the
1992 laws--and the recent and most promising attempt to
address these problems on an international level, the Panama
Declaration.
At the root of the problem is the fact that while tuna is
caught around the world, U.S. dolphin protection laws are
applicable only in the ETP. As strong as the laws may be,
they do not uniformly apply in other regions, which yield as
much as 80 percent of the world's tuna. Unfortunately, this
policy is based on the unproven assumption that tuna outside
the ETP do not migrate with marine mammals. Hence, tuna sold
in the U.S. from other regions are also afforded the
``dolphin-safe'' label, amounting to little more than a p.r.
gimmick here and abroad.
Furthermore, the ``dolphin-safe'' label only means that no
dolphins were ``encircled'' by fishing nets in the ETP; it
does not mean that no dolphins or other marine mammals were
harmed or killed during tuna harvests. The prohibition of
dolphin encirclement by American vessels in the ETP sparked a
mass exodus of more than 95 percent of the U.S. fleet. Most
vessels headed for the Southern Pacific, while some owners
simply sold their boats to citizens of other nations. So
while few if any recent dolphin deaths are attributable to
U.S. tuna vessels, these deaths continue in regions where
U.S. law is irrelevant.
Disallowing encirclement of dolphins, with whom adult tuna
migrate, put fishermen in the position of focusing their
effort or juvenile tuna which tend to congregate near shore
in schools, or under floating debris such as logs. This
breaks the cardinal rule of successful fisheries management;
harvest only mature fish which have spawned at least once.
Biologists are concerned that a currently well-managed,
healthy fishery will begin to decline if efforts continue to
focus on young tuna.
Equally alarming is a Greenpeace study showing that methods
considered ``dolphin-safe'' under U.S. law have resulted in
hundreds of thousands of pounds of by-catch (incidental
harvest) of other species in the past 3 years alone. Sharks,
sea turtles, other fish, and yes, even dolphins, congregate
with juvenile tuna and are unavoidably killed in the fishery.
From an ecosystem perspective, this is intolerable.
So what needs to be done to protect dolphins? Switching
from one fishing method to another in a small section of the
world's ocean has not solved the problem. And simply shutting
down the tuna fishery altogether would threaten the survival
of fishing communities and the ability to feed a growing
world population. Tuna is the leading seafood product
consumed in America, and a renewable protein source for poor
and low-income persons the world over.
Unilateral embargoes by the U.S. alone also have proved
unable to save the world's dolphins. Indeed, the unilateral
embargo on imports of ``dolphin-unsafe'' tuna has led to a
trade dispute under the General Agreement on Tariffs and
Trade (GATT).
Clearly, there has long been a need for a strong
international approach. Recognizing this, international
negotiators began developing an alternative, multilateral
agreement which put observers on all tuna vessels fishing in
the ETP, regardless of nationality and method of fishing.
That program also set progressively declining caps on dolphin
mortality.
This plan has now been strengthened and extended in a
recent accord known as the ``Panama Declaration.'' Supported
by Greenpeace, the Seafarers International Union (SIU), the
Clinton administration and a growing contingent in Congress,
this accord take a significant step towards achieving the
twin goals of saving dolphins and other marine species from
extinction while insuring a sustainable and healthy tuna
fishery.
Hammered out through difficult negotiations between
government representatives, environmentalists, and fishermen,
this agreement would legally bind countries to require
mandatory enforcement measures and reporting internationally,
while rewarding fishermen who do not kill dolphins. The
agreement would mandate continued reductions of dolphin
deaths, and would bring many new boats under a regulatory
framework to reduce by-catch of all marine species.
To take the next step, U.S. laws on dolphin-safe labeling
requirements must be rewritten in accord with the Panama
Declaration. Also, the current unilateral embargo must be
replaced with internationally agreed upon enforcement
measures which allow the U.S. to impose trade sanctions on
nations failing to live up to their commitment to dolphins.
Congress is now considering these changes. Greenpeace and the
SIU strongly opposed passage of the NAFTA and GATT treaties
last year. We believed then as now that those agreements
fundamentally weaken a nation's ability to pass and enforce
strong environmental, health, safety, and labor protection
laws.
[[Page S403]]
At the same time, many environmental crises know no
borders, and the unnecessary killing of marine mammals is one
such crisis. One country acting alone cannot save the oceans
and protect their bounty. Once we succeed in getting
governments and fishermen to agree to a goal of zero dolphin
deaths, we will achieve real truth in labeling, and more
importantly, a package dolphins can truly live with.
Barbara Dudley,
Executive Director, Greenpeace U.S.
Joseph Sacco,
Executive Vice President, Seafarers International Union of
North America.
Steve Edney,
National Director, United Industrial Workers.
Terry Hoinsky,
President, Fishermen's Union of America.
Mr. BREAUX. Mr. President, today, along with Senator Stevens and
others, I am introducing legislation that will implement the Panama
Declaration for the protection of dolphins in the tuna fishery of the
eastern tropical Pacific Ocean. The United States signed the Panama
Declaration on October 4, 1995, along with the Governments of Belize,
Colombia, Costa Rica, Ecuador, France, Honduras, Mexico, Panama, Spain,
Vanuatu, and Venezuela. by agreeing to the Panama Declaration, these
countries have demonstrated their commitment to the conservation of
ecosystems and the sustainable use of living resources related to the
tuna fishery in the eastern tropical Pacific.
By implementing the Panama Declaration, we will strengthen the Inter-
American Tropical Tuna Commission [IATTC], which has proven to be an
extremely effective international resource management organization.
Implementing the Panama Declaration will ensure the reduction of
dolphin mortalities associated with tuna fishing in the eastern
tropical Pacific Ocean. In addition, we will enable American tuna
fishermen to re-enter that tuna fishery on the same footing as foreign
fishermen.
Since 1949, the IATTC has served as the regional fishery management
organization for the tuna fishery of the eastern tropical Pacific
Ocean, managing that fishery in an exemplary manner. Managing migratory
species requires a multilateral approach, one which the IATTC is well-
suited to perform. The yellowfin tuna fishery of the eastern tropical
Pacific Ocean, which the Panama Declaration addresses, falls under the
auspices of the IATTC. In that fishery, tuna fishermen use dolphins to
locate schools of large, mature yellowfin tuna which, for unknown
reasons, associate with schools of dolphin. Once the schools of dolphin
have been located, the fishermen use purse seine nets to encircle the
dolphins with the objective of catching the tuna swimming below. The
dolphins are then safely released before the tuna is hauled abroad.
In recent years, there has been some concern about these fishing
practices which, in the past, have resulted in excessive incidental
mortality to dolphins. In 1992, in an effort to address this problem,
10 nations with tuna vessels operating in the eastern tropical Pacific
signed an agreement known as the La Jolla Agreement. The La Jolla
Agreement established the International Dolphin Conservation Program
[IDCP], which is administered by the IATTC.
The regional objective of the IDCP is to reduce dolphin mortalities
to insignificant levels approaching zero, with a goal of eliminating
them entirely. Pursuant to that program, the number of dolphins killed
accidentally in the tuna fishery has been reduced to less than
4,000. annually from a previous average of over 300,000 killed
annually. The current dolphin mortality represents approximately four
one-hundredths of 1 percent of the 9.5 million dolphins of the eastern
tropical Pacific. Thus, the IDCP has been remarkably successful in
achieving its goal of reducing unintended dolphin mortalities to
biologically insignificant levels approaching zero.
This legislation will implement the Panama Declaration, formalize the
1992 La Jolla Agreement and make it a legal agreement binding on the
member countries of the IATTC. The Panama Declaration strengthens the
IDCP and furthers its goals by placing a cap of 5,000 per year on
dolphin mortalities.
Although U.S. fishermen developed the techniques now used in
capturing tuna and safely releasing dolphins, they effectively have
been forced from fishing in the eastern tropical Pacific since the 1992
amendments to the Marine Mammal Protection Act, which prohibit the
encirclement of dolphins. The legislation to implement the Panama
Declaration will eliminate the inequitable treatment of United States
tuna fishermen and enable them to re-enter this important fishery on an
equal footing with foreign fishermen.
The 1992 ban on encirclement of dolphins has required fishermen to
use alternative fishing practices which have serious environmental
consequences. Alternative fishing practices lead to excessive bycatch
of endangered sea turtles, sharks, billfish, and great numbers of
immature tuna and other fish species. In an attempt to manage a single
species, in this case dolphins, we have caused serious harm to the
entire ecosystem. This legislation will result in a reduction of this
bycatch problem as well as permit fishermen to encircle dolphins as
long as they comply with the stringent regulations imposed by the
IATTC.
The purpose of this bill is to improve and solidify efforts to
protect dolphins in the eastern tropical Pacific Ocean, eliminate the
bycatch problems caused by alternative fishing methods, and recognize
the tremendous gains by other countries in reducing dolphin mortality.
The Panama Declaration establishes a common environmental standard for
all countries fishing in the region. By formalizing the La Jolla
Agreement, U.S. and foreign fishermen in the eastern tropical Pacific
will be subject to the most stringent fishery regulations in the world.
The Panama Declaration represents a tremendous environmental
achievement, and it enjoys support from such diverse interests as
major, mainstream environmental groups, the U.S. tuna fishing fleet,
the Clinton administration, and other countries whose fishermen operate
in the eastern tropical Pacific.
Mr. President, I ask unanimous consent that a letter of support from
Vice President Gore be entered into the Record.
I am encouraged that the majority leader, on the Senate floor on
September 30, 1996, had promised to provide floor time at the beginning
of this Congress to vote on this legislation. I urge my colleagues to
join me in supporting this legislation in order that we may implement
this important international agreement.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
The Vice President,
Washington, June 3, 1996.
Hon. John B. Breaux,
U.S. Senate,
Washington, DC.
Dear John: I am writing to thank you for your leadership on
the International Dolphin Conservation Program Act, S. 1420.
As you know, the Administration strongly supports this
legislation, which is essential to the protection of dolphins
and other marine life in the Eastern Tropical Pacific.
In recent years, we have reduced dolphin mortality in the
Eastern Tropical Pacific tuna fishery far below historic
levels. Your legislation will codify an international
agreement to lock these gains in place, further reduce
dolphin mortality, and protect other marine life in the
region. This agreement was signed last year by the United
States and 11 other nations, but will not take effect unless
your legislation is enacted into law.
As you know, S. 1420 is supported by major environmental
groups, including Greenpeace, the World Wildlife Fund, the
National Wildlife Federation, the Center for Marine
Conservation, and the Environmental Defense Fund. The
legislation is also supported by the U.S. fishing industry,
which has been barred from the Eastern Tropical Pacific tuna
fishery.
Opponents of this legislation promote alternative fishing
methods, such as ``log fishing'' and ``school fishing,'' but
these are environmentally unsound. These fishing methods
involve unacceptably high by-catch of juvenile tunas,
billfish, sharks, endangered sea turtles and other species,
and pose long-term threats to the marine ecosystem.
I urge your colleagues to support this legislation. Passage
of this legislation this session is integral to ensure
implementation of an important international agreement that
protects dolphins and other marine life in the Eastern
Tropical Pacific.
Sincerely,
Al Gore.
______
By Mr. HELMS:
S. 41. A bill to prohibit the provision of Federal funds to any State
or local
[[Page S404]]
educational agency that denies or prevents participation in
constitutional prayer in schools; read twice and placed on the
calendar.
voluntary school prayer protection
Mr. HELMS. Mr. President, this year marks the 200th anniversary of
George Washington's departure from public life. A few months before the
end of his Presidency, in his farewell address to the Nation, he
included a parting word of advice--and a final warning--that is just as
significant and relevant today as it was then. Washington counseled the
new Nation:
Of all the dispositions and habits which lead to political
prosperity, religion and morality are indispensable supports.
In vain would that man claim the tribute to patriotism who
should labor to subvert these great pillars of human
happiness.
Our Founding Fathers understood well the intricate relationship
between freedom and responsibility. They knew that the blessings of
liberty engendered certain obligations on the part of a free people--
namely, that citizens conduct their actions in such a way that society
can remain cohesive without excessive government intrusion. The
American experiment would never have succeeded without the traditional
moral and spiritual values of the American people--values that allow
people to govern themselves, rather than be governed.
Not long ago, my friend, Margaret Thatcher, highlighted for us the
words of another of our Nation's founders, John Adams, who said, ``Our
Constitution was designed only for a moral and religious people. It is
wholly inadequate for the government of any other.'' Yet over the last
30 years, our society has evidenced increasing apathy--and, in some
cases, outright hostility--toward the spiritual principles upon which
our Nation was founded.
Mr. President, Bill Bennett once observed to me that America has
become the kind of country that civilized countries once dispatched
missionaries to centuries ago. If we care about cleaning up the streets
and classrooms, if we care about the long-term survival of our Nation--
how could there be anything more important for Congress to protect than
the right of America's children to participate in voluntary,
constitutionally protected prayer in their schools?
Mr. President, the legislation I am introducing today will ensure
that student-initiated prayer is treated the same as all other student-
initiated free speech--which the U.S. Supreme Court has upheld as
constitutionally protected as long as it is done in an appropriate
time, place, and manner such that it ``does not materially disrupt the
school day''. [Tinker v. Des Moines School District, 393 U.S. 503.]
Under this bill, school districts could not continue--in
constitutional ignorance--enforcing blanket denials of students' rights
to voluntary prayer and religious activity in the schools. For the
first time, schools would be faced with real consequences for making
uninformed and unconstitutional decisions prohibiting all voluntary
prayer. The bill creates a complete system of checks and balances to
ensure that school districts do not shortchange their students one way
or the other.
This proposal, Mr. President, prevents public schools from
prohibiting constitutionally protected voluntary student-initiated
prayer. It does not mandate school prayer and suggestions to the
contrary are simply in error. Nor does it require schools to write any
particular prayer, or compel any student to participate in prayer. It
does not prevent school districts from establishing appropriate time,
place, and manner restrictions on voluntary prayer--the same kind of
restrictions that are placed on other forms of speech in the schools.
What this proposal will do is prevent school districts from
establishing official policies or procedures with the intent of
prohibiting students from exercising their constitutionally protected
right to lead, or participate in, voluntary prayer in school.
Mr. President, this bill is especially noxious to school prayer
opponents because it explodes the myth popular among school
administrators and bureaucrats--a myth perpetuated by liberal groups
such as the American Civil Liberties Union--that the U.S. Constitution
somehow prohibits every last vestige of religion from the public
schools.
Seldom is it heard on the issue of school prayer that the
Constitution also forbids governmental restrictions on the free
exercise of religion, or that the Constitution protects students' free
speech--whether religious or not--and that student-initiated, voluntary
prayer expressed at an appropriate time, place and manner, has never
been outlawed by the Supreme Court.
Mr. President, I find it more than a little ironic that I am forced
to revisit this issue on the floor of the Senate. I remind Senators
that in 1994, this same proposal--offered in amendment form by Senator
Lott and myself--passed this body overwhelmingly, 75 to 22. In the
House of Representatives, this language was approved on two different
occasions by similar 3-to-1 margins. Yet this simple protection of
constitutional rights was dropped in the closing 60 seconds of a
conference with no debate, no discussion, and no vote--just a wink and
a nod between the senior Senator from Massachusetts and his counterpart
on the House side.
So I am obliged to offer this measure once again to protect the
constitutional rights of America's children to participate in voluntary
school prayer. Indeed, standing here brings to mind the words of the
legendary New York Yankee catcher, manager, and philosopher Yogi Berra:
``it's deja vu all over again.''
Well, this time, Mr. President, I hope Congress will accede to the
wishes of a huge majority of the American people, and enact this
legislation. A Wirthlin poll reported in Reader's Digest indicates that
75 percent of our citizens favor prayer in public schools. My
legislation ensures that the American people's will to protect
constitutionally sanctioned prayer in our Nation's schools is
accomplished--and shows Congress's respect for the moral and spiritual
values that make our Nation whole.
______
By Mr. HELMS:
S. 42. A bill to protect the lives of unborn human beings; read
twice, and placed on the calendar.
the unborn children's civil rights act
Mr. HELMS. Mr. President, 2 years ago--and on five occasions prior to
that--I have offered the Unborn Children's Civil Rights Act, proposing
that the Senate go on record in favor of reversing the Roe versus Wade
decision. That wrongful U.S. Supreme Court decision, handed down 24
years ago tomorrow, paved the way for the destruction of more than 35
million innocent children--1.5 million little innocent, helpless lives
every year.
An enormous number of men and women of all ages will descend upon
Washington tomorrow--as they have every year since the fateful Roe
versus Wade decision--pleading with Congress to remember that a nation
which fails to value the God-given gifts of life and liberty will one
day find itself in the dustbin of history.
So, as the 105th Congress begins its work, I do hope that all
Senators will give thought to the need to put an end to the legalized
deliberate destruction of the lives of innocent, helpless little human
beings.
The Unborn Children's Civil Rights Act proposes four things:
First, to put Congress clearly on record as declaring that one, every
abortion destroys deliberately, the life of an unborn child; two, that
the U.S. Constitution sanctions no right to abortion; and three, that
Roe versus Wade was improperly decided.
Second, this legislation will prohibition Federal funding to pay for,
or to promote, abortion. Further, this legislation proposes to defund
abortion permanently, thereby relieving Congress of annual legislative
battles about abortion restrictions in appropriation bills.
Third, the Unborn Children's Civil Rights Act proposes to end
indirect Federal funding for abortions by one, prohibiting
discrimination, at all federally funded institutions, against citizens
who as a matter of conscience object to abortion and two, curtailing
attorney's fees in abortion-related cases.
Fourth, this legislation proposes that appeals to the Supreme Court
be provided as a right if and when any lower Federal court declares
restrictions on abortion unconstitutional, thus effectively assuring
Supreme Court reconsideration of the abortion issue.
[[Page S405]]
Mr. President, it has become fashionable today for America's courts
to discard the Constitution in order to create rights and protect
freedoms founded upon mankind's depraved nature instead of God's
eternal and moral truths.
Yet, never has a court handed down such a misguided decision than
when it created the right of a woman to choose to terminate the life of
her child. Roe versus Wade has no foundation whatsoever in the text or
history of the Constitution. It was a callous invention. Justice White
said it best in his dissent: Roe, he declared, was an exercise in raw
judicial power.
Why has this Supreme Court's exercise in raw judicial power been
allowed to stand? Why has Congress stood idly by for 24 years while
4,000 unborn babies are deliberately, intentionally destroyed every day
as a result of legalized abortion?
The answer is simple, Mr. President. Even though Roe versus Wade was
and is an unconstitutional decision, Congress has been unwilling to
exercise its powers to check and balance a Supreme Court that
deliberately allows the destruction of the most defenseless, most
innocent humanity imaginable.
So, Mr. President, Roe versus Wade still stands; millions of children
continue to be deprived of their right to live, to love, and to be
loved. It is not a failure of the U.S. Constitution. It is a failure of
both the Supreme Court and the Congress for 24 years to overturn Roe
versus Wade.
______
By Mr. HELMS (for himself, Mr. DeWine, Mr. Hatch, Mr. Nickles,
Mr. Abraham, and Mr. Faircloth):
S. 43. A bill to throttle criminal use of guns; read twice and placed
on the calendar
THROTTLE CRIMINAL USE OF GUNS
Mr. HELMS. Mr. President, on December 6, 1995, the U.S. Supreme Court
handed down an opinion that has undermined the prosecution of literally
hundreds of violent and drug trafficking criminals. There could not
have been a worse time to go soft on criminals, but when the Supreme
Court's decision was announced, hardened convicts across America were
overjoyed by the prospect of prison doors swinging open for them.
Sure enough, since the Court's decision just over 1 year ago,
hundreds of criminals have indeed been set free.
The bill I am introducing today will correct the Supreme Court's
blunder, and it will crack down on gun-toting thugs who commit all
manner of unspeakable crimes. I am advised that my bill is being
numbered S. 43, and it provides that a 5-year mandatory minimum
sentence shall be imposed upon any criminal possessing a gun during and
in relation to the commission of a violent or drug trafficking crime.
If the criminal fires the weapon, the mandatory penalty is elevated to
10 years. If there is a killing during the crime, the punishment is
life imprisonment or the death penalty.
This is just common sense, Mr. President; violent felons who possess
firearms are demonstrably more dangerous than those who do not. This
legislation, of course, does not apply to anyone lawfully possessing a
gun.
Current Federal law provides that a person who, during a Federal
crime of violence or drug trafficking crime, uses or carries a firearm
shall be sentenced to 5 years in prison. That law has been used
effectively by Federal prosecutors across the country to add 5
additional years to the prison sentences of criminals who use or carry
firearms.
But along came the Supreme Court's unwise decision thwarting
prosecutors' effective use of this statute. The Court, in Bailey versus
United States, interpreted the law to require that a violent felon
actively employ a firearm as a precondition of receiving an additional
5-year sentence. The Court held that the firearm must be brandished,
fired or otherwise actively used; so if a criminal merely possesses a
firearm, but doesn't fire or otherwise use it, he escapes the
additional 5 year penalty.
Someone put it this way: As a result of the Court's decision, any
thug who hides a gun under the back seat of his car, or who stashes a
gun with his drugs, may now get off with a slap on the wrist. The fact
is, Mr. President, that firearms are the tools of the trade of most
drug traffickers. Weapons clearly facilitate the criminal transactions
and embolden violent thugs to commit their crimes.
Mr. President, this Supreme Court decision poses serious problems for
law enforcement. It has weakened the Federal criminal law and has
already led to the early release of hundreds of violent criminals.
After the word got out about the Bailey decision, prisoners
frantically began preparing and filing motions to get out of jail as
fast as they could write. Prosecutors were inundated with petitions
from criminals. One example is a man named Lancelot Martin, who ran a
Haitian drug trafficking operation out of Raleigh, my hometown, the
capital city of North Carolina. Martin used the U.S. Postal Service to
receive and sell drugs. Police seized his drugs and recovered a 9 mm
semiautomatic pistol that Martin used to protect his drug business.
Lancelot Martin was convicted of drug trafficking charges and
received a 5-year sentence for using the gun. But on March 11 of last
year, years before his sentence expired, Martin walked free, simply
because while his gun and a hefty supply of drugs were found--the gun
was not actively employed at the time he was caught.
So, Mr. President, this bill will ensure that future criminals
possessing guns, like Lancelot Martin, serve real time when they
possess a gun in furtherance of a violent or drug trafficking crime.
The Supreme Court, recognizing the consequences of its decision,
issued this invitation to us: ``Had Congress intended possession alone
to trigger liability * * * it easily could have so provided.'' That,
Mr. President, is precisely the intent of this legislation--to make
clear that possession alone does indeed trigger liability.
Mr. President, a modified version of this legislation passed the
Senate last year, only to be blocked in the House of Representatives.
This bill is a necessary and appropriate response to the Supreme
Court's judicial limitation of the mandatory penalty for gun-toting
criminals. According to Sentencing Commission statistics, more than
9,000 armed violent felons were convicted from April 1991, through
October 1995. In North Carolina alone, this statute was used to help
imprison over 800 violent criminals. We must strengthen law
enforcement's ability to use this strong anticrime provision.
Fighting crime is, and must be, a prime concern in America. It has
been estimated that in the United States one violent crime is committed
every 16 seconds. We must fight back with the most severe punishment
possible for those who terrorize law-abiding citizens. Enactment of
this legislation is a necessary step toward recommitting our Government
and our citizens to a real honest-to-God war on crime.
Mr. ABRAHAM. Mr. President, I rise to cosponsor Senator Helms' bill
to amend section 924 of title 18 of the United States Code. This bill
would ensure that stiff, mandatory sentences are imposed on criminals
who possess firearms while committing a crime of violence or drug
trafficking offense.
As currently written, title 18 of section 924(c) already mandates
that a sentence of 5 years or more be imposed on any defendant who uses
or carries a firearm while committing a crime of violence or drug
trafficking offense. Over the past several years, however, courts have
struggled with the issue of whether a defendant uses a weapon for
purposes of section 924(c) if he technically possesses the weapon but
does not actually employ it in committing the underlying offense.
This issue was recently taken up by the Supreme Court in the case of
Bailey versus United States. Hewing closely to the ordinary meaning of
``use,'' the Court unanimously held that ``use'' in section 924(c)
signifies ``an active employment of the firearm by the defendant.''
After observing that the term ``possess'' is frequently used elsewhere
in Federal gun-crime statutes, the Court reasoned that, ``[h]ad
Congress intended possession alone to trigger liability under section
924(c)(1), it easily could have so provided.''
The bill I cosponsor today does so provide, as it would amend section
924(c)(1) to apply to any defendant who ``uses, carries, or possesses''
a firearm while committing a crime of violence or drug trafficking
offense. This is a worthwhile change. Any crime becomes far more
dangerous when committed by a criminal who controls a firearm.
[[Page S406]]
Such a criminal should not be rewarded if, in a particular case, it
turns out that he has no need actually to employ the weapon. The fact
that he so augmented the danger attending his crime is reason enough to
impose the stiff sentences set forth in section 924.
Thus, in short, this bill closes a dangerous loophole in current law.
I applaud the Senator from North Carolina for his leadership on this
issue, and look forward to the bill's speedy enactment.
______
By Mr. HELMS:
S. 44. A bill to make it a violation of a right secured by the
Constitution and laws of the United States to perform an abortion with
the knowledge that the abortion is being performed solely because of
the gender of the fetus; read twice and placed on the calendar.
Civil Rights of Infants Act
Mr. HELMS. Mr. President, the distinguished Senator from New
Hampshire, Mr. Robert Smith, introduced legislation in the 104th
Congress prohibiting the destruction of helpless, unborn babies by a
procedure called partial-birth abortions.
Congress heeded the outcry of the American people against this
shameful abuse of the most innocent humans imaginable; the Partial-
Birth Abortion Ban Act was passed by both the House and the Senate only
to have it vetoed by President Clinton.
Mr. President, another stalwart Senator of New Hampshire, Mr.
Humphrey brought to the attention of the Senate in 1989 incredibly
brutal practice in America--abortions performed solely because
prospective mothers prefer a child of a gender from the babies in their
womb.
Senator Humphrey, in the 1989 debate called attention to the New York
Times article published Christmas morning the year before. It was
titled ``Fetal Sex Test Used as Step to Abortion.'' Sadly, Senator
Humphrey's remarks and subsequent legislation were met with general
disinterest among those who sanctimoniously defend what they regard as
a woman's right to destroy her unborn child. Those holding such views
never discuss an unborn child's right to live, to love and be loved.
Mr. President, it was typical for The New York Times, that the Times
article which Senator Humphrey deplored began as follows:
In a major change in medical attitudes and practices, many
doctors are providing prenatal diagnoses to pregnant women
who want to abort a fetus on the basis of the gender of the
unborn child.
Geneticists say that the reasons for this change in
attitude are an increased availability of diagnostic
technologies, a growing disinclination of doctors to be
paternalistic, deciding for patients what is best, and an
increasing tendency for patients to ask for the tests. Many
geneticists and ethicists say they are disturbed by the
trend.
Mr. President, this rhetorical horseradish is simply another
measurement of how far the moral and spiritual priorities of America
have fallen. Professor George Annas of the Boston University School of
Medicine was quoted as saying:
I think the [medical] profession should set limits and I
think most people would be outraged, and properly so, at the
notion that you would have an abortion because you don't want
a boy or you don't want a girl. If you are worried about a
woman's right to an abortion, the easiest way to lose it is
not set any limits on this technology.
Mr. President, how sad it is that any mother in a civilized society
would be willing to destroy the unborn female child she is carrying
simply because she happens to prefer a male child--or vice-versa. But
believe it. It is happening without the Government of the United States
lifting an eyebrow, let alone a finger.
And that, Mr. President, is why I am again offering legislation to
limit this incredibly inhumane practice.
As I mentioned at the outset of my remarks, the 104th Congress acted
on legislation to outlaw the brutal killings of unborn babies subjected
to partial-birth abortions. I pray the 105th Congress will take action
to end another callous cruelty against the unborn--gender-selection
abortions.
Specifically, the legislation I have sent to the desk proposes to
amend title 42 of the United States Code governing civil rights. Anyone
who administers an abortion for the purpose of choosing the gender of
the infant will protect unborn children as title 42 presently protects
any other citizen who is a victim of discrimination.
Mr. President, the American people are clearly opposed to this
practice. A Boston Globe poll reports that 93 percent of the American
people reject the taking of life as a means of gender selection.
Another poll conducted by Newsweek/Gallup showed that four out of every
five Americans oppose gender selection abortions.
Even radical feminists cannot ignore the absurdity of denying a child
the right to life simply because the parents happened to prefer a child
of the opposite gender. The Associated Press reported on August 22,
1996, that the platform adopted by last year's U.N. women's conference
in Beijing included a provision condemning sex-selection abortions.
Of course, feminists proclaim that gender selection abortions are
atrocities in China--or in India where a survey was taken 7 years ago
which revealed that of 8,000 abortions, 7,999 were female.
Now, Mr. President, I do not believe--even for a minute--that the
pro-abortion crowd and its amen corner in Congress would want to see
action on this legislation. I deliberately stated that the feminists in
Beijing--led by the American coalition--could not ignore this cruel
practice. But lip service is all that will be paid to this violent
practice by most of those who call themselves pro-choice.
Just as they did during debate on the Partial-Birth Abortion Ban Act,
I suspect NOW and NARAL supporters in the Senate will do their best to
stop the Civil Rights of Infants Act. Cries will go up and the charge
will be made that the Senate is somehow trying to take away the freedom
of American women. In the meantime, the freedoms of life and liberty
are being denied to thousands of unborn children.
Nonetheless, those of us who support the rights of the unborn must do
our best. Hopefully, this 105th Congress will take early action to
fulfill the desires of the overwhelming majority of the American people
who rightfully believe it is immoral to destroy unborn babies simply
because the mother demands freedom-of-gender choice.
______
By Mr. HELMS:
S. 45. A bill to amend title X of the Public Health Service Act to
permit family planning projects to offer adoption services; read twice
and placed on the calendar.
federal adoption services act of 1997
Mr. HELMS. Mr. President, there's a significant question about the
use of the American taxpayers' money.
Should State and local health departments, hospitals, and other
family planning organizations funded under title X of the Public Health
Services Act, be specifically allowed to offer adoption services to
pregnant women?
The answer, Mr. President, is: Absolutely.
And Congress should be unmistakably clear in expressing our judgment
that public and private health facilities can and should offer adoption
services.
The vast majority of the American people agree. Many polls have shown
that people approve of their tax dollars being used by clinics to
promote and encourage adoptions instead of the heinous destruction of
unborn children.
Statistics emphasize the merit of the proposal that clinics and
agencies receiving title X funding should explicitly be authorized to
offer adoption services. The National Council for Adoption asserts that
an estimated 2 million couples are today hopefully and prayerfully
waiting to adopt a child. Yet, 1.5 million babies are refused the right
to live every year.
Mr. President, if every abortion in this country could be prevented
this year there would still be 500,000 couples ready and waiting to
adopt children. Small wonder that adoption is called ``the loving
option.''
But it is even more tragic, Mr. President, that women with unplanned
or unwanted pregnancies are unaware of the wonderful opportunities
available to their child through adoption. These women, states Jeff
Rosenberg, formerly of the National Council for Adoption, ``are not
hearing about adoption, and thus [are] not considering it as a
possibility. Young pregnant women are frequently not told by counselors
and social workers that adoption is an alternative.''
With this in mind, I offer today the Federal Adoption Services Act of
1997,
[[Page S407]]
a bill that proposes to amend title X of the Public Health Services Act
to permit federally-funded planning services to provide adoption
services based on two factors: No. 1, the needs of the community in
which the clinic is located, and No. 2, the ability of an individual
clinic to provide such services.
Mr. President, those familiar with the many Senate debates of the
past regarding title X will recall the excessive emphasis placed on
preventing and/or spacing of pregnancies, and limiting the size of the
American family.
I hope that this year, we can refocus this debate, emphasizing the
need to affirm life rather than preventing or terminating it.
Sure, the radical feminists and other pro-abortionists will voice
their hysterical objections. So before they raise their voices, let's
make clear what this legislation will not do. For example:
No woman will be threatened or cajoled into giving up her child for
adoption. Family planning clinics will not be required to provide
adoption services. Rather, this legislation will make it clear that
Federal policy will allow, or even encourage adoption as a means of
family planning. Women who use title X services--one-third of whom are
teenagers--will be in a better position to make informed, compassionate
judgments about the unborn children they are carrying.
Mr. President, I contend that it is not the responsibility of
civilized society to protect the rights of the most innocent and most
helpless human beings imaginable. Furthermore, shouldn't we do our best
to provide couples willing to love and care for these children an
opportunity to do so? That question, Mr. President, answers itself--in
the affirmative.
______
By Mr. HELMS:
S. 46. A bill to amend the Civil Rights Act of 1964 to make
preferential treatment an unlawful employment practice, and for other
purposes; read twice and placed on the calendar.
civil rights restoration act of 1997
Mr. HELMS. Mr. President, I send to the desk legislation I first
submitted in amendment form on June 25, 1991--which I subsequently
introduced as a bill in both the 103d and 104th Congresses. But as I
introduce once more the Civil Rights Restoration Act, I recall that
similar antidiscrimination legislation passed this body long before
1973, when I first became a Member of the Senate.
Thirty-three years ago, Congress passed the historic Civil Rights Act
of 1964. The intent of that legislation was to prohibit discrimination
based on race in a broad variety of circumstances, including hiring
practices. Proponents of the Civil Rights Act proclaimed that there was
nothing in the bill that would require any quotas or preferential
treatment.
Well, three decades later, the Federal Government's quota
establishment--aided and abetted by an activist Federal judiciary--have
so perverted the plain language and intent of the Civil Rights Act that
it is unrecognizable. My proposal today is intended to ensure that all
civil rights laws are consistent with the goal of a color-blind
society.
Specifically, this legislation prevents Federal agencies, and the
Federal courts, from interpreting title VII of the Civil Rights Act of
1964 to allow an employer to grant preferential treatment in employment
to any group or individual on account of race.
This proposal prohibits the use of racial quotas once and for all.
During the past several years, almost every Member of the Senate--and
the President of the United States--have proclaimed that they are
opposed to quotas. This bill will give Senators an opportunity to
reinforce their statements by voting in a rollcall vote against quotas.
Mr. President, this legislation emphasizes that from here on out,
employers must hire on a race neutral basis. They can reach out into
the community to the disadvantaged and they can even have businesses
with 80 or 90 percent minority workforces as long as the motivating
factor in employment is not race.
This bill clarifies section 703(j) of title VII of the Civil Rights
Act of 1964 to make it consistent with the intent of its authors,
Hubert Humphrey and Everett Dirksen. Let me state it for the Record:
It shall be an unlawful employment practice for any entity
that is an employer, employment agency, labor organization,
or joint labor-management committee subject to this title to
grant preferential treatment to any individual or group with
respect to selection for, discharge from, compensation for,
or the terms, conditions, or privileges of, employment or
union membership, on the basis of the race, color, religion,
sex, or national origin of such individual or group, for any
person, except as provided in subsection (e) or paragraph
(2).
It shall not be an unlawful employment practice for an
entity described in paragraph (1) to recruit individuals of
an underrepresented race, color, religion, sex, or national
origin, to expand the applicant pool of the individuals
seeking employment or union membership with the entity.
Specifically, this bill proposes to make part (j) of section 703 of
the 1964 Civil Rights Act consistent with subsections (a) and (d) of
that section. It contains the identical language used in those
subsections to make preferential treatment on the basis of race--that
is, quotas--an unlawful employment practice.
Mr. President, I want to be clear that this legislation does not make
outreach programs an unlawful employment practice. Under language
suggested years ago by the distinguished Senator from Kansas, Bob Dole,
a company can recruit and hire in the inner city, prefer people who are
disadvantaged, create literacy programs, recruit in the schools,
establish day care programs, and expand its labor pool in the poorest
sections of the community. In other words, expansion of the employee
pool is specifically provided for under this act.
Mr. President, this legislation is necessary because in the 33 years
since the passage of the Civil Rights Act, the Federal Government and
the courts have combined to corrupt the spirit of the act as enumerated
by both Hubert Humphrey and Everett Dirksen, who made clear that they
were unalterably opposed to racial quotas. Yet in spite of the clear
intent of Congress, businesses large and small must adhere to hiring
quotas in order to keep the all-powerful Federal Government off their
backs.
Several times before, I have directed the attention of Senators to
the Daniel Lamp Co., a small Chicago lamp factory harassed by
investigators from the Equal Employment Opportunity Commission. The CBS
news program, ``60 Minutes,'' did a story several years back that
exposed the mentality of the quota-enforcing bureaucrats at the EEOC to
the Nation.
The Daniel Lamp Co. was a small, struggling business which employed
28 people when ``60 Minutes'' began its investigation--8 of whom were
black and 18 of whom were Hispanic. But this obviously
nondiscriminatory hiring practice was simply not enough for the EEOC.
According to the ``60 Minutes'' reporter, Morley Safer, the EEOC told
the owner of the Daniel Lamp Co. that ``based on other larger
companies' personnel, Daniel Lamp should employ 8.45 blacks.'' In other
words, this small company--which had never had over 30 people on its
payroll--had failed to meet the Federal Government's hiring quotas.
The Daniel Lamp Co., which was justifiably proud of its mostly
minority workforce, decided to stand up to the EEOC. For their
troubles, they were forced to pay a fine of $148,000, meet the quota
set by the agency, and spend $10,000 on newspaper advertisements to
tell other job applicants that they might have been discriminated
against--and to please contact the Daniel Lamp Co. for a potential
financial windfall.
Yet through all of this outrageous conduct, the EEOC continued to
insist that the agency does not set hiring quotas. And although one
would have reasonably expected that ``60 Minutes'' exposure of the
Daniel Lamp Co.'s predicament would embarrass the Federal Government's
quota establishment into mending its ways, it is still business as
usual among the bureaucrats.
For example, on November 21, 1996, my office received an unsolicited
facsimile transmission from the Department of Labor's Office of Federal
Contract Compliance Program [OFCCP]. For those unfamiliar with the
OFCCP, this is the branch of the Department of Labor that engages in
race and gender nose-counting for private businesses who have contracts
with the federal government.
[[Page S408]]
This facsimile was titled ``OFCCP Egregious Discrimination Cases.''
Curious as to what constituted egregious in the eyes of the Labor
Department bureaucrats, I reviewed this document--and one particular
case caught my eye.
During June 1993, OFCCP investigators conducted a so-called
compliance review of the San Diego Marriott and Marina. In the course
of their walk-through, the OFCCP officers believed they did not see
enough African-American women in visible jobs to satisfy their notion
of an acceptable workplace.
This unscientific observation prompted a massive investigation of the
San Diego Marriott's hiring practices. After a year-long inquiry--paid
for by the American taxpayer, I might add--the OFCCP uncovered only
this unremarkable revelation: that of the hotel's 1,579 employees, 950
were minorities and/or women, including 101 African-Americans.
Instead of being satisfied that over 60 percent of the workforce were
minorities or women, the OFCCP found this an egregious case of race
discrimination--because not enough black women were employed to suit
their idea of diversity. In the view of the OFCCP, a 60 percent
minority workforce is insufficient unless the ``right'' kind of
minorities are represented. Mr. President, if that is not a quota, I
don't know what is.
In any event, rather than trying to fight the Department of Labor,
the San Diego Marriott settled to the tune of $627,000. And Mr.
President, the Marriott Corporation could at least afford such an
extravagant settlement. Thousands of small businesses across the
country would be bankrupt by such a fine--and all it would take is one
Federal bureaucrat failing to see what he or she considers the right
kind of faces in the workplace.
Well, this bill is designed to put an end to all this nonsense
bandied about by the Federal Government's power-hungry quota
establishment.
Mr. President, as I have said at outset, this legislation should be
familiar to students of history. This legislation will bring our civil
rights laws full circle, putting America back on the course that
Everett Dirksen and Hubert Humphrey envisioned when they sponsored the
Civil Rights Act of 1964.
Speaking of Hubert Humphrey, Mr. President--he was a man admired by
all of us who served with him. Senator Humphrey was one of the
principal authors of the Civil Rights Act of 1964. He hated the idea of
quotas and preferential treatment based on race. Senator Humphrey stood
right here on the floor of this chamber and said in the strongest terms
possible that the Act could not possibly be interpreted to permit
quotas:
``if there is any language [in the Civil Rights Act of
1964] which provides that any employer will have to hire on
the basis of percentages or quotas related to color, race, or
religion or national origin, I will start eating the pages
one after another because it is not there.''
Those words have become so familiar to us during the course of our
debates regarding this issue, that they perhaps need a little added
emphasis. The authors of the Civil Rights Act explicitly stated that
the bill was not to be interpreted to require any quotas or percentage-
based hiring.
Well, Mr. President, tell that to the Daniel Lamp Company. Tell that
to the San Diego Marriot. Tell that to all the policemen, firemen, or
small businessmen across this country who have found that, in the
United States of America, merit and achievement is sometimes not good
enough.
Mr. President, after 30 years, it is obvious that the social
experiment known as affirmative action has outlived its usefulness. It
is time for the Congress to return the civil rights laws to their
original intent of preventing discrimination, and restore the
principles upon which our country was built--personal responsibility,
self-reliance, and hard work. The Civil Rights Restoration Act aims to
do just that.
Mr. President, I ask unanimous consent that a March 20, 1995 article
by Paul Craig Roberts and Lawrence M. Stratton, Jr. in National Review
be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the National Review, March 20, 1995]
How We Got Quotas--Color Code
(By Paul Craig Roberts and Lawrence M. Stratton, Jr.)
Bureaucrats and judges have turned the 1964 Civil Rights
Act on its head, creating a system of preferences based on
race and sex. Can we restore equality before the law?
Forty years after Brown v. Board of Education, the civil-
rights movement has strayed far from the color-blind
principles of Martin Luther King Jr., Public outrage over
preferential treatment for ``protected minorities'' has taken
the place of guilt over segregation. Americans who supported
desegration and equal rights are astonished to find
themselves governed by quotas, which were prohibited by the
Civil Rights Act of 1964.
In California momentum is building for a 1996 initiative,
modeled on the 1964 Civil Rights Act, that would amend the
state's constitution to prohibit the use of quotas by state
institutions. Polls indicate that the initiative's objective
of ending affirmative action is enormously popular, even in
traditionally liberal bastions such as Berkeley and San
Francisco. Citizens in other states are organizing to place
similar measures on the ballot. The prospects for such
measures are bright: surveys find that some 80 per cent of
Americans oppose affirmative action in employment and
education.
The hostility to race and gender preferments reflects a
general sense that reverse discrimination violates
fundamental norms of justice and fair play. Thomas Wood, a
co-drafter of the California initiative and executive
director of the California Association of Scholars, says he
has been denied a teaching job because he is a white male:
``I was told by a member of a search committee at a
university, `You'd walk into this job if you were the right
gender.' '' Glynn Custred, a California State University
anthropology professor, says he decided to join Wood in
drafting the initiative because he was concerned about the
destructive impact racial quotas were having on higher
education, where ``diversity'' overshadows academic merit.
The California initiative has drawn support from across the
political spectrum. Charles Geshekter, a teacher of African
history at Chico State University and a supporter of the
initiative, wrote in the August 14 Chico Enterprise Record:
``As a liberal Democrat, I despise those who advocate
preferential treatment based on genitalia or skin color.
Having taught university classes on the history of European
racism toward Africa for 25 years, I am appalled to watch
sexist and racist demands for equality of outcomes erode the
principle of affirmative equality of opportunity.''
University of California Regent Ward Connerly, a black
businessman who supports the initiative, lamented in the
August 10 Sacramento Bee that ``we have institutionalized
this preferential treatment.''
The Pervasiveness of Preferences
Opposition to quotas was initially unfocused, because their
impact was not widely felt. The public was aware of a few
celebrated cases, but they seemed to be the exception rather
than the rule. This is no longer the case. Preferential
treatment based on race and sex pervades private and public
employment, university admissions and hiring, and the
allocation of government contracts, broadcast licenses, and
research grants. Consider a few examples:
A 1989 survey by Fortune magazine found that only 14 per
cent of Fortune 500 companies hired employees based on talent
and merit alone; 18 per cent admitted that they had racial
quotas, while 54 per cent used the euphemism ``goals.''
--A Defense Department memo cited on the November 18
broadcast of ABC's 20/20 declares, ``In the future, special
permission will be required for the promotion of all white
men without disabilities.''
--The Federal Aviation Administration officially recognizes
the Council of African American Employees, the National Asian
Pacific American Association, the Gay, Lesbian, or Bisexual
Employees group, and the Native American/Alaska Native
Coalition, granting them access to bulletin boards,
photocopiers, electronic mail, voice mail, and rooms in
government buildings for meetings on government time. By
contrast, the Coalition of Federal White Aviation Employees
has been seeking recognition from the FAA since 1992 without
success; FAA employees are even forbidden to read the group's
literature.
--In the 1994 case Hapwood v. State of Texas, U.S. District
Court Judge Sam Sparks found that the constitutional rights
of four white law-school applicants had been violated by
quota policies at the University of Texas. However, he
awarded them each only $1 in damages and refused to order
them admitted ahead of protected minorities with
substantially lower scores.
A case that came before the U.S. Supreme Court in January
shows even more clearly how preferential policies have warped
basic concepts of fairness. Randy Pech, owner of Adarand
Constructors, lost in the bidding for a guard-rail
construction project in Colorado's San Juan National Forest
because of his skin color. Pech put in the lowest bid.
However, the prime contractor was eligible for a bounty of
$10,000 in taxpayers' money from the U.S. Department of
Transportation for hiring minority-owned subcontractors, and
the bounty was greater than the difference in the bids
submitted by Pech and his competitor, a Hispanic-owned firm.
[[Page S409]]
Pech filed a discrimination lawsuit. When it reached the
Supreme Court, U.S. Solicitor General Drew S. Days III argued
that Pech had no standing to sue, even though the U.S.
Government had paid the prime contractor $10,000 to
discriminate against him. Whatever the technical merits of
the solicitor general's argument, it reveals the system of
racial preferments that today passes for civil rights.
``Protected minorities'' have standing to sue without any
requirement of showing that they themselves have ever
suffered from an act of discrimination. Today's college-aged
protected minorities have never suffered from legal
discrimination, yet U.S. policy assumes they are victims and
provides remedies in the form of preferments. In contrast,
victims of reverse discrimination have no remedy and no legal
standing.
The political repercussions of this double standard are by
no means restricted to California. In November's
congressional elections, white males deserted the Democratic
Party in droves, voting Republican by a margin of 63 per cent
to 37 per cent. The Wall Street Journal has identified
``angry white males'' as an important new political group.
But more is at stake than the plight of white males and the
relative fortunes of political parties. At issue is equality
before the law and the democratic process itself. As freedom
of conscience, goodwill, and persuasion are supplanted by
regulatory and judicial coercion, privilege reappears in open
defiance of Justice John Marshall Harlan's dictum: ``There is
no caste here. Our Constitution is color-blind.''
Color-blindness was the guiding principle of the 1964 Civil
Rights Act. The basic act was full of language prohibiting
quotas, and various amendments to it defined discrimination
as an intentional act, insulated professionally developed
employment tests from attack for disproportionately screening
out racial minorities, and restricted the Equal Employment
Opportunity Commission (EEOC) from issuing any substantive
interpretive regulations. Senator Hubert H. Humphrey (D.,
Minn.), the chief sponsor of the act, confidently declared
that if anyone could find ``any language which provides that
an employer will have to hire on the basis of percentage or
quota related to color, race, religion, or national origin, I
will start eating the pages one after another, because it is
not in there.'' In less than a decade, federal bureaucrats
and judges had cast aside Congress's rejection of
preferential treatment for minorities and stuffed the pages
of the 1964 Civil Rights Act down Hubert Humphrey's throat.
two models of discrimination
The Civil Rights Act of 1964 undertook to put millions of
employer decisions through a government filter. Such a
massive intrusion into private life had not previously
occurred in a free society. Congress assumed that the EEOC,
the agency created by the act to run the filter, would be
like the state Fair Employment Practice (FEP) commissions
that had been created in some Northern states after World War
II.
Civil-rights activists regarded these commissions, many of
which had more power than the EEOC, as ineffective. As
University of Chicago economist Gary Becker observed,
however, there was an explanation for the paucity of
enforcement actions by the FEP commissions: discrimination
doesn't pay. In his 1957 book, The Economics of
Discrimination, Becker showed that racial discrimination is
costly to those who practice it and therefore sets in motion
forces that inexorably reduce it. Meritorious employees who
are underpaid and underutilized because of their race will
move to firms where they get paid according to their
contributions. An employer who hires a less qualified
white because of prejudice against blacks will
disadvantage himself in competition against those who hire
the best employees they can find.
Indeed, scholars who studied the cases handled by FEP
commissions found that the complainant's problem was usually
his job qualifications, not his race. Sociologist Leon
Mayhew, who studied employment-discrimination complaints
filed with the Massachusetts FEP commission from 1946 to
1962, found that most complaints were based on ``mere
suspicion'' and usually resulted in a finding that the
employer had not discriminated. He pointed out that most
complainants were poor and lacked job skills. Thus, ordinary,
profit-oriented business decisions ``regularly produced
experiences that could be interpreted as discrimination.''
This phenomenon ``permits Negroes to blame discrimination for
their troubles. Hence, some complaints represent a projection
of one's own deficiencies onto the outside world.''
This argument did not appeal to those who wanted to achieve
racial integration through government policy. Activists such
as Rutgers law professor Alfred W. Blumrosen, who as the
EEOC's first compliance chief became the de facto head of the
commission in its formative years, rejected the complaint-
based, ``retail'' model of FEP enforcement and envisioned a
``wholesale'' model attacking the entrenched legacy of
discrimination. In 1965 Blumrosen wrote in the Rutgers Law
Review that FEP commissions focused too much on individual
acts of discrimination and ``did not remedy the broader
social problems'' by reducing the disparity between black and
white unemployment. Seeking to redefine discrimination in
terms of statistical disparity, he dismissed other
explanations of economic differences between blacks and
whites, such as education and illegitimacy, as harmful
``attempt[s] to shift focus.'' Blumrosen disdained the Civil
Rights Act's definition of discrimination as an intentional
act, preferring a definition that Congress had rejected. In
his 1971 book, Black Employment and the Law, he wrote:``
``If discrimination is narrowly defined, for example, by
requiring an evil intent to injure minorities, then it will
be difficult to find that it exists. If it does not exist,
then the plight of racial and ethnic minorities must be
attributable to some more generalized failures in society, in
the fields of basic education, housing, family relations, and
the like. The search for efforts to improve the condition of
minorities must then focus in these general and difficult
areas, and the answers can come only gradually as basic
institutions, attitudes, customs, and practices are changed.
We thus would have before us generations of time before the
effects of subjugation of minorities are dissipated.
``But if discrimination is broadly defined, as, for
example, by including all conduct which adversely affects
minority group employment opportunities . . . then the
prospects for rapid improvement in minority employment
opportunities are greatly increased. Industrial relations
systems are flexible; they are in control of defined
individuals and institutions; they can be altered either by
negotiation or by law. If discrimination exists within these
institutions, the solution lies within our immediate grasp.
It is not embedded in the complications of fundamental
sociology but can be sharply influenced by intelligent,
effective, and aggressive legal action.
``This is the optimistic view of the racial problem in our
nation. This view finds discrimination at every turn where
minorities are adversely affected by institutional decisions,
which are subject to legal regulation. In this view, we are
in control of our own history. The destruction of our society
over the race question is not inevitable.''
blumrosen's agenda
Blumrosen figured that a redefinition of discrimination to
include anything that yielded statistical disparities between
blacks and whites would force employers to give preferential
treatment to blacks in pursuit of proportional
representation, so as to avoid liability in class-action
suits. He set out to ``liberally construe'' Title VII of the
Civil Rights Act, which prohibited discrimination in
employment, in order to advance ``the needs of the minorities
for whom the statute had been adopted.'' By promoting quotas,
he could ``maximize the effect of the statute on employment
discrimination without going back to the Congress for more
substantive legislation.''
Blumrosen's EEOC colleagues kidded him that he was working
on a textbook entitled Blumrosen on Loopholes. He took pride
in his reputation for ``free and easy ways with statutory
construction.'' He later praised the agency for being like
``the proverbial bumble bee'' that flies ``in defiance of the
laws governing its operation.'' Blumrosen's strategy was
based on his bet that ``most of the problems confronting the
EEOC could be solved by creative interpretation of Title VII
which would be upheld by the courts, partly out of deference
to the administrators.'' History has proved Blumrosen right.
As inside-the-Beltway lore expresses it, ``Personnel is
policy.'' Blumrosen had a free hand because Franklin Delano
Roosevelt Jr., the EEOC's first chairman, spent most of his
time yachting. Staffers jokingly changed the lyrics of the
song ``Anchors Aweigh'' and sang ``Franklin's Away'' during
his frequent absences. Roosevelt resigned before a year was
out, and his successors stayed little longer. The EEOC had
four chairmen in its first five years, which enhanced
Blumrosen's power.
The White House Conference on Equal Employment Opportunity
in August 1965 indicated what was to come. Speaker after
speaker described ``deeply rooted patterns of
discrimination'' and ``under-representation'' of minorities
that the EEOC should counter in order to promote ``equal
employment opportunity.'' The conference report stressed on
its first page that the ``conferees were eager to move beyond
the letter of the law to a sympathetic discussion of those
affirmative actions required to make the legal requirement of
equal opportunity an operating reality.'' Another telling
line said that ``it is not enough to obey the technical
letter of the law; we must go a step beyond in order to
assure equal employment opportunity.'' One panel concluded
that ``it is possible that the letter of the law can be
obeyed to the fullest extent without eliminating
discrimination in hiring and promotion. For the legislative
intent of Title VII to be met, the law will have to be obeyed
in spirit as well as in letter.''
The report noted that many panelists shared Blumrosen's
suspicion that if the EEOC limited its activities to
responding to complaints of discrimination, the agency would
never ``reach the extent of discriminatory patterns.''
Blumrosen inserted a paragraph into the report suggesting
that the agency should initiate proceedings against employers
even in the absence of complaints of discrimination.
Underutilizers of minority workers could be identified by
using ``employer reports of the racial composition of the
work force as a sociological `radar net' to determine the
existence of patterns of discrimination.''
Blumrosen succeeded in setting up a national reporting
system of racial employment statistics despite the Civil
Rights Act's
[[Page S410]]
specific prohibition of such data collection. An amendment
introduced by Senator Everett Dirksen (R., Ill.), said
employers did not have to report statistics to the EEOC if
they were already reporting them to local or state FEP
commissions. Blumrosen later admitted that the requirement he
imposed on employers to report the racial composition of
their work forces was based on ``a reading of the statute
contrary to the plain meaning.'' But what was a mere statute?
Columbia University law professor Michael Sovern predicted
that the EEOC would be called on the carpet for exceeding its
authority. In a study for the Twentieth Century Fund, Legal
Restraints on Racial Discrimination, he wrote that Title VII
``cannot possibly be stretched to permit the Commission to
insist on the filing of reports'' and predicted that
Blumrosen would ``encounter resistance.'' But no resistance
materialized. As Hugh Davis Graham observed in The Civil
Rights Era, ``In 1965 Congress was distracted by debates over
voting rights and Vietnam and Watts and inflation and scores
of other issues more pressing than agency records.''
After Blumrosen got his way in forcing employers to submit
reports, the agency developed the confidence to dispense with
other statutory restrictions on its mission. The EEOC saw the
reporting requirement as a ``calling card'' that ``gives
credibility to an otherwise weak statute.'' Blumrosen knew
that ``with the aid of a computer,'' the EEOC could now get
``lists of employers who, prima facie, may be underutilizing
minority-group persons'' and eventually force them to engage
in preferential hiring of blacks.
In mid 1965 Blumrosen sent EEOC investigators to Newport
News, Virginia, to solicit discrimination complaints against
the Newport News Shipbuilding & Dry Dock Company, one of the
world's largest shipyards, employing 22,000 workers. Knocking
on doors in black neighborhoods, the investigators found 41
complainants, later narrowed down to 4. Blumrosen then
successfully pressured the company, which received 75 per
cent of its business from Navy contracts, to promote 3,890 of
its 5,000 black workers, designate 100 blacks as supervisors,
and adopt a quota system in which the ratio of black to white
apprentices in a given year would match the region's ratio of
blacks to whites. One shipyard worker told Barron's that the
EEOC had done its worst to ``set black against white, labor
against management, and disconcert everybody.''
Armed with the national reporting system's racial data and
the victory at Newport News, Blumrosen and his colleagues
decided to build a body of case law under Title VII to impose
minority-preference schemes on employers across the country.
The barrier to this strategy was Title VII itself. An
internal EEOC legal memorandum concluded: ``Under the literal
language of Title VII, the only actions required by a covered
employer are to past notices, and not to discriminate
subsequent to July 2, 1965. By the explicit terms of Section
703(j), an employer is not required to redress an imbalance
in his work force which is the result of past
discrimination.'' Fearing a storm over quotas like the one
that had occurred during the congressional debates on the
Civil Rights Act, the EEOC ruled out trying to amend the Act
itself. The memorandum instead urged the agency to rewrite
the statute on its own and influence the courts to embrace
the EEOC's ``affirmative theory of nondiscrimination,'' under
which compliance with Title VII requires that ``Negroes are
recruited, hired, transferred, and promoted in line with
their ability and numbers.''
The Assault on Employment Tests
To implement the ``affirmative theory of non-
discrimination,'' the EEOC decided to assault employment
tests that failed blacks at a higher rate than whites.
Commissioner Samuel Jackson told members of the NAACP that
the EEOC had decided to interpret Title VII as banning not
only racial discrimination per se but also employment
practices ``which prove to have a demonstrable racial
effect.'' EEOC lawyers formed an alliance with civil-rights
attorneys at the NAACP and began a litigation drive to
redefine discrimination in terms of statistical effects.
Summer riots and Vietnam protests helped activists target
employment tests. The Kerner Commission's report on civil
disorders described employment tests as ``artificial barriers
to employment and promotion.'' The Kerner Commission blamed
these ``artificial barriers'' and the ``explosive mixture
which has been accumulating in our cities'' on racism and
concluded, ``Our nation is moving toward two societies, one
black, one white--separate and unequal.''
The EEOC's chief psychologist, William H. Enneis, attacked
``irrelevant and unreasonable standards for job applicants
and upgrading of employees, [which] pose serious threats to
our social and economic system. The results will be denial of
employment to qualified and trainable minorities and women.''
Enneis said the EEOC would not ``stand idle in the face of
this challenge. The cult of credentialism is one of our
targets,'' to be fought ``in whatever form is occurs.''
The EEOC issued guidelines in 1966 and 1970 designed to
abrogate the pro-testing amendment to the Civil Rights Act
introduced by Senator John Tower (R., Tex.) by defining the
phrase ``professionally developed ability tests'' as tests
that either passed blacks and whites at an equal rate or met
complex ``validation'' requirements for ``fairness'' and
``utility.'' Under the validation requirements that Enneis
designed, employers had to prove that the tests measured
skills they needed. The objective was to make tests so
difficult to defend in court that employers would simply
abandon them and hire by racial quota. Enneis testified
before Congress in 1974 that he knew of only three or four
test-validation studies that satisfied his guidelines. As a
1971 Harvard Law Review survey of developments in employment
law deduced, the EEOC guidelines ``appear designed to scare
employers away from any objective standards which have a
differential impact on minority groups, because, applied
strictly, the testing requirements are impossible for many
employers to follow.'' As a result, the guidelines
``encourage many employers to use a quota system of hiring.''
An EEOC staffer told the Harvard Law Review that ``the anti-
preferential-hiring provisions [of Title VII] are a big zero,
a nothing, a nullity. They don't mean anything at all to
us.''
The EEOC's attack on tests gutted not only Senator Tower's
amendment but also the statutory definition of discrimination
as an intentional act. The commission was well aware that it
was treading on legal thin ice. A history of the EEOC during
the Johnson Administration, prepared by the EEOC for the
Johnson Library under the direction of Vice Chairman Luther
Holcomb, detailed the EEOC's strategy of redefining
discrimination and suggested that it was on a collision
course with the text and legislative intent of Title VII. The
history said the EEOC had rejected the ``traditional
meaning'' of discrimination as ``one of intent in the state
of mind of the actor'' in favor of a ``constructive proof of
discrimination'' that would ``disregard intent as crucial to
the finding of an unlawful employment practice'' and forbid
employment criteria that have a ``demonstrable racial effect
without clear and convincing business motive.''
Noting that this redefinition would conflict with Senator
Dirksen's insertion of the word ``intentional'' into the
statute, the history said ``courts cannot assume as a matter
of statutory construction that Congress meant to accomplish
an empty act by the amendment'' defining discrimination as
intentional. The history predicted that ``the Commission and
the courts will be in disagreement as to the basis on which
they find an unlawful employment practice'' and conclude that
``eventually this will call for the reconsideration of the
amendment by Congress or the reconsideration of its
interpretation by the Commission.''
As things turned out neither the EEOC nor Congress had to
reconsider the meaning of discrimination, because the courts
also ignored the law. In the 1971 case Griggs v. Duke Power,
the Supreme Court accepted the EEOC's rewrite of the Civil
Rights Act. The opinion was written by Chief Justice Warren
Burger, President Richard Nixon's first appointee to the
Supreme Court. Coveting the fame of his predecessor, Earl
Warren, Chief Justice Burger told his clerks that he wanted
to ``confuse his detractors in the press'' by writing some
``liberal opinions.''
blumrosen wins his bet
When Burger declared that ``the administrative
interpretation of the Act by the enforcing agency is entitled
to great deference,'' Professor Blumrosen won his bet that
the EEOC's ``creative interpretation of Title VII would be
upheld by the courts, partly out of deference to the
administrators.'' Burger got the acclaim he coveted.
Blumrosen cheered the Chief Justice's opinion as a
``sensitive, liberal interpretation of Title VII'' that ``has
the imprimatur of permanence.''
In Griggs the Court ignored clear statutory language and
unambiguous legislative history. In fact, Griggs paralleled a
1964 Illinois case, Myart v. Motorola, that had troubled many
of the legislators who approved the Civil Rights Act. Myart
struck down Motorola Corporation's use of an employment test
that blacks failed at a higher rate than whites. The EEOC's
history for the Johnson Library noted that ``many members of
Congress were concerned about this issue because the court
order against Motorola was handed down during the debates.
The record establishes that the use of professionally
developed ability tests would not be considered
discriminatory.'' Nevertheless, the Supreme Court ruled that
Duke Power Company was discriminating against blacks by
requiring employees seeking promotions to have a high-school
diploma or a passing grade on intelligence and mechanical-
comprehension tests.
The Supreme Court agreed with the lower courts that Duke
Power had not adopted the requirement with any intention to
discriminate against blacks. Burger admitted that the
company's policy of financing two-thirds of the cost of adult
high-school education for its employees suggested good
intent. But the lack of a racist motive did not make any
difference to the Chief Justice. He decreed that the
``absence of discriminatory intent does not redeem employment
procedures or testing mechanisms that operate as `built-in
headwinds' for minority groups.'' Burger was mistaken when he
wrote, ``Congress directed the thrust of the Act to the
consequences of employment practices, not simply the
motivation.'' It was precisely this misinterpretation of the
statute that the Dirksen Amendment was crafted to prevent.
Burger viewed the promotion requirements as ``built-in-
headwinds'' against blacks because blacks were less likely
than whites to have completed high school or to do well on
aptitude tests. He cited 1960 census statistics showing that
34 percent of white males in North Carolina had completed
high school,
[[Page S411]]
compared to 12 percent of black males, and EEOC findings that
58 percent of whites passed the tests used by Duke Power,
compared to 6 percent of blacks. Blaming these disparities on
segregation, Burger said that ``under the Act, practices,
procedures, or tests neutral on their face, and even neutral
in terms of intent, cannot be maintained if they operate to
`freeze' the status quo of prior discriminatory employment
practices.'' Burger destroyed job testing when he declared,
``The Act proscribes not only overt discrimination but also
practices that are fair in form, but discriminatory in
operation.''
Burger's casuistry was to be given a name. In the 1976 book
Employment Discrimination Law, EEOC District Counsel Barbara
Lindemann Schlei and co-author Paul Grossman called the new
emphasis on consequences ``disparate impact'' analysis. One
year later, the Supreme Court used the phrase for the first
time in the case International Brotherhood of Teamsters v.
United States, which dealt with burdens of proof in Title VII
cases attacking union seniority systems. ``Proof of
discriminatory motive,'' the Court said, ``is not required
under a disparate-impact theory.'' Henceforth, any
requirement that had a disparate impact on the races,
regardless of intent or the reasonableness of the
requirement, constituted discrimination. In employment and
promotions, unequals had to be treated as equals. The same
was soon to follow in university admissions testing. Race-
based privileges had found their way into law.
In Griggs Chief Justice Burger said employers could escape
prima facie Title VII liability only if test requirements are
``demonstrably a reasonable measure of job performance.''
Pulling a phrase out of thin air, Burger said ``the
touchstone is business necessity. If an employment practice
which operates to exclude Negroes cannot be shown to be
related to job performance, the practice is prohibited.''
Burger invented a statutory hook for his ruling by asserting,
falsely, that ``Congress has placed on the employer the
burden of showing that any given requirement must have a
manifest relationship to the employment in question.'' It was
precisely this heavyhanded intrusion into job requirements
that the Tower Amendment was designed to prevent.
Burger's deference to the EEOC meant that the agency would
become the national arbiter of job tests. Following Griggs,
the agency immediately issued manuals warning employers that
unless they ``voluntarily'' increased their minority
statistics, they risked costly liability. Ultimately, it
became prohibitively expensive to use job tests unless they
were race-normed so that blacks could qualify with lower
scores.
the impact of disparate impact
In a subsequent case interpreting Griggs, Justice Harry
Blackmun expressed his concern that the EEOC's guidelines
would lead to hiring based on race rather than merit. He
warned that ``a too-rigid application of the EEOC guidelines
will leave the employer little choice, save an impossibly
expensive and complex validation study, but to engage in a
subjective quota system of employment selection. This, of
course, is far from the intent of Title VII.''
By then it was too late. Griggs had killed four birds with
one stone: Senator Tower's amendment on tests, Senator
Dirksen's amendment on intent, Senator Humphrey's guarantee
that the Civil Rights Act could not be used to induce quotas,
and the amendment introduced by Representative Emanuel Celler
(D., N.Y.) prohibiting the EEOC from issuing substantive
regulatory interpretations of Title VII. The EEOC wanted
quotas, and thanks to Griggs it would get them. ``At the EEOC
we believe in numbers,'' Chairman Clifford Alexander declared
in 1968. In pursuit of its goal, the agency assumed powers it
did not have. In 1972 Blumrosen boasted in the Michigan Law
Review that the EEOC's power to issue guidelines ``does not
flow from any congressional grant of authority.''
When Burger created what would come to be known as
disparate-impact analysis he did not realize its quota
implications. He thought he was just attacking
``credentialism.'' As the holder of a law degree from an
obscure night school in St. Paul, Minnesota, Burger may have
been thinking of himself when he wrote that ``history is
filled with examples of men and women who rendered highly
effective performance without the conventional badges of
accomplishment in terms of certificates, diplomas, or
degrees.'' Surrounded by Court colleagues and clerks with
prestigious Ivy League degrees, Burger might have tasted
credential discrimination. He thought that the Court could
take away the ``headwind'' of credentialism that blew against
blacks without creating a privileged position for minorities.
Yet before Griggs, any employer who was so inclined could
take the measure of prospective employees and make bets on
people with obscure backgrounds who may not have had the
best chances in life. After Griggs, no employer could risk
hiring a white male from William Mitchell Law School in
St. Paul over a black from Harvard. Griggs made race a
critical factor in employment decisions. High-school
diplomas, arrest records, wage garnishments, dishonorable
military discharges, and grade-point averages all became
forbidden considerations in hiring decisions, because they
are criteria that could have a disparate impact on blacks.
Farmers have even been sued for asking prospective farm
hands whether they could use a hoe, on the grounds that
blacks have a greater propensity to back problems.
Perfectly sensible height and weight requirements for
prison guards and police officers have also been struck
down for having a disparate impact on women.
The EEOC strategy that led to Griggs was not created in a
vacuum. Civil-rights activists needed a new cause, and
preferences that would enable blacks to attain equality of
result became the new goal. In January 1965, Playboy asked
Martin Luther King Jr., ``Do you feel it's fair to request a
multibillion-dollar program of preferential treatment for the
Negro, or for any other minority group?'' King replied, ``I
do indeed.'' In 1969, the U.S. Court of Appeals for the Fifth
Circuit, the same court that had initiated school busing in
the name of ``racial balance,'' cast aside the prohibition of
quotas in Section 703(j) of the Civil Rights Act by upholding
a court order that every other person admitted to a Louisiana
labor union must be black. Responding to the argument that
this order clearly violated Section 703(j), the three judge
panel simply wrote, ``We disagree.''
President Johnson was the most prominent proponent of the
shift away from the color-blind ideal. At his commencement
speech at Howard University on June 4, 1965, Johnson said the
disappearance of legal segregation was not enough:
``You do not take a person who, for years, has been hobbled
by chains and liberate him, bring him up to the starting line
of a race, and then say, ``You are free to compete with all
the others,'' and still justly believe that you have been
completely fair.
``Thus it is not enough just to open the gates of
opportunity. All our citizens must have the ability to work
through those gates.
``This is the next and the more profound state of the
battle for civil rights. We seek not just freedom but
opportunity. We seek not just legal equity but human ability,
not just equality as a right and a theory but equality as a
fact and equality as a result.''
To back up his speech with action, Johnson issued Executive
Order 11246, which put the phrase ``affirmative action'' into
common parlance. The order required all Federal Government
contractors and subcontractors to ``take affirmative action
to ensure that applicants are employed, and that employees
are treated during employment, without regard to their race,
creed, color, or national origin.''
Johnson's equality-of-results rhetoric and his metaphor of
helping a hobbled runner have provided the main emotional
justification for ``affirmative action,'' but the quotas that
now web federal contractors under Executive Order 11246 were
not implemented by his Administration. Facing strong
opposition from the Department of Defense, labor unions,
members of Congress, and Comptroller General Elmer Staats,
Johnson's labor secretary, Willard Wirtz, dropped his plans
to impose quotas on federal construction projects in
Philadelphia.
That task fell to George P. Shultz, Richard Nixon's labor
secretary. Just as Burger considered Griggs a blow against
credentialism, Shultz, a labor economist from the University
of Chicago, saw the Philadelphia Plan as a way of making an
end run around the Davis-Bacon Act, which inflated the cost
of federal construction contracts by setting wages at
``prevailing union levels.'' Davis-Bacon meant non-union
contractors and laborers (many of whom were black) could not
get government contract work. Sensitive to charges that he
was hostile to civil rights, Nixon wrote in his memoirs that
he accepted Shultz's proposal to revive the Philadelphia Plan
in order to demonstrate to blacks ``that we do care.''
On June 27, 1969, Assistant Secretary of Labor Arthur A.
Fletcher, a black former businessman who had been a
professional football player, announced the Philadelphia Plan
in the City of Brotherly Love. He said that while ``visible,
measurable goals to correct obvious imbalances are
essential,'' the plan did not involve ``rigid quotas.'' The
Congressional Quarterly disagreed with Fletcher's scholastic
distinction, calling the Philadelphia Plan a ``nonnegotiable
quota system.''
Under the plan, the Labor Department's Office of Federal
Contract Compliance (OFCC) would assess conditions in the
five-county Philadelphia area and set a target percentage of
minorities to be employed in several construction trades,
with the aim of attaining a racially proportionate work
force. Potential federal contractors would have to submit
complex plans detailing goals and timetables for hiring
blacks within each trade to satisfy the OFCC's
``utilization'' targets. Arthur Fletcher said the
Philadelphia Plan ``put economic flesh and bones on Dr.
King's dream.''
In 1971 the U.S. Court of Appeals for the Third Circuit
accepted the Nixon Administration's argument that ``goals and
timetables'' were not quotas and that, even if they were, the
Civil Rights Act's ban on quotas applied to Title VII
remedies, not to executive orders. The Supreme Court avoided
the controversial quota issue by refusing to review the case.
Although the appeals court's ruling had no force outside the
Third Circuit, the Nixon Administration interpreted the
Supreme Court's lack of interest as a green light. As
Laurence H. Silberman, who was undersecretary of labor at the
time, later wrote, the Nixon Administration went on to spread
Philadelphia Plans ``across the country like Johnny
Appleseed.'' The Labor Department quickly issued Order #4,
which required all federal contractors to meet
[[Page S412]]
``goals and timetables'' to ``correct any identifiable
deficiencies'' of minorities in their work forces. The carrot
of government contracts and the stick of disparate-impact
liability under Griggs quickly established quotas. For many
corporate managers, hiring by the numbers was the only
protection against discrimination lawsuits and the loss of
lucrative government contracts. Contractors hired minorities
to guard against the sin of ``underutilization,'' and racial
proportionality became a precondition of government largesse.
Arthur Fletcher estimated that the new quota regime covered
``from one-third to one-half of all U.S. workers.''
The Section 703(j) prohibition of quotas in the Civil
Rights Act remained in the law but meant nothing. Reverse
discrimination was in. When the liberal William O. Douglas,
the only remaining member of the Brown Court, tried to get
his Supreme Court colleagues to review the case of a white
who was refused admission to the Arizona bar to make room for
blacks with lower bar-exam scores, he argued that ``racial
discrimination against a white was as unconstitutional as
racial discrimination against a black.'' Douglas failed to
persuade his fellow Justices. He reports in his autobiography
that Thurgood Marshall replied: ``You guys have been
practicing discrimination for years. Now it is our turn.''
THE SPREAD OF QUOTAS
Although the phrase ``federal contractor'' conjures up
images of workers in hard hats busy with construction
projects or weapons systems, colleges and universities are
also federal contractors, receiving federal funds through
research grants and financial aid to students. Following the
Labor Department's lead, Nixon's Department of Health,
Education, and Welfare soon required similar ``goals and
timetables'' for faculty hiring. Before long the practice had
spread to student admissions as well.
In 1974 Douglas tried to get the Court to address quotas in
this area. Marco DeFunis challenged the University of
Washington Law School's 20 per cent quota for blacks. The
school had rejected DeFunis though his GPA and test scores
surpassed those of 36 of the 37 admitted blacks. Using his
powers as a Circuit Justice, Douglas stayed the Washington
Supreme Court's ruling against DeFunis and ordered his
admission.
By the time DeFunis's case came before the Supreme Court,
however, he was about to receive his degree. This let the
Court avoid the quota issue by declaring the case moot.
Douglas dissented on the mootness ruling and addressed the
case's merits. He viewed DeFunis just as he had Brown:
``There is no superior person by constitutional standards. A
DeFunis who is white is entitled to no advantage by reason of
that fact; nor is he subject to any disability, no matter
what his race or color. Whatever his race, he had a
constitutional right to have his application consideration on
its individual merits in a racially neutral manner.''
But time had passed Douglas by. In Douglas's mind,
discrimination was still connected with merit. DeFunis's
scores showed that he met a higher objective standard than
those admitted in his place. But by this time any standard
that had disparate impact was ipso facto discriminatory. In
the eyes of Douglas's colleagues, DeFunis was simply a
beneficiary of a discriminatory standard. Douglas, who had
supported the Griggs decision, obviously did not comprehend
its implications.
The quota issue re-emerged in 1978, when Allan Bakke, a
white male refused admission to the University of California
Medical School, challenged the school's policy of reserving
16 per cent of its slots for minorities. Each of the accepted
minorities had academic credentials inferior to Bakke's. In a
156-page opinion with 167 footnotes, the Justices reached the
schizophrenic conclusion that Bakke should be admitted, but
that certain skin colors could nevertheless be considered
grounds for college admissions if the goal was to enhance
``educational diversity.''
A year later the Supreme Court ruled that companies could
``voluntarily'' impose quotas on themselves to avoid
liability. Pressured by OFCC affirmative-action requirements
and the need to forestall Title VII liability under Griggs,
Kaiser Aluminum, like many other companies, had entered into
a quota agreement with its union, the United Steelworkers of
America, in 1974. The agreement stipulated that ``not less
than one minority employee will enter'' apprentice and craft
training programs ``for every nonminority employee'' until
the percentage of minority craft workers approximated the
percentage of minorities in the regions surrounding the
percentage of minorities in the regions surrounding each
Kaiser plant. Two seniority lists were drawn up, one white
and one black, and training openings were filled alternately
from the two lists.
Brian Weber, a 32-year-old white blue-collar worker who had
ten years' seniority as an unskilled lab technician at Kaiser
Aluminum's plant in Gramercy, Louisiana, applied for a
training-program slot but was denied in favor of two blacks
with less seniority. After his union denied his grievance,
Weber wrote the local EEOC office requesting a copy of the
1964 Civil Rights Act. When the Civil Rights Act arrived in
the mail, Weber read it through and found that it said
``exactly what I thought. Everyone should be treated the
same, regardless of race or sex.'' Encouraged by the
statute's words, he filed a class-action suit representing
his plant's white workers and won before district and
appellate courts.
During Supreme Court oral arguments in United Steelworkers
v. Weber Justice Potter Stewart quipped that the Justices had
to determine whether employers may ``discriminate against
some white people.'' Justice William Brennan's answer, for a
5 to 2 majority, was an emphatic ``yes.'' Brennan said the
meaning of the 1964 Civil Rights Act could not be found in
its statutory language but resided in its spirit, which
Brennan had divined. He asserted that the Act's clear
statutory language and the Dirksen, Tower, and Celler
amendments conveyed a meaning that was the opposite of what
Congress had really intended. A literal reading of Title VII,
he said, would ``bring about an end completely at variance
with the purpose of the statute.'' In enacting the Civil
Rights Act, Brennan continued, ``Congress's primary concern''
was with the plight of the Negro in our economy. Anything
that helped minorities was broadly consistent with this
purpose. This included racial quotas, as long as they were
voluntarily adopted by companies and not required by the
Federal Government under Title VII. Brennan denied that
Kaiser's plan would lead to quotas: ``The plan is a temporary
measure; it is not intended to maintain racial balance, but
simply to eliminate a manifest racial imbalance.''
burger has second thoughts
Chief Justice Burger had created disparate-impact analysis
in his Griggs opinion without realizing its quota
implications. Now that quotas were upon him, he found himself
joining in dissent with Justice William Rehnquist. Brennan's
Weber opinion, they said, was ``Orwellian.'' In Griggs, the
Court had declared that ``discriminatory preference for any
group, minority or majority, is precisely and only what
Congress has proscribed.'' But eight years had passed, and
the Civil Rights Act had been fully reconstructed. Burger and
Rehnquist's alarm showed in their dissenting language: ``By a
tour de force reminiscent not of jurists such as Hale,
Holmes, and Hughes, but of escape artists such as Houdini,
the Court eludes clear statutory language, uncontradicted
legislative history, and uniform precedent in concluding that
employers are, after all, permitted to consider race in
making employment decisions.'' The Court ``introduces into
Title VII a tolerance for the very evil that the law was
intended to eradicate,'' Rehnquist said. Moreover, Brennan's
reading of Section 703(j) was ``outlandish'' in the light of
Title VII's other ``flat prohibitions'' against racial
discrimination and is ``totally belied by the Act's
legislative history.'' Rehnquist cited a congressional
interpretative memorandum clearly stating that ``Title VII
does not permit the ordering of racial quotas in businesses
or unions and does not permit interferences with seniority
rights of employees or union members.'' But Burger had set
the stage for Weber with Griggs, and it was the pot calling
the kettle black when he accused Brennan of amending the
Civil Rights Act ``to do precisely what both its sponsors and
its opponents agreed the statute was not intended to do.''
Having ruled in Weber that reverse discrimination was
``benign discrimination,'' the Supreme Court upheld other
quota schemes in subsequent cases. In the 1980 case Fullilove
v. Klutznick, the Court said a federal spending program
setting aside 10 per cent of public-works money for minority
businesses violated neither the Constitution's guarantee of
equal protection of the laws nor the 1964 Civil Rights Act.
In the 1987 case Johnson v. Transportation Agency Santa
Clara County, the issue was the maleness rather than the
whiteness of white males. The Court ruled that job
discrimination against a white male in favor of a woman with
lower performance ratings was perfectly legal under Title
VII, even though the county's transportation agency had no
record of prior discrimination requiring remedies. Rehnquist,
Byron White, and Antonin Scalia didn't like the decision.
Scalia said, ``We effectively replace the goal of a
discrimination-free society with the quite incompatible goal
of proportionate representation by race and by sex in the
workplace.'' He noted that civil rights had become a cynical
numbers game played by politicians, lobbyists, corporate
executives, lawyers, and government bureaucrats.
In 1989 there was a brief retrenchment when the Supreme
Court, with its Reagan appointees, confronted the quota
implications of Griggs and the decisions that had followed
it. In Wards Cove v. Atonio, the Court ruled that statistical
disparities were insufficient to establish a prima facie case
of discrimination. In this case, the racial minorities who
made up a majority of the unskilled work force at two Alaskan
salmon canneries brought a discrimination lawsuit based on
the fact that whites held a majority of skilled office
positions. The suit claimed that this constituted
underutilization of preferred minorities in office positions
and was evidence of racial discrimination. The majority
opinion, written by Justice White, rejected the
discrimination claim. White noted that:
``Any employer who had a segment of his work force that
was--for some reason--racially imbalanced, could be hauled
into court and forced to engage in the expensive and time-
consuming task of defending the `business necessity' of the
methods used to select the other members of his work force.
The only practicable option for many employers will be to
adopt racial quotas, ensuring that no portion of his work
force deviates in racial composition from the other portions
[[Page S413]]
thereof; this is a result that Congress expressly rejected in
drafting Title VII.''
A week after Wards Cove, the Court ruled in Martin v. Wilks
that victims of reverse discrimination due to consent decrees
that imposed quotas had the right to challenge the decrees in
court. The Court noted that victims of reverse discrimination
found their rights affected by lawsuits to which they were
not parties. Citing a long-standing legal tradition, the
majority held that ``a person cannot be deprived of his legal
rights in a proceeding to which he is not a party.''
These rulings caused an uproar among civil-rights
activists, who charged that the new Reagan Court was racist.
The illegal privileges that had evolved in the 18 years since
Griggs was decided had become a squatter's right, and
Congress and the Bush Administration were bullied into
enacting the new inequality into law. The 1991 Civil Rights
Act in effect repealed the 1964 Act by legalizing racial
preferences as the core of civil-rights law. The new Act was
designed to overturn the Wards Cove and Wilks rulings and to
codify the disparate-impact standard of Griggs.
The statute also slammed shut the courthouse doors on white
male victims of reverse discrimination. If statistical
disparities or racial imbalance is proof of discrimination,
white males adversely affected by quotas can have no standing
in court. To give them standing would necessarily imperil the
quota remedies for racial imbalance. You cannot
simultaneously declare that anything short of proportional
racial representation is discrimination and recognize the
adverse impact of the ``remedy'' on white males. Under the
1991 Civil Rights Act, white makes have no grounds for
discrimination lawsuits until they are statistically
underrepresented in management and line positions. They have
no claims to be statistically represented as hirees,
trainees, and promotees until preferred minorities are
proportionately represented in management and line positions.
Indeed,under Brennan's interpretation of the Civil Rights
Act, which says that anything that helps preferred minorities
is broadly consistent with the law, the disparate-impact
standard could one day be ruled inapplicable to whites.
The 1991 Civil Rights Act added the threat of compensatory
and punitive damages to the pressure for quotas. In
``Understanding the 1991 Civil Rights Act,'' an article in
The Practical Lawyer, Irving M. Geslewitz recommended that
corporations apply cost-benefit analysis to determine whether
``they are safer in hiring and promoting by numbers
reflecting the percentages in the surrounding community than
in risking disparate-impact lawsuits they are likely to
lose,'' To counter charges of ``hostile work environments,''
company lawyers want to be able to tell juries that their
clients have many minority and women employees at all levels.
The day after the Civil Rights Act of 1991 became law, a
New York Times article, ``Affirmative Action Plans Are Part
of Business Life,'' observed that quota policies are as
``familiar to American businesses as tally sheets and bottom
lines.'' A 1991 Business Week article entitled ``Race in the
Workplace: Is Affirmative Action Working?'' reported that
affirmative action is ``deeply ingrained in American
corporation culture.
. . . The machinery hums along, nearly automatically, at
the largest U.S. corporations. They have turned affirmative
action into a smoothly running assembly line, with phalanxes
of lawyers and affirmative-action managers.''
The 1964 Civil Rights Act, which undertook to eliminate
race and sex from private employment decisions, has instead
been used to make race and sex the determining factors.
Reverse discrimination is now a fact of life. Indeed, in
strictly legal terms, the situation for white males today is
worse than the situation for blacks under Plessy v.
Ferguson's separate-but-equal doctrine. In practice, blacks
suffered unequal treatment under Plessy, but the decision
officially required equal treatment, Under today's civil-
rights regime, by contrast, whites can be legally
discriminated against in university admissions, employment,
and the allocation of government contracts.
In his famous dissent from Plessy, Justice John Marshall
Harlan worried that the Louisiana law requiring racial
segregation on public transportation would allow class
distinctions to enter the legal system, since blacks and
whites were economically as well as racially distinct. Harlan
was certain that he wanted no status-based distinctions in
the law. Our Constitution, he said, ``is color-blind, and
neither knows nor tolerates classes among citizens. In
respect of civil rights, all citizens are equal before the
law. The humblest is the peer of the most powerful.'' Today,
civil-rights activists reject Harlan's color-blind views.
Privilege before the law has replaced equality before the
law.
______
By Mr. HELMS:
S. 47. A bill to prohibit the executive branch of the Federal
Government from establishing an additional class of individuals that is
protected against discrimination in Federal employment, and for other
purposes; read twice and placed on the calendar.
freedom of speech act
Mr. HELMS. Mr. President, many readers of the Washington Times on
December 31, 1996, were offended when they read an article, ``Postal
Inspectors' Bias Code Seen as Silencing Anti-Gay Views.'' The article
reported that the U.S. Postal Service's law enforcement branch had
recently issued a new code of conduct forbidding employees from
expressing their personal and religious beliefs regarding
homosexuality--even during off-duty hours.
When asked about the Postal Service's decision, Robert Maginnis, an
analyst at the Family Research Council, asserted correctly that
``People who have deeply-held moral beliefs * * * need not apply for
the Federal jobs. Talk about discrimination! This is reverse
discrimination of the worst kind.''
Mr. Maginnis was right on target: Freedom of speech is not permitted
to those who deplore the favoritism shown people who have the morals of
alley cats. I recall the 1994 episode in which the Senate came to the
defense of a faithful and longtime employee of the Department of
Agriculture, Dr. Karl Mertz, whose freedom of speech was callously
violated after he dared to stand up against sodomy. Dr. Mertz did so on
his own time, when he opposed his government's giving special rights to
homosexuals.
Mr. President, during the incident involving Dr. Mertz, it because
abundantly clear, at least to me, that the Clinton Administration had
conducted and continues to conduct a concerted effort to give
homosexuals special rights, privileges, and protections throughout the
Federal agencies--rights not accorded to most other groups and
individuals.
The fact is, no other group in America is given special rights based
on its sexual behavior. To grant special rights to homosexuals would be
redundant--the 1964 Civil Rights Act already protects every American
from discrimination.
Moreover, the Senate, on September 10, 1996, defeated attempts by
Senator Kennedy and others to amend the Civil Rights Act in order to
extend special rights to employees based exclusively on the employees'
sexual preferences.
Mr. President, after Dr. Mertz's plight was brought to light in 1994,
my office began to hear from Federal Government employees throughout
Washington and the country who were personally concerned about the
Administration's attempts to defend and promote special rights for
homosexuals in the workplace.
And we continue to hear from them. These are not hate-filled or mean-
spirited; they are understandably disturbed by the government's
attempts to sanction and protect a lifestyle they--and many Americans--
regard as immoral.
Mr. President, let's look at statements issued by three of the
Administration's cabinet members regarding efforts by the Clinton
Administration to confer special rights and protections upon
homosexuals and lesbians.
On April 15, 1993, then-Secretary of Agriculture, Mike Espy, issued a
Civil Rights Policy Statement in which he stated that the USDA would
``create a work environment free of discrimination and harassment based
on gender or sexual orientation.''
On December 6, 1993, the Secretary of Health and Human Services,
Donna Shalala, issued her agency's directive to celebrate cultural
``diversity'' in a workplace free of discrimination against gays and
lesbians.
On August 30, 1994, Henry Cisneros, the Secretary of the Department
of Housing and Urban Development, likewise informed all HUD employees
that his department would not tolerate discrimination on the basis of
sexual orientation.
In fact, Mr. President, Leonard Hirsch, president of Gay, Lesbian and
Bisexual Employees of the Federal Government (GLOBE), told the
Washington Times that every Cabinet-level department, excluding the
Pentagon, now has rules barring discrimination based on sexual
orientation.
Which brings us to the issue of whether the Federal Government
intends to expand the definition of discrimination to include
suppression of the constitutional rights of its employees to voice
personal and religious beliefs regarding homosexuality. The fact is, it
is already happening.
To the delight of the homosexual community, Federal employees are
required to leave their moral and spiritual views at home every morning
since Federal agencies and departments have unilaterally adopted a
policy to treat homosexuals as a special
[[Page S414]]
class protected under various titles of the Civil Rights Act of 1964.
Congress must not remain silent as the executive branch creates
special protections for homosexuals without regard to the
constitutional right of freedom of speech enjoyed by all Federal
employees. That is the purpose of the legislation I offer today.
Under this bill, no Federal department or agency shall implement or
enforce any policy creating a special class of individuals in Federal
employment discrimination law. This bill will also prevent the Federal
government from trampling the first amendment rights of Federal
employees to express their moral and spiritual values in the workplace.
Finally, this bill will turn back the tide of the homosexual
community in its efforts to force Americans to accept, and even
legitimize, moral perversion.
Mr. President, I ask unanimous consent that the text of this
legislation be printed in the Record.
______
By Mr. HELMS:
S. 48. A bill to abolish the National Endowment for the Arts and the
National Council on the Arts; read twice placed on the calendar.
the national endowment or the arts termination act of 1997
Mr. HELMS. Mr. President, something more than 7 years ago, I first
reported to the Senate some evidence that a war was then being waged
against America's standards of decency by some self-proclaimed
``artists'' funded by the national Endowment for the Arts.
When I came to the Senate floor that day, July 26, 1989, and
suggested that Senators should examine some examples of the material
that the taxpayers were being required to subsidize, and that I had an
amendment to put an end to it, the distinguished manager of the bill
took one look and said, ``We'' take your amendment.''
And that's when the battle began. Since that time some of the know-
it-all media have tried in vain to make a silk purse out of the NEA's
sow's ear. They failed miserably to persuade the American people that
such so-called ``art'' deserved the taxpayers' money allocated to the
arrogant artists whose minds belonged in the sewer.
The names of these self-proclaimed ``artists'' consist of a wide
range of curious individuals who have no regard for decency--Annie
Sprinkle, Holly Hughes, and Karen Finley performing their live sex
acts; Andres Serrano sticking a crucifix in a jar filled with his
urine, taking a picture of it, and choosing for its title a mockery of
Jesus Christ. Then there was Robert Mapplethorpe, who became noted for
his filthy homosexual photographs; Joel-Peter Witken who used bodies of
dead men and women to produce stomach-churning photographs; and many
others.
From burning the American flag to flouting their own bodies and those
of others, such depravity knows no bounds. The only religiously-
oriented ``art'' funded by the NEA were scurrilous attacks on the
Catholic church or blasphemous insults to the deity of Jesus Christ.
More recently, The Washington Times, in an article last June,
reported that the National Endowment for the Arts had, in 1995, awarded
$31,500 to a lesbian film director for her production of the film
titled, ``Watermelon Woman''. In her description of the film to the
NEA, the film's director boasted that with the NEA's support, she would
``be one of the first African American lesbian film makers who promotes
our rarely seen lifestyles.''
Mr. President, I will not waste the Senate's time further detailing
the outrageous abuse of Federal tax dollars by the National Endowment
for the Arts. But it continues, despite the efforts by those in
Congress to reform the agency. Sadly, the real travesty is found in the
efforts of a few misguided souls to defend requiring the American
taxpayers to finance the attempted to glorify perversion and
immorality.
When I came to the Senate floor that day in 1989, I told Senators
that the arts community and the media--because they balked at any
restriction on Federal funding--had left Congress with two choices:
First, absolutely no Federal presence in the arts; or second, granting
artists the absolute freedom to use tax dollars as they wish,
regardless of how vulgar, blasphemous, or despicable their works may
be. I said at the time that if we indeed must make this choice, then
the Federal Government should get out of the arts. But, I felt then
that Congress could make another choice--to clean up the NEA, and
merely prevent the use of Federal funds to support the creation or
production of vulgar or sacrilegious works.
Well, Mr. President, as Paul Harvey says, now you know the rest of
the story. For more than 7 years, I offered numerous amendments to put
an end to the taxpayer-subsidized obscenity I've detailed today. But
without fail, every year, the American people are shocked to hear of
another instance in which the NEA has given its blessing--and the
taxpayers' money--to an organization or individual determined to cross
the lines of decency and morality.
The last card was played out, Mr. President, when a liberal Federal
appeals court, on November 5, 1996, usurped the right of Congress to
put any semblance of restrictions on the way the NEA uses the money
granted to it by Congress. The U.S. 9th Circuit Court thumbed its nose
at Congress--and the American people--when it upheld the right of so-
called ``artists'' such as Karen Finley and Holly Hughes to continue to
be subsidized for their decadent acts.
Mr. President, no more choices or compromises remain. I have
concluded, as have so many Americans, that the only way Congress can
stop the irresponsible use of the taxpayers' money by the NEA is to
abolish it.
Moreover, there is much to be said for the priority to confront the
existing $5.3 trillion Federal debt and the effect that it will have on
the futures of today's young people. The sky will not fall if the
Congress votes to privatize the NEA as the arts already swim in an
ocean of private funds--more than $9 billion annually. Bruce Fein wrote
in his editorial, ``Dollars for Depravity,'' that ``NEA funds are but a
tiny fraction of national art expenditures. Thus, a denial of an NEA
grant is far from tantamount to a professional death sentence.''
For these reasons, I today introduce The National Endowment for the
Arts Termination Act of 1997. The bill mirrors the legislation offered
in the House of Representatives this year by Phil Crane, Sam Johnson,
and Charlie Norwood.
This bill finally alleviates the burden, shouldered by the American
taxpayers, of allocating money every year to an agency whose mission
has been sorely mistreated. The strings will be cut and the Federal
government will no longer be in the business of propping up ``artists''
such as Robert Mapplethorpe and Andres Serrano. Furthermore, Congress
will rid itself of the annual fight to defend the cultural high ground
against a group of people who are in a lifelong crusade to destroy the
Judeo-Christian foundations of this country.
Mr. President, this bill is the only solution to end the
irresponsible use of the taxpayers' money by this agency. Efforts to
reform it have failed. It is time to put the National Endowment for the
Arts to rest.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
______
By Mr. STEVENS (for himself and Mr. Murkowski):
S. 49. A bill to amend the wetlands regulatory program under the
Federal Water Pollution Control Act to provide credit for the low
wetlands loss rate in Alaska and recognize the significant extent of
wetlands conservation in Alaska, to protect Alaskan property owners,
and to ease the burden on overly regulated Alaskan cities, boroughs,
municipalities, and villages; to the Committee on Environment and
Public Works.
the alaska wetlands conservation act
Mr. STEVENS. Mr. President, I am pleased to introduce the Alaska
Wetlands Conservation Act, a bill to conform wetlands protection to the
unique conditions found throughout Alaska.
My State contains more wetlands than all other States combined. Since
1780 we have developed less than 1/10 of one percent of those wetlands.
According to the United States Fish and Wildlife Service, about 170.2
million acres of wetlands existed in Alaska in the 1780's
[[Page S415]]
and about 170 million acres exist today. That represents a negligible
loss rate over a period of 217 years. Furthermore almost ninety percent
of our wetlands are publicly owned, protected by strict land use
designations that guarantee these wetlands will remain intact
permanently.
We Alaskans have substantially conserved our wetlands. Unfortunately
Federal policies established to protect and restore wetlands in the
southern forty-eight States do not recognize our unique circumstances
nor do these policies provide an appropriate level of flexibility in
managing the roughly one percent of land available for private or
commercial development in Alaska.
My bill continues to require Alaskans who apply for discharge permits
under section 404 of the Clean Water Act to avoid or minimize adverse
impacts on wetlands, but it would eliminate requirements to mitigate
for unavoidable impacts. It also removes the burden for an applicant to
prove that no alternative sites are available. Most of Alaska's
communities are surrounded by literally millions of acres of wetland.
These areas are made unaccessible under the law for mitigation purposes
since they are already protected. In Alaska, mitigation makes no sense
except to extort compensatory concessions from applicants which would
otherwise not be justified.
The threat of mitigation sends a chilling message to potential
investors by artificially raising the costs of doing business in
Alaska. In turn, this contributes to unemployment and weakening the
economic self sufficiency of our far flung communities. In the long
run, the current program wastes taxpayer money in an ill advised
attempt to protect abundant wetlands that are already more than
adequately protected in Alaska. The resources at risk in Alaska are not
our wetlands, they are our people.
The blind application of legislation written to protect wetlands
elsewhere inhibits reasonable growth by our Native villages and local
governments. In effect, the section 404 program has a life threatening
choke hold on Native Alaskans. It is difficult to place a stake in the
ground in Alaska without impacting a wetland, let alone to build
critical infrastructure. Compounding the problem, we have recently seen
the Administration begin to phase out nationwide permits. This makes it
increasingly difficult to address the huge task facing our local and
State officials in providing safe drinking water, sanitation systems,
electric power and other critical services to far flung Alaskan
communities. Without this bill, the Federal wetlands bureaucracy simply
lacks the authority to apply common sense.
Mr. President, many rural Alaskans are trapped living under third
world conditions by well-meaning outsiders and bureaucrats narrowly
focused on environmental protection. Unfortunately for Alaska, in this
case the problem is larger than protecting our over abundance of
wetlands. Wetlands policies conflict with other laws which were passed
to promote the economic self sufficiency of Alaskans. My bill would
require approval of permit applications with reasonable safeguards for
``economic base lands'' meaning those lands conveyed under the Alaska
Native Claims Settlement Act or Alaska Statehood Act, both acts
intended to provide the means for Alaskans to achieve economic self
sufficiency.
The Alaska Wetlands Conservation Act is a common sense approach to
Alaska's circumstances. It maintains flexibility to protect wetlands
without hurting people. With respect to existing activities related to
airport safety, logging, mining, ice pads and roads, and snow removal
or storage, the bill prevents Alaskans from having to obtain section
404 permits to continue those activities. The bill would also require
the Army Corps of Engineers to approve general wetlands permits with
reasonable safeguards for specific categories of activities if the
general permit is requested by the State of Alaska.
There has been negligible benefit to the environment in Alaska as a
result of the expansive wetlands regulations issued by bureaucrats
inside the beltway. On the other hand, the harm caused by overzealous
Federal wetlands police is documented in many examples of bureaucratic
delay, expense and irrational decision making. Ask the Mayor of Juneau
how the Federal Government handled that city's application for a
general permit. It is a national disgrace simply because laws intended
to protect scarce wetlands elsewhere were strictly applied in an area
of abundance. This bill restores rational decision making authority to
those closest to the wetlands situation of Alaska. I encourage my
colleagues in the Senate and the House to act expeditiously on my
proposed remedy.
______
By Mr. FEINGOLD:
S. 51. A bill to amend the Internal Revenue Code of 1986 to eliminate
the percentage depletion allowance for certain minerals; to the
Committee on Finance.
depletion allowances legislation
Mr. FEINGOLD. Mr. President, I am pleased to introduce legislation to
eliminate percentage depletion allowances for four mined substances--
asbestos, lead, mercury, and uranium--from the Federal tax code. This
measure is based on language passed as part of the Energy Policy Act of
1992 by the other body during the 102d Congress.
Analysis by the Joint Committee on Taxation on the similar
legislation that passed the House estimated that, under that bill,
income to the Federal treasury from the elimination of percentage
depletion allowances in just these four mined commodities would total
$83 million over 5 years, $20 million in this year alone. These savings
are calculated as the excess amount of federal revenues above what
would be collected if depletion allowances were limited to the actual
costs in capital investments.
These four allowances are only a few of the percentage depletion
allowances contained in the tax code for extracted fuel, minerals,
metal and other mined commodities--with a combined value, according to
1994 estimates by the Joint Committee on Taxation, of $4.8 billion.
Mr. President, unlike depreciation or cost depletion, the ability to
use so-called percentage depletion allows companies to deduct far more
than their actual costs. The result is a generous loophole for the
company, and an expensive subsidy for the taxpayer.
Historically, percentage depletion allowances were placed in the tax
code to reduce the effective tax rates in the mineral and extraction
industries far below tax rates on other industries, providing
incentives to increase investment, exploration and output. However,
unlike cost depletion or even accelerated depreciation, percentage
depletion also makes it possible to recover more than the amount of the
original investment. As noted in the Budget Committee's report on tax
expenditures, this makes percentage depletion essentially a mineral
production subsidy.
There are two methods of calculating a deduction to allow a mining
companies to recover the costs of their capital investment: cost
depletion, and percentage depletion. Cost depletion allows for the
recovery of the actual capital investment over the period which the
reserve produces income. Using cost depletion, a company deducts a
portion of their original capital investment minus any previous
deductions, in an amount that is equal to the fraction of the remaining
recoverable reserves. Under this method, the total deductions cannot
exceed the original capital investment.
However, under percentage depletion, the deduction for recovery of a
company's investment is a fixed percentage of ``gross income''--namely,
sales revenue--from the sale of the mineral. According to the Budget
Committee's summary of tax expenditures, under this method, total
deductions typically exceed the capital that the company invested.
Mr. President, given the need to reduce the deficit and balance the
budget, there is just as clear a need to review the spending done
through the tax code as there is to scrutinize discretionary spending
and entitlement programs. All of these forms of spending must be asked
to justify themselves, and be weighed against each other in seeking to
reach the broader goal of a balanced budget.
In the case of these particular tax expenditures, we must decide who
should bear the costs of exploration, development, and production of
natural resources: all taxpayers, or the users and producers of the
resource. The current
[[Page S416]]
tax break provided to the users and producers of these resources
increases pressure on the budget deficit, and shifts a greater tax
burden onto other businesses and individuals to compensate for the
special treatment provided to the few.
Mr. President, the measure I am introducing is straightforward. It
eliminates the percentage depletion allowance for asbestos, lead,
mercury, and uranium while continuing to allow companies to recover
reasonable cost depletion.
Even as a production subsidy, the percentage depletion tax loophole
is inefficient. As the Budget Committee summary of tax expenditures
notes, it encourages excessive development of existing properties
rather than the exploration of new ones.
Moreover, Mr. President, the four commodities covered by my bill are
among some of the most environmentally adverse. The percentage
depletion allowance makes a mockery of conservation efforts. The
subsidy effectively encourages mining regardless of the true economic
value of the resource. The effects of such mines on U.S. lands, both
public and private, has been significant--with tailings piles, scarred
earth, toxic by-products, and disturbed habitats to prove it.
Ironically, the more toxic the commodity, the greater the percentage
depletion received by the producer. Mercury, lead, uranium, and
asbestos receive the highest percentage depletion allowance, while less
toxic substances receive lower rates.
Mr. President, particularly in the case of the four commodities
covered by my bill, these tax breaks create absurd contradictions in
government policy. While Federal public health and environmental
agencies are struggling to come to grips with a vast children's health
crisis caused by lead poisoning, spending millions each year to prevent
lead poisoning, test young people, and research solutions, the tax code
is providing a subsidy for lead production--a subsidy that is not
provided for the lead recycling industry.
Asbestos, too, has posed massive public health problems, and it is
indefensible that this commodity, the use of which the Federal
Government will effectively ban before the year 2000, continues to
receive a massive tax subsidy.
Mr. President, the time has come for the Federal Government to get
out of the business of subsidizing business in ways it can no longer
afford--both financially and for the health of its citizens. This
legislation is one step in that direction.
Mr. President, in 1992, I developed an 82+ plan to eliminate the
Federal deficit and have continued to work on implementation of the
elements of that plan since that time. Elimination of special tax
preferences for mining companies was part of that 82+ point plan. Just
as we must cut direct spending programs, if we are to balance that
budget, we must also curtail these special taxpayer subsidies to
particular industries that can no longer be justified.
Finally, Mr. President, in conclusion I want to pay tribute to
several elected officials from Milwaukee, Mayor John Norquist and
Milwaukee Alderman Michael Murphy, who have brought to my attention the
incongruity of the federal government continuing to provide taxpayer
subsidies for the production of toxic substances like lead while our
inner cities are struggling to remove lead-based paint from older homes
and buildings where children may be exposed to this hazardous material.
I deeply appreciate their support and encouragement for my efforts in
this area.
Mr. President, I ask unanimous consent that a copy of the legislation
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 51
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CERTAIN MINERALS NOT ELIGIBLE FOR PERCENTAGE
DEPLETION.
(a) In General.--Section 613(b)(1) of the Internal Revenue
Code of 1986 (relating to percentage depletion rates) is
amended--
(A) in subparagraph (A), by striking ``and uranium''; and
(B) in subparagraph (B), by striking ``asbestos,'',
``lead,'', and ``mercury,''.
(b) Conforming Amendments.--
(1) Section 613(b)(3)(A) of the Internal Revenue Code of
1986 is amended by inserting ``other than lead, mercury, or
uranium'' after ``metal mines''.
(2) Section 613(b)(4) of such Code is amended by striking
``asbestos (if paragraph (1)(B) does not apply),''.
(3) Section 613(b)(7) of such Code is amended by striking
``or'' at the end of subparagraph (B), by striking the period
at the end of subparagraph (C) and inserting ``, or'', and by
inserting after subparagraph (C) the following:
``(D) mercury, uranium, lead, and asbestos.''
(4) Section 613(c)(4)(D) of such Code is amended by
striking ``lead,'' and ``uranium,''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 1996.
______
By Mr. FEINGOLD:
S. 52. A bill to amend the Agricultural Adjustment Act to prohibit
the Secretary of Agriculture from basing minimum prices for Class I
milk on the distance or transportation costs from any location that is
not within a marketing area, except under certain circumstances, and
for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.
______
By Mr. FEINGOLD (for himself and Mr. Kohl):
S. 55. A bill to amend the Dairy Production Stabilization Act of 1983
to prohibit bloc voting by cooperative associations of milk producers
in connection with the program, and for other purposes; to the
Committee on Agriculture, Nutrition, and Forestry.
S. 56. A bill to amend the Dairy Production Stabilization Act of 1983
to ensure that all persons who benefit from the dairy promotion and
research program contribute to the cost of the program, and for other
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
domestic dairy policy legislation
Mr. FEINGOLD. Mr. President, today I rise to introduce three bills
which attempt to rectify three different problems with domestic dairy
policy. My State of Wisconsin is home to more than 26,000 dairy
farmers. Over the past 4 years during the more than 288 listening
sessions I've held in Wisconsin counties, I have heard from many of
those dairy farmers on the issues addressed by the legislation I am
introducing today.
The first bill I am introducing today, if enacted, will be a first
step towards rectifying the inequities in the Federal Milk Marketing
Order system. The Federal Milk Marketing Order system, created 60 years
ago, establishes minimum prices for milk paid to producers throughout
various marketing areas in the United States.
My legislation is very simple. It identifies the single most
inequitable and injurious provision in the current system, and corrects
it. That provision--known as single basing point pricing--is USDA's
practice of basing prices for fluid milk--Class I milk--in all
marketing areas east of the Rocky Mountains on the distance from Eau
Claire, WI, when there is little economic justification for doing so.
In general, the price for fluid milk increases at a rate of 21 cents
per 100 miles from Eau Claire, WI. Fluid milk prices, as a result, are
$2.98 cents higher in Florida than in Wisconsin, more than $2 higher in
New England, and more than $1 higher in Texas.
While this system has been around since 1937, the practice of basing
fluid milk price differentials on the distance from Eau Claire was
formalized in the 1960's, when arguably the Upper Midwest was the
primary reserve for additional supplies of milk. The idea was to
encourage local supplies of fluid milks in areas of the country that
did not traditionally produce enough fluid milk to meet their own
needs. At that time, this was important because our transportation
infrastructure made long distance bulk shipments of milk difficult.
Thus, the only way to ensure consumers a fresh local supply of fluid
milk was to provide dairy farmers in those distant regions with a milk
price high enough to encourage local production. Mr. President, the
system worked too well. Ultimately, it has worked to the disadvantage
of the Upper Midwest, and in particular, Wisconsin dairy farmers.
The artificially inflated Class I prices have provided production
incentives beyond those needed to ensure a local supply of fluid milk
in some regions, leading to an increase in manufactured products in
those marketing orders. Those manufactured products directly compete
with Wisconsin's processed
[[Page S417]]
products, eroding our markets and driving national prices down.
Under the provisions of the 1996 farm bill, the U.S. Department of
Agriculture is currently undergoing an informal rulemaking process to
consolidate the number of Federal Milk Marketing Orders from 32 to 10.
USDA is also looking at how to set prices for milk in those
consolidated orders. By statute USDA is prohibited from basing the new
prices on the structure of the existing milk differentials set by the
1985 farm bill. The reforms must be completed by spring, 1999.
Secretary of Agriculture Dan Glickman will no doubt be pressured by
many supporters of the status quo to maintain the overall price
structure that has discriminated against Wisconsin farmers for so many
years. I will do everything I can to prevent that from happening.
Wisconsin farmers need real Class I price reform that removes the
artificial competitive advantages provided to other regions to other
regions of the country and allows Upper Midwest farmers to compete on a
level playing field.
The legislation that I am introducing today identifies the one change
that is absolutely necessary in any outcome--the elimination of single
basing point pricing. It prohibits the Secretary of Agriculture from
using distance or transportation costs from any location as the basis
for pricing milk, unless significant quantities of milk are actually
transported from that location into the recipient market. The Secretary
will have to comply with the statutory requirement that supply and
demand factors be considered as specified in the Agricultural Marketing
Agreement Act when setting milk prices in marketing orders.
This legislation sends a very simple message to the Secretary of
Agriculture--that among all the Class I pricing reform options from
which the Secretary must choose, he should in no case select on option
that either by intent or effect sets prices based on distance from a
single location. I will work towards enactment of this legislation
prior to the completion the proposed rule on Class I pricing reform.
Mr. President, my next two bills address inequities to dairy
producers throughout the country under the Dairy Promotion and Research
Order--also known as the dairy checkoff. I am pleased to be joined by
Senator Kohl today on these two very important bills.
The National Dairy Promotion and Research Program collect roughly
$225 million every year from dairy farmers each paying a mandatory 15
cents for every hundred pounds of milk they produce. The program is
designed to promote dairy products to consumers and to conduct research
relating to milk processing and marketing.
While 15 cents may appear to be a small amount of money, multiplied
by all the milk marketed in this country, it adds up to thousands of
dollars each year for the average producer. Given the magnitude of this
program, it is critical that Congress take seriously the concerns
producers have about their promotion program.
Since participation in the checkoff is mandatory and producers are
not allowed refunds, Congress required that producers vote in a
referendum to approve the program after it was authorized. The problem
is that Congress didn't provide for a fair and equitable voting process
in the original act and it's time to correct our mistake. My bill does
that by eliminating a process known as bloc voting by dairy
cooperatives.
Under current law, dairy cooperatives are allowed to cast votes in
producer referenda en bloc for all of their farmer-members, either in
favor of or against continuation of the National Dairy Board. While
individual dissenters from the cooperative's position are allowed to
vote individually, many farmers and producer groups claim the process
stacks the deck against those seeking reform of the program.
Mr. President, the problem bloc voting creates is best illustrated by
the results of the August 1993 producer referendum on continuation of
the National Dairy Promotion and Research Board, called for by a
petition of 16,000 diary farmers. In that referendum, 59 dairy
cooperatives voting en bloc, cast 49,000 votes in favor of the program.
Seven thousand producers from those cooperatives went against co-op
policy and voted individually against continuing the program.
While virtually all of the votes in favor of the program were cast by
cooperative bloc vote, nearly 100 percent of the votes in opposition
were cast by individuals. Bloc voting allows cooperatives to cast votes
for every indifferent or ambivalent producer in their membership,
drowning out the voices of dissenting producers. It biases the
referendum in favor of the Dairy Board's supporters, whose votes should
not have greater weight than the dissenters.
The inappropriate nature of bloc voting in Dairy Board referendum is
even clearer given that none of the 17 other commodity promotion
programs allow cooperatives to bloc vote despite the existence of
marketing cooperatives for many of those commodities.
Mr. President, it is time to give dairy farmers a fair voting process
for their promotion program. I urge my colleagues to support this very
important legislation.
My last bill, Mr. President, provides equity to domestic producers
who have been paying into the promotion program for over 10 years while
importers have gotten a free ride. Since the National Dairy Promotion
and Research Board conducts generic promotion and general product
research, domestic farmers and importers alike benefit from these
actions. The Dairy Promotion Program Equity Act requires that all dairy
product importers contribute to the Dairy Promotion Program for all
dairy products imported at the same rate as domestic dairy farmers.
This is not an unusual proposal, Mr. President. Many of our largest
generic promotion programs in agriculture already assess importers for
their fair share of the program, including programs for pork, beef, and
cotton.
This legislation is particularly important in light of the passage of
the General Agreement on Tariffs and Trade which will result in greater
imports of dairy products over the next several years. An assessment of
this type on importers would also be allowed under the GATT since our
own milk producers are already paying the same assessment.
We have put our own producers at a competitive disadvantage for far
too long. It's high time importers paid for their fair share of the
program.
I am also pleased to be an original cosponsor of the National Dairy
Promotion Board Reform Act introduced today by Senator Kohl. That bill
further enhances producer representation on the National Dairy Board by
providing for the direct election of National Dairy Board members,
rather than appointment by the Secretary. That process will allow
producers to elect members to the board that represent their views on
promotion and eliminates the divisive impact of the political
appointment process on the Dairy Board. Direct producer election of
board members should also increase the accountability to their fellow
dairy farmers.
I believe that these bills together comprise a sound reform package
for the National Dairy Promotion and Research Board by providing a
stronger voice to dairy farmers. These reforms will create a stronger,
more effective and more representative Dairy Board. I urge my
colleagues to support this important legislation.
Mr. President, I ask unanimous consent that the text of all three
bills be printed in the Record.
There being no objection, the bills were ordered to be printed in the
Record, as follows:
S. 52
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. LOCATION ADJUSTMENTS FOR MINIMUM PRICES FOR CLASS
I MILK.
Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C.
608c(5)), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended--
(1) in paragraph (A)--
(A) in clause (3) of the second sentence, by inserting
after ``the locations'' the following: ``within a marketing
area subject to the order''; and
(B) by striking the last 2 sentences and inserting the
following: ``Notwithstanding subsection (18) or any other
provision of law, when fixing minimum prices for milk of the
highest use classification in a marketing area subject to an
order under this subsection, the Secretary may not, directly
or indirectly, base the prices on the distance from, or all
or part of the costs incurred to transport milk to or from,
any location that
[[Page S418]]
is not within the marketing area subject to the order, unless
milk from the location constitutes at least 50 percent of the
total supply of milk of the highest use classification in the
marketing area. The Secretary shall report to the Committee
on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the
Senate on the criteria that are used as the basis for the
minimum prices referred to in the preceding sentence,
including a certification that the minimum prices are made in
accordance with the preceding sentence.''; and
(2) in paragraph (B)(c), by inserting after ``the
locations'' the following: ``within a marketing area subject
to the order''.
____
S. 55
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PROHIBITION ON BLOC VOTING.
Section 117 of the Dairy Production Stabilization Act of
1983 (7 U.S.C. 4508) is amended--
(1) in the first sentence, by striking ``Secretary shall''
and inserting ``Secretary shall not''; and
(2) by striking the second through fifth sentences.
____
S. 56
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Dairy Promotion Equity
Act''.
SEC. 2. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.
(a) Declaration of Policy.--The first sentence of section
110(b) of the Dairy Production Stabilization Act of 1983 (7
U.S.C. 4501(b)) is amended--
(1) by inserting after ``commercial use'' the following:
``and on imported dairy products''; and
(2) by striking ``products produced in'' and inserting
``products produced in or imported into''.
(b) Definitions.--Section 111 of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4502) is amended--
(1) in subsection (k), by striking ``and'' at the end;
(2) in subsection (l), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(m) the term `imported dairy product' means any dairy
product that is imported into the United States, including--
``(1) milk and cream and fresh and dried dairy products;
``(2) butter and butterfat mixtures;
``(3) cheese;
``(4) casein and mixtures; and
``(5) other dairy products; and
``(n) the term `importer' means a person that imports an
imported dairy product into the United States.''.
(c) Funding.--
(1) Representation on board.--Section 113(b) of the Dairy
Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) is
amended--
(A) by designating the first through ninth sentences as
paragraphs (1) through (5) and paragraphs (7) through (10),
respectively;
(B) in paragraph (1) (as so designated), by striking
``thirty-six'' and inserting ``38'';
(C) in paragraph (2) (as so designated), by striking
``Members'' and inserting ``Of the members of the Board, 36
members''; and
(D) by inserting after paragraph (5) (as so designated) the
following:
``(6) Importers.--
``(A) In general.--Of the members of the Board, 2 members
shall be representatives of importers of imported dairy
products.
``(B) Appointment.--The importer representatives shall be
appointed by the Secretary from nominations submitted by
importers under such procedures as the Secretary determines
to be appropriate.''.
(2) Assessment.--Section 113(g) of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended--
(A) by designating the first through fifth sentences as
paragraphs (1) through (5), respectively; and
(B) by adding at the end of the following:
``(6) Importers.--
``(A) In general.--The order shall provide that each
importer of imported dairy products shall pay an assessment
to the Board in the manner prescribed by the order.
``(B) Rate.--The rate of assessment on imported dairy
products shall be determined in the same manner as the rate
of assessment per hundredweight or the equivalent of milk.
``(C) Value of products.--For the purpose of determining
the assessment on imports under subparagraph (B), the value
to be placed on imported dairy products shall be established
by the Secretary in a fair and equitable manner.''.
(3) Records.--The first sentence of section 113(k) of the
Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(k))
is amended by striking ``person receiving'' and inserting
``importer of imported dairy products, each person
receiving''.
(4) Referendum.--Section 116 of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4507) is amended by
adding at the end the following:
(d) Referendum on Dairy Promotion Equity Act.--
``(1) In general.--On the request of a representative group
comprising 10 percent or more of the number of producers
subject to the order, the Secretary shall--
``(A) conduct a referendum to determine whether the
producers favor suspension of the application of the
amendments made by section 2 of the Dairy Promotion Equity
Act; and
``(B) suspend the application of the amendments until the
results of the referendum are known.
``(2) Continuation of suspension.--The Secretary shall
continue the suspension of the application of the amendments
referred to in paragraph (1)(A) only if the Secretary
determines that suspension of the application of the
amendments is favored by a majority of the producers voting
in the referendum who, during a representative period (as
determined by the Secretary), have been engaged in the
production of milk for commercial use.''.
By Mr. HATCH (for himself, Mr. Leahy, Mr. Thurmond, and Mr.
Moynihan):
S. 53. A bill to require the general application of the antitrust
laws to major league baseball, and for other purposes; to the Committee
on the Judiciary.
The Curt Flood Act of 1997
Mr. HATCH. Mr. President, I am introducing today, along with Senators
Leahy, Thurmond, and Moynihan, the Curt Flood Act of 1997, clarifying
the applicability of antitrust law to major league baseball. This
legislation, which is basically the same bill that was approved by the
Judiciary Committee last Congress, marks what I hope will be the final
chapter in a long and, at times, frustrating effort to correct a
mistaken decision by the Supreme Court.
As was true before, the bill simply makes clear that major league
baseball, like all other professional sports, is subject to our
Nation's antitrust laws, except with regard to team relocation, the
minor leagues, and sports broadcasting. It overturns the Court's
mistaken premise that baseball is not a business involved in interstate
commerce, and it eliminates the unjustifiable legal precedent that
individuals who play professional baseball should be treated
differently from those who participate in other professional sports.
In 1922, in Federal Baseball Club of Baltimore v. National League of
Professional Baseball Clubs, 259 U.S. 200 (1922), the Supreme Court
ruled that professional baseball was immune from the reach of the
Federal antitrust laws because baseball was not a business in
interstate commerce. Obviously, the Court at that time could not have
imagined the modern game or a 1993 World Series where Canada's Toronto
Blue Jays defeated the Philadelphia Phillies in games that were
televised literally around the world.
Fifty years after the Supreme Court's decision in Federal Baseball
Club, the Court rendered its decision in Flood v. Kuhn, which
repudiated the legal basis of its prior decision as an ``anomaly'' and
``aberration confined to baseball'' but, because of its reluctance to
overturn long-standing decisions, left the job of remedying its mistake
to Congress.
Unfortunately, Congress has been reluctant to follow the Court's
instruction. In the past, it has been argued that this issue was not
ripe, that it should not be considered too close to a labor dispute or,
as was the case most recently, that it should not be discussed during a
labor dispute. Fortunately, that now infamous dispute, which has done
so much to tarnish the game, is resolved. The time has come to pass
this legislation.
Moreover, for the first time, the primary impediment to passage has
been eliminated. In the new collective bargaining agreement the owners
have pledged to work with the players to pass legislation that makes
clear that professional baseball is subject to the antitrust laws with
regard to labor relations.
It is our hope that this year, Congress will finally rectify the
Court's mistake and make clear once and for all that baseball no longer
has any claim to antitrust immunity. It has been 25 years since Curt
Flood jeopardized his career by unsuccessfully challenging baseball's
reserve clause, a suit which resulted in the unfortunate decision
mentioned above.
Yesterday, Curt Flood tragically died of throat cancer at the age of
59. The hearts of baseball fans all over the country go out to Mr.
Flood's family. I join these fans in expressing my deepest regrets to
the Flood family, and let me suggest today that the time has come to
finish what Curt Flood so courageously began.
Let me emphasize that our bill does not impose a big government
solution
[[Page S419]]
to baseball's problems. On the contrary, it would get government out of
the way by eliminating a serious government-made obstacle to resolution
of the labor difficulties in baseball. Baseball's antitrust immunity
has distorted labor relations in major league baseball and has
sheltered baseball from the market forces that have allowed the other
professional sports, such as football and basketball, to thrive.
I should note that comparable legislation has been introduced in the
other body by Mr. Conyers of Michigan, the ranking member of the House
Judiciary Committee, whose bill bears Mr. Flood's number.
Mr. President, I ask unanimous consent that the full text of our bill
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 53
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Curt Flood Act of 1997''.
SEC. 2. APPLICATION OF THE ANTITRUST LAWS TO PROFESSIONAL
MAJOR LEAGUE BASEBALL.
The Clayton Act (15 U.S.C. 12 et seq.) is amended by adding
at the end the following new section:
``Sec. 27. (a) Subject to subsection (b), the antitrust
laws shall apply to the business of professional major league
baseball.
``(b) Nothing in this section shall be construed to
affect--
``(1) the applicability or nonapplicability of the
antitrust laws to the amateur draft of professional baseball,
the minor league reserve clause, the agreement between
professional major league baseball teams and teams of the
National Association of Baseball, commonly known as the
`Professional Baseball Agreement', or any other matter
relating to the minor leagues;
``(2) the applicability or nonapplicability of the
antitrust laws to any restraint by professional baseball on
franchise relocation; or
``(3) the application of Public Law 87-331 (15 U.S.C. 1291
et seq.) (commonly known as the `Sports Broadcasting Act of
1961').''.
Mr. THURMOND. Mr. President, I rise today in support of the Curt
Flood Act of 1997, which I am cosponsoring with Senator Hatch, Senator
Leahy, and others. Our legislation would repeal the antitrust exemption
which shields major league baseball from the antitrust laws that apply
to all other sports and unregulated businesses in our Nation. This bill
is virtually identical to S. 627 in the last Congress which was the
result of discussions between myself and Senators Hatch and Leahy
following the February 1995 hearing I chaired on this important issue.
The bill is a compromise which has been carefully drafted to ensure
that it achieves its purpose without imposing any unnecessary hardship
on major league baseball.
It is fitting that this bill is named after Curt Flood, who died
yesterday, for the Supreme Court denied Mr. Flood the relief he sought
by upholding the antitrust exemption which we now seek to change. In
his 1972 Supreme Court case, Mr. Flood challenged baseball's reserve
clause which bound players to teams for their entire careers. Although
unsuccessful because of the judicially-created antitrust exemption, Mr.
Flood's selfless actions paved the way for the success of other players
through arbitration. It is now time for us to resolve the antitrust
exemption.
The bill we are introducing today eliminates baseball's antitrust
exemption, with two exceptions. The legislation maintains the status
quo for franchise location, and for the relationship with the minor
leagues. It is important to protect the existing minor league
relationships in order to avoid disruption of the more than 170 minor
league teams which exist throughout our Nation. Continuing to shield
franchise relocation decisions from the antitrust laws resolves the
uncertainty facing team owners in other professional sports.
Mr. President, it is my belief that the Congress should repeal the
court-imposed antitrust exemption and restore baseball to the same
level playing field as other professional sports and unregulated
businesses. In the last Congress, we were successful in passing S. 627
in the Antitrust, Business Rights, and Competition Subcommittee and in
the Committee on the Judiciary. In this Congress we should make a
concerted effort to enact the Curt Flood Act.
Mr. LEAHY. Mr. President, I join today in introducing the Curt Flood
Act of 1997. Like the earlier version of this legislation that I
sponsored in the last Congress, this bill is intended to cut back on
the unjustified, judicially created exemption from the antitrust laws.
In my view no one is or should be above the law.
Last Congress for the first time in our history, the Senate Judiciary
Committee favorably reported language designed to cut back baseball's
judicially mandated and aberrational antitrust exemption. We did so
with the support of the Clinton administration and a bipartisan
coalition of Senators. This bill reflects that language.
The Senate refused to consider the measure over the last 2 years. In
part that may be explained by the opposition from major league baseball
team owners and perhaps by a feeling among some that we should not
legislate during a time in which there was a labor-management impasse.
Both those concerns have now been removed with the recent, 5-year
agreement between the major league baseball team owners and the Major
League Baseball Players Association. Indeed, a provision in that
agreement calls for the owners to lobby Congress in support of the
repeal of the antitrust exemption, at least to the extent it relates to
labor-management relations.
It is time to build on the progress we made last year and long past
time for the Senate to act. Congress may not be able to solve every
problem or heal baseball's self-inflicted wounds, but we can do this:
We can pass legislation that will declare that professional baseball
can no longer operate above the law.
Our antitrust laws protect competition and benefit consumers. We are
faced with an anomalous situation where the Federal antitrust laws have
not applied to certain major league baseball functions and operations
for over 70 years.
I hope that we will, at long last, take up the issue of major leagues
baseball's antitrust exemption. The burden of proof is on those who
seek to justify this exemption from the law. No other business or
professional or amateur sport is possessed of the exemption from law
that major league baseball has enjoyed and abused.
One of the players who testified at our hearings last Congress asked
a most perceptive question: If baseball were coming to Congress today
to ask us to provide a statutory exemption, would such a bill be
passed? I believe the answer to that question is a resounding no.
In addition, there is and has been no independent commissioner who
could look out for the best interests of baseball and its fans. Despite
repeated assurances, there has been no action to restore a strong,
independent commissioner to oversee the game and it has suffered the
consequences. It is only now beginning to emerge from a 4-year struggle
without a labor-management agreement. I see that the owners last week
authorized their executive committee to begin a search for a new
commissioner. In my view baseball would be well served by making a
serious commitment to a strong, independent commissioner. Neither fans
nor Congress will be inspired by delay, drift or lack of direction.
In Vermont when I was growing up virtually everyone was a Red Sox
fan. Now loyalties are split among teams and among various sports. We
have a successful minor league team, the Vermont Expos, the champions
of the New York-Penn League last season. We also have businesses and
jobs that depend on baseball and fans who have been hurt by its
shortsightedness and mismanagement over the past several years. There
is a strong public interest in baseball and it reverberates throughout
the country.
I am concerned about the interests of the public and, in particular,
the interests of baseball fans. To reiterate the words of baseball's
last commissioner, Fay Vincent: ``Baseball is more than ownership of an
ordinary business. Owners have a duty to take into consideration that
they own a part of America's national pastime--in trust. This trust
sometimes requires putting self-interest second.'' Baseball's fans feel
that this trust had been violated over the last several years.
It is the public that is being shortchanged by the policies and
practices of major league baseball and by disregard for the interests
of the fans. I
[[Page S420]]
look forward to moving ahead thoughtfully to reconsider major league
baseball's exemption from legal requirements to which all other
businesses must conform their behavior. Since the multi-billion dollar
businesses that have grown from what was once our national pastime are
now being run accordingly to a financial bottom line, a healthy
injection of competition may be just what is needed.
I want to be reassured, for example, that the minor league teams will
not be abandoned or exploited by major league owners and that the
negotiations concerning the Professional Baseball Agreement proceed to
a fair conclusion without being skewed by some notion of antitrust
exemption. I want to consider whether there are measures we in Congress
might take to strengthen the hands of cities, taxpayers and fans
against the extortionate demands for new stadiums at public expense. I
want to revisit the issues of antitrust immunity in connection with
sports broadcasting rights and restrictions on viewers' access to
programming imposed by major league owners. If I had my way, we would
make progress in clarifying each of these matters.
In an effort to act expeditiously, I am cosponsoring this consensus
measure. I look forward to our prompt hearings, Committee and Senate
consideration and to working with others to forge a legal framework in
which the public will be better served.
I am delighted and encouraged that the ranking Democratic member of
the House Judiciary Committee, Rep. John Conyers, Jr., also acted on
the first day of legislative activity in the House to introduce H.R.
21, companion baseball antitrust legislation based on what we reported
last Congress. It is right and fitting that he chose Curt Flood's
number for this bill.
Mr. Flood passed away yesterday. His contributions to the game of
baseball went well beyond his all star play and outstanding statistics.
He was a critical part of championship teams during his years
patrolling center field for the St. Louis Cardinals in the late 50's
and 60's. He was an outstanding hitter, fielder and all around player
in an era of great players.
His part in baseball history has even more to do with his resolve to
stand up for what he knew was the right thing and his legal challenge
to the reserve clause, which had bound players to teams for life. He
was the plaintiff who sacrificed his career and a place in baseball's
Hall of Fame by taking the matter all the way to the United States
Supreme Court where, in 1972, the Court challenged Congress to correct
the aberration that baseball's antitrust immunity represents in our
law. There would be no more fitting tribute to Curt Flood's courage
than for this Congress finally to answer that 25-year-old call to
action. I hope that we will do so without further delay.
Mr. MOYNIHAN. Mr. President, I am pleased to be an original cosponsor
of the Curt Flood Act of 1997, a bill drafted by the distinguished
chairman of the Judiciary Committee, Senator Hatch.
This bill is designed to be a partial repeal of major league
baseball's antitrust exemption. It would leave the exemption in place
as it pertains to minor league baseball and the ability of major league
baseball to control the relocation of franchises.
In 1922, the Supreme Court of the United States, in Federal Baseball
Club v. National League, held that ``exhibitions of base ball'' were
not interstate commerce and thus were exempt from the antitrust laws.
Fifty years later, in Flood v. Kuhn in 1972, the Court concluded that
the antitrust exemption was an ``anomaly'' and an ``aberration confined
to baseball'' and that ``profession baseball is a business and it is
engaged in interstate commerce.'' Even so, the Court refused to reverse
its 1922 decision in Federal Baseball. Justice Blackmun, delivering the
opinion of the Court in Food, wrote:
If there is any inconsistency or illogic in all this, it is
an inconsistency and illogic of long standing that is to be
remedied by the Congress and not by this Court.
This decision clearly laid responsibility for baseball's antitrust
exemption on Congress. It also explicitly recognized baseball's
evolution into a major industry. Clearly, baseball is a business
engaged in interstate commerce, and should be subject to the antitrust
laws to the same extent that all other businesses are. So now, in 1997,
on the 75th anniversary of Federal Baseball, the time has come for
Congress to act.
On the first day of the 104th Congress, I introduced my own
legislation on the subject. My bill, S. 15, the National Pastime
Preservation Act of 1995, would have applied the antitrust laws to
major league baseball without the exceptions suggested by my friend
from Utah.
At this time, I am pleased to support any efforts that will provide a
more level playing field for baseball's labor negotiations and that
should help to prevent future strikes like the one we experienced in
1994 and 1995 from interrupting the fans enjoyment of the game of
baseball itself. While I am happy that both the owners and the players
agreed to support this limited repeal of baseball's antitrust
exemption, it is important to keep in mind that the players and owners
do not write the labor laws, Congress does.
It is most appropriate that this bill has been named in honor of Curt
Flood, the man responsible for the second significant challenge to
baseball's antitrust immunity. Curt Flood was a battler. Sadly, he lost
a different battle yesterday, to throat cancer. He was only 59.
Mr. Flood hit over .300 six times playing for the St. Louis Cardinals
and he finished his 15-year career with a lifetime batting average of
.293. he was also a seven-time Gold Glove winner, a three-time all-
star, and he helped lead the cardinals to their World Series titles in
1964 and 1967.
After the 1969 season, however, at the age of 32, Curt Flood was
traded to the Phillies. Mr. Flood did not want to move. St. Louis was
his home (he had played for the Cardinals for 11 years) and he was
concerned about the racial politics in Philadelphia at the time. He
sent a letter to Commissioner Bowie Kuhn asking him to nullify the
trade, but his request was denied. It was in response to this denial
that Mr. Flood initiated his historic suit challenging baseball's
antitrust exemption.
Curt Flood put his career on the line by sitting out the 1970 season
as he challenged baseballs' reserve clause--rules that prohibited
players from choosing which teams they wished to play for. While he
resumed playing in 1971 after St. Louis and Philadelphia made a deal
with the Washington Senators, the year off hurt Mr. Flood. his level of
play was not the same and he retired after playing only 13 games for
the Senators. The head of the players' union, Don Fehr, called Mr.
Flood ``a man of quiet dignity.'' He added, ``Curt Flood conducted his
life in a way that set an example for all who had the privilege to know
him. When it came time to take a stand, at great personal risk and
sacrifice, he proudly stood firm for what he believe was right.''
I thank my friend from Utah for inviting me to cosponsor this
legislation, and hope other Senators agree with us that the time has
come to act.
______
By Mr. HATCH (for himself, Mrs. Feinstein, Mr. D'Amato, Mr.
Harkin, and Mr. Reid):
S. 54. A bill to reduce interstate street gang and organized crime
activity, and for other purposes; to the Committee on the Judiciary.
the federal gang violence act of 1997
Mr. HATCH. Mr. President, I rise today to introduce the Federal Gang
Violence Act. I am pleased to be joined in this important effort by
Senator Feinstein, as well as by Senators D'Amato, Harkin, and Reid.
Gang violence in many of our communities is reaching frightening
levels. Last year, my hometown of Salt Lake City was shocked by a
particularly awful example. Asipeli Mohi, a 17-year-old Utahn, was
tried and convicted of the gang-related beating and shooting death of
another teenager, Aaron Chapman. Why was Aaron Chapman murdered? He was
wearing red, apparently the color of a rival gang. Ironically, Mr.
Chapman was on his way home from attending an anti-gang benefit concert
when he was killed. Before committing this murder, the killer had
racked up a record of five felonies and fifteen misdemeanors in
juvenile court. Sadly, this example of senseless gang violence is not
an isolated incident in my State or elsewhere. It is a scene replayed
with disturbing frequency.
Gang violence is now common even in places where this would have been
unthinkable several years ago. Indeed,
[[Page S421]]
many people find it hard to believe that Salt Lake City or Ogden could
have such a problem--gangs, they think, are a problem in cities like
New York, Chicago, and Los Angeles, but not in our smaller cities.
However, reality is much grimmer. Since 1992, gang activity in Salt
Lake City has increased tremendously. For instance, the number of
identified gangs has increased fifty-five percent, from 185 to 288, and
the number of gang members has increased 146 percent, from 1,438 to
3,545.
The number of gang-related crimes has increased a staggering 196
percent, from 1,741 in 1992 to 5,158 in the first eleven months of
1996. In 1995, there were 174 gang-related drive-by shootings, and in
the first eleven months of 1996, this dismaying statistic increased to
207.
Our problem is severe. Moreover, there is a significant role the
federal government can play in fighting this battle. I am not one to
advocate the unbridled extension of federal jurisdiction. Indeed, I
often think that we have federalized too many crimes. However, in the
case of criminal street gangs, which increasingly are moving interstate
to commit crimes, there is a very proper role for the federal
government to play.
This bill will strengthen the coordinated, cooperative response of
federal, state, and local law enforcement to criminal street gangs by
providing more flexibility to the federal partners in this effort. It
provides the federal prosecutorial tools needed to combat gang
violence. Violent crimes committed by youth continue to be the fastest
growing type of crime. Indeed, even as the general crime rate has
leveled off, or even declined slightly over the last couple of years,
violent youth crime, much of it committed by gangs, has increased. As
my colleagues know, the sophistication and the interstate nature of
these gangs has increased as well.
This bill puts teeth into the federal gang statute, by adding tough
penalties based on the existing Continuing Criminal Enterprise statute
in title 21 [21 U.S.C. 848]. Federal prosecutors will be able to charge
gang leaders or members under this section if they engage in two or
more criminal gang offenses.
These offenses include violent crimes, serious drug crimes, drug
money laundering, extortion, and obstruction of justice--all offenses
commonly committed by gangs.
Our bill adds a one to ten year sentence for the recruitment of
persons into a gang. Importantly, there are even tougher penalties for
recruiting a minor into a gang, including a four year mandatory minimum
sentence.
The bill adds the use of a minor in a crime to the list of offenses
for which a person can be prosecuted under the federal racketeering
laws, known as RICO.
It enhances the penalties for transferring a handgun to a minor,
knowing that it will be used in a crime of violence, and adds a new
federal sentencing enhancement for the use of body armor in the
commission of a federal crime.
Finally, the legislation we introduce today adds serious juvenile
drug offenses to the list of predicates under the federal Armed Career
Criminal Act, and authorizes $20 million over five years to hire
federal prosecutors to crack down on criminal gangs.
Mr. President, these are common sense, needed provisions. They're
tough. We need to get tough with gangs who recruit kids with the lure
of easy money and glamour. This legislation is not a panacea for our
youth violence crisis. But it is a large and critical step in
addressing this issue. I look forward to working with my colleagues on
this bill, and urge their support.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 54
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Gang Violence Act''.
SEC. 2. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN CRIME
AS A GANG MEMBER.
(a) Definition.--In this section, the term ``criminal
street gang'' has the same meaning as in section 521(a) of
title 18, United States Code, as amended by section 3 of this
Act.
(b) Amendment of Sentencing Guidelines.--Pursuant to its
authority under section 994(p) of title 28, United States
Code, the United States Sentencing Commission shall amend the
Federal sentencing guidelines to provide an appropriate
enhancement, increasing the offense level by not less than 6
levels, for any offense, if the offense was both committed in
connection with, or in furtherance of, the activities of a
criminal street gang and the defendant was a member of the
criminal street gang at the time of the offense.
(c) Construction With Other Guidelines.--The amendment made
pursuant to subsection (b) shall provide that the increase in
the offense level shall be in addition to any other
adjustment under chapter 3 of the Federal sentencing
guidelines.
SEC. 3. AMENDMENT OF TITLE 18 WITH RESPECT TO CRIMINAL STREET
GANGS.
(a) In General.--Section 521 of title 18, United States
Code, is amended--
(1) in subsection (a)--
(A) by striking ``(a) Definitions.--'' and inserting the
following:
``(a) Definitions.--In this section:'', and
(B) by striking `` `conviction'' and all that follows
through the end of the subsection and inserting the
following:
``(1) Criminal street gang.--The term `criminal street
gang' means an ongoing group, club, organization, or
association of 3 or more persons, whether formal or
informal--
``(A) a primary activity of which is the commission of 1 or
more predicate gang crimes;
``(B) any members of which engage, or have engaged during
the 5-year period preceding the date in question, in a
pattern of criminal gang activity; and
``(C) the activities of which affect interstate or foreign
commerce.
``(2) Pattern of criminal gang activity.--The term `pattern
of criminal gang activity' means the commission of 2 or more
predicate gang crimes committed in connection with, or in
furtherance of, the activities of a criminal street gang--
``(A) at least 1 of which was committed after the date of
enactment of the Federal Gang Violence Act;
``(B) the first of which was committed not more than 5
years before the commission of another predicate gang crime;
and
``(C) that were committed on separate occasions.
``(3) Predicate gang crime.--The term `predicate gang
crime' means an offense, including an act of juvenile
delinquency that, if committed by an adult, would be an
offense that is--
``(A) a Federal offense--
``(i) that is a crime of violence (as that term is defined
in section 16) including carjacking, drive-by-shooting,
shooting at an unoccupied dwelling or motor vehicle, assault
with a deadly weapon, and homicide;
``(ii) that involves a controlled substance (as that term
is defined in section 102 of the Controlled Substances Act
(21 U.S.C. 802)) for which the penalty is imprisonment for
not less than 5 years;
``(iii) that is a violation of section 844, section 875 or
876 (relating to extortion and threats), section 1084
(relating to gambling), section 1955 (relating to gambling),
chapter 44 (relating to firearms), or chapter 73 (relating to
obstruction of justice);
``(iv) that is a violation of section 1956 (relating to
money laundering), insofar as the violation of such section
is related to a Federal or State offense involving a
controlled substance (as that term is defined in section 102
of the Controlled Substances Act (21 U.S.C. 802)); or
``(v) that is a violation of section 274(a)(1)(A), 277, or
278 of the Immigration and Nationality Act (8 U.S.C.
1324(a)(1)(A), 1327, or 1328) (relating to alien smuggling);
``(B) a State offense involving conduct that would
constitute an offense under subparagraph (A) if Federal
jurisdiction existed or had been exercised; or
``(C) a conspiracy, attempt, or solicitation to commit an
offense described in subparagraph (A) or (B).
``(3) State.--The term `State' includes a State of the
United States, the District of Columbia, Puerto Rico, Guam,
the Virgin Islands, and any other territory of possession of
the United States.''; and
(2) by striking subsections (b), (c), and (d) and inserting
the following:
``(b) Criminal Penalties.--Any person who engages in a
pattern of criminal gang activity--
``(1) shall be sentenced to--
``(A) a term of imprisonment of not less than 10 years and
not more than life, fined in accordance with this title, or
both; and
``(B) the forfeiture prescribed in section 413 of the
Controlled Substances Act (21 U.S.C. 853); and
``(2) if any person engages in such activity after 1 or
more prior convictions under this section have become final,
shall be sentenced to--
``(A) a term of imprisonment of not less than 20 years and
not more than life, fined in accordance with this title, or
both; and
``(B) the forfeiture prescribed in section 412 of the
Controlled Substances Act (21 U.S.C. 853).''.
(b) Conforming Amendment.--Section 3663(c)(4) of title 18,
United States Code, is amended by inserting before ``chapter
46'' the following: ``section 521 of this title,''.
SEC. 4. INTERSTATE AND FOREIGN TRAVEL OR TRANSPORTATION IN
AID OF CRIMINAL STREET GANGS.
(a) Travel Act Amendments.--
[[Page S422]]
(1) Prohibited conduct and penalties.--Section 1952(a) of
title 18, United States Code, is amended to read as follows:
``(a) Prohibited Conduct and Penalties.--
``(1) In general.--Any person who--
``(A) travels in interstate or foreign commerce or uses the
mail or any facility in interstate or foreign commerce, with
intent to--
``(i) distribute the proceeds of any unlawful activity; or
``(ii) otherwise promote, manage, establish, carry on, or
facilitate the promotion, management, establishment, or
carrying on, of any unlawful activity; and
``(B) after travel or use of the mail or any facility in
interstate or foreign commerce described in subparagraph (A),
performs, attempts to perform, or conspires to perform an act
described in clause (i) or (ii) of subparagraph (A),
shall be fined under this title, imprisoned not more than 10
years, or both.
``(2) Crimes of violence.--Any person who--
``(A) travels in interstate or foreign commerce or uses the
mail or any facility in interstate or foreign commerce, with
intent to commit any crime of violence to further any
unlawful activity; and
``(B) after travel or use of the mail or any facility in
interstate or foreign commerce described in subparagraph (A),
commits, attempts to commit, or conspires to commit any crime
of violence to further any unlawful activity,
shall be fined under this title, imprisoned for not more than
20 years, or both, and if death results shall be sentenced to
death or be imprisoned for any term of years or for life.''.
(2) Definitions.--Section 1952(b) of title 18, United
States Code, is amended to read as follows:
``(b) Definitions.--In this section:
``(1) Controlled substance.--The term `controlled
substance' has the same meaning as in section 102(6) of the
Controlled Substances Act (21 U.S.C. 802(6)).
``(2) State.--The term `State' includes a State of the
United States, the District of Columbia, and any
commonwealth, territory, or possession of the United States.
``(3) Unlawful activity.--The term `unlawful activity'
means--
``(A) predicate gang crime (as that term is defined in
section 521);
``(B) any business enterprise involving gambling, liquor on
which the Federal excise tax has not been paid, narcotics or
controlled substances, or prostitution offenses in violation
of the laws of the State in which the offense is committed or
of the United States;
``(C) extortion, bribery, arson, robbery, burglary, assault
with a deadly weapon, retaliation against or intimidation of
witnesses, victims, jurors, or informants, assault resulting
in bodily injury, possession of or trafficking in stolen
property, illegally trafficking in firearms, kidnapping,
alien smuggling, or shooting at an occupied dwelling or motor
vehicle, in each case, in violation of the laws of the State
in which the offense is committed or of the United States; or
``(D) any act that is indictable under section 1956 or 1957
of this title or under subchapter II of chapter 53 of title
31.''.
(b) Amendment of Sentencing Guidelines.--
(1) In general.--Pursuant to its authority under section
994(p) of title 28, United States Code, the United States
Sentencing Commission shall amend chapter 2 of the Federal
sentencing guidelines so that--
(A) the base offense level for traveling in interstate or
foreign commerce in aid of a criminal street gang or other
unlawful activity is increased to 12; and
(B) the base offense level for the commission of a crime of
violence in aid of a criminal street gang or other unlawful
activity is increased to 24.
(2) Definitions.--In this subsection--
(A) the term ``crime of violence'' has the same meaning as
in section 16 of title 18, United States Code;
(B) the term ``criminal street gang'' has the same meaning
as in 521(a) of title 18, United States Code, as amended by
section 3 of this Act; and
(C) the term ``unlawful activity'' has the same meaning as
in section 1952(b) of title 18, United States Code, as
amended by this section.
SEC. 5. SOLICITATION OR RECRUITMENT OF PERSONS IN CRIMINAL
GANG ACTIVITY.
(a) Prohibited Acts.--Chapter 26 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 522. Recruitment of persons to participate in criminal
street gang activity
``(a) Prohibited Act.--It shall be unlawful for any person
to--
``(1) use any facility in, or travel in, interstate or
foreign commerce, or cause another to do so, to recruit,
solicit, request, induce, counsel, command, or cause another
person to be a member of a criminal street gang, or conspire
to do so; or
``(2) recruit, solicit, request, induce, counsel, command,
or cause another person to engage in a predicate gang crime
for which such person may be prosecuted in a court of the
United States, or conspire to do so.
``(b) Penalties.--A person who violates subsection (a)
shall--
``(1) if the person recruited--
``(A) is a minor, be imprisoned for a term of not less than
4 years and not more than 10 years, fined in accordance with
this title, or both; or
``(B) is not a minor, be imprisoned for a term of not less
than 1 year and not more than 10 years, fined in accordance
with this title, or both; and
``(2) be liable for any costs incurred by the Federal
Government or by any State or local government for housing,
maintaining, and treating the minor until the minor reaches
the age of 18.
``(c) Definitions.--In this section--
``(1) the terms `criminal street gang' and `predicate gang
crime' have the same meanings as in section 521; and
``(2) the term `minor' means a person who is younger than
18 years of age.''.
(b) Sentencing Guidelines.--Pursuant to its authority under
section 994(p) of title 28, United States Code, the United
States Sentencing Commission shall amend chapter 2 of the
Federal sentencing guidelines to provide an appropriate
enhancement for any offense involving the recruitment of a
minor to participate in a gang activity.
(c) Technical Amendment.--The chapter analysis for chapter
26 of title 18, United States Code, is amended by adding at
the end the following:
``522. Recruitment of persons to participate in criminal street gang
activity.''.
SEC. 6. CRIMES INVOLVING THE RECRUITMENT OF PERSONS TO
PARTICIPATE IN CRIMINAL STREET GANGS AND
FIREARMS OFFENSES AS RICO PREDICATES.
Section 1961(1) of title 18, United States Code, is
amended--
(1) by striking ``or'' before ``(F)''; and
(2) by inserting before the semicolon at the end the
following: ``, (G) an offense under section 522 of this
title, or (H) an act or conspiracy to commit any violation of
chapter 44 of this title (relating to firearms)''.
SEC. 7. PROHIBITIONS RELATING TO FIREARMS.
(a) Penalties.--Section 924(a)(6) of title 18, United
States Code, is amended--
(1) by striking subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (A);
(3) in subparagraph (A), as redesignated--
(A) by striking ``(B) A person other than a juvenile who
knowingly'' and inserting ``(A) A person who knowingly'';
(B) in clause (i), by striking ``not more than 1 year'' and
inserting ``not less than 1 year and not more than 5 years'';
and
(C) in clause (ii), by inserting ``not less than 1 year
and'' after ``imprisoned''; and
(4) by adding at the end the following:
``(B) Notwithstanding subparagraph (A), no mandatory
minimum sentence shall apply to a juvenile who is less than
13 years of age.''.
(b) Serious Juvenile Drug Offenses as Armed Career Criminal
Predicates.--Section 924(e)(2)(A) of title 18, United States
Code, is amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by adding ``or'' at the end; and
(3) by adding at the end the following:
``(iii) any act of juvenile delinquency that if committed
by an adult would be an offense described in clause (i) or
(ii);''.
(c) Transfer of Firearms to Minors for Use in Crime.--
Section 924(h) of title 18, United States Code, is amended by
striking ``10 years, fined in accordance with this title, or
both'' and inserting ``10 years, and if the transferee is a
person who is under 18 years of age, imprisoned for a term of
not less than 3 years, fined in accordance with this title,
or both''.
SEC. 8. AMENDMENT OF SENTENCING GUIDELINES WITH RESPECT TO
BODY ARMOR.
(a) Definitions.--In this section--
(1) the term ``body armor'' means any product sold or
offered for sale as personal protective body covering
intended to protect against gunfire, regardless of whether
the product is to be worn alone or is sold as a complement to
another product or garment; and
(2) the term ``law enforcement officer'' means any officer,
agent, or employee of the United States, a State, or a
political subdivision of a State, authorized by law or by a
government agency to engage in or supervise the prevention,
detection, investigation, or prosecution of any violation of
criminal law.
(b) Sentencing Enhancement.--The United States Sentencing
Commission shall amend the Federal sentencing guidelines to
provide an appropriate sentencing enhancement, increasing the
offense level not less than 2 levels, for any crime in which
the defendant used body armor.
(c) Applicability.--No Federal sentencing guideline
amendment made pursuant to this section shall apply if the
Federal crime in which the body armor is used constitutes a
violation of, attempted violation of, or conspiracy to
violate the civil rights of a person by a law enforcement
officer acting under color of the authority of such law
enforcement officer.
SEC. 9. ADDITIONAL PROSECUTORS.
There are authorized to be appropriated $20,000,000 for
each of the fiscal years 1998, 1999, 2000, 2001, and 2002 for
the hiring of Assistant United States Attorneys and attorneys
in the Criminal Division of the Department of Justice to
prosecute juvenile criminal street gangs (as that term is
defined in section 521(a) of title 18, United States Code, as
amended by section 3 of this Act).
______
By Mr. FEINGOLD (for himself and Mr. Reid):
[[Page S423]]
S. 57. A bill to amend the Federal Election Campaign Act of 1971 to
provide for a voluntary system of spending limits and partial public
financing of Senate primary and general election campaigns, to limit
contributions by multicandidate political committees, to limit soft
money of political party committees, and for other purposes; to the
Committee on Rules and Administration.
The senate campaign financing and spending reform act
Mr. FEINGOLD. Mr. President, I rise today to introduce the proposed
Senate Campaign Financing and Spending Reform Act of 1997, legislation
that would provide public financing for Senate elections.
The need for comprehensive campaign finance reform is unquestionable.
Each election year continues to set new records for campaign spending
by federal candidates, with 1996 campaign expenditures expected to
surpass $1.6 billion. This explosion in campaign spending has alienated
the American people from the election process, discouraged thousands of
qualified yet underfunded candidates from seeking public office, and
heightened public disgust with the ways of Washington to levels not
seen since the dark days of Watergate.
I have long believed that we need to sever the nexus between money
and politics, and end as a prerequisite for elected office a
candidate's ability to raise and spend millions of dollars. The most
straight forward way to achieve that result is through a system of
public financing.
The legislation I am introducing today, which I also introduced at
the outset of the 104th Congress, would provide qualified candidates
with the means to run a credible, competitive and issue-based campaign
without having to raise the average $5 million it takes to win a Senate
election.
This bill will establish voluntary spending limits based on each
state's individual voting age population. With the cooperation of the
candidates, this will finally curtail the skyrocketing spending that
has plagued political campaigns in recent years. Just as important,
these spending limits will allow members of Congress to focus on their
duties and responsibilities as elected officials rather than spending
substantial amounts of time raising money. For those candidates that do
abide by the spending limits, there will be matching funds in the
primary election for contributions under $250, once a candidate has
raised 15 percent of that state's spending limit in contributions of
$250 or less, half of which must come from within the candidate's
state. There will be a 100 percent match for contributions under $100,
and a 50 percent match for contributions between $101 and $250.
These provisions, along with only providing matching funds for in-
state contributions, will encourage candidates to focus on smaller
contributions from their home states. I believe this focus upon raising
money within our home states is critical. General election candidates
will become eligible for public financing benefits equal to the general
election spending limit for their state.
In addition to agreeing to limit their overall campaign spending,
candidates who receive the public benefits must agree to not spend more
than $25,000 of their own money.
Opponents of campaign finance reform have often suggested that
voluntary spending limits are unconstitutional. That is unfounded. In
fact, in the landmark Supreme Court decision in Buckley v. Valeo, the
Court noted that ``Congress may engage in public financing of election
campaigns and may condition acceptance of public funds on an agreement
by the candidate to abide by specified expenditure limitations. Just as
a candidate may voluntarily limit the size of the contributions he
chooses to accept, he may decide to forego private fundraising and
accept public funding.''
The legislation also bans so-called ``soft money'' that has allowed
corporations, labor unions, and wealth individuals to contribute
unlimited funds, up to millions of dollars, to the political parties
outside the scope of Federal election law. The legislation restricts
Political Action Committee (PAC) contributions to Federal candidates,
prohibits lawmakers from sending out franked mass mailings during the
calendar year of an election, bars lobbyists from contributing to
elected officials they have lobbied in a 12-month period, and codifies
a recent ruling by the Federal Election Commission that bars candidates
from using campaign funds for personal purposes, such as mortgage
payments, country club memberships, and vacations.
Public financing of campaigns will give challengers a legitimate
opportunity to run a competitive campaign, will allow incumbents to
focus on their legislative responsibilities, and will help to
extinguish public perceptions that the United States Congress is under
the control of the Washington special interests.
Public support for this sort of reform is strong. According to a
recent poll by the Mellman Group, 59 percent of the American people--
the highest level since Watergate--support full public financing for
congressional campaigns. Just 29 percent of the American people oppose
this proposal. The Mellman Group even found two out of every three
self-described Republicans supported public financing. A Gallup poll
found similar results, finding 64 percent overall support for a public
financing system.
And perhaps most revealing, a very recent Wall Street Journal/NBC
News poll found 92 percent of the American people simply believe too
much money is spent in Federal elections.
I have no illusions that a public financing proposal would win
approval in the 105th Congress. I believe that one day those who have
opposed public financing will finally get the message the voters are
trying to send us and there will be wider support within the Congress
for this approach to cleaning up election campaigns.
In the meantime, I do believe there are meaningful reforms that can
be considered and enacted with bipartisan support. That is why I have
joined with a number of my colleagues on both sides of the aisle,
including Senators McCain, Thompson, Wellstone and others in co-
authoring the first bipartisan campaign finance reform proposal offered
in a decade.
That legislation, strongly supported by President Clinton, Common
Cause, and numerous grassroots organizations and newspapers nationwide,
would begin the process of fundamentally changing and reducing the role
of money in our political system. It also encourages candidates to
limit their campaign spending, but instead of offering direct public
financing it provides substantial discounts on broadcast media and
postage rates to candidates who agree to limit their overall spending,
who agree to limit their own personal spending, and who agree to raise
60 percent of their campaign funds from their home States. I look
forward to working with my colleagues on passing such meaningful
reform, and will press for action in the first 100 days of this new
Congress.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 57
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Senate
Campaign Financing and Spending Reform Act''.
(b) Table of Contents.--
Sec. 1. Short title; table of contents.
Sec. 2. Findings and eclarations of the Senate.
TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
Subtitle A--Senate Election Campaign Expenditure Limits and Benefits
Sec. 101. Senate expenditure limits and benefits.
Sec. 102. Political action committees.
Sec. 103. Reporting requirements.
Sec. 104. Disclosure by candidates other than eligible Senate
candidates.
Subtitle B--General Provisions
Sec. 131. Broadcast rates and preemption.
Sec. 132. Extension of reduced third-class mailing rates to eligible
senate candidates.
Sec. 133. Campaign advertising amendments.
Sec. 134. Definitions.
Sec. 135. Provisions relating to franked mass mailings.
TITLE II--INDEPENDENT EXPENDITURES
Sec. 201. Definitions.
Sec. 202. Reporting requirements for certain independent expenditures.
[[Page S424]]
TITLE III--EXPENDITURES
Subtitle A--Personal Funds; Credit
Sec. 301. Contributions and loans from personal funds.
Sec. 302. Extensions of credit.
Subtitle B--Soft Money of Political Party Committees
Sec. 311. Soft money of political party committees.
Sec. 312. Reporting requirements.
TITLE IV--CONTRIBUTIONS
Sec. 401. Contributions through intermediaries and conduits;
prohibition on certain contributions by lobbyists.
Sec. 402. Contributions by dependents not of voting age.
Sec. 403. Contributions to candidates from State and local committees
of political parties to be aggregated.
Sec. 404. Limited exclusion of advances by campaign workers from the
definition of the term ``contribution''.
TITLE V--REPORTING REQUIREMENTS
Sec. 501. Change in certain reporting from a calendar year basis to an
election cycle basis.
Sec. 502. Personal and consulting services.
Sec. 503. Contributions of $50 or more.
Sec. 504. Computerized indices of contributions.
TITLE VI--FEDERAL ELECTION COMMISSION
Sec. 601. Use of candidates' names.
Sec. 602. Reporting requirements.
Sec. 603. Provisions relating to the general counsel of the Commission.
Sec. 604. Penalties.
Sec. 605. Random audits.
Sec. 606. Prohibition of false representation to solicit contributions.
Sec. 607. Regulations relating to use of non-Federal money.
Sec. 608. Filing of reports using computers and facsimile machines.
TITLE VII--MISCELLANEOUS
Sec. 701. Prohibition of leadership committees.
Sec. 702. Polling data contributed to candidates.
Sec. 703. Restrictions on use of campaign funds for personal purposes.
TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS
Sec. 801. Effective date.
Sec. 802. Severability.
Sec. 803. Expedited review of constitutional issues.
SEC. 2. FINDINGS AND DECLARATIONS OF THE SENATE.
(a) Necessity for Spending Limits.--The Senate finds and
declares that--
(1) the current system of campaign finance has led to
public perceptions that political contributions and their
solicitation have unduly influenced the official conduct of
elected officials;
(2) permitting candidates for Federal office to raise and
spend unlimited amounts of money constitutes a fundamental
flaw in the current system of campaign finance, and has
undermined public respect for the Senate as an institution;
(3) the failure to limit campaign expenditures has caused
individuals elected to the Senate to spend an increasing
proportion of their time in office as elected officials
raising funds, interfering with the ability of the Senate to
carry out its constitutional responsibilities;
(4) the failure to limit campaign expenditures has damaged
the Senate as an institution, due to the time lost to raising
funds for campaigns; and
(5) to prevent the appearance of undue influence and to
restore public trust in the Senate as an institution, it is
necessary to limit campaign expenditures, through a system
which provides public benefits to candidates who agree to
limit campaign expenditures.
(b) Necessity for Attributing Cooperative Expenditures to
Candidates.--The Senate finds and declares that--
(1) public confidence and trust in the system of campaign
finance would be undermined should any candidate be able to
circumvent a system of caps on expenditures through
cooperative expenditures with outside individuals, groups, or
organizations;
(2) cooperative expenditures by candidates with outside
individuals, groups, or organizations would severely
undermine the effectiveness of caps on campaign expenditures,
unless they are included within such caps; and
(3) to maintain the integrity of the system of campaign
finance, expenditures by any individual, group, or
organization that have been made in cooperation with any
candidate, authorized committee, or agent of any candidate
must be attributed to that candidate's cap on campaign
expenditures.
TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
Subtitle A--Senate Election Campaign Expenditure Limits and Benefits
SEC. 101. SENATE EXPENDITURE LIMITS AND BENEFITS.
(a) Amendment of FECA.--Federal Election Campaign Act of
1971 (2 U.S.C. 431 et seq.) is amended by adding at the end
the following:
``TITLE V--EXPENDITURE LIMITS AND BENEFITS FOR SENATE ELECTION
CAMPAIGNS
``SEC. 501. DEFINITIONS.
``In this title:
``(1) Eligible senate candidate.--The term `eligible Senate
candidate' means a candidate who is certified under section
505 as being eligible to receive benefits under this title.
``(2) Excess expenditure amount.--The term `excess
expenditure amount', with respect to an eligible Senate
candidate, means the amount applicable to the eligible Senate
candidate under section 504(c).
``(3) Expenditure.--The term `expenditure' has the meaning
given in paragraph (9) of section 301, excluding subparagraph
(B)(ii) of that paragraph.
``(4) Fund.--The term `Fund' means the Senate Election
Campaign Fund established by section 509.
``(5) General election expenditure limit.--The term
`general election expenditure limit', with respect to an
eligible Senate candidate, means the limit applicable to the
eligible Senate candidate under section 503(b).
``(6) Personal funds expenditure limit.--The term `personal
funds expenditure limit' means the limit stated in section
503(a).
``(7) Primary election expenditure limit.--The term
`primary election expenditure limit', with respect to an
eligible Senate candidate, means the limit applicable to the
eligible Senate candidate under section 502(d)(1)(A).
``(8) Runoff election expenditure limit.--The term `runoff
election expenditure limit', with respect to an eligible
Senate candidate, means the limit applicable to the eligible
Senate candidate under section 502(d)(1)(B).
``SEC. 502. ELIGIBLE SENATE CANDIDATES.
``(a) In General.--For purposes of this title, a candidate
is an eligible Senate candidate if the candidate--
``(1) files a primary election eligibility certification
and declaration under subsection (b) and is in compliance
with the representations made in the certification and
declaration; and
``(2) files a general election eligibility certification
and declaration under subsection (c) and is in compliance
with the representations made in the certification and
declaration.
``(b) Primary Election Eligibility Certification and
Declaration.--
``(1) In general.--The requirements of this subsection are
met if the candidate files with the Secretary of the Senate--
``(A) a certification, under pending of perjury, that the
candidate has met the threshold contribution requirement of
subsection (e); and
``(B) a declaration that the candidate and the candidate's
authorized committees--
``(i)(I) will not exceed the primary election expenditure
limit or runoff election expenditure limits; and
``(II) will accept only an amount of contributions for the
primary election and any runoff election that does not exceed
the primary election expenditure limit and, if there is a
runoff election, the runoff election expenditure limit;
``(ii)(I) will not exceed the primary and runoff election
multicandidate political committee contribution limits of
subsection (f); and
``(II) will accept only an amount of contributions for the
primary election and any runoff election from multicandidate
political committees that does not exceed those limits;
``(iii) will not accept contributions for the primary or
runoff election that would cause the candidate to exceed the
limitation on contributions from out-of-State residents under
subsection (g);
``(iv) will not exceed the personal funds expenditure
limit; and
``(v) will not exceed the general election expenditure
limit.
``(2) Deadline for filing declaration.--The declaration
under paragraph (1) shall be filed not later than the date on
which the candidate files as a candidate for the primary
election.
``(c) General Election Eligibility Certification and
Declaration.--
``(1) In general.--The requirements of this subsection are
met if the candidate files with the Secretary of the Senate--
``(A) a certification, under penalty of perjury, that--
``(i) the candidate and the candidate's authorized
committees--
``(I) did not exceed the primary election expenditure limit
or runoff election expenditure limit;
``(II) did not accept contributions for the primary
election or runoff election in excess of the primary election
expenditure limit or runoff election expenditure limit,
reduced by any amounts transferred to the current election
cycle from a preceding election cycle;
``(III) did not accept contributions for the primary or
runoff election in excess of the multicandidate political
committee contribution limits under subsection (f);
``(IV) did not accept contributions for the primary
election or runoff election that caused the candidate to
exceed the limitation on contributions from out-of-State
residents under subsection (g); and
``(ii) at least 1 other candidate has qualified for the
same general election ballot under the law of the candidate's
State; and
``(B) a declaration that the candidate and the authorized
committees of the candidate--
[[Page S425]]
``(i) except as otherwise provided by this title, will not
make expenditures that exceed the general election
expenditure limit;
``(ii) except as otherwise provided by this title, will not
accept any contribution for the general election to the
extent that the contribution--
``(I) would cause the aggregate amount of contributions to
exceed the sum of the amount of the general election
expenditure limit, reduced by any amounts transferred to the
current election cycle from a previous election cycle and not
taken into account under subparagraph (A)(ii);
``(II) would cause the candidate to exceed the limitation
on contributions from out-of-State residents under subsection
(g);
``(III) would be in violation of section 315;
``(iii) will deposit all payments received under this title
in an account insured by the Federal Deposit Insurance
Corporation from which funds may be withdrawn by check or
similar means of payment to third parties;
``(vi) will furnish campaign records, evidence of
contributions, and other appropriate information to the
Commission; and
``(v) will cooperate in the case of any audit and
examination by the Commission under section 506 and will pay
any amounts required to be paid under that section.
``(2) Deadline for filing declaration and certification.--
The declaration and certification under paragraph (1) shall
be filed not later than 7 days after the earlier of--
``(A) the date on which the candidate qualifies for the
general election ballot under State law; or
``(B) if, under State law, a primary or runoff election to
qualify for the general election ballot occurs after
September 1, the date on which the candidate wins the primary
or runoff election.
``(d) Primary and Runoff Election Expenditure Limits.--
``(1) In general.--The requirements of this subsection are
met if--
``(A) the candidate or the candidate's authorized
committees did not make expenditures for the primary election
in excess of the lesser of--
``(i) 67 percent of the general election expenditure limit;
or
``(ii) $2,750,000;
``(B) the candidate and the candidate's authorized
committees did not make expenditures for any runoff election
in excess of 20 percent of the general election expenditure
limit.
``(2) Indexing.--The $2,750,000 amount under paragraph
(1)(A)(ii) shall be increased as of the beginning of each
calendar year based on the increase in the price index
determined under section 315(c), except that, for purposes of
subsection (d)(1) and section 503(b)(3), the base period
shall be calendar year 1996.
``(3) Increase.--The limitations under subparagraphs (A)
and (B) of paragraph (1) with respect to any candidate shall
be increased by the aggregate amount of independent
expenditures in opposition to, or on behalf of any opponent
of, the candidate during the primary or runoff election
period, whichever is applicable, that are required to be
reported to the Secretary of the Senate or to the Commission
with respect to that period under section 304.
``(4) Excess amount of contributions.--
``(A) In general.--If the contributions received by a
candidate or the candidate's authorized committees for the
primary election or runoff election exceed the expenditures
for either election--
``(i) the excess amount of contributions shall be treated
as contributions for the general election; and
``(ii) expenditures for the general election may be made
from the excess amount of contributions.
``(B) Limitation.--Subparagraph (A) shall not apply to the
extent that treatment of excess contributions in accordance
with subparagraph (A)--
``(i) would result in the violation of any limitation under
section 315; or
``(ii) would cause the aggregate amount of contributions
received for the general election to exceed the limits under
subsection (c)(1)(D)(iii).
``(e) Threshold Contribution Requirement.--
``(1) In general.--The requirement of this subsection is
met if the candidate and the candidate's authorized
committees have received allowable contributions during the
applicable period in an amount at least equal to the lesser
of--
``(A) 10 percent of the general election expenditure limit;
or
``(B) $250,000.
``(2) Definitions.--In this section and subsections (b) and
(c) of section 504:
``(A) Allowable contribution.--
``(i) In general.--The term `allowable contribution' means
a contribution that is made as a gift of money by an
individual pursuant to a written instrument identifying the
individual as the contributor.
``(ii) Exclusions.--The term `allowable contribution' does
not include--
``(I) a contribution from any individual during the
applicable period to the extent that the aggregate amount of
such contributions from the individual exceeds $250; or
``(II) a contribution from an individual residing outside
the candidate's State to the extent that acceptance of the
contribution would bring a candidate out of compliance with
subsection (g).
``(iii) Applicability.--Items subclauses (I) and (II) of
clause (ii) shall not apply for purposes of section 504(a).
``(B) Applicable period.--The term `applicable period'
means--
``(i) the period beginning on January 1 of the calendar
year preceding the calendar year of a general election and
ending on--
``(I) the date on which the certification and declaration
under subsection (c) is filed by the candidate; or
``(II) for purposes of subsection (a) of section 503, the
date of the general election; or
``(ii) in the case of a special election for the office of
United States Senator, the period beginning on the date on
which the vacancy in the office occurs and ending on the date
of the general election.
``(f) Multicandidate Political Committee Contribution
Limits.--The requirements of this subsection are met if the
candidate and the candidate's authorized committees have
accepted from multicandidate political committees allowable
contributions that do not exceed--
``(1) during the primary election period, an amount equal
to 20 percent of the primary election spending limit; and
``(2) during the runoff election period, an amount equal to
20 percent of the runoff election spending limit.
``(g) Limitation on Out-of-State Contributions.--
``(1) Requirements.--The requirements of this subsection
are met if at least 50 percent of the total amount of
contributions accepted by the candidate and the candidate's
authorized committees are from individuals who are legal
residents of the candidate's State.
``(2) Personal funds.--For purposes of paragraph (1),
amounts consisting of funds from sources described in section
503(a) shall be treated as contributions from individuals
residing outside the candidate's State.
``(3) Time for determination.--A determination whether the
requirements of paragraph (1) are met shall be made each time
a candidate is required to file a report under section 304
and shall be made on an aggregate basis.
``SEC. 503. LIMITS ON EXPENDITURES.
``(a) Personal Funds Expenditure Limit.--
``(1) In general.--The aggregate amount of expenditures
that may be made during an election cycle by an eligible
Senate candidate or the candidate's authorized committees
from the sources described in paragraph (2) shall not exceed
$25,000.
``(2) Sources.--A source is described in this paragraph if
it is--
``(A) personal funds of the candidate or a member of the
candidate's immediate family; or
``(B) proceeds of indebtedness incurred by the candidate or
a member of the candidate's immediate family.
``(b) General Election Expenditure Limit.--
``(1) In general.--Except as otherwise provided in this
title, the aggregate amount of expenditures for a general
election by an eligible Senate candidate and the candidate's
authorized committees shall not exceed the lesser of--
``(A) $5,500,000; or
``(B) the greater of--
``(i) $950,000; or
``(ii) $400,000; plus
``(I) 30 cents multiplied by the voting age population not
in excess of 4,000,000; and
``(II) 25 cents multiplied by the voting age population in
excess of 4,000,000.
``(2) Exception.--In the case of an eligible Senate
candidate in a State that has not more than 1 transmitter for
a commercial Very High Frequency (VHF) television station
licensed to operate in that State, paragraph (1)(B)(ii) shall
be applied by substituting--
``(A) `80 cents' for `30 cents' in subclause (I); and
``(B) `70 cents' for `25 cents' in subclause (II).
``(3) Indexing.--The amount otherwise determined under
paragraph (1) for any calendar year shall be increased by the
same percentage as the percentage increase for the calendar
year under section 502(d)(2).
``(c) Payment of Taxes on Earnings.--The limitation under
subsection (b) shall not apply to any expenditure for
Federal, State, or local income taxes on the earnings of a
candidate's authorized committees.
``(d) Expenditures.--For purposes of this title, the term
`expenditure' has the meaning given such term by section
301(9), except that in determining any expenditures made by,
or on behalf of, a candidate or a candidate's authorized
committees, section 301(9)(B) shall be applied without regard
to clause (ii) or (vi).
``(e) Expenditures in Response to Independent
Expenditures..--If an eligible Senate candidate is notified
by the Commission under section 304(c)(4) that independent
expenditures totaling $10,000 or more have been made in the
same election in favor of another candidate or against the
eligible candidate, the eligible candidate shall be permitted
to spend an amount equal to the amount of the independent
expenditures, and any such expenditures shall not be subject
to any limit applicable under this title to the eligible
candidate for the election.
``SEC. 504. BENEFITS FOR ELIGIBLE SENATE CANDIDATES.
``(a) In General.--An eligible Senate candidate shall be
entitled to--
``(1) the broadcast media rates provided under section
315(b) of the Communications Act of 1934;
[[Page S426]]
``(2) the mailing rates provided in section 3626(e) of
title 39, United States Code; and
``(3) payments in an amount equal to--
``(A) the public financing amount determined under
subsection (b);
``(B) the excess expenditure amount determined under
subsection (c); and
``(C) the independent expenditure amount determined under
subsection (d).
``(b) Public Financing Amount.--
``(1) Determination.--The public financing amount is--
``(A) in the case of an eligible candidate who is a major
party candidate and has met the threshold requirement of
section 502(e)--
``(i)(I) during the primary election period, the public
financing an amount equal to 100 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
$100 or less; plus
``(II) an amount equal to 50 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
more than $100 but less than $251, up to 50 percent of the
primary election expenditure limit; reduced by
``(III) the threshold requirement under section 502(e);
(ii)(I) during the runoff election period, an amount equal
to 100 percent of the amount of contributions received during
that period from individuals residing in the candidate's
State in the aggregate amount of $100 or less; plus
``(II) an amount equal to 50 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
more than $100 but less than $251, up to 10 percent of the
general election expenditure limit; and
``(III) during the general election period, an amount equal
to the general election expenditure limit; and
``(B) in the case of an eligible candidate who is not a
major party candidate and who has met the threshold
requirement of section 502(e)--
``(i)(I) during the primary election period, an amount
equal to 100 percent of the amount of contributions received
during that period from individuals residing in the
candidate's State in the aggregate amount of $100 or less;
plus
``(II) an amount equal to 50 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
more than $100 but less than $251, up to 50 percent of the
primary election expenditure limit; reduced by
``(III) the threshold requirement under section 502(e);
``(ii)(I) during the runoff election period, an amount
equal to 100 percent of the amount of contributions received
during that period from individuals residing in the
candidate's State in the aggregate amount of $100 or less;
plus,
``(II) an amount equal to 50 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
more than $100 but less than $251, up to 10 percent of the
general election expenditure limit; and
``(iii)(I) during the general election period, an amount
equal to 100 percent of the amount of contributions received
during that period from individuals residing in the
candidate's State in the aggregate amount of $100 or less,
plus;
``(II) an amount equal to 50 percent of the amount of
contributions received during that period from individuals
residing in the candidate's State in the aggregate amount of
more than $100 but less than $251, up to 50 percent of the
general election expenditure limit.
``(c) Excess Expenditure Amount.--
``(1) Determination.--The excess expenditure amount is--
``(A) in the case of a major party candidate, an amount
equal to the sum of--
``(i) if the opponent's excess is less than 33\1/3\ percent
of the general election expenditure limit, an amount equal to
one-third of the general election expenditure limit; plus
``(ii) if the opponent's excess equals or exceeds 33\1/3\
percent but is less than 66\2/3\ percent of the general
election expenditure limit, an amount equal to one-third of
the general election expenditure limit; plus
``(iii) if the opponent's excess equals or exceeds 66\2/3\
percent of the general election expenditure limit, an amount
equal to one-third of the general election expenditure limit;
and
``(B) in the case of an eligible Senate candidate who is
not a major party candidate, an amount equal to the least
of--
``(i) the amount of allowable contributions accepted by the
eligible Senate candidate during the applicable period in
excess of the threshold contribution requirement under
section 502(e);
``(ii) 50 percent of the general election expenditure
limit; or
``(iii) the opponent's excess.
``(2) Definition of opponent's excess.--In this subsection,
the term `opponent's excess' means the amount by which an
opponent of an eligible Senate candidate in the general
election accepts contributions or makes (or obligates to
make) expenditures for the election in excess of the general
election expenditure limit.
``(d) Independent Expenditure Amount.--The independent
expenditure amount is the total amount of independent
expenditures made, or obligated to be made, during the
general election period by 1 or more persons in opposition
to, or on behalf of an opponent of, an eligible Senate
candidate that are required to be reported by the persons
under section 304(c) with respect to the general election
period and are certified by the Commission under section
304(c).
``(e) Waiver of Expenditure and Contribution Limits.--
``(1) Recipients of excess expenditure amount payments and
independent expenditure amount payments.--
``(A) In general.--An eligible Senate candidate who
receives payments under subsection (a)(3) that are allocable
to the independent expenditure or excess expenditure amounts
described in subsections (c) and (d) may make expenditures
from the payments for the general election without regard to
the general election expenditure limit.
``(B) Nonmajor party candidates.--In the case of an
eligible Senate candidate who is not a major party candidate,
the general election expenditure limit shall be increased by
the amount (if any) by which the excess opponent expenditure
amount exceeds the amount determined under subsection
(b)(2)(B) with respect to the candidate.
``(2) All benefit recipients.--
``(A) In general.--An eligible Senate candidate who
receives benefits under this section may make expenditures
for the general election without regard to the personal funds
expenditure limit or general election expenditure limit if
any 1 of the eligible Senate candidate's opponents who is not
an eligible Senate candidate raises an amount of
contributions or makes or becomes obligated to make an amount
of expenditures for the general election that exceeds 200
percent of the general election expenditure limit.
``(B) Limitation.--The amount of the expenditures that may
be made by reason of subparagraph (A) shall not exceed 100
percent of the general election expenditure limit.
``(3) Acceptance of contribution without regard to section
502(c)(1)(B)(iv).--
``(A) A candidate who receives benefits under this section
may accept a contribution for the general election without
regard to section 502(c)(1)(B)(iv) if--
``(i) a major party candidate in the same general election
is not an eligible Senate candidate; or
``(ii) any other candidate in the same general election who
is not an eligible Senate candidate raises an amount of
contributions or makes or becomes obligated to make an amount
of expenditures for the general election that exceeds 75
percent of the general election expenditure limit applicable
to such other candidate.
``(B) Limitation.--The amount of contributions that may be
received by reason of subparagraph (A) shall not exceed 100
percent of the general election expenditure limit.
``(e) Use of Payments.--
``(1) Permitted use.--Payments received by an eligible
Senate candidate under subsection (a)(3) shall be used to
make expenditures with respect to the general election period
for the candidate.
``(2) Prohibited use.--Payments received by an eligible
Senate candidate under subsection (a)(3) shall not be used--
``(A) except as provided in subparagraph (D), to make any
payments, directly or indirectly, to the candidate or to any
member of the immediate family of the candidate;
``(B) to make any expenditure other than an expenditure to
further the general election of the candidate;
``(C) to make an expenditure the making of which
constitutes a violation of any law of the United States or of
the State in which the expenditure is made; or
``(D) subject to section 315(i), to repay any loan to any
person except to the extent that proceeds of the loan were
used to further the general election of the candidate.
``SEC. 505. CERTIFICATION BY COMMISSION.
``(a) Certification of Status as Eligible Senate
Candidate.--
``(1) In general.--The Commission shall certify to any
candidate meeting the requirements of section 502 that the
candidate is an eligible Senate candidate entitled to
benefits under this title.
``(2) Revocation.--The Commission shall revoke a
certification under paragraph (1) if the Commission
determines that a candidate fails to continue to meet the
requirements of section 502.
``(b) Certification of Eligibility To Receive Benefits.--
``(1) In general.--Not later than 7 business days after an
eligible Senate candidate files a request with the Secretary
of the Senate to receive benefits under section 504, the
Commission shall issue a certification stating whether the
candidate is eligible for payments under this title and the
amount of such payments to which such candidate is entitled.
``(2) Contents of request.--A request under paragraph (1)
shall--
``(A) contain such information and be made in accordance
with such procedures as the Commission may provide by
regulation; and
``(B) contain a verification signed by the candidate and
the treasurer of the principal campaign committee of the
candidate stating that the information furnished in support
of the request, to the best of their knowledge, is correct
and fully satisfies the requirements of this title.
``(c) Determinations by the Commission.--All determinations
made by the Commission under this title (including
certifications
[[Page S427]]
under subsections (a) and (b)) shall be final and conclusive,
except to the extent that a determination is subject to
examination and audit by the Commission under section 506 and
judicial review under section 507.
``SEC. 506. EXAMINATIONS AND AUDITS; REPAYMENTS; CIVIL
PENALTIES.
``(a) Examinations and Audits.--
``(1) After a general election.--After each general
election, the Commission shall conduct an examination and
audit of the campaign accounts of 10 percent of all
candidates for the office of United States in which there was
an eligible Senate candidate on the ballot, as designated by
the Commission through the use of an appropriate statistical
method of random selection, to determine whether the
candidates have complied with the conditions of eligibility
and other requirements of this title. If the Commission
selects a candidate, the Commission shall examine and audit
the campaign accounts of all other candidates in the general
election for the office the selected candidate is seeking.
``(2) With reason to believe there may have been a
violation.--The Commission may conduct an examination and
audit of the campaign accounts of any eligible Senate
candidate in a general election if the Commission determines
that there exists reason to believe that the eligible Senate
candidate may have failed to comply with this title.
``(b) Excess Payment.--If the Commission determines any
payment was made to an eligible Senate candidate under this
title in excess of the aggregate amounts to which the
eligible Senate candidate was entitled, the Commission shall
notify the eligible Senate candidate, and the eligible Senate
candidate shall pay an amount equal to the excess.
``(c) Revocation of Status.--If the Commission revokes the
certification of an eligible Senate candidate as an eligible
Senate candidate under section 505(a)(1), the Commission
shall notify the eligible Senate candidate, and the eligible
Senate candidate shall pay an amount equal to the payments
received under this title.
``(d) Misuse of Benefit.--If the Commission determines that
any amount of any benefit made available to an eligible
Senate candidate under this title was not used as provided
for in this title, the Commission shall notify the eligible
Senate candidate, and the eligible Senate candidate shall pay
the amount of that benefit.
``(e) Excess Expenditures.--If the Commission determines
that an eligible Senate candidate who received benefits under
this title made expenditures that in the aggregate exceed the
primary election expenditure, the runoff election expenditure
limit, or the general election expenditure limit, the
Commission shall notify the eligible Senate candidate, and
the eligible Senate candidate shall pay an amount equal to
the amount of the excess expenditures.
``(f) Civil Penalties.--
``(1) Misuse of benefit.--If the Commission determines that
an eligible Senate candidate has committed a violation
described in subsection (d), the Commission may assess a
civil penalty against the eligible Senate candidate in an
amount not greater than 200 percent of the amount of the
benefit that was misused.
``(2) Excess expenditures.--
``(A) Low amount of excess expenditures.--If the Commission
determines that an eligible Senate candidate made
expenditures that exceeded by 2.5 percent or less the primary
election expenditure limit, the runoff election expenditure
limit, or the general election expenditure limit, the
Commission shall assess a civil penalty against the eligible
Senate candidate in an amount equal to the amount of the
excess expenditures.
``(B) Medium amount of excess expenditures.--If the
Commission determines that an eligible Senate candidate made
expenditures that exceeded by more than 2.5 percent and less
than 5 percent the primary election expenditure limit, the
runoff election expenditure limit, or the general election
expenditure limit, the Commission shall assess a civil
penalty against the eligible Senate candidate in an amount
equal to 3 times the amount of the excess expenditures.
``(C) Large amount of excess expenditures.--If the
Commission determines that an eligible Senate candidate made
expenditures that exceeded by 5 percent or more the primary
election expenditure limit, the runoff election expenditure
limit, or the general election expenditure limit, the
Commission shall assess a civil penalty against the eligible
Senate candidate in an amount equal to the sum of 3 times the
amount of the excess expenditures plus an additional amount
determined by the Commission.
``(g) Unexpended Funds.--
``(1) Retention for purposes of liquidation of
obligations.--An eligible Senate candidate may retain for a
period not exceeding 120 days after the date of a general
election any unexpended funds received under this title for
the liquidation of all obligations to pay expenditures for
the general election incurred during the general election
period.
``(2) Repayment.--At the end of the 120-day period, any
unexpended funds received under this title shall be promptly
repaid.
``(h) Limit on Period for Notification.--No notification
shall be made by the Commission under this section with
respect to an election more than 3 years after the date of
the election.
``(i) Deposits.--The Secretary shall deposit all payments
received under this section into the Senate Election Campaign
Fund.
``SEC. 507. JUDICIAL REVIEW.
``(a) Judicial Review.--Any agency action by the Commission
under this title shall be subject to review by the United
States Court of Appeals for the District of Columbia Circuit
upon petition filed in that court within 30 days after the
date of the agency action.
``(b) Application of Title 5, United States Code.--Chapter
7 of title 5, United States Code, shall apply to judicial
review of any agency action by the Commission under this
title.
``(c) Agency Action.--For purposes of this section, the
term `agency action' has the meaning given the term in
section 551(13) of title 5, United States Code.
``SEC. 508. PARTICIPATION BY COMMISSION IN JUDICIAL
PROCEEDINGS.
``(a) Appearances.--The Commission may appear in and defend
against any action instituted under this section and under
section 507 by attorneys employed in the office of the
Commission or by counsel whom it may appoint without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service, and whose
compensation it may fix without regard to chapter 51 and
subchapter III of chapter 53 of that title.
``(b) Actions for Recovery of Amount of Benefits.--The
Commission, by attorneys and counsel described in subsection
(a), may bring an action in United States district court to
recover any amounts determined under this title to be payable
to any entity that afforded a benefit to an eligible Senate
candidate under this title.
``(c) Action for Injunctive Relief.--The Commission, by
attorneys and counsel described in subsection (a), may
petition the courts of the United States for such injunctive
relief as is appropriate in order to implement any provision
of this title.
``(d) Appeals.--The Commission, on behalf of the United
States, may appeal from, and may petition the Supreme Court
for certiorari to review, any judgment or decree entered with
respect to actions in which the Commission under this
section.
``SEC. 509. REPORTS TO CONGRESS; REGULATIONS.
``(a) Reports.--
``(1) In general.--As soon as practicable after each
general election, the Commission shall submit a full report
to the Senate setting forth--
``(A) the expenditures (shown in such detail as the
Commission determines to be appropriate) made by each
eligible Senate candidate and the authorized committees of
the candidate;
``(B) the amounts certified by the Commission under section
505 as benefits available to each eligible Senate candidate;
``(C) the amount of repayments, if any, required under
section 506 and the reason why each repayment was required;
and
``(D) the balance in the senate Election Campaign Fund, and
the balance in any account maintained by the Fund.
``(2) Printing.--Each report under paragraph (1) shall be
printed as a Senate document.
``(b) Regulations.--
``(1) In general.--The Commission may issue such
regulations, conduct such examinations and investigations,
and require the keeping and submission of such books,
records, and information, as the Commission considers
necessary to carry out the functions and duties of the
Commission under this title.
``(2) Statement to Senate.--Not less than 30 days before
issuing a regulation under paragraph (1), the Commission
shall submit to the Senate a statement setting forth the
proposed regulation and containing a detailed explanation and
justification for the regulation.
``SEC. 510. PAYMENTS TO ELIGIBLE CANDIDATES.
``(a) Senate Election Campaign Fund.--
``(1) Establishment of Campaign Fund.-- There is
established on the books of the Treasury of the United States
a special fund to be known as the `Senate Election Campaign
Fund'.
``(2) Appropriations.--
(A) In general.--There are appropriated to the Fund for
each fiscal year, out of amounts in the general fund of the
Treasury not otherwise appropriated, amounts equal to--
``(i) any contributions by persons which are specifically
designated as being made to the Fund;
``(ii) amounts collected under section 506(i); and
``(iii) any other amounts that may be appropriated to or
deposited into the Fund under this title.
``(B) Transfers.--The Secretary of the Treasury shall, from
time to time, transfer to the Fund an amount not in excess of
the amounts described in subparagraph (A).
``(C) Fiscal year.--Amounts in the Fund shall remain
available without fiscal year limitation.
``(3) Use of Fund.--Amounts in the Fund shall be available
only for the purposes of--
``(A) making payments required under this title; and
``(B) making expenditures in connection with the
administration of the Fund.
``(4) Fund account.--The Secretary shall maintain such
accounts in the Fund as may be required by this title or
which the Secretary determines to be necessary to carry out
the provisions of this title.
``(b) Payments on Certification.--On receipt of a
certification from the Commission under section 505, except
as provided in subsection (c), the Secretary shall, subject
to
[[Page S428]]
the availability of appropriations, promptly pay the amount
certified by the Commission to the candidate out of the
Senate Election Campaign Fund.
``(c) Insufficient Funds.--
``(1) Withholding.--If, at the time of a certification by
the Commission under section 505 for payment to an eligible
Senate candidate, the Secretary determines that the monies in
the Senate Election Campaign Fund are not, or may not be,
sufficient to satisfy the full entitlement of all eligible
candidates, the Secretary shall withhold from the amount of
the payment any amount that the Secretary determines to be
necessary to ensure that each eligible Senate candidate will
receive the same pro rata share of the candidate's full
entitlement.
``(2) Subsequent payment.--Amounts withheld under paragraph
(1) shall be paid when the Secretary determines that there
are sufficient monies in the Senate Election Campaign Fund to
pay all or a portion of the funds withheld from all eligible
Senate candidates, but, if only a portion is to be paid, the
portion shall be paid in such a manner that each eligible
candidate receives an equal pro rata share.
``(3) Notification of estimated withholding.--
``(A) Advance estimate of available funds and projected
costs.--Not later than December 31 of any calendar year
preceding a calendar year in which there is a regularly
scheduled general election, the Secretary, after consultation
with the Commission, shall make an estimate of--
``(i) the amount of funds that will be available to make
payments under this title in the general election year; and
``(ii) the costs of implementing this title in the general
election year.
``(B) Notification.--If the Secretary determines that there
will be insufficient funds under subparagraph (A) for any
calendar year, the Secretary shall notify by registered mail
each candidate for the Senate on January 1 of that year (or,
if later, the date on which an individual becomes such a
candidate ) of the amount that the Secretary estimates will
be the pro rata withholding from each eligible Senate
candidate's payments under this subsection.
``(C) Increase in contribution limit.--The amount of an
eligible candidate's contribution limit under section
502(c)(1)(B)(iv) shall be increased by the amount of the
estimated pro rata withholding under subparagraph (B).
``(4) Notification of actual withholding.--
``(A) In general.--The Secretary shall notify the
Commission and each eligible Senate candidate by registered
mail of any actual reduction in the amount of any payment by
reason of this subsection.
``(B) Greater amount of withholding.--If the amount of a
withholding exceeds the amount estimated under paragraph (3),
an eligible Senate candidate's contribution limit under
section 502(c)(1)(B)(iv) shall be increased by the amount of
the excess.''.
(b) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendment made by subsection (a) shall apply to elections
occurring after December 31, 1998.
(2) Applicability to contributions and expenditures.--For
purposes of any expenditure or contribution limit imposed by
the amendment made by subsection (b)--
(A) no expenditure made before January 1, 1999, shall be
taken into account, except that there shall be taken into
account any such expenditure for goods or services to be
provided after that date; and
(B) all cash, cash items, and Government securities on hand
as of January 1, 1999, shall be taken into account in
determining whether the contribution limit is met, except
that there shall not be taken into account amounts used
during the 60-day period beginning on January 1, 1999, to pay
for expenditures that were incurred (but unpaid) before that
date.
(c) Effect of Invalidity on Other Provisions of Title.--If
section 502, 503, or 504 of the Federal Election Campaign Act
of 1971 (as added by subsection (a)) or any part of those
sections is held to be invalid, this Act and all amendments
made by this Act shall be treated as invalid.
(d) Provisions To Facilitate Voluntary Contributions to
Senate Election Campaign Fund.--
(1) General Rule.--Part VIII of subchapter A of chapter 61
of the Internal Revenue Code of 1986 (relating to returns and
records) is amended by adding at the end the following:
``Subpart B--Designation of Additional Amounts to Senate Election
Campaign Fund
``Sec. 6097. Designation of additional amounts.
``SEC. 6097. DESIGNATION OF ADDITIONAL AMOUNTS.
``(a) General Rule.--Every individual (other than a
nonresident alien) who files an income tax return for any
taxable year may designate an additional amount equal to $5
($10 in the case of a joint return) to be paid over to the
Senate Election Campaign Fund.
``(b) Manner and Time of Designation.--A designation under
subsection (a) may be made for any taxable year only at the
time of filing the income tax return for the taxable year.
Such designation shall be made on the page bearing the
taxpayer's signature.
``(c) Treatment of Additional Amounts.--Any additional
amount designated under subsection (a) for any taxable year
shall, for all purposes of law, be treated as an additional
income tax imposed by chapter 1 for such taxable year.
``(d) Income Tax Return.--For purposes of this section, the
term `income tax return' means the return of the tax imposed
by chapter 1.''.
(2) Conforming amendments.--(A) Part VIII of subchapter A
of chapter 61 of such Code is amended by striking the heading
and inserting:
``PART VIII--DESIGNATION OF AMOUNTS TO ELECTION CAMPAIGN FUNDS
``Subpart A. Presidential Election Campaign Fund.
``Subpart B. Designation of additional amounts to Senate Election
Campaign Fund.
``Subpart A--Presidential Election Campaign Fund''.
(B) The table of parts for subchapter A of chapter 61 of
such Code is amended by striking the item relating to part
VIII and inserting:
``Part VIII. Designation of amounts to election campaign funds.''
(3) Effective date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
SEC. 102. POLITICAL ACTION COMMITTEES.
(a) Limitations on Multicandidate Political Committee
Contributions to Candidates.--Section 315(a)(2) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(2))
is amended--
(1) by striking ``(2) No multicandidate'' and inserting the
following:
``(2) Multicandidate political committees.--
``(A) In general.--No multicandidate'';
(2) in subparagraph (A) by striking ``$5,000'' and
inserting ``$1,000'';
(3) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively; and
(4) by adding at the end the following:
``(B) Contributions to candidates.-- Notwithstanding
subparagraph (A)(i) it shall be unlawful for a multicandidate
political committee to make a contribution to a candidate for
election, or nomination for election, to the Senate or an
authorized committee of a Senate candidate, or for a Senate
candidate to accept a contribution, to the extent that the
making or accepting of the contribution would cause the
amount of contributions received by the candidate and the
candidate's authorized committees from multicandidate
political committees to exceed the lesser of--
``(i) $825,000; or
``(ii) 20 percent of the primary election expenditure
limit, runoff election expenditure limit, or general election
expenditure limit (as those terms are defined in section 501)
that is applicable (or, if the candidate were an eligible
Senate candidate (as defined in section 501) would be
applicable) to the candidate.''.
(b) Indexing.--The $825,000 amount under subparagraph (B)
shall be increased as of the beginning of each calendar year
based on the increase in the price index determined under
section 315(c) of the Federal Election Campaign Act of 1971
(2 U.S.C. 441a(c)), except that for purposes of subparagraph
(B), the base period shall be the calendar year 1996.
(c) Return of excess.--A candidate or authorized committee
that receives a contribution from a multicandidate political
committee in excess of the amount allowed under subparagraph
(B) shall return the amount of the excess contribution to the
contributor.
(d) Limitations on Multicandidate Committee Contributions
to Political Committees.--Paragraphs (1)(C) and (2)(A)(iii)
of section 315(a) of the Federal Election Campaign Act of
1971 (2 U.S.C. 441a(a)), as amended by subsection (a), are
amended by striking ``$5,000'' and inserting ``$1,000''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to elections (and
the election cycles relating thereto) occurring after
December 31, 1998.
(2) Applicability.--In applying the amendments made by this
section, there shall not be taken into account--
(A) a contribution made or received before January 1, 1999;
or
(B) a contribution made to, or received by, a candidate on
or after January 1, 1999, to the extent that the aggregate
amount of such contributions made to or received by the
candidate is not greater than the excess (if any) of--
(i) the aggregate amount of such contributions made to or
received by any opponent of the candidate before January 1,
1999; over
(ii) the aggregate amount of such contributions made to or
received by the candidate before January 1, 1999.
SEC. 103. REPORTING REQUIREMENTS.
Title III of the Federal Election Campaign Act of 1971 (2
U.S.C. 431 et seq.) is amended by inserting after section 304
the following:
``SEC. 304A. REPORTING REQUIREMENTS FOR SENATE CANDIDATES.
``(a) Meanings of Terms.--Any term used in this section
that is used in title V shall have the same meaning as when
used in title V.
``(b) Candidate Other Than Eligible Senate Candidate.--
``(1) Declaration of intent.--A candidate for the office of
Senator who does not file a certification with the Secretary
of the Senate under section 502(c) shall, at the time
[[Page S429]]
provided in section 502(c)(2), file with the Secretary of the
Senate a declaration as to whether the candidate intends to
make expenditures for the general election in excess of the
general election expenditure limit.
``(2) Reports.--
``(A) Initial report.--A candidate for the Senate who
qualifies for the ballot for a general election--
``(i) who is not an eligible Senate candidate under section
502; and
``(ii) who receives contributions in an aggregate amount or
makes or obligates to make expenditures in an aggregate
amount for the general election that exceeds 75 percent of
the general election expenditure limit;
shall file a report with the Secretary of the Senate within
24 hours after aggregate contributions have been received or
aggregate expenditures have been made or obligated to be made
in that amount (or, if later, within 24 hours after the date
of qualification for the general election ballot), setting
forth the candidate's aggregate amount of contributions
received and aggregate amount of expenditures made or
obligated to be made for the election as of the date of the
report.
``(B) Additional reports.--After an initial report is filed
under subparagraph (A), the candidate shall file additional
reports (until the amount of such contributions or
expenditures exceeds 200 percent of the general election
expenditure limit) with the Secretary of the Senate within 24
hours after each time additional contributions are received,
or expenditures are made or are obligated to be made, that in
the aggregate exceed an amount equal to 10 percent of the
general election expenditure limit and after the aggregate
amount of contributions or expenditures exceeds 133\1/3\,
166\2/3\, and 200 percent of the general election expenditure
limit.
``(3) Notification of other candidates.--The Commission--
``(A) shall, within 24 hours after receipt of a declaration
or report under paragraph (1) or (2), notify each eligible
Senate candidate of the filing of the declaration or report;
and
``(B) if an opposing candidate has received aggregate
contributions, or made or obligated to make aggregate
expenditures, in excess of the general election expenditure
limit, shall certify, under subsection (e), the eligibility
for payment of any amount to which an eligible Senate
candidate in the general election is entitled under section
504(a).
``(4) Action by the commission absent report.--
``(A) In general.--Notwithstanding the reporting
requirements under this subsection, the Commission may make
its own determination that a candidate in a general election
who is not an eligible Senate candidate has raised aggregate
contributions, or made or has obligated to make aggregate
expenditures, in the amounts that would require a report
under paragraph (2).
``(B) Notification of eligible senate candidates.--The
Commission shall--
``(i) within 24 hours after making a determination under
subparagraph (A), notify each eligible Senate candidate in
the general election of the making of the determination; and
``(ii) when the aggregate amount of contributions or
expenditures exceeds the general election expenditure limit,
certify under subsection (e) an eligible Senate candidate's
eligibility for payment of any amount under section 504(a).
``(c) Reports on Personal Funds.--
``(1) Filing.--A candidate for the Senate who, during an
election cycle, expends more than the personal funds
expenditure limit during the election cycle shall file a
report with the Secretary of the Senate within 24 hours after
expenditures have been made or loans incurred in excess of
the personal funds expenditure limit.
``(2) Notification of eligible senate candidates.--Within
24 hours after a report has been filed under paragraph (1),
the Commission shall notify each eligible Senate candidate in
the general election of the filing of the report.
``(3) Action by the commission absent report.--
``(A) In General.--Notwithstanding the reporting
requirements under this subsection, the Commission may make
its own determination that a candidate for the Senate has
made expenditures in excess of the amount under paragraph
(1).
``(B) Notification of eligible senate candidates.--Within
24 hours after making a determination under subparagraph (A),
the Commission shall notify each eligible Senate candidate in
the general election of the making of the determination.
``(d) Candidates for Other Offices.--
``(1) Filing.--Each individual--
``(A) who becomes a candidate for the office of United
States Senator;
``(B) who, during the election cycle for that office, held
any other Federal, State, or local office or was a candidate
for any such office; and
``(C) who expended any amount during the election cycle
before becoming a candidate for the office of United States
Senator that would have been treated as an expenditure if the
individual had been such a candidate (including amounts for
activities to promote the image or name recognition of the
individual);
shall, within 7 days after becoming a candidate for the
office of United States Senator, report to the Secretary of
the Senate the amount and nature of such expenditures.
``(2) Applicability.--Paragraph (1) shall not apply to any
expenditures in connection with a Federal, State, or local
election that has been held before the individual becomes a
candidate for the office of United States Senator.
``(3) Determination.--The Commission shall, as soon as
practicable, make a determination as to whether any amounts
reported under paragraph (1) were made for purposes of
influencing the election of the individual to the office of
Senator.
``(d) Basis of Certifications.--Notwithstanding section
505(a), the certification required by this section shall be
made by the Commission on the basis of reports filed in
accordance with this Act or on the basis of the Commission's
own investigation or determination.
``(e) Copies of Reports and Public Inspection.--The
Secretary of the Senate shall--
``(1) transmit a copy of any report or filing received
under this section or under title V (whenever a 24 hour
response is required of the Commission) as soon as possible
(but not later than 4 working hours of the Commission) after
receipt of the report or filing;
``(2) make the report or filing available for public
inspection and copying in the same manner as the Commission
under section 311(a)(4); and
``(3) preserve the reports and filings in the same manner
as the Commission under section 311(a)(5).''.
SEC. 104. DISCLOSURE BY CANDIDATES OTHER THAN ELIGIBLE SENATE
CANDIDATES.
Section 318 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441d) (as amended by section 133) is amended by adding
at the end the following:
``(f) Disclosure by Candidates Other Than Eligible Senate
Candidates.--A broadcast, cablecast, or other communication
that is paid for or authorized by a candidate in the general
election for the office of United States Senator who is not
an eligible Senate candidate, or the authorized committee of
such a candidate, shall contain the following sentence: `This
candidate has not agreed to voluntary campaign spending
limits.'.''.
Subtitle B--General Provisions
SEC. 131. BROADCAST RATES AND PREEMPTION.
(a) Broadcast Rates.--Section 315(b) of the Communications
Act of 1934 (47 U.S.C. 315(b)) is amended--
(1) by striking ``(b) The charges'' and inserting the
following:
``(b) Broadcast Media Rates.--
``(1) In general.--The charges'';
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and adjusting the
margins accordingly;
(3) in paragraph (1)(A) (as redesignated by paragraph
(2))--
(A) by striking ``forty-five'' and inserting ``30'';
(B) by striking ``sixty'' and inserting ``45''; and
(C) by striking ``lowest unit charge of the station for the
same class and amount of time for the same period'' and
inserting ``lowest charge of the station for the same amount
of time for the same period on the same date''; and
(4) by adding at the end the following:
``(2) Eligible senate candidates.--In the case of an
eligible Senate candidate (as described in section 501 of the
Federal Election Campaign Act), the charges for the use of a
television broadcasting station during the general election
period (as defined in section 301 of that Act) shall not
exceed 50 percent of the lowest charge described in paragraph
(1)(A).
(b) Preemption; Access.--Section 315 of the Communications
Act of 1947 (47 U.S.C. 315) is amended--
(1) by redesignating subsections (c) and (d) as subsections
(e) and (f), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Preemption.--
``(1) In general.--Except as provided in paragraph (2), a
licensee shall not preempt the use, during any period
specified in subsection (b)(1), of a broadcasting station by
a legally qualified candidate for public office who has
purchased and paid for such use pursuant to subsection
(b)(1).
``(2) Circumstances beyond control of licensee.--If a
program to be broadcast by a broadcasting station is
preempted because of circumstances beyond the control of the
broadcasting station, any candidate advertising spot
scheduled to be broadcast during that program may also be
preempted.''.
``(d) Time for Legally Qualified Senate Candidates.--In the
case of a legally qualified candidate for the United States
Senate, a licensee shall provide broadcast time without
regard to the rates charged for the time.''.
SEC. 132. EXTENSION OF REDUCED THIRD-CLASS MAILING RATES TO
ELIGIBLE SENATE CANDIDATES.
Section 3626(e) of title 39, United States Code, is
amended--
(1) in paragraph (2)(A)--
(A) by striking ``and the National'' and inserting ``the
National''; and
(B) by striking ``Committee;'' and inserting ``Committee,
and, subject to paragraph (3), the principal campaign
committee of an eligible House of Representatives or Senate
candidate;'';
(2) in paragraph (2)(B), by striking ``and'' after the
semicolon;
(3) in paragraph (2)(C), by striking the period and
inserting ``; and'';
(4) by adding after paragraph (2)(C) the following new
subparagraph:
[[Page S430]]
``(D) The terms `eligible Senate candidate' and `principal
campaign committee' have the meanings given those terms in
section 301 of the Federal Election Campaign Act of 1971.'';
and
(5) by adding after paragraph (2) the following paragraph:
``(3) The rate made available under this subsection with
respect to an eligible Senate candidate shall apply only to--
``(A) the general election period (as defined in section
301 of the Federal Election Campaign Act of 1971); and
``(B) that number of pieces of mail equal to the number of
individuals in the voting age population (as certified under
section 315(e) of such Act) of the congressional district or
State, whichever is applicable.''.
SEC. 133. CAMPAIGN ADVERTISING AMENDMENTS.
Section 318 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441d) is amended--
(1) in subsection (a)--
(A) by striking ``Whenever'' and inserting the following:
``(a) Disclosure.--When a political committee makes a
disbursement for the purpose of financing any communication
through any broadcasting station, newspaper, magazine,
outdoor advertising facility, mailing, or any other type of
general public political advertising, or when'';
(B) by striking ``an expenditure'' and inserting ``a
disbursement'';
(C) by striking ``direct''; and
(D) in paragraph (3), by inserting ``and permanent street
address'' after ``name'';
(2) in subsection (b), by inserting ``Same Charge as Charge
for Comparable Use.--'' before ``No''; and
(3) by adding at the end the following:
``(c) Requirements for Printed Communications.--A printed
communication described in subsection (a) shall be--
``(1) of sufficient type size to be clearly readable by the
recipient of the communication;
``(2) contained in a printed box set apart from the other
contents of the communication; and
``(3) consist of a reasonable degree of color contrast
between the background and the printed statement.
``(d) Requirements for Broadcast and Cablecast
Communications.--
``(1) Paid for or authorized by the candidate.--
``(A) In general.--A broadcast or cablecast communication
described in paragraph (1) or (2) of subsection (a) shall
include, in addition to the requirements of those paragraphs,
an audio statement by the candidate that identifies the
candidate and states that the candidate has approved the
communication.
``(B) Televised communications.--A broadcast or cablecast
communication described in paragraph (1) that is broadcast or
cablecast by means of television shall include, in addition
to the audio statement under subparagraph (A), a written
statement--
``(i) that states: `I [name of candidate] am a candidate
for [the office the candidate is seeking], and I have
approved this message';
``(ii) that appears at the end of the communication in a
clearly readable manner with a reasonable degree of color
contrast between the background and the printed statement,
for a period of at least 4 seconds; and
``(iii) that is accompanied by a clearly identifiable
photographic or similar image of the candidate.
``(2) Not paid for or authorized by the candidate.--A
broadcast or cablecast communication described in subsection
(a)(3) shall include, in addition to the requirements of that
paragraph, in a clearly spoken manner, the statement--
`____________________ is responsible for the content of
this advertisement.';
with the blank to be filled in with the name of the political
committee or other person paying for the communication and
the name of any connected organization of the payor; and, if
the communication is broadcast or cablecast by means of
television, the statement shall also appear in a clearly
readable manner with a reasonable degree of color contrast
between the background and the printed statement, for a
period of at least 4 seconds.''.
SEC. 134. DEFINITIONS.
(a) In General.--Section 301 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431) is amended by striking
paragraph (19) and inserting the following:
``(19) The term `general election'--
``(A) means an election that will directly result in the
election of a person to a Federal office; but
``(B) does not include an open primary election.
``(20) The term `general election period' means, with
respect to a candidate, the period beginning on the day after
the date of the primary or runoff election for the specific
office that the candidate is seeking, whichever is later, and
ending on the earlier of--
``(A) the date of the general election; or
``(B) the date on which the candidate withdraws from the
campaign or otherwise ceases actively to seek election.
``(21) The term `immediate family' means--
``(A) a candidate's spouse;
``(B) a child, stepchild, parent, grandparent, brother,
half-brother, sister, or half-sister of the candidate or the
candidate's spouse; and
``(C) the spouse of any person described in subparagraph
(B).
``(22) The term `major party' has the meaning given the
term in section 9002(6) of the Internal Revenue Code of 1986,
except that if a candidate qualified under State law for the
ballot in a general election in an open primary in which all
the candidates for the office participated and which resulted
in the candidate and at least 1 other candidate's qualifying
for the ballot in the general election, the candidate shall
be treated as a candidate of a major party for purposes of
title V.
``(23) The term `primary election' means an election that
may result in the selection of a candidate for the ballot in
a general election for a Federal office.
``(24) The term `primary election period' means, with
respect to a candidate, the period beginning on the day
following the date of the last election for the specific
office that the candidate is seeking and ending on the
earlier of--
``(A) the date of the first primary election for that
office following the last general election for that office;
or
``(B) the date on which the candidate withdraws from the
election or otherwise ceases actively to seek election.
``(25) The term `runoff election' means an election held
after a primary election that is prescribed by applicable
State law as the means for deciding which candidate will be
on the ballot in the general election for a Federal office.
``(26) The term `runoff election period' means, with
respect to any candidate, the period beginning on the day
following the date of the last primary election for the
specific office that the candidate is seeking and ending on
the date of the runoff election for that office.
``(27) The term `voting age population' means the number of
residents of a State who are 18 years of age or older, as
certified under section 315(e).
``(28) The term `election cycle' means--
``(A) in the case of a candidate or the authorized
committees of a candidate, the period beginning on the day
after the date of the most recent general election for the
specific office or seat that the candidate is seeking and
ending on the date of the next general election for that
office or seat; and
``(B) in the case of all other persons, the period
beginning on the first day following the date of the last
general election and ending on the date of the next general
election.''.
``(29) The term `lobbyist' means--
``(A) a person required to register under the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) or the Foreign
Agents Registration Act of 1938 (22 U.S.C. 611 et seq.); and
``(B) a person who receives compensation in return for
having contact with Congress on any legislative matter.''.
(b) Identification.--Section 301(13) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(13)) is amended
by striking ``mailing address'' and inserting ``permanent
residence address''.
SEC. 135. PROVISIONS RELATING TO FRANKED MASS MAILINGS.
(a) Mass Mailings of Senators.--Section 3210(a)(6) of title
39, United States Code, is amended--
(1) in subparagraph (A), by striking ``It is the intent of
Congress that a Member of, or a Member-elect to, Congress''
and inserting ``A Member of, or Member-elect to, the House'';
and
(2) in subparagraph (C)--
(A) by striking ``if such mass mailing is postmarked fewer
than 60 days immediately before the date'' and inserting ``if
such mass mailing is postmarked during the calendar year'';
and
(B) by inserting ``or reelection'' before the period.
(b) Mass Mailings of House Members.--Section 3210 of title
39, United States Code, is amended--
(1) in subsection (a)(7) by striking ``, except that--''
and all that follows through the end of subparagraph (B) and
inserting a period; and
(2) in subsection (d)(1) by striking ``delivery--'' and all
that follows through the end of subparagraph (B) and
inserting ``delivery within that area constituting the
congressional district or State from which the Member was
elected.''.
(c) Prohibition on Use of Official Funds.--The Committee on
House Administration of the House of Representatives may not
approve any payment, nor may a Member of the House of
Representatives make any expenditure from, any allowance of
the House of Representatives or any other official funds if
any portion of the payment or expenditure is for any cost
related to a mass mailing by a Member of the House of
Representatives outside the congressional district of the
Member.
TITLE II--INDEPENDENT EXPENDITURES
SEC. 201. DEFINITIONS.
(a) Independent Expenditure; Express Advocacy.--Section 301
of the Federal Election Campaign Act of 1971 (2 U.S.C. 431)
is amended by striking paragraphs (17) and (18) and inserting
the following:
``(17) Independent expenditure.--
``(A) In general.--The term `independent expenditure' means
an expenditure for an advertisement or other communication
that--
``(i) contains express advocacy; and
``(ii) is made without the participation or cooperation of,
or without the consultation of, a candidate or a candidate's
representative.
``(B) Exclusions.--The term `independent expenditure' does
not include the following:
[[Page S431]]
``(i) An expenditure made by--
``(I) an authorized committee of a candidate; or
``(II) a political committee of a political party.
``(ii) An expenditure if there is any arrangement,
coordination, or direction with respect to the expenditure
between the candidate or the candidate's representative and
the person making the expenditure.
``(iii) An expenditure if, in the same election cycle, the
person making the expenditure--
``(I) is or has been authorized to raise or expend funds on
behalf of the candidate or the candidate's authorized
committees; or
``(II) is serving or has served as a member, employee, or
agent of the candidate's authorized committees in an
executive or policymaking position.
``(iv) An expenditure if the person making the expenditure
has played a significant role in advising or counseling the
candidate or the candidate's agents at any time on the
candidate's plans, projects, or needs relating to the
candidate's pursuit of nomination for election, or election,
to Federal office, in the same election cycle, including any
advice relating to the candidate's decision to seek Federal
office.
``(v) An expenditure if the person making the expenditure
retains the professional services of any individual or other
person also providing services in the same election cycle to
the candidate in connection with the candidate's pursuit of
nomination for election, or election, to Federal office,
including any services relating to the candidate's decision
to seek Federal office.
``(C) Definitions.--For purposes of subparagraph (B)--
``(i) the person making the expenditure includes any
officer, director, employee, or agent of a person; and
``(ii) the term `professional service' includes any service
(other than legal and accounting services for purposes of
ensuring compliance with this title) in support of a
candidate's pursuit of nomination for election, or election,
to Federal office.
``(18) Express advocacy.--
``(A) In general.--The term `express advocacy' means a
communication that is taken as a whole and with limited
reference to external events, makes an expression of support
for or opposition to a specific candidate, to a specific
group of candidates, or to candidates of a particular
political party.
``(B) Expression of support for or opposition to.--In
subparagraph (A), the term `expression of support for or
opposition to' includes a suggestion to take action with
respect to an election, such as to vote for or against, make
contributions to, or participate in campaign activity, or to
refrain from taking action.''.
``(C) Voting records.--The term `express advocacy' does not
include the publication and distribution of a communication
that is limited to providing information about votes by
elected officials on legislative matters and that does not
expressly advocate the election or defeat of a clearly
identified candidate.''.
(b) Contribution Definition Amendment.--Section 301(8)(A)
of the Federal Election Campaign Act of 1971 (2 U.S.C.
431(8)(A)) is amended--
(1) by striking ``or'' at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ``; or''; and
(3) by adding at the end the following:
``(iii) any payment or other transaction referred to in
paragraph (17)(A)(i) that is excluded from the meaning of
`independent expenditure' under paragraph (17)(B).''.
SEC. 202. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT
EXPENDITURES.
(a) In General.--Section 304 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 434) is amended by adding at
the end the following:
``(d) Time for Reporting Certain Expenditures.--
``(1) Expenditures aggregating $1,000.--
``(A) Initial report.--A person (including a political
committee) that makes independent expenditures aggregating
$1,000 or more after the 20th day, but more than 24 hours,
before an election shall file a report describing the
expenditures within 24 hours after that amount of independent
expenditures has been made.
``(B) Additional reports.--After a person files a report
under subparagraph (A), the person filing the report shall
file an additional report each time that independent
expenditures aggregating an additional $1,000 are made with
respect to the same election as that to which the initial
report relates.
``(2) Expenditures aggregating $10,000.--
``(A) Initial report.--A person (including a political
committee) that makes independent expenditures aggregating
$10,000 or more at any time up to and including the 20th day
before an election shall file a report describing the
expenditures within 48 hours that amount of independent
expenditures has been made.
``(B) Additional reports.--After a person files a report
under subparagraph (A), the person filing the report shall
file an additional report each time that independent
expenditures aggregating an additional $10,000 are made with
respect to the same election as that to which the initial
report relates.
``(3) Place of filing; contents; transmittal.--
``(A) Place of filing; contents.--A report under this
subsection--
``(i) shall be filed with the Commission; and
``(ii) shall contain the information required by subsection
(b)(6)(B)(iii), including whether each independent
expenditure was made in support of, or in opposition to, a
candidate.
``(B) Transmittal to candidates.--In the case of an
election for United States Senator, not later than 48 hours
after receipt of a report under this subsection, the
Commission shall transmit a copy of the report to each
eligible candidate seeking nomination for election to, or
election to, the office in question.
``(4) Obligation to make expenditure.--For purposes of this
subsection, an expenditure shall be treated as being made
when it is made or obligated to be made.
``(5) Determinations by the Commission.--
``(A) In general.--The Commission may, upon a request of a
candidate or on its own initiative, make its own
determination that a person, including a political committee,
has made, or has incurred obligations to make, independent
expenditures with respect to any candidate in any Federal
election that in the aggregate exceed the applicable amounts
under paragraph (1) or (2).
``(B) Notification.--In the case of a United States
Senator, the Commission shall notify each candidate in the
election of the making of the determination within 2 business
days after making the determination.
``(C) Time to comply with request for determination.--A
determination made at the request of a candidate shall be
made with 48 hours of the request.
``(6) Notification of an allowable increase in independent
expenditure limit.--When independent expenditures totaling in
the aggregate $10,000 have been made in the same election in
favor of another candidate or against an eligible Senate
candidate, the Commission shall, within 2 business days,
notify the eligible candidate that such candidate is entitled
to an increase under section 503(e) in the candidate's
applicable election limit in an amount equal to the amount of
such independent expenditures.''.
TITLE III--EXPENDITURES
Subtitle A--Personal Funds; Credit
SEC. 301. CONTRIBUTIONS AND LOANS FROM PERSONAL FUNDS.
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) is amended by adding at the end the following:
``(i) Limitations on Repayment of Loans and Return of
Contributions From Personal Funds.--
``(1) Repayment of loans.--If a candidate or a member of
the candidate's immediate family made a loan to the candidate
or to the candidate's authorized committees during an
election cycle, no contribution received after the date of
the general election for the election cycle may be used to
repay the loan.
``(2) Return of contributions.--No contribution by a
candidate or member of the candidate's immediate family may
be returned to the candidate or member other than as part of
a pro rata distribution of excess contributions to all
contributors.''.
SEC. 302. EXTENSIONS OF CREDIT.
Section 301(8)(A) of the Federal Election Campaign Act of
1971 (2 U.S.C. 431(8)(A)), as amended by section 201(b), is
amended--
(1) by striking ``or'' at the end of clause (ii);
(2) by striking the period at the end of clause (iii) and
inserting ``; or''; and
(3) by inserting at the end the following:
``(iv) with respect to a candidate and the candidate's
authorized committees, any extension of credit for goods or
services relating to advertising on a broadcasting station,
in a newspaper or magazine, or by a mailing, or relating to
other similar types of general public political advertising,
if the extension of credit is--
``(I) in an amount greater than $1,000; and
``(II) for a period greater than the period, not in excess
of 60 days, for which credit is generally extended in the
normal course of business after the date on which the goods
or services are furnished or the date of a mailing.''.
Subtitle B--Soft Money of Political Party Committees
SEC. 311. SOFT MONEY OF POLITICAL PARTY COMMITTEES.
(a) Soft Money of Committees of Political Parties.--Title
III of the Federal Election Campaign Act of 1971 (2 U.S.C.
431 et seq.) is amended by adding at the end the following:
``SEC. 324. SOFT MONEY OF POLITICAL PARTY COMMITTEES.
``(a) National Committees.--A national committee of a
political party and the congressional campaign committees of
a political party (including a national congressional
campaign committee of a political party, an entity that is
established, financed, maintained, or controlled by the
national committee, a national congressional campaign
committee of a political party, and an officer or agent of
any such party or entity but not including an entity
regulated under subsection (b)) shall not solicit or accept
an amount or spend any funds, or solicit or accept a transfer
from another political committee, that is not subject to the
limitations, prohibitions, and reporting requirements of this
Act.
``(b) State, District, and Local Committees.--
``(1) In general.--Any amount that is expended or disbursed
by a State, district, or
[[Page S432]]
local committee of a political party (including an entity
that is established, financed, maintained, or controlled by a
State, district, or local committee of a political party and
an agent or officer of any such committee or entity) during a
calendar year in which a Federal election is held, for any
activity that might affect the outcome of a Federal election,
including any voter registration or get-out-the-vote
activity, any generic campaign activity, and any
communication that identifies a candidate (regardless of
whether a candidate for State or local office is also
mentioned or identified) shall be made from funds subject to
the limitations, prohibitions, and reporting requirements of
this Act.
``(2) Activity excluded from paragraph (1).--
``(A) In general.--Paragraph (1) shall not apply to an
expenditure or disbursement made by a State, district, or
local committee of a political party for--
``(i) a contribution to a candidate for State or local
office if the contribution is not designated or otherwise
earmarked to pay for an activity described in paragraph (1);
``(ii) the costs of a State, district, or local political
convention;
``(iii) the non-Federal share of a State, district, or
local party committee's administrative and overhead expenses
(but not including the compensation in any month of any
individual who spends more than 20 percent of the
individual's time on activity during the month that may
affect the outcome of a Federal election) except that for
purposes of this paragraph, the non-Federal share of a party
committee's administrative and overhead expenses shall be
determined by applying the ratio of the non-Federal
disbursements to the total Federal expenditures and non-
Federal disbursements made by the committee during the
previous presidential election year to the committee's
administrative and overhead expenses in the election year in
question;
``(iv) the costs of grassroots campaign materials,
including buttons, bumper stickers, and yard signs that name
or depict only a candidate for State or local office; and
(v) the cost of any campaign activity conducted solely on
behalf of a clearly identified candidate for State or local
office, if the candidate activity is not an activity
described in paragraph (1).
``(B) Fundraising costs.--Any amount spent by a national,
State, district, or local committee, by an entity that is
established, financed, maintained or controlled by a State,
district, or local committee of a political party, or by an
agent or officer of any such committee or entity to raise
funds that are used, in whole or in part, in connection with
an activity described in paragraph (1) shall be made from
funds subject to the limitations, prohibitions, and reporting
requirements of this Act.
``(c) Tax-exempt organizations.--No national, State,
district, or local committee of a political party shall
solicit any funds for or make any donations to an
organization that is exempt from Federal taxation under
section 501(c) of the Internal Revenue Code of 1986.
``(d) Candidates.--
``(1) In general.--Except as provided in paragraph (2), no
candidate, individual holding Federal office, or agent of a
candidate or individual holding Federal office may--
``(A) solicit or receive funds in connection with an
election for Federal office unless the funds are subject to
the limitations, prohibitions, and reporting requirements of
this Act; or
``(B) solicit or receive funds that are to be expended in
connection with any election for other than a Federal
election unless the funds--
``(i) are not in excess of the amounts permitted with
respect to contributions to candidates and political
committees under section 315(a) (1) and (2); and
``(ii) are not from sources prohibited by this Act from
making contributions with respect to an election for Federal
office.
``(2) Exception.--Paragraph (1) does not apply to the
solicitation or receipt of funds by an individual who is a
candidate for a State or local office if the solicitation or
receipt of funds is permitted under State law for the
individual's State or local campaign committee.''.
SEC. 312. REPORTING REQUIREMENTS.
(a) Reporting Requirements.--Section 304 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434) is amended by
adding at the end the following:
``(d) Political Committees.--
``(1) National and congressional political committees.--The
national committee of a political party, a congressional
campaign committee of a political party, and any subordinate
committee of a national committee or congressional campaign
committee of a political party, shall report all receipts and
disbursements during the reporting period, whether or not in
connection with an election for Federal office.
``(2) Other political committees to which section 324
applies.--A political committee (not described in paragraph
(1)) to which section 324 applies shall report all receipts
and disbursements.
``(3) Transfers.--A political committee to which section
324 applies shall--
``(A) include in a report under paragraph (1) or (2) the
amount of any transfer described in section 324(d)(2); and
``(B) itemize those amounts to the extent required by
section 304(b)(3)(A).
``(4) Other political committees.--Any political committee
to which paragraph (1) or (2) does not apply shall report any
receipts or disbursements that are used in connection with a
Federal election.
``(5) Itemization.--If a political committee has receipts
or disbursements to which this subsection applies from any
person aggregating in excess of $200 for any calendar year,
the political committee shall separately itemize its
reporting for the person in the same manner as under
paragraphs (3)(A), (5), and (6) of subsection (b).
``(6) Reporting periods.--Reports required to be filed by
this subsection shall be filed for the same time periods as
reports are required for political committees under
subsection (a).''.
(b) Report of Exempt Contributions.--Section 301(8) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is
amended by adding at the end the following:
``(C) Reporting requirement.--The exclusion provided in
subparagraph (B)(viii) shall not apply for purposes of any
requirement to report contributions under this Act, and all
such contributions aggregating in excess of $200 shall be
reported.''.
(c) Reports by State Committees.--Section 304 of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434 (as
amended by subsection (a)) is amended by adding at the end
the following:
``(f) Filing of State Reports.--In lieu of any report
required to be filed under this Act, the Commission may allow
a State committee of a political party to file with the
Commission a report required to be filed under State law if
the Commission determines that such a report contains
substantially the same information as a report required under
this Act.''.
(d) Other Reporting Requirements.--
(1) Authorized committees.--Section 304(b)(4) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(4)) is
amended--
(A) by striking ``and'' at the end of subparagraph (H);
(B) by inserting ``and'' at the end of subparagraph (I);
and
(C) by adding at the end the following:
``(J) in the case of an authorized committee, disbursements
for the primary election, the general election, and any other
election in which the candidate participates;''.
(2) Names and addresses.--Section 304(b)(5)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(5)(A))
is amended--
(A) by striking ``within the calendar year''; and
(B) by striking ``such operating expenditures'' and
inserting ``operating expenses, and the election to which the
operating expense relates''.
TITLE IV--CONTRIBUTIONS
SEC. 401. CONTRIBUTIONS THROUGH INTERMEDIARIES AND CONDUITS;
PROHIBITION ON CERTAIN CONTRIBUTIONS BY
LOBBYISTS.
(a) Contributions Through Intermediaries and Conduits.--
Section 315(a)(8) of FECA (2 U.S.C. 441a(a)(8)) is amended by
striking paragraph (8) and inserting the following:
``(8) Intermediaries and conduits.--
``(A) Definitions.--In this paragraph:
``(i) Acting on behalf of the entity.--The term `acting on
behalf of the entity' means soliciting one or more
contributions--
``(I) in the name of an entity;
``(II) using other than incidental resources of an entity;
or
``(III) by directing a significant portion of the
solicitations to other officers, employees, agents, or
members of an entity or their spouses, or by soliciting a
significant portion of the other officers, employees, agents,
or members of an entity or their spouses.
``(ii) Bundler.--The term `bundler' means an intermediary
or conduit that is any of the following persons or entities:
``(I) A political committee (other than the authorized
campaign committee of the candidate that receives
contributions as described in subparagraph (B) or (C)).
``(II) Any officer, employee or agent of a political
committee described in subclause (I).
``(III) An entity.
``(IV) Any officer, employee, or agent of an entity who is
acting on behalf of the entity.
``(V) A person required to be listed as a lobbyist on a
registration or other report filed pursuant to the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) or any
successor law that requires reporting on the activities of a
person who is a lobbyist or foreign agent.
``(iii) Deliver.--The term `deliver' means to deliver
contributions to a candidate by any method of delivery used
or suggested by a bundler that communicates to the candidate
(or to the person who receives the contributions on behalf of
the candidate) that the bundler collected the contributions
for the candidate, including such methods as--
``(I) personal delivery;
``(II) United States mail or similar services;
``(III) messenger service; and
``(IV) collection at an event or reception.
``(iv) Entity.--The term `entity' means a corporation,
labor organization, or partnership.
``(B) Treatment as contributions from persons by whom
made.--
[[Page S433]]
``(i) In general.--For purposes of the limitations imposed
by this section, all contributions made by a person, either
directly or indirectly, on behalf of a candidate, including
contributions that are in any way earmarked or otherwise
directed through an intermediary or conduit to the candidate,
shall be treated as contributions from the person to the
candidate.
``(ii) Reporting.--The intermediary or conduit through
which a contribution is made shall report the name of the
original contributor and the intended recipient of the
contribution to the Commission and to the intended recipient.
``(C) Treatment as contributions from the bundler.--
Contributions that a bundler delivers to a candidate, agent
of the candidate, or the candidate's authorized committee
shall be treated as contributions from the bundler to the
candidate as well as from the original contributor.
``(D) No limitation on or prohibition of certain
activities.--This subsection does not--
``(i) limit fundraising efforts for the benefit of a
candidate that are conducted by another candidate or Federal
officeholder; or
``(ii) prohibit any individual described in subparagraph
(A)(ii)(IV) from soliciting, collecting, or delivering a
contribution to a candidate, agent of the candidate, or the
candidate's authorized committee if the individual is not
acting on behalf of the entity.''.
(b) Prohibition of Certain Contributions by Lobbyists.--
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) (as amended by section 314(b)) is amended by
adding at the end the following:
``(m) Prohibition of Certain Contributions by Lobbyists.--
``(1) In general.--A lobbyist, or a political committee
controlled by a lobbyist, shall not make a contribution to or
solicit contributions for or on behalf of--
``(A) a Federal officeholder or candidate for Federal
office if, during the preceding 12 months, the lobbyist has
made a lobbying contact with the officeholder or candidate;
or
``(B) any authorized committee of the President or Vice
President of the United States if, during the preceding 12
months, the lobbyist has made a lobbying contact with a
covered executive branch official.
``(2) Contributions to member of congress or candidate for
congress.--A lobbyist who, or a lobbyist whose political
committee, has made a contribution to a member of Congress or
candidate for Congress (or any authorized committee of the
President) shall not, during the 12 months following such
contribution, make a lobbying contact with the member or
candidate who becomes a member of Congress or with a covered
executive branch official.
``(3) Solicitation of contributions.--If a lobbyist advises
or otherwise suggests to a client of the lobbyist (including
a client that is the lobbyist's regular employer), or to a
political committee that is funded or administered by such a
client, that the client or political committee should make a
contribution to or solicit a contribution for or on behalf
of--
``(A) a member of Congress or candidate for Congress, the
making or soliciting of such a contribution is prohibited if
the lobbyist has made a lobbying contact with the member of
Congress within the preceding 12 months; or
``(B) an authorized committee of the President or Vice
President, the making or soliciting of such a contribution
shall be unlawful if the lobbyist has made a lobbying contact
with a covered executive branch official within the preceding
12 months.
``(4) Definitions.--In this subsection, the terms `covered
executive branch official', `lobbying contact', and
`lobbyist' have the meanings given those terms in section 3
of the Federal Lobbying Disclosure Act of 1995 (2 U.S.C.
1602), except that--
``(A) the term `lobbyist' includes a person required to
register under the Foreign Agents Registration Act of 1938
(22 U.S.C. 611 et seq.); and
``(B) for purposes of this subsection, a lobbyist shall be
considered to make a lobbying contact or communication with a
member of Congress if the lobbyist makes a lobbying contact
or communication with--
``(i) the member of Congress;
``(ii) any person employed in the office of the member of
Congress; or
``(iii) any person employed by a committee, joint
committee, or leadership office who, to the knowledge of the
lobbyist, was employed at the request of or is employed at
the pleasure of, reports primarily to, represents, or acts as
the agent of the member of Congress.''.
SEC. 402. CONTRIBUTIONS BY DEPENDENTS NOT OF VOTING AGE.
Section 315 of the Federal Election Campaign Act of 1971 (2
U.S.C. 441a) (as amended by section 401(c)) is amended by
adding at the end the following:
``(n) Dependents Not of Voting Age.--
``(1) In general.--For purposes of this section, any
contribution by an individual who--
``(A) is a dependent of another individual; and
``(B) has not, as of the time of the making of the
contribution, attained the legal age for voting in an
election to Federal office in the State in which the
individual resides;
shall be treated as having been made by the other individual.
``(2) Allocation between spouses.--If such individual
described in paragraph (1) is the dependent of another
individual and the individual's spouse, a the contribution
described in paragraph (1) shall be allocated among such
individuals in the manner determined by them.''.
SEC. 403. CONTRIBUTIONS TO CANDIDATES FROM STATE AND LOCAL
COMMITTEES OF POLITICAL PARTIES TO BE
AGGREGATED.
Section 315(a) of the Federal Election Campaign Act of 1971
(2 U.S.C. 441a(a)) is amended by adding at the end the
following:
``(9) Aggregation of contributions from State and local
committees of political parties.--Notwithstanding paragraph
(5)(B), a candidate may not accept, with respect to an
election, any contribution from a State or local committee of
a political party (including any subordinate committee of
such a committee), if the contribution, when added to the
total of contributions previously accepted from all such
committees of that political party, exceeds would cause the
total amount of contributions to exceed a limitation on
contributions to a candidate under this section.''.
SEC. 404. LIMITED EXCLUSION OF ADVANCES BY CAMPAIGN WORKERS
FROM THE DEFINITION OF THE TERM
``CONTRIBUTION''.
Section 301(8)(B) of the Federal Election Campaign Act of
1971 (2 U.S.C. 431(8)(B)) is amended--
(1) in clause (xiii), by striking ``and'' after the
semicolon at the end;
(2) in clause (xiv), by striking the period at the end and
inserting: ``; and''; and
(3) by adding at the end the following new clause:
``(xv) any advance voluntarily made on behalf of an
authorized committee of a candidate by an individual in the
normal course of such individual's responsibilities as a
volunteer for, or employee of, the committee, if the advance
is reimbursed by the committee within 10 days after the date
on which the advance is made, and the value of advances on
behalf of a committee does not exceed $500 with respect to an
election.''.
TITLE V--REPORTING REQUIREMENTS
SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CALENDAR YEAR
BASIS TO AN ELECTION CYCLE BASIS.
Paragraphs (2) through (7) of section 304(b) of Federal
Election Campaign Act of 1971 (2 U.S.C. 434(b)(2)-(7)) are
amended by inserting after ``calendar year'' each place it
appears the following: ``(election cycle, in the case of an
authorized committee of a candidate for Federal office)''.
SEC. 502. PERSONAL AND CONSULTING SERVICES.
Section 304(b)(5)(A) of Federal Election Campaign Act of
1971 (2 U.S.C. 434(b)(5)(A)) is amended by adding before the
semicolon at the end the following: ``, except that if a
person to whom an expenditure is made is merely providing
personal or consulting services and is in turn making
expenditures to other persons (not including employees) who
provide goods or services to the candidate or his or her
authorized committees, the name and address of such other
person, together with the date, amount and purpose of such
expenditure shall also be disclosed''.
SEC. 503. CONTRIBUTIONS OF $50 OR MORE.
Section 304(b)(2)(A) of Federal Election Campaign Act of
1971 (2 U.S.C. 434(b)2)(A)) is amended by inserting ``,
including the name and address of each person who makes
contributions aggregating at least $50 but not more than $200
during the calendar year'' after ``political committees''.
SEC. 504. COMPUTERIZED INDICES OF CONTRIBUTIONS.
Section 311(a) of Federal Election Campaign Act of 1971 (2
U.S.C. 438(a)) is amended--
(1) by striking ``and'' at the end of paragraph (9);
(2) by striking the period at the end of paragraph (10) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(11) maintain computerized indices of contributions of
$50 or more.''.
TITLE VI--FEDERAL ELECTION COMMISSION
SEC. 601. USE OF CANDIDATES' NAMES.
Section 302(e)(4) of Federal Election Campaign Act of 1971
(2 U.S.C. 432(e)(4)) is amended to read as follows:
``(4) Name of political committee.--
(A) Authorized committee.--The name of each authorized
committee shall include the name of the candidate who
authorized the committee under paragraph (1).
``(B) Unauthorized committee.--A political committee that
is not an authorized committee shall not include the name of
any candidate in its name or use the name of any candidate in
any activity on behalf of such committee in such a context as
to suggest that the committee is an authorized committee of
the candidate or that the use of the candidate's name has
been authorized by the candidate.''.
SEC. 602. REPORTING REQUIREMENTS.
(a) Option To File Monthly Reports--Section 304(a)(2) of
Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(2)) is
amended--
(1) in subparagraph (A) by striking ``and'' at the end;
(2) in subparagraph (B) by striking the period at the end
and inserting ``; and''; and
(3) by inserting the following new subparagraph at the end:
``(C) in lieu of the reports required by subparagraphs (A)
and (B), the treasurer may file monthly reports in all
calendar years,
[[Page S434]]
which shall be filed no later than the 15th day after the
last day of the month and shall be complete as of the last
day of the month, except that, in lieu of filing the reports
otherwise due in November and December of any year in which a
regularly scheduled general election is held, a pre-primary
election report and a pre-general election report shall be
filed in accordance with subparagraph (A)(i), a post-general
election report shall be filed in accordance with
subparagraph (A)(ii), and a year end report shall be filed no
later than January 31 of the following calendar year.''.
(b) Filing Date.--Section 304(a)(4)(B) of Federal Election
Campaign Act of 1971 (2 U.S.C. 434(a)(4)(B)) is amended by
striking ``20th'' and inserting ``15th''.
SEC. 603. PROVISIONS RELATING TO THE GENERAL COUNSEL OF THE
COMMISSION.
(a) Vacancy in the Office of General Counsel.--Section
306(f) of Federal Election Campaign Act of 1971 (2 U.S.C.
437c(f)) is amended by adding at the end the following:
``(5) Vacancy.--In the event of a vacancy in the office of
general counsel, the next highest ranking enforcement
official in the general counsel's office shall serve as
acting general counsel with full powers of the general
counsel until a successor is appointed.''.
(b) Pay of the General Counsel.--Section 306(f)(1) of
Federal Election Campaign Act of 1971 (2 U.S.C. 437c(f)(1))
is amended--
(1) by inserting ``and the general counsel'' after ``staff
director'' in the second sentence; and
(2) by striking the third sentence.
SEC. 604. PENALTIES.
(a) Penalties Prescribed in Conciliation Agreements.--
(1) Civil penalty for violation of Act.--Section
309(a)(5)(A) of Federal Election Campaign Act of 1971 (2
U.S.C. 437g(a)(5)(A)) is amended by striking ``which does not
exceed the greater of $5,000 or an amount equal to any
contribution or expenditure involved in such violation'' and
inserting ``which is--
``(i) not less than 50 percent of all contributions and
expenditures involved in the violation (or such lesser amount
as the Commission provides if necessary to ensure that the
penalty is not unjustly disproportionate to the violation);
and
``(ii) not greater than all contributions and expenditures
involved in the violation''.
(2) Penalty for knowing and willful violation of Act.--
Section 309(a)(5)(B) of Federal Election Campaign Act of 1971
(2 U.S.C. 437g(a)(5)(B)) is amended by striking ``which does
not exceed the greater of $10,000 or an amount equal to 200
percent of any contribution or expenditure involved in such
violation'' and inserting ``which is--
``(i) not less than all contributions and expenditures
involved in the violation; and
``(ii) not greater than 150 percent of all contributions
and expenditures involved in the violation''.
(b) Penalties When Violations Are Adjudicated in Court.--
(1) Commission proceedings instituted for an order.--
Section 309(a)(6)(A) of Federal Election Campaign Act of 1971
(2 U.S.C. 437g(a)(6)(A)) is amended by striking all that
follows ``appropriate order'' and inserting ``, including an
order for a civil penalty in the amount determined under
subparagraph (A) or (B) in the district court of the United
States for the district in which the defendant resides,
transacts business, or may be found.''.
(2) Court orders.--Section 309(a)(6)(B) of Federal Election
Campaign Act of 1971 (2 U.S.C. 437g(a)(6)(B)) is amended by
striking all that follows ``other order'' and inserting ``,
including an order for a civil penalty which is--
``(i) not less than all contributions and expenditures
involved in the violation; and
``(ii) not greater than 200 percent of all contributions
and expenditures involved in the violation;
upon a proper showing that the person involved has committed,
or is about to commit (if the relief sought is a permanent or
temporary injunction or a restraining order), a violation of
this Act or chapter 95 of chapter 96 of the Internal Revenue
Code of 1986.''.
(3) Knowing and willful violation penalty.--Section
309(a)(6)(C) of Federal Election Campaign Act of 1971 (29
U.S.C. 437g(6)(C)) is amended by striking ``a civil penalty''
and all that follows and inserting ``a civil penalty which
is--''
``(i) not less than 200 percent of all contributions and
expenditures involved in the violation; and
``(ii) not greater than 250 percent of all contributions
and expenditures involved in the violation.''.
SEC. 605. RANDOM AUDITS.
Section 311(b) of Federal Election Campaign Act of 1971 (2
U.S.C. 438(b)) is amended--
(1) by inserting ``(1)'' before ``The Commission''; and
(2) by adding at the end the following new paragraph:
``(2) Random audits.--
``(A) In general.--Notwithstanding paragraph (1), the
Commission may from time to time conduct random audits and
investigations to ensure voluntary compliance with this Act.
``(B) Selection of subjects.--The subjects of such audits
and investigations shall be selected on the basis of criteria
established by vote of at least 4 members of the Commission
to ensure impartiality in the selection process.
``(C) Applicability.--This paragraph does not apply to an
authorized committee of an eligible Senate candidate subject
to audit under section 505(a) or an authorized committee of
an eligible House of Representatives candidate subject to
audit under section 605(a).''.
SEC. 606. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT
CONTRIBUTIONS.
Section 322 of Federal Election Campaign Act of 1971 (2
U.S.C. 441h) is amended--
(1) by inserting after ``Sec. 322.'' the following:
``(a)''; and
(2) by adding at the end the following:
``(b) False Solicitation of Contributions.--No person shall
solicit contributions by falsely representing himself as a
candidate or as a representative of a candidate, a political
committee, or a political party.''.
SEC. 607. REGULATIONS RELATING TO USE OF NON-FEDERAL MONEY.
Section 306 of Federal Election Campaign Act of 1971 (2
U.S.C. 437c) is amended by adding at the end the following:
``(g) Regulations.--The Commission shall promulgate
regulations to prohibit devices or arrangements which have
the purpose or effect of undermining or evading the
provisions of this Act restricting the use of non-Federal
money to affect Federal elections.''.
SEC. 608. FILING OF REPORTS USING COMPUTERS AND FACSIMILE
MACHINES.
Section 302(g) of the Federal Election Campaign Act of 1971
(2 U.S.C. 432(g)) is amended by adding at the end the
following new paragraph:
``(6)(A) The Commission, in consultation with the Secretary
of the Senate, may prescribe regulations under which persons
required to file designations, statements, and reports under
this Act--
``(i) are required to maintain and file them for any
calendar year in electronic form accessible by computers if
the person has, or has reason to expect to have, aggregate
contributions or expenditures in excess of a threshold amount
determined by the Commission; and
``(ii) may maintain and file them in that manner if not
required to do so under regulations prescribed under clause
(i).
``(B) The Commission, in consultation with the Secretary of
the Senate, shall prescribe regulations which allow persons
to file designations, statements, and reports required by
this Act through the use of facsimile machines.
``(C) In prescribing regulations under this paragraph, the
Commission shall provide methods (other than requiring a
signature on the document being filed) for verifying
designations, statements, and reports covered by the
regulations. Any document verified under any of the methods
shall be treated for all purposes (including penalties for
perjury) in the same manner as a document verified by
signature.
``(D) The Secretary of the Senate and the Clerk of the
House of Representatives shall ensure that any computer or
other system that they may develop and maintain to receive
designations, statements, and reports in the forms required
or permitted under this paragraph is compatible with any such
system that the Commission may develop and maintain.''.
TITLE VII--MISCELLANEOUS
SEC. 701. PROHIBITION OF LEADERSHIP COMMITTEES.
(a) Definitions.--Section 301 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431) is amended by adding at
the end the following:
(b) Prohibition.--Section 302(e) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 432(e)) is amended--
(1) by striking paragraph (3) and inserting the following:
``(3) Limitations.--A political committee that supports or
has supported more than 1 candidate shall not be designated
as an authorized committee, except that--
``(A) a candidate for the office of President nominated by
a political party may designate the national committee of the
political party as the candidate's principal campaign
committee if the national committee maintains separate books
of account with respect to its functions as a principal
campaign committee; and
``(B) a candidate may designate a political committee
established solely for the purpose of joint fundraising by
such candidates as an authorized committee.''; and
(2) by adding at the end the following:
``(6) Prohibition of leadership committees.--
``(A) In general.--
``(i) Prohibition.--A candidate for Federal office or an
individual holding Federal office shall not establish,
finance, maintain, or control any political committee or non-
Federal political committee other than a principal campaign
committee of the candidate, authorized committee, party
committee, or other political committee designated in
accordance with paragraph (3).
``(ii) Candidate for more than 1 office.--A candidate for
more than 1 Federal office may designate a separate principal
campaign committee for the campaign for election to each
Federal office.
``(B) Transition.--
``(i) Continuation for 12 months.--For a period of 12
months after the effective date of this paragraph, any
political committee established before that date but that is
prohibited under subparagraph (A) may continue to make
contributions.
[[Page S435]]
``(ii) Disbursement at the end of 1 year.--At the end of
that period the political committee shall disburse all funds
by 1 or more of the following means:
``(I) Making contributions a person described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of the United States Code.
``(II) Making a contribution to the Treasury of the United
States.
``(III) Contributing to the national, State, or local
committee of a political party.
``(IV) Making a contribution of not to exceed $1,000 each
to candidates or non-Federal candidates.''.
SEC. 702. POLLING DATA CONTRIBUTED TO CANDIDATES.
Section 301(8) of Federal Election Campaign Act of 1971 (2
U.S.C. 431(8)), as amended by section 314(b), is amended by
inserting at the end the following:
``(D) Valuation of polling data as a contribution.--A
contribution of polling data to a candidate shall be valued
at the fair market value of the data on the date the poll was
completed, depreciated at a rate not more than 1 percent per
day from such date to the date on which the contribution was
made.''.
SEC. 703. RESTRICTIONS ON USE OF CAMPAIGN FUNDS FOR PERSONAL
PURPOSES.
(a) Restrictions on Use of Campaign Funds.--Title III of
Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.)
(as amended by section 311) is amended by adding at the end
the following:
``SEC. 325. RESTRICTIONS ON USE OF CAMPAIGN FUNDS FOR
PERSONAL PURPOSES.
``(a) Definitions.--In this section:
``(1) Campaign expense.--The term `campaign expense' means
an expense that is attributable solely to a bona fide
campaign purpose.
``(2) Inherently personal purposes.--The term `inherently
personal purpose' means a purpose that, by its nature,
confers a personal benefit, including a home mortgage, rent,
or utility payment, clothing purchase, noncampaign automobile
expense, country club membership, vacation, or trip of a
noncampaign nature, household food items, tuition payment,
admission to a sporting event, concert, theater or other form
of entertainment not associated with a campaign, dues, fees,
or contributions to a health club or recreational facility,
and any other inherently personal living expense as
determined under the regulations promulgated pursuant to
section 301(b) of the Senate Campaign Financing and Spending
Reform Act.
``(b) Permitted and Prohibited Uses.--An individual who
receives contributions as a candidate for Federal office--
``(1) shall use the contributions only for legitimate and
verifiable campaign expenses; and
``(2) shall not use the contributions for any inherently
personal purpose.''.
(b) Regulation.--Not later than 90 days after the date of
enactment of this Act, the Federal Election Commission shall
issue a regulation consistent with this Act to implement
subsection (a). The regulation shall apply to all
contributions possessed by an individual on the date of
enactment of this Act.
TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS
SEC. 801. EFFECTIVE DATE.
Except as otherwise provided in this Act and the amendments
made by this Act shall take effect on the date of the
enactment of this Act but shall not apply with respect to
activities in connection with any election occurring before
January 1, 1999.
SEC. 802. SEVERABILITY.
Except as provided in section 101(c), if any provision of
this Act (including any amendment made by this Act), or the
application of any such provision to any person or
circumstance, is held invalid, the validity of any other
provision of this Act, or the application of the provision to
other persons and circumstances, shall not be affected
thereby.
SEC. 803. EXPEDITED REVIEW OF CONSTITUTIONAL ISSUES.
(a) Direct Appeal to Supreme Court.--An appeal may be taken
directly to the Supreme Court of the United States from any
interlocutory order or final judgment, decree, or order
issued by any court ruling on the constitutionality of any
provision of this Act or amendment made by this Act.
(b) Acceptance and Expedition.--The Supreme Court shall, if
it has not previously ruled on the question addressed in the
ruling below, accept jurisdiction over, advance on the
docket, and expedite the appeal to the greatest extent
possible.
______
By Mr. FEINGOLD.
S. 58. A bill to modify the estate recovery provisions of the
medicaid program to give States the option to recover the costs of home
and community-based services for individuals over age 55; to the
Committee on Finance.
MEDICAID BENEFICIARIES LEGISLATION
Mr. FEINGOLD. Mr. President, I am pleased to introduce legislation
today to eliminate the current mandate on States to place liens on the
homes and estates of older Medicaid beneficiaries receiving home and
community-based long-term care services, and to provide more than
adequate funding for that change by establishing a certificate of need
process to regulate the growth of federally funded nursing home beds.
This legislation modifies the estate recovery provisions of OBRA 93
to clarify that States may pursue recovery of the cost of Medicaid home
and community-based long-term care services from the estate of
beneficiaries, but that States are not required to do so.
Mr. President, slowing the growth of rising Medicaid costs is central
to easing pressure on both Federal and State budgets, and addressing
the long-term care portion of those Medicaid budgets is a key to
containing those costs. Meaningful reform of our long-term care system
is the ultimate solution to this problem, and I will introduce long-
term care reform legislation in the near future that will outline the
path we need to follow--helping States provide flexible, consumer-
oriented and consumer-directed home and community-based long-term care
services.
In the meantime, however, we can take a few important steps down the
path toward long-term care reform by repealing the cumbersome mandate
on States that they recover the cost of some services by imposing liens
on the homes and estates of seniors using home and community-based
long-term care services.
Mr. President, in the past, States have had the option of recovering
payments for those services from the estates of beneficiaries, but in
some cases, at least, have chosen not to do so. In Wisconsin, estate
recovery for home and community-based long-term care services was
implemented briefly in 1991, but was terminated because of the
significant problems experienced with the home and Medicaid waiver
programs. Many cases were documented where individuals needing long-
term care refused community-based care because of their fear of estate
recovery or the placement of a lien on their homes.
One case in southwestern Wisconsin involved an older woman who was
suffering from congestive heart failure, phlebitis, severe arthritis,
and who had difficulty just being able to move. She was being screened
for the Medicaid version of Wisconsin's model home and community-based
long-term care program, the Community Options Program, when the
caseworker told her of the new law, and that a lien would be put on the
estate of the program's clients. The caseworker reported that the older
woman began to sob, and told the caseworker that she had worked hard
all her life and paid taxes and could not understand why the things she
had worked for so hard would be taken from her family after her death.
When asked if she would like to receive services, the client refused.
As frail as this client was, the social worker noted that she preferred
to chance being on her own rather than endanger her meager estate by
using Medicaid funded services.
In northeastern Wisconsin, a 96-year-old woman was being care for by
her 73-year-old widowed daughter in their home. The family was
receiving some Medicaid long-term care services, including respite
services for the elderly caregiver daughter, but the family
discontinued all services when they heard of the new law because the
older daughter needed to count on the home for security in her own old
age.
A 72-year-old man, who had 4 by-pass surgeries and was paralyzed on
one side, and his 66-year-old wife, who had 3 by-pass surgeries and
rheumatoid arthritis, both needed some assistance to be able to live
together at home. But when Medicaid was suggested, they refused because
of the new law.
Mr. President, these examples are not unusual. Nor were many of the
individuals and families who refused help protecting vast estates. For
many, the estates being put at risk were modest at best. A couple in
the Green Bay area of Wisconsin who lived in a mobile home and had less
than $20,000 in life savings told the local benefit specialist that
they would refuse Medicaid funded services rather than risk not leaving
their small estate to their family members.
Leaving even a small bequest to a loved-one is a fundamental and
deeply felt need of many seniors. Even the most modest home can
represent a lifetime's work, and many are willing to forego medical
care they know they need to be able to leave a small legacy.
Mr. President, while the vision of this mandate on States from inside
the
[[Page S436]]
Washington beltway may appear simple, the estate recovery requirements
are not so simple for program administrators. States, counties, and
nonprofit agencies, administrators of Medicaid services, are ill-
equipped to be real estate agents.
Further, divestment concerns in the Medicaid Program, already a
problem, could continue to grow as pressure to utilize existing
loopholes increases with estate recovery mandated in this way. Worse,
as the Coalition of Wisconsin Aging Groups has pointed out, children
who feel ``entitled to inheritance'' might force transfers,
constituting elder abuse in some cases.
Too, Mr. President, there is a very real question of age
discrimination with the estate recovery provisions of OBRA 93. Only
individuals over age 55 are subject to estate recovery. Such age-based
distinctions border on age discrimination and ought to be minimized.
Mr. President, because I am committed to reducing the deficit and
balancing the budget, I firmly believe we must find offsetting spending
cuts to fully fund legislative proposals, even when we might disagree
with the cost estimates for those proposals. For that reason, I have
included provisions in this measure that have been scored by the
Congressional Budget Office to more than offset the officially
estimated loss in savings from the estate recovery mandate.
Nevertheless, while this bill includes offsetting cuts to fund the
proposed change, I also believe that the savings ascribed to the
existing mandate are questionable.
Prior to enacting estate recovery in Wisconsin, officials estimated
$13.4 million a year could be recovered by the liens. Real collections
fell far short. For fiscal year 1992, the State only realized a
reported $1 million in collections. And for the period of January to
July of 1993, even after officials lowered their estimates, only $2.2
million was realized of an expected $3.8 million in collections.
In addition to lower than expected collections, the refusal to accept
home and community-based long-term care because of the prospect of a
lien on the estate could lead to the earlier and more costly need for
institutional care. Such a result would not only undercut the
questionable savings from the program, but would be directly contrary
to the Medicaid home and community-based waiver program,which is
intended precisely to keep people out of institutions and in their own
homes and communities.
The brief experience we had in Wisconsin led the State to limit
estate recovery to nursing home care and related services, where, as a
practical matter, the potential for estate recovery and liens on homes
are much less of a barrier to services. Indeed, just as we should
provide financial incentives to individuals to use more cost-effective
care, so too should we consider financial disincentives for more costly
alternatives. A recent study in Wisconsin showed that two Medicaid
waiver programs saved $17.6 million in 1992 by providing home and
community-based alternatives to institutional care.
In that context, retaining the more expansive institutional care
alternatives in the estate recovery mandate makes good sense, and my
legislation would not change that portion of the law. But it does not
make sense to jeopardize a program that has produced many more times
the savings in lowered institutional costs than even the overly
optimistic estimates suggest could be recovered from the estates of
those receiving home and community-based long-term care.
All in all, the estate recovery provisions of OBRA 93 are likely to
produce more expensive utilization of Medicaid services, may cause an
administrative nightmare for State and local government, could
aggravate the divestment problem, may result in increased elder abuse,
and could well constitute age discrimination.
Though many long-term care experts maintain that mandating estate
recovery for home and community-based long-term care services will only
lead to increased utilization of more expensive institutional
alternatives, and thus increased cost to Federal taxpayers, the CBO
estimated a revenue loss of $20 million in the first year and $260
million over 5 years for this proposal.
As I noted above, it is important to act responsibly to fund that
formal cost estimate with offsetting spending cuts. The additional
savings I firmly believe will be generated beyond the scored amounts
would then help reduce our Federal budget deficit. This measure
includes a provision that more than offsets the official scored revenue
loss from eliminating the estate recovery mandate. That provision
regulates the growth in the number of nursing home beds eligible for
Federal funding through Medicaid, Medicare, or other Federal programs
by requiring providers to obtain a certificate of need [CON] to operate
additional beds.
For any specified area, States would issue a CON only if the ratio of
the number of nursing home beds to the population that is likely to
need them falls below guidelines set by the State and subject to
Federal approval.
This approach allows new nursing home beds to operate where there is
a demonstrated need, while limiting the potential burden on the
taxpayer where no such need has been established. CBO has estimated
that the proposed regulation of nursing home bed growth would generate
savings of $35 million in the first year, and $625 million over 5
years, more than offsetting the CBO estimates for removing the State
mandate on estate recoveries sought in this bill. The net fiscal effect
of this proposal would be to generate about $15 million in savings in
the first year, and $365 million over 5 years.
Slowing the growth of nursing home beds is critical to reforming the
current long-term care system. In Wisconsin, limiting nursing home bed
growth has been part of the success of the long-term care reforms
initiated in the early 1980's. While the rest of the country
experienced a 46-percent increase in Medicaid nursing home bed use
between 1980 and 1993, Wisconsin saw Medicaid nursing home bed use
decline by 15 percent.
The certificate of need provision is far more modest than the
absolute cap on nursing home beds adopted in Wisconsin, and recognizes
that there needs to be some flexibility to recognize the differences of
long-term care services among States. It is also consistent with the
kind of long-term care reform I will be proposing as separate
legislation.
Certainly, our ability to reform long-term care will depend not only
on establishing a consumer-oriented, consumer-directed home and
community-based services that are available to the severely disabled of
all ages, but also on establishing a more balanced and cost-effective
allocation of public support of long-term care services by eliminating
the current bias toward institutional care.
Mr. President, taken together, the change in the estate recovery
provisions and the slowing of nursing home bed growth, these two
provisions will help shift the current distorted Federal long-term care
policy away from the institutional bias that currently exists and
toward a more balanced approach that emphasizes home and community-
based services.
That is the direction that we will need to take if we are to achieve
significant long-term care reform.
Mr. President, I ask unanimous consent that the text of the
legislation be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 58
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MEDICAID ESTATE RECOVERIES.
Section 1917(b)(1)(B) of the Social Security Act (42 U.S.C.
1396p(b)(1)(B)) is amended by striking ``consisting of--''
and all that follows through the period and inserting the
following: ``consisting of--
``(i) nursing facility services and related hospital and
prescription drug services; and
``(ii) at the option of the State, any additional items or
services under the State plan.''.
SEC. 2. REQUIRING STATES TO REGULATE GROWTH IN THE NUMBER OF
NURSING FACILITY BEDS.
(a) In General.--A nursing facility shall not receive
reimbursement under the medicare program under title XVIII of
the Social Security Act, the medicaid program under title XIX
of such Act, or any other Federal program for services
furnished with respect to any beds first operated by such
facility on or after the date of the enactment of this Act
unless a certificate of need is issued by the State with
respect to such beds.
(b) Issuance of Certificate.--A certificate of need may be
issued by a State with respect to a geographic area only if
the ratio of
[[Page S437]]
the number of nursing facility beds in such area to the total
population in such area that is likely to need such beds is
below the ratio included in guidelines that are established
by the State and approved by the Secretary of Health and
Human Services under subsection (c).
(c) Approval of Guidelines.--The Secretary of Health and
Human Services shall promulgate regulations under which
States may submit proposed guidelines for the issuance of
certificates of need under subsection (b) for review and
approval.
(d) Definition of Nursing Facility.--In this section, the
term ``nursing facility'' has the meaning given the terms--
(1) ``skilled nursing facility'', under the medicare
program under title XVIII of the Social Security Act; and
(2) ``nursing facility'', under the medicaid program under
title XIX of such Act.
______
By Mr. FEINGOLD (for himself and Mr. Kohl):
S. 59. A bill to terminate the Extremely Low Frequency Communication
System of the Navy; to the Committee on Armed Services.
extremely low frequency communication system termination and deficit
reduction act of 1997
Mr. FEINGOLD. Mr. President, today I am introducing legislation for
myself and Senator Kohl, which we offered during the 103d and 104th
Congress to terminate the Extremely Low Frequency Communications
System, located in Clam Lake, WI, and Republic, MI.
This project has been opposed by residents of Wisconsin since its
inception, but for years we were told that the national security
considerations of the cold war outweighed our concerns about this
installation in our State. As we continue our efforts to reduce the
Federal budget deficit and as the Department of Defense continues to
struggle to meet a tighter budget, it is clear that Project ELF should
be closed down. If enacted, my legislation would save $9 to $20 million
a year.
Project ELF was developed in the late 1970's as an added protection
against the Soviet naval nuclear deployment. It is an electromagnetic
messenger system--otherwise known as a bell ringer--used primarily to
tell a deeply submerged Trident submarine that it needs to surface to
retrieve a message. Because it communicates through very primitive
pulses, called phonetic-letter-spelled-out [PLSO] messages, ELF's
radiowaves transmit very limited messages.
With the end of the cold war, Project ELF becomes harder and harder
to justify. Trident submarines no longer need to take that extra
precaution against Soviet nuclear forces. They can now surface on a
regular basis with less danger of detection or attack. They can also
receive more complicated messages through very low frequency [VLF]
radiowaves or lengthier messages through satellite systems, if it can
be done more cheaply.
Not only do Wisconsinites think the mission of Project ELF is
unnecessary and anachronistic, but they are also concerned about
possible environmental and public health hazards associated with it.
While I have heard some ELF supporters say there is no apparent
environmental impact of Project ELF, we can only conclude that we do
not know that--in fact, we do not know much about its impact at all.
The Navy itself had yet to conclude definitively that operating
Project ELF is safe for the residents living near the site. It you are
a resident in Clam Lake, that is unsettling information. For example,
in 1992, a Swedish study found that children exposed to relatively weak
magnetic fields from powerlines develop leukemia at almost four times
the expected rate. We also know that in 1984, a U.S. district court
ruling on State of Wisconsin versus Weinberger ordered Project ELF to
be shut down because the Navy paid inadequate attention to the system's
possible health effects and violated the National Environmental Policy
Act. That decision was overturned on appeal, however, in a ruling that
claimed national security interests at the time prevailed over
environmental concerns. More recent studies of the impact of
electromagnetic fields in general still leave unanswered questions and
concerns.
During the 103d Congress, I worked with the Senator from Georgia,
Senator Nunn to include an amendment in the National Defense
Authorization Act for fiscal year 1994 requiring a report by the
Secretary of Defense on the benefits and costs of continued operation
of Project ELF. The report issued by DOD was particularly disappointing
because it basically argued that because Project ELF may have a purpose
during the cold war, it should continue to operate after the cold war
as part of the complete complement of command and control links
configured for the cold war.
Did Project ELF play a role in helping to minimize the Soviet threat?
Perhaps. Did it do so at risk to the community? Perhaps. Does it
continue to play a vital security role to the Nation? No.
Most of us in Wisconsin don't want it anymore. Many of my
constituents have opposed Project ELF since its inception. Congressman
David Obey has consistently sought to terminate Project ELF, and in
fact, we have him to thank in part for getting ELF scaled down from the
large-scale project first conceived by the Carter administration. I
look forward to continue working with him on this issue in the 105th
Congress.
As we take up the budget for fiscal year 1998, the Department of
Defense and the Armed Services Committee will again be searching for
programs that have outlived their intended purpose. I hope they will
seriously consider zeroing out the ELF transmitter system, as I propose
in this bill, and save the taxpayers $9 to $20 million a year. Given
both its apparently diminished strategic value and potential
environmental and public health hazards, Project ELF is a perfect
target for termination.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 59
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Extremely Low Frequency
Communication System Termination and Deficit Reduction Act of
1997''.
SEC. 2. PROHIBITION OF FURTHER FUNDING OF THE EXTREMELY LOW
FREQUENCY COMMUNICATION SYSTEM.
(a) Prohibition on Use of Funds.--Except as provided in
subsection (b), funds appropriated on or after the date of
enactment of this Act to or for the use of the Department of
Defense may not be obligated or expended for the Extremely
Low Frequency Communication System of the Navy.
(b) Limited Exception for Termination Costs.--Subsection
(a) does not apply to expenditures solely for termination of
the Extremely Low Frequency Communication System.
______
By Mr. LOTT:
S. 61. A bill to amend title 46, United States Code, to extend
eligibility for veterans' burial benefits, funeral benefits, and
related benefits for veterans of certain service in the United States
merchant marine during World War II; to the Committee on Veterans
Affairs.
the merchant mariners fairness act of 1997
Mr. LOTT. Mr. President, today, it is my pleasure to introduce the
Merchant Mariners Fairness Act. My bill would grant veterans status to
American merchant mariners who have been denied this status.
In 1988, the Secretary of the Air Force decided, for the purposes of
granting veterans benefits to merchant seamen, that the cut-off date
for service would be August 15, 1945, V-J Day, rather than December 31,
1946, when hostilities were declared officially ended. My bill would
correct the 1988 decision and extend veterans benefits to merchant
mariners who served from August 15, 1945 to December 31, 1946. It would
extend eligibility for burial benefits and related veterans benefits
for certain members of the U.S. Merchant Marine during World War II.
I urge my distinguished colleagues to join me in supporting this
important legislation.
______
By Mr. CRAIG (for himself and Mr. Kempthorne):
S. 62. A bill to prohibit further extension of establishment of any
national monument in Idaho without full public participation and an
express Act of Congress, and for other purposes; to the Committee on
Energy and National Resources.
THE IDAHO PROTECTION ACT OF 1997
Mr. CRAIG. Mr. President, I rise today to introduce legislation that
has been forced by recent events. I am talking about President
Clinton's proclamation of last fall declaring nearly
[[Page S438]]
two million acres of southern Utah a national monument.
After the President's announcement, Senator Kempthorne and I
introduced the Idaho Protection Act of 1996. That bill would have
required that the public and the Congress be included before a national
monument could be established in Idaho.
When we introduced that bill, I was immediately approached by other
Senators seeking the same protection. What we see unfolding before us
in Utah ought to frighten all of us. Without including Utah's Governor,
Senators, congressional delegation, the State legislature, county
commissioners, or the people of Utah--President Clinton set off-limits
forever approximately 1.7 million acres of Utah.
Under the 1906 Antiquities Act, President Clinton has the unilateral
authority to create a national monument where none existed before. And
if he can do it in the State of Utah, he can do it in Idaho. In fact,
since 1906, the law has been used some 66 times to set lands aside. I
would note--with very few exceptions, these declarations occurred
before enactment of the National Environmental Policy Act of 1969 which
recognized the need for public involvement in such issues and mandated
public comment periods before such decisions are made.
Just as 64 percent of the land in Utah is owned by the Federal
Government, 62 percent of Idaho is owned by Uncle Sam. What the
President has done in Utah, without public input, he could also do in
Idaho or any or the States where the Federal Government has a presence.
With Senator Kempthorne as a cosponsor, I am once again introducing
the Idaho Protection Act. This bill would simply require that the
public and the Congress be fully involved and give approval before such
a unilateral Presidential declaration of a new national monument could
be imposed on Idaho.
The President's action in Utah has been a wake-up call to people
across America. While we all want to preserve what is best in our
States, people everywhere understand that much of their economic future
is tied up in what happens on their public lands.
In the West, where public lands dominate the landscape, issues such
as grazing, timber harvesting, water use, and recreation access have
all come under attack by this administration seemingly bent upon
kowtowing to a segment of our population that wants these uses kicked
off our public lands.
Everyone wants public lands decisions to be made in an open and
inclusive process. No one wants the President, acting alone, to
unilaterally lock up enormous parts of any State. We certainly don't
work that way in the West. There is a recognition that with common
sense, a balance can be struck that allows jobs to grow and families to
put down roots while at the same time protecting America's great
natural resources.
In my view, the President's actions are beyond the pale and for that
reason--to protect others from suffering a similar fate, I am
cosponsoring this bill.
______
By Mr. FEINGOLD:
S. 63. A bill to amend certain Federal civil rights statutes to
prevent the involuntary application of arbitration to claims that arise
from unlawful employment discrimination based on race, color, religion,
sex, national origin, age, or disability, and for other purposes; to
the Committee on Labor and Human Resources.
THE CIVIL RIGHTS PROCEDURES PROTECTION ACT OF 1997
Mr. FEINGOLD. Mr. President, I rise today to introduce the Civil
Rights Procedures Protection Act of 1997. The 105th Congress will mark
the third successive Congress that I have introduced this legislation.
Very simply Mr. President, this legislation addresses the rapidly
growing and, in my opinion, troubling practice of employers
conditioning employment or professional advancement upon their
employees willingness to submit claims of discrimination or harassment
to arbitration, rather than pursuing them in the courts. In other
words, employees raising claims of harassment or discrimination by
their employers must submit the adjudication of those claims to
arbitration, irrespective of what other remedies may exist under the
laws of this Nation.
To address the growing incidents of compulsory arbitration, the Civil
Rights Procedures Protection Act of 1997 amends seven civil rights
statutes to ensure that those statutes remain effective when claims of
this nature arise. Specifically, this legislation affects claims raised
under Title VII of the Civil Rights Act of 1965, Section 505 of the
Rehabilitation Act of 1973, the Americans with Disabilities Act,
Section 1977 of the Revised Statutes, the Equal Pay Act, the Family and
Medical Leave Act and the Federal Arbitration Act (FAA). In the context
of the Federal Arbitration Act, the protections of this legislation are
extended to claims of unlawful discrimination arising under State or
local law and other Federal laws that prohibit job discrimination.
Mr. President, I want to be clear that this legislation is in no way
intended to bar the use of arbitration, conciliation, mediation or any
other form of adjudication short of litigation in resolving these
claims. I have long been and will continue to be a strong supporter of
``voluntary'' forms of alternative dispute resolution. The key,
however, is that the practices targeted by this bill are not voluntary.
Rather they are imposed upon working men and women and are mandatory.
Furthermore, the ability to be promoted, or in some cases, to be hired
in the first place, is often conditioned upon the employee accepting
this type of mandatory arbitration. Mandatory arbitration allows
employers to tell all current and prospective employees in effect, `if
you want to work for us, you will have to check your rights as a
working American citizen at the door.' In short, working men and women
all across this country are faced with the tenuous choice of either
accepting these mandatory limitations on their right to redress in the
face of discrimination or placing at risk employment opportunities or
professional advancement. These requirements have been referred to
recently as ``front door'' contracts; that is, they require an employee
to surrender certain rights up front in order to ``get in the front
door.'' As a nation which values work as well as deplores
discrimination, we should not allow this situation to continue.
As I noted Mr. President, today marks the third successive Congress
in which this important legislation has been introduced. Given that
much of the rhetoric coming out of Washington and this body in recent
months, certainly during the most recent elections, dealt with helping
working families, it is my hope that this legislation will receive
consideration in the coming months. The practice of mandatory
arbitration should be stopped now--if people are being discriminated
against, they should retain all avenues of redress provided for in the
laws of this Nation. This bill will help restore integrity in relations
between hard working employees and their employers, but more
importantly, it will ensure that the civil rights laws which we pass,
will continue to protect all Americans.
Mr. President, I ask unanimous consent that the text of the
legislation be printed in the Record at the conclusion of my remarks.
Mr. President, I also ask unanimous consent that a newspaper article
from the September 24, 1996 edition of the Boston Globe, entitled, ``A
cautionary tale about signing away right to sue,'' be placed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 63
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Civil Rights Procedures
Protection Act of 1997''.
SEC. 2. AMENDMENT TO TITLE VII OF THE CIVIL RIGHTS ACT OF
1964.
Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e
et seq.) is amended by adding at the end the following new
section:
``exclusivity of powers and procedures
``Sec. 719. Notwithstanding any Federal statute of general
applicability that would modify any of the powers and
procedures expressly applicable to a claim arising under this
title, such powers and procedures shall be the exclusive
powers and procedures applicable to such claim unless after
such claim arises the claimant voluntarily enters into an
agreement to resolve such claim through arbitration or
another procedure.''.
[[Page S439]]
SEC. 3. AMENDMENT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT
OF 1967.
The Age Discrimination in Employment Act of 1967 (29 U.S.C.
621 et seq.) is amended--
(1) by redesignating sections 16 and 17 as sections 17 and
18, respectively; and
(2) by inserting after section 15 the following new section
16:
``exclusivity of powers and procedures
``Sec. 16. Notwithstanding any Federal statute of general
applicability that would modify any of the powers and
procedures expressly applicable to a right or claim arising
under this Act, such powers and procedures shall be the
exclusive powers and procedures applicable to such right or
such claim unless after such right or such claim arises the
claimant voluntarily enters into an agreement to resolve such
right or such claim through arbitration or another
procedure.''.
SEC. 4. AMENDMENT TO THE REHABILITATION ACT OF 1973.
Section 505 of the Rehabilitation Act of 1973 (29 U.S.C.
795) is amended by adding at the end the following new
subsection:
``(c) Notwithstanding any Federal statute of general
applicability that would modify any of the procedures
expressly applicable to a claim based on right under section
501, such procedures shall be the exclusive procedures
applicable to such claim unless after such claim arises the
claimant voluntarily enters into an agreement to resolve such
claim through arbitration or another procedure.''.
SEC. 5. AMENDMENT TO THE AMERICANS WITH DISABILITIES ACT OF
1990.
Section 107 of the Americans with Disabilities Act of 1990
(42 U.S.C. 12117) is amended by adding at the end the
following new subsection:
``(c) Notwithstanding any Federal statute of general
applicability that would modify any of the powers and
procedures expressly applicable to a claim based on a
violation described in subsection (a), such powers and
procedures shall be the exclusive powers and procedures
applicable to such claim unless after such claim arises the
claimant voluntarily enters into an agreement to resolve such
claim through arbitration or another procedure.''.
SEC. 6. AMENDMENT TO SECTION 1977 OF THE REVISED STATUTES OF
THE UNITED STATES.
Section 1977 of the Revised Statutes (42 U.S.C. 1981) is
amended by adding at the end the following new subsection:
``(d) Notwithstanding any Federal statute of general
applicability that would modify any of the procedures
expressly applicable to a right to make and enforce a
contract of employment under this section, such procedures
shall be the exclusive procedures applicable to a claim based
on such right unless after such claim arises the claimant
voluntarily enters into an agreement to resolve such claim
through arbitration or another procedure.''.
SEC. 7. AMENDMENT TO THE EQUAL PAY REQUIREMENT UNDER THE FAIR
LABOR STANDARDS ACT OF 1938.
Section 6(d) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(d)) is amended by adding at the end the following
new paragraph:
``(5) Notwithstanding any Federal statute of general
applicability that would modify any of the powers or
procedures expressly applicable to a claim based on violation
of this subsection, such powers and procedures shall be the
exclusive procedures applicable to such claim unless after
such claim arises the claimant voluntarily enters into an
agreement to resolve such claim through arbitration or
another procedure.''.
SEC. 8. AMENDMENT TO THE FAMILY AND MEDICAL LEAVE ACT OF
1993.
Title IV of the Family and Medical Leave Act of 1993 (29
U.S.C. 2601 et seq.) is amended by adding at the end the
following new section:
``SEC. 406. EXCLUSIVITY OF REMEDIES.
``Notwithstanding any Federal statute of general
applicability that would modify any of the procedures
expressly applicable to a claim based on a right provided
under this Act or under an amendment made by this Act, such
procedures shall be the exclusive procedures applicable to
such claim unless after such claim arises the claimant
voluntarily enters into an agreement to resolve such claim
through arbitration or another procedure.''.
SEC. 9. AMENDMENT TO TITLE 9 OF THE UNITED STATES CODE.
Section 14 of title 9, United States Code, is amended--
(1) by inserting ``(a)'' before ``This''; and
(2) by adding at the end the following new subsection:
``(b) This chapter shall not apply with respect to a claim
of unlawful discrimination in employment if such claim arises
from discrimination based on race, color, religion, sex,
national origin, age, or disability.''.
SEC. 10. APPLICATION OF AMENDMENTS.
The amendments made by this Act shall apply with respect to
claims arising on and after the date of the enactment of this
Act.
[From the Boston Globe, Sept. 24, 1996]
A Cautionary Tale About Signing Away Right To Sue; on the Job
(By Diane E. Lewis)
Jane Lajoie thought she had an open-and-shut discrimination
case against her employer. Instead, she now has a cautionary
tale for the growing number of American workers whose
employers have asked them to sign away their rights to have
employment complaints brought before a jury.
Lajoie's story begins in 1987 when, after receiving an MBA,
she joined Fidelity Management Research Corp. as a data
analyst for the publishing group's Mutual Fund Guide. Over
the next seven years, she took on more responsibilities,
rising to managing editor and then publisher of the guide.
But the Marlborough woman says there was a dark cloud over
what should have been a successful career: She was convinced
that she was not being compensated fairly, that men in
comparable posts had more prestigious titles and were getting
a lot more money for the same work. And she voiced her
concerns.
Lajoie, 51, alleges that not long after she spoke up, a
company lawyer asked her to register as a principle with the
New York Stock Exchange and the National Association of
Securities Dealers. Lajoie says she agreed, think she was
required to register. She admits that she didn't read the
fine print.
Today, Lajoie claims she was tricked into signing a so-
called U-4 securities arbitration form stating that any
dispute or claim against her employer must be submitted to
private arbitration. In a lawsuit filed in Norfolk Superior
Court, she alleges that she was replaced by a younger woman
and then fired after she signed the form.
Fidelity denies discriminating against Lajoie. ``There was
no discrimination. She was compensated properly and fairly.
She was also replaced by another woman,'' said attorney
Wilfred Benoit Jr., who represents the Boston firm.
As for trickery, Benoit asserted: ``Jane Lajoie was not
tricked into signing anything. She signed a U-4 application
as a principal in the securities industry and, as far as we
know, she understood what it was.''
Thus far, two Massachusetts courts have upheld Fidelity's
right to arbitration, and an arbitration hearing is expected
this year. The dispute may or may not end there.
Attorney Nancy Shilepsky, who represents Lajoie, says the
Massachusetts Court of Appeals has acknowledged that her
client may have good grounds for an appeal. But the court
also ruled the Lajoie must arbitrate first and then, if
unhappy with the findings, appeal.
For employers, mandatory arbitration has been a boon. Not
only does it limit lengthy and expensive court battles, but
it also reduces the kind of publicity that can seriously
damage a company's image. In the five years since the US
Supreme Court ruled that U-4s were legal, scores of companies
have sought to have sexual harassment, age, gender and other
discrimination claims moved from courts to the system of
private justice known as binding arbitration. In the
securities industry alone, about 500,000 Wall Street
employees are legally bound by arbitration agreements.
Not surprisingly, the American Arbitration Association
reports that employment arbitration claims increased 70
percent between 1994 and 1995.
Criticism has kept pace with the trend. Both the Equal
Employment Opportunity Commission and the National Labor
Relations Board have denounced the increased use of mandatory
arbitration forms. The National Employment Lawyers
Association has an ongoing campaign against the agreements.
The critics argue that the agreements are generally signed
at the time of hiring or in the course of a policy change at
a company--times when workers are concerned about making a
good first impression or are probably not focused on the
consequences of compliance.
Last year, the EEOC succeeded in enjoining an employer from
requiring workers to sign mandatory arbitration forms and
from firing those workers who refused.
This spring, the NLRB took a similar stand when it issued a
complaint against a luggage maker that fired an employee for
refusing to sign a form stating that all workplace disputes
would have to be arbitrated.
``Nobody should be forced to use an employer's private
justice system,'' says Lewis Maltby, director of workplace
rights at the American Civil Liberties Union in New York.
Maltby, who sits on the board of the American Arbitration
Association, concedes that there are times when employees may
be better off arbitrating a dispute than taking the matter to
a backlogged court or a beleaguered government agency.
In Boston, the Massachusetts Commission Against
Discrimination is hoping arbitration will help reduce a two-
year backlog of cases. For those who opt for binding
arbitration, the dispute would be heard within 30 days after
filing and decided in 60 days. Decisions would be binding on
both sides.
Still, MCAD Commissioner Michael Duffy has drawn the line:
His program will not mediate any cases stemming from
mandatory arbitration agreements.
``We're not against arbitration or mediation,'' said Duffy.
``We think it's fine when all parties agree. But problems
arise when employees are told they must do it or are made to
feel they could lose a job, and then they wind up giving up
their right to a jury trial.''
In the meantime, he and others advise what consumer
advocates have been telling the public for years: Read the
fine print before signing on the bottom line.
______
By Mr. LUGAR:
S. 64. A bill to state the national missile defense policy of the
United
[[Page S440]]
States; to the Committee on Armed Services.
the defend the united states of america act of 1997
Mr. LUGAR. Mr. President, as we commence the 105th Congress and take
up, as we surely will, issues with regard to national missile defense
and theater missile defense, a key question is whether continued
adherence to the ABM Treaty, in its original or a modified form, is
compatible with the kind of missile defense we need.
Is this an ``either/or'' choice?
I hold the view that the ABM Treaty does have, or can be made to
have, sufficient flexibility or elasticity to accommodate certain kinds
of national missile or theater missile defense systems. By the same
token, I reject the notion that we can only achieve the types of
theater missile defense or national missile defense we need by outright
abrogation of the ABM Treaty.
I am struck more by the commonality than the differences between the
prevailing views of some of my Republican colleagues in the Senate and
views in the Administration on this subject. Much of the difference has
to do with timing, stemming in part from different assessments of the
intelligence information on the ballistic missile threat facing the
country. Ultimately, responsible policy makers must come to grips with
the management of the risk entailed by the threat and how much money we
are willing to spend, in a tight budget situation, for various levels
of missile defense to counter that threat.
At this point in our debates, there seems to be general agreement
that we are not trying to protect the U.S. against a massive nuclear
strike from a reconstituted Soviet Union or even a general exchange
with Russia. Nor, for that matter, are we talking about protection
against a deliberate, massive Chinese nuclear attack on the United
States.
A consensus between the prevailing positions on the Hill and that of
the administration comes closer if there is an acceptance that this
range of Russian or Chinese threats are beyond our technological and
financial means in the near term and that our objective is one of
defending America against a Third World, long-range ballistic missile
capability from a regime not subject to any rational laws of
deterrence.
It is the prospect that rogue states will at some point obtain
strategic ballistic missiles - ICBMs - that can reach American shores
which propels us to consider the deployment of a national missile
defense. A second prospect involves an unauthorized or accidental
launch of an ICBM from Russia or China.
The kind of national missile defense system promoted both on the Hill
and in the administration would not be capable of defending against
thousands of warheads being launched against the United States. Rather,
both sides are talking about a system capable of defending against the
much smaller and relatively unsophisticated ICBM threat that a rogue
nation or terrorist group could mount anytime in the foreseeable future
as well as one capable of shooting down an unauthorized or accidentally
launched missile.
The critical difference between many of the plans offered on the Hill
and those proposed by the administration has to do with timing. Some
Congressional proposals would require selection of a missile defense
system to be made within a year, with deployment to begin within three
years. The administration has argued for the need to develop a system,
assess the threat in three years, and make a deployment decision
accordingly.
It is the difference between the various plans over timing on system
selection and deployment that holds practical implications for existing
and potential arms control agreements--START II, the ABM Treaty, START
III?--as well as the potential effectiveness of the system deployed.
The more immediate the commitment to deploy a national defense system,
the greater the risk of a Russian rejection of the START II Treaty and
of an outright American rejection of the original ABM Treaty.
Second, differences over timing have been linked to the issue of the
effectiveness of the system deployed by the United States. The
administration has argued that selection of a system within the next
year or so will limit the options to build a system that is better
matched to the threat, and that the real choice between various
Congressional plans and that of the administration is between building
an advanced system to defeat an actual threat and a less capable system
to defeat a hypothetical threat.
Mr. President, is there a middle ground--one that satisfies neither
the administration nor various Congressional proponents fully but that
does move us in the direction of providing the American people with a
limited national defense system against the most urgent ballistic
missile threats? I believe there is, and this legislation is an attempt
to chart it.
Mr. President, I sense a greater willingness in both branches to try
to come together in the interest of providing the American people with
some form of limited, national defense system against the most urgent
form of ballistic missile threat --to seek to bridge gaps rather than
score debating points.
Moreover, with the passage of time, the differences over preferred
dates of system selection and deployment have narrowed.
With that in mind, and with a felt need to change the terms of
reference of previous ballistic missile defense debates by focusing on
areas of commonality between the administration's position and the
various congressional plans, I offer this legislation as one of the
starting points for a more constructive exchange on the subject of
national missile defense.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Defend the United States of America Act of 1997--Section-by-Section
Analysis
i. short title
This act may be cited as the ``Defend the United States of
America Act of 1997''.
ii. findings
Describes the linkages between U.S. missile defenses, the
ABM Treaty, and continued Russian adherences to other arms
reduction treaties like START I and START II.
Describes the newly-emerging threats posed by other kinds
of weapons of mass destruction than nuclear weapons, and
other delivery means than long-range ballistic missiles.
Hearings over the last two years have shown the pervasive
threat to the U.S. from chemical, biological, and
radiological weapons, and the relative unpreparedness of U.S.
governments at all levels to cope with such terrorist
incidents.
Restates what DoD and Congress have learned about major
weapons system development, which emphasis on the necessity
for thorough testing and careful systems cost-effectiveness
analysis prior to a commitment to deployment.
iii. national missile defense policy
Development for deployment not later than 2003 of a
National Missile Defense system designed to defend against
accidental, unauthorized, and limited attacks.
The initial National Missile Defense system to be developed
and deployed at the former Safeguard ABM site in compliance
with the ABM Treaty, and to consist of:
Fixed, guard-based battle management radars;
Up to 100 ground-based interceptor missiles;
Space based adjuncts allowed by the ABM Treaty; and
Large phased array radars on the periphery of the U.S.,
facing outward, as necessary.
A requirement for a Presidential recommendation in 2000 on
whether or not to deploy the developed system, and a set of
criteria that should be used by the Congress in 2000 to aid
in making a deployment decision. The criteria include:
The threat, as it exists in 2000 and is projected over the
next several years;
The projected cost and effectiveness of the system, based
on development and testing results;
The projected cost and effectiveness of the National
Missile Defense system if deployment were deferred for one to
three years, while additional development occurs;
Arms control factors; and
Where the U.S. stands in preparedness for, and defenses
against, all the other nuclear, chemical and biological
threats to the U.S.
The establishment of provisions to give the 106th Congress
a vote on whether or not to authorize deployment of the
system, as a privileged motion under expedited procedures.
This is a process that has been used by previous Congresses
to insure an up-or-down vote in both Houses on the B-2
bomber, the MX missile, and on B-52s.
In sum, this section establishes a process whereby Congress
will vote in 2000 on whether or not to deploy whatever
National Missile Defense system may be ready to begin
deployment at that time, and with better information than we
have today.
[[Page S441]]
IV. national missile defense vs. arms control agreements
A statement that it is the United States' legal right to
deploy such a National Missile Defense system, and that such
a deployment does not threaten Russian or Chinese deterrent
capabilities.
A direction to the President to seek both further
cooperation with Russia on a variety of Theater Missile
Defense issues, and the relaxation of the ABM Treaty to allow
both sides to have two National Missile Defense sites.
This would greatly increase the effectiveness of our
National Missile Defense systems against Third World missile
attacks aimed at targets on our distant borders, while not
posing a threat to Russia's deterrent.
This section also contains a provision requiring the
President, if the ballistic missile threat to the U.S.
exceeds that which the initial National Missile Defense
system is capable of handling, to consult with the Congress
regarding the exercise of our right to withdraw from the ABM
Treaty under Article XV.
V. DOD to continue R&D on national missile defense
Directs the Secretary of Defense to continue a research and
development program on advanced National Missile Defense
technologies while the initial site is developed and
deployed; this program would be conducted in full compliance
with the ABM Treaty.
VI. U.S. policy toward other WMD delivery threats
Sets forth U.S. policy on reducing the threat to the U.S.
from weapons of mass destruction and associated delivery
systems. It further directs the Administration to develop a
balanced comprehensive plan for reducing the threat to the
U.S. from all weapons of mass destruction and all delivery
means.
VII. presidential and congressional review of U.S. defenses against all
types of WMD attack
Requires a review, following the initial deployment of a
National Missile Defense, by the President and the Congress
to determine the future course of U.S. defenses against all
types of weapons of mass destruction.
VIII. reporting requirements
Administration reporting requirements to Congress.
IX. legal definitions
The legal definitions of the treaties mentioned in the
bill.
______
By Mr. HATCH:
S. 65. A bill to amend the Internal Revenue Code of 1986 to ensure
that members of tax-exempt organizations are notified of the portion of
their dues used for political and lobbying activities, and for other
purposes; to the Committee on Finance.
membership dues disclosure and deductibility legislation.
Mr. HATCH. Mr. President, for many years, Congress has recognized
that private institutions can often provide better service in certain
areas than the government. In this regard, membership organizations
that serve various public needs are given tax-exempt treatment.
However, some tax-exempt membership organizations are involved in
political and lobbying activities. These activities may or may not meet
with the approval of those who pay dues and certainly should not be
subsidized by the taxpayers.
Today, I am introducing legislation that is designed to rectify this
problem. My bill is very simple. It requires tax-exempt membership
organizations to disclose to their members these political activities
and organizational resources spent on them. In addition, this bill will
give the members of these tax-exempt organizations the opportunity to
deduct the nonpolitical portion of their dues for income tax purposes
without regard to the so-called ``two percent limitation.''
First, let me discuss the issue of full disclosure.
Mr. President, in the Omnibus Budget Reconciliation Act of 1993,
Congress disallowed a deduction for expenses relating to lobbying and
political activities. Lobbying is no longer a legitimate deductible
expense for American businesses. Since tax-exempt organizations
generally do not pay any income tax, the law was amended to further
disallow an individual taxpayer a tax deduction for the portion of
annual dues paid to a tax-exempt organization that is attributable to
any lobbying or political activities of the organization. To assist
association members in knowing what portion is and what portion is not
deductible when paying their dues, the law requires organizations to
annually disclose to the IRS and to the individual members the amount
of money spent on political activities by the organization.
However, certain exceptions to the disclosure rules are provided in
the tax code and an organization is not required to disclose such
information if (1) political activities do not exceed $2,000 a year;
(2) the organization elects to pay a proxy tax on the nondeductible
portion in order to avoid providing disclosure; or (3) substantially
all of the individual members do not deduct their annual dues payments
on their tax returns as itemized deductions.
In 1995, the IRS put forth an interpretation of this third exception
and explained what they believe Congress meant by substantially all
dues are not deductible. In Revenue Procedure 95-35, the IRS let all
but three categories of tax-exempt organizations off the hook from the
disclosure rules. The three that must comply are: section 501(c)(4)
organizations that are not veterans organizations, 501(c)(5)
agricultural and horticultural organizations, and 501(c)(6)
organizations.
Interestingly, Mr. President, the IRS choose to grant labor unions,
which are also 501(c)(5) organizations, a complete exemption from the
lobbying disclosure rules. Thus, unions do not have to inform their
members how much of their dues are used for political purposes.
I am sure that my colleagues see the obvious problems in this. It is
simply not fair that the IRS would treat a labor union preferentially.
Why are unions exempt and not, for example, farm cooperatives?
Mr. President, it seems to me that the Clinton administration has
twisted the law to favor their friends in union leadership at the
expense of the right to know for the rank and file. Let me reiterate
this point: the law says clearly that tax-exempt organizations must
disclose their political and lobbying activities. It is only the IRS
interpretation that enables unions to duck this disclosure requirement
and still benefit from tax-exempt status.
Second, I find it outrageous that union leadership are able to coerce
dues from workers in many states as a condition of employment. But, it
adds insult to injury that those dues can be used for political
purposes without the knowledge, let alone permission, of the rank and
file.
The Supreme Court, in 1988, in Beck v. Communication Workers of
America, declared that workers were entitled to know how much of their
dues were being directed to political uses and to receive a refund for
that portion of dues paid. This seems like a simple common sense
solution to this violation of free speech rights. However, in one of
his first acts upon taking office in 1993, President Clinton rescinded
the executive order enforcing this decision of the Supreme Court.
Mr. President, in the Beck case, for example, it was found that only
21 percent of the dues collected by the Communications Workers of
America went for bargaining-related activities. This meant that Harry
Beck, the former Maryland union shop steward who spent 13 years
fighting his case in the courts, was entitled to get a substantial
rebate of his dues, plus interest. Yet, this case is merely
illustrative of a widespread injustice. Where is the fairness in
requiring a worker to contribute to a political cause or a lobbying
effort with which he or she does not agree?
Forcing people to contribute portions of their earnings to political
causes they oppose violates their First Amendment rights. In his Beck
opinion, Justice William Brennen cited Thomas Jefferson's view that
forcing people to finance opinions they disagree with was ``sinful and
tyrannical.''
Mr. President, it is often a requirement or a condition of employment
for workers to be members of a labor union. Yet, this requirement is
often very costly. Union dues can run from about $300 to over $1,000 a
year. Now, I am the first to acknowledge that unions play an important
role in employee-employer relations. I will wager that I am one of the
few members of this body who was ever a member of a union. And, that
experience, perhaps, is the reason I believe so strongly that the rank
and file have rights that must be protected.
Citizens of a free country ought to be free to spend their own money
on the political causes and candidates they wish to support. In 1992,
union officials admit to having spent at least $92 million on political
contributions and expenses. In-kind contributions could be
[[Page S442]]
3 to 5 times that amount. In other words, organized labor may have
actually spent from $300 million to $500 million on political
activities in 1992. While some union members would approve of these
expenditures, some definitely would not.
But, I want to be absolutely clear that the bill I am introducing
today does not affect any provision in the National Labor Relations
Act, the ability of unions to establish closed or agency shops in any
state where they are currently permitted, or the ability of unions to
assess dues or collect fees. Those are debates for another day.
Rather, this bill deals only with the obligation of labor unions, as
tax exempt organizations, to disclose political and lobbying activities
to their members. All union members deserve to know how their
organizations spend their money. Moreover, because these are tax-exempt
organizations, the taxpayers deserve to know what they are subsidizing.
While union members are certainly capable of reading a headline like,
``Union leaders commit $35 million to Democrats,'' they may wish to
have a more comprehensive disclosure of political and lobbying activity
financed with their dues--and I cannot blame them one bit.
Mr. President, polling data suggests that union members would prefer
that their unions not engage in partisan political campaign activities
at all. But, by an overwhelming 84 percent to 9 percent margin,
according to a survey by Luntz and Associates, union members want to
force their union leaders to explain what happens to their dues. They
simply want to know where the money is spent and why. This seems
utterly reasonable and fair to me.
Furthermore, only 19 percent of union members know that they can
request a refund if they do not agree with an ideological position and/
or political position of their particular union. When told that they
have the right to a refund, 20 percent say they would ``definitely''
request their money back, and another 20 percent would be ``very
likely'' to request a refund.
Mr. President, let me turn to the issue of deductibility.
Currently, an individual union member may deduct his union dues only
if the amount exceed two percent of his or her adjusted gross income
[AGI]. For all intents and purposes, this means that union dues and
fees are not deductible at all for most workers, even if such dues and
fees are required as a condition of employment.
I believe that union dues and fees, especially to the extent that so
many workers are forced to pay them, ought to be fully deductible for
those who itemize deductions. Therefore, I am proposing this bill to
remove the two percent threshold and to permit union members and fee
payers to deduct that portion of their dues and fees that is not used
for political or lobbying activities. This conforms union dues and fees
with all other sorts of business expenses and contributions to tax-
exempt organizations.
Moreover, this deduction is a form of tax break that could put real
money back in the pockets of American workers.
Mr. President, to summarize, if my bill is enacted into law, tax-
exempt organizations would be required--really required--to disclose to
their members the amount of their political and lobbying activities. It
goes further by allowing full deductibility of membership dues to the
extent they are used for nonpolitical or lobbying activities.
Mr President, this proposal is a step in the direction of campaign
finance reform. One important objective of campaign finance reform
should be to return political power to individual citizens and to
diminish the influence of large organizational special interests.
Well, Mr. President, knowledge has always been power. To return power
to individual voters, they need to know where their dollars are going.
If my bill is passed, workers will no longer be in the dark about their
dues. At the same time they will be getting a tax break and possibly an
increase in their take-home pay. I believe this is the fair and honest
thing to do. I urge all my colleagues to support and cosponsor this
bill.
______
By Mr. HATCH (for himself, Mr. Lieberman, Mr. Grassley, and Mr.
Breaux):
S. 66. A bill to amend the Internal Revenue Code of 1986 to encourage
capital formation through reductions in taxes on capital gains, and for
other purposes; to the Committee on Finance.
THE CAPITAL FORMATION ACT OF 1997
Mr. HATCH. Mr. President, I am pleased to be joined by Senators
Lieberman, Grassley, and Breaux in introducing the Capital Formation
Act of 1997.
Mr. President, reducing the high rate on capital gains has long been
a priority of mine. During the last Congress, I joined my good friend,
the chairman of the House Ways and Means Committee, Bill Archer, in
sponsoring the Archer-Hatch capital gains bill. Then later in the
session Senator Lieberman and I offered a bipartisan capital gains tax
reduction bill. The Hatch/Lieberman bill, S. 959, contained the same 50
percent deduction for capital gains as well as an enhanced incentive
for investments in newly issued stock of small corporations. This
measure was supported by 45 senators, and we were pleased that its
provisions were included in the Balanced Budget Act of 1995.
The bill we are introducing today is substantially the same. Our bill
combines two important elements of capital gains relief with a broad
based tax cut and a targeted incentive to give an extra push for newly
formed or expanding small businesses. Like the capital gains measure
that passed the House and Senate during the last Congress, our bill
would allow individual taxpayers to deduct 50 percent of any net
capital gain. This means that the top capital gains tax rate for
individuals would be 19.8 percent. Also, it grants a 25-percent maximum
capital gains tax rate for corporations. Our bill also includes an
important provision that would allow homeowners who sell their personal
residences at a loss to take a capital gains deduction.
A provision that is not in our bill is a provision for indexing
assets. Many of our Senate colleagues have expressed concern that
indexing capital assets would result in undue complexity and possibly
lead to a resurgence of tax shelters. While I continue to support the
concept of indexing capital assets to prevent the taxation of
inflationary gains, I believe even more strongly that capital gains tax
relief is essential for our long-term economic growth. Therefore, in an
effort to streamline this bill and expedite its passage, we have
omitted the indexing provisions. I hope that some form of indexing can
be developed that will achieve the goals of indexing without adding
undue complexity or the potential for abuse.
In addition to the broad-based provisions listed above, our bill also
includes some extra capital gains incentives targeted to individuals
and corporations who are willing to invest in small businesses. We see
this add-on as an inducement for investors to provide the capital
needed to help small businesses get established and to expand.
Mr. President, this additional targeted incentive works as follows:
If an investor buys newly issued stock of a qualified small business,
which is defined as one with up to $100 million in assets, and holds
that stock for three or more years, he or she can deduct 75 percent of
the gain on the sale of that stock, rather than just the 50 percent
deduction provided for other capital gains.
In addition, any time after the end of the 3 year period, if the
investor decides to sell the stock of one qualified small business and
invest in another qualified small business, he or she can completely
defer the gain on the sale of the first stock and not pay taxes on the
gain until the second stock is sold. In essence, the investor is
allowed to roll over the gain into the new stock until he or she sells
the stock and cashes out the assets. We think that this additional
incentive will make a tremendous amount of capital available for new
and expanding small businesses in this country.
In particular, these special incentives should really make a
difference in the electronics, biotechnology, and other high tech
industries that are so important to our economy and to our future. The
software and medical device industries in Utah are perfect examples of
how these industries have transformed our economy. While these
[[Page S443]]
provisions are not limited to high tech companies by any means, these
are the types of businesses that are most likely to use them because it
is so hard to attract capital for these higher risk ventures. In
addition, many start-up companies have large research and development
needs. With the uncertainty of the R&E tax credit, this bill will give
investors an incentive to fund high risk research companies that may be
a Novell or Thiokol of tomorrow.
Mr. President, our economy is becoming more connected to the global
marketplace every day. And, it is vital for us to realize that capital
flows across national boundaries very rapidly. Therefore, we need to be
concerned with how our trading partners tax capital and investment
income.
Unfortunately, the U.S. has the highest tax rate on individual
capital gains of all of the G-7 nations, except the U.K. And, even in
the U.K., individuals can take advantage of indexing to alleviate
capital gains caused solely by inflation. For example, Germany totally
exempts long-term capital gains on securities. In Japan, investors pay
the lesser of 1 percent of the sales price or 20 percent of the net
gain. I think it is no coincidence, Mr. President, that Germany's
saving rate is twice ours, and Japan's is three times as high as ours.
In order to stay competitive in the world, it is vital that our tax
laws provide the proper incentive to attract the capital we need here
in the U.S.
We are aware that some of the opponents of capital gains tax
reductions have asserted that such changes would inordinately benefit
the wealthy, leaving little or no tax relief for the lower and middle
income classes. Nothing could be further from the truth. In fact,
capital gains taxation affects every homeowner, every employee who
participates in a stock purchase plan, or every senior citizen who
relies on income from mutual funds for their basic needs during
retirement. A capital gains tax cut is for everybody.
It is interesting to note how the current treatment of capital gains
only gives preferential treatment to those taxpayers whose incomes lie
in the highest tax brackets. Under the Capital Formation Act of 1997,
the benefits will tilt decidedly toward the middle-income taxpayer. A
married couple with $30,000 in taxable income who sells a capital asset
would, under our bill, pay only a 7.5-percent tax on the capital gain.
Further, this bill would slash the taxes retired seniors pay when they
sell the assets they have accumulated for income during retirement.
I also believe there is a misperception about the term ``capital
asset.'' We tend to think of capital assets as something only wealthy
persons have. In fact, a capital asset is a savings account--which we
should all have--a piece of land, a savings bond, some stock your
grandmother gave you, a mutual fund share, your house, your farm, your
1964 Mustang convertible, or any number of things that have monetary
worth. It is misleading to imply that only ``the wealthy'' would
benefit from this bill.
I want to elaborate on this point, Mr. President. Current law already
provides a sizeable differential between ordinary income tax rates and
capital gains tax rates for upper income taxpayers. The wealthiest
among us pay up to 39.6 percent on ordinary income but only 28 percent
on capital gains. We certainly believe that income tax rates are too
high. And, for middle-income taxpayers in the 28 percent income tax
bracket, there is no difference between their capital gains rate and
their ordinary income rate. Thus, current law provides no tax incentive
for middle income taxpayers to invest assets that may have capital
gains. Our bill would correct this problem and give the largest
percentage rate reduction to the lowest income taxpayers. For example,
the rate for high income earners would change from 28 percent to 19.8
percent--a 8.2 percentage point reduction. Whereas, a middle income
taxpayer--who is getting no benefit under current law--would be taxed
at 14 percent--a 14 percentage point reduction.
Frankly, Mr. President, the introduction of a bipartisan capital
gains bill couldn't come at a better time than now. Congress is in the
midst of formulating a plan to balance the federal budget. The elements
of this plan will have consequences far beyond this year or even beyond
2002 when we hope to achieve our balanced budget goal. Crucial to the
achievement of a balanced budget is the underlying growth and strength
of our economy. Small changes in the behavior of the economy can make
or break our ability to put our fiscal house in order. Thus, especially
now, we can ill afford to have our economy slow down and create an
increased fear of future job insecurity. Both Republicans and Democrats
alike can agree that the creation of new and secure jobs is imperative
for a vibrant and growing economy.
This is where a reduction of the capital gains rate can be so
important. By stimulating the economy and spurring job creation, a cut
in the capital gains rate can stave off the downturn that may be on its
way.
Many Americans have expressed concern about the wisdom of a tax
reduction while we are trying to balance the budget. However, Mr.
President, we see this bill as a change that will help us balance the
budget. The evidence clearly shows that a cut in the capital gains tax
rate will increase, not decrease, revenue to the Treasury. During the
period from 1978 to 1985, the tax rate on capital gains was cut from
almost 50 percent to 20 percent. Over this same period, however, tax
receipts increased from $9.1 billion to $26.5 billion. The opposite
occurred after the 1986 Tax Reform Act raised the capital gains tax
rate. The higher rate resulted in less revenue.
Mr. President, the capital gains tax is really a tax on realizing the
American dream. For those Americans who have planted seeds in small or
large companies, family farms, or other investments, and who have been
fortunate enough and worked hard enough to see them grow, the capital
gains tax is a tax on success. It is an additional tax on the reward
for taking risks. The American dream is not dead; it's just that we
have been taxing it away.
I urge my colleagues on both sides of the aisle to take a close look
at this bill. We believe it offers a solid plan to help us achieve our
goal of a brighter future for our children and grandchildren. When it
comes down to it, jobs, economic growth, and entrepreneurship are not
partisan issues. They are American issues.
I ask unanimous consent that the text and a summary of the bill be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 66
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Capital
Formation Act of 1997''.
(b) Reference to 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
TITLE I--CAPITAL GAINS REFORM
Subtitle A--Capital Gains Deduction for Taxpayers Other Than
Corporations
SEC. 101. CAPITAL GAINS DEDUCTION.
(a) In General.--Part I of subchapter P of chapter 1
(relating to treatment of capital gains) is amended by
redesignating section 1202 as section 1203 and by inserting
after section 1201 the following:
``SEC. 1202. CAPITAL GAINS DEDUCTION.
``(a) General Rule.--If for any taxable year a taxpayer
other than a corporation has a net capital gain, 50 percent
of such gain shall be a deduction from gross income.
``(b) Estates and Trusts.--In the case of an estate or
trust, the deduction shall be computed by excluding the
portion (if any) of the gains for the taxable year from sales
or exchanges of capital assets which, under sections 652 and
662 (relating to inclusions of amounts in gross income of
beneficiaries of trusts), is includible by the income
beneficiaries as gain derived from the sale or exchange of
capital assets.
``(c) Coordination With Treatment of Capital Gain Under
Limitation on Investment Interest.--For purposes of this
section, the net capital gain for any taxable year shall be
reduced (but not below zero) by the amount which the taxpayer
takes into account as investment income under section
163(d)(4)(B)(iii).
``(d) Transitional Rule.--
``(1) In general.--In the case of a taxable year which
includes January 1, 1997--
``(A) the amount taken into account as the net capital gain
under subsection (a) shall not exceed the net capital gain
determined by only taking into account gains and losses
properly taken into account for the portion of the taxable
year on or after January 1, 1997, and
[[Page S444]]
``(B) if the net capital gain for such year exceeds the
amount taken into account under subsection (a), the rate of
tax imposed by section 1 on such excess shall not exceed 28
percent.
``(2) Special rules for pass-thru entities.--
``(A) In general.--In applying paragraph (1) with respect
to any pass-thru entity, the determination of when gains and
losses are properly taken into account shall be made at the
entity level.
``(B) Pass-thru entity defined.--For purposes of
subparagraph (A), the term `pass-thru entity' means--
``(i) a regulated investment company,
``(ii) a real estate investment trust,
``(iii) an S corporation,
``(iv) a partnership,
``(v) an estate or trust, and
``(vi) a common trust fund.''.
(b) Deduction Allowable in Computing Adjusted Gross
Income.--Section 62(a) is amended by inserting after
paragraph (15) the following:
``(16) Long-term capital gains.--The deduction allowed by
section 1202.''.
(c) Conforming Amendments.--
(1) Section 1 is amended by striking subsection (h).
(2) Section 170(e)(1) is amended by striking ``the amount
of gain'' in the material following subparagraph (B)(ii) and
inserting ``50 percent (\25/35\ in the case of a corporation)
of the amount of gain''.
(3) Section 172(d)(2)(B) is amended to read as follows:
``(B) the deduction under section 1202 and the exclusion
under section 1203 shall not be allowed.''.
(4) The last sentence of section 453A(c)(3) is amended by
striking all that follows ``long-term capital gain,'' and
inserting ``the maximum rate on net capital gain under
section 1201 or the deduction under section 1202 (whichever
is appropriate) shall be taken into account.''.
(5) Section 642(c)(4) is amended to read as follows:
``(4) Adjustments.--To the extent that the amount otherwise
allowable as a deduction under this subsection consists of
gain from the sale or exchange of capital assets held for
more than 1 year or gain described in section 1203(a), proper
adjustment shall be made for any deduction allowable to the
estate or trust under section 1202 (relating to deduction for
excess of capital gains over capital losses) or for the
exclusion allowable to the estate or trust under section 1203
(relating to exclusion for gain from certain small business
stock). In the case of a trust, the deduction allowed by this
subsection shall be subject to section 681 (relating to
unrelated business income).''.
(6) The last sentence of section 643(a)(3) is amended to
read as follows: ``The deduction under section 1202 (relating
to deduction of excess of capital gains over capital losses)
and the exclusion under section 1203 (relating to exclusion
for gain from certain small business stock) shall not be
taken into account.''.
(7) Section 643(a)(6)(C) is amended by inserting ``(i)''
before ``there shall'' and by inserting before the period ``,
and (ii) the deduction under section 1202 (relating to
capital gains deduction) and the exclusion under section 1203
(relating to exclusion for gain from certain small business
stock) shall not be taken into account''.
(8) Section 691(c)(4) is amended by striking ``sections
1(h), 1201, 1202, and 1211'' and inserting ``sections 1201,
1202, 1203, and 1211''.
(9) The second sentence of section 871(a)(2) is amended by
inserting ``or 1203'' after ``section 1202''.
(10)(A) Section 904(b)(2) is amended by striking
subparagraph (A), by redesignating subparagraph (B) as
subparagraph (A), and by inserting after subparagraph (A) (as
so redesignated) the following:
``(B) Other taxpayers.--In the case of a taxpayer other
than a corporation, taxable income from sources outside the
United States shall include gain from the sale or exchange of
capital assets only to the extent of foreign source capital
gain net income.''.
(B) Section 904(b)(2)(A), as so redesignated, is amended--
(i) by striking all that precedes clause (i) and inserting
the following:
``(A) Corporations.--In the case of a corporation--'', and
(ii) by striking in clause (i) ``in lieu of applying
subparagraph (A),''.
(C) Section 904(b)(3) is amended by striking subparagraphs
(D) and (E) and inserting the following:
``(D) Rate differential portion.--The rate differential
portion of foreign source net capital gain, net capital gain,
or the excess of net capital gain from sources within the
United States over net capital gain, as the case may be, is
the same proportion of such amount as the excess of the
highest rate of tax specified in section 11(b) over the
alternative rate of tax under section 1201(a) bears to the
highest rate of tax specified in section 11(b).''.
(D) Section 593(b)(2)(D)(v) is amended--
(i) by striking ``if there is a capital gain rate
differential (as defined in section 904(b)(3)(D)) for the
taxable year,''; and
(ii) by striking ``section 904(b)(3)(E)'' and inserting
``section 904(b)(3)(D)''.
(11) The last sentence of section 1044(d) is amended by
striking ``1202'' and inserting ``1203''.
(12)(A) Section 1211(b)(2) is amended to read as follows:
``(2) the sum of--
``(A) the excess of the net short-term capital loss over
the net long-term capital gain, and
``(B) one-half of the excess of the net long-term capital
loss over the net short-term capital gain.''.
(B) So much of section 1212(b)(2) as precedes subparagraph
(B) thereof is amended to read as follows:
``(2) Special rules.--
``(A) Adjustments.--
``(i) For purposes of determining the excess referred to in
paragraph (1)(A), there shall be treated as short-term
capital gain in the taxable year an amount equal to the
lesser of--
``(I) the amount allowed for the taxable year under
paragraph (1) or (2) of section 1211(b), or
``(II) the adjusted taxable income for such taxable year.
``(ii) For purposes of determining the excess referred to
in paragraph (1)(B), there shall be treated as short-term
capital gain in the taxable year an amount equal to the sum
of--
``(I) the amount allowed for the taxable year under
paragraph (1) or (2) of section 1211(b) or the adjusted
taxable income for such taxable year, whichever is the least,
plus
``(II) the excess of the amount described in subclause (I)
over the net short-term capital loss (determined without
regard to this subsection) for such year.''.
(C) Section 1212(b) is amended by adding at the end the
following:
``(3) Transitional rule.--In the case of any amount which,
under this subsection and section 1211(b) (as in effect for
taxable years beginning before January 1, 1998), is treated
as a capital loss in the first taxable year beginning after
December 31, 1997, paragraph (2) and section 1211(b) (as so
in effect) shall apply (and paragraph (2) and section 1211(b)
as in effect for taxable years beginning after December 31,
1997, shall not apply) to the extent such amount exceeds the
total of any capital gain net income (determined without
regard to this subsection) for taxable years beginning after
December 31, 1997.''.
(13) Section 1402(i)(1) is amended by inserting ``, and the
deduction provided by section 1202 and the exclusion provided
by section 1203 shall not apply'' before the period at the
end thereof.
(14) Section 1445(e) is amended--
(A) in paragraph (1), by striking ``35 percent (or, to the
extent provided in regulations, 28 percent)'' and inserting
``25 percent (or, to the extent provided in regulations, 19.8
percent)''; and
(B) in paragraph (2), by striking ``35 percent'' and
inserting ``25 percent''.
(15)(A) The second sentence of section 7518(g)(6)(A) is
amended--
(i) by striking ``during a taxable year to which section
1(h) or 1201(a) applies''; and
(ii) by striking ``28 percent (34 percent'' and inserting
``19.8 percent (25 percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936 is amended--
(i) by striking ``during a taxable year to which section
1(h) or 1201(a) of such Code applies''; and
(ii) by striking ``28 percent (34 percent'' and inserting
``19.8 percent (25 percent''.
(16) The table of sections for part I of subchapter P of
chapter 1 is amended by striking the item relating to section
1202 and by inserting after the item relating to section 1201
the following:
``Sec. 1202. Capital gains deduction.
``Sec. 1203. 50-percent exclusion for gain from certain small business
stock.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section apply to
taxable years ending after December 31, 1996.
(2) Contributions.--The amendment made by subsection (c)(2)
applies to contributions on or after January 1, 1997.
(3) Use of long-term losses.--The amendments made by
subsection (c)(12) apply to taxable years beginning after
December 31, 1997.
(4) Withholding.--The amendments made by subsection (c)(14)
apply only to amounts paid after the date of enactment of
this Act.
Subtitle B--Capital Gains Reduction for Corporations
SEC. 111. REDUCTION OF ALTERNATIVE CAPITAL GAIN TAX FOR
CORPORATIONS.
(a) In General.--Section 1201 is amended to read as
follows:
``SEC. 1201. ALTERNATIVE TAX FOR CORPORATIONS.
``(a) General Rule.--If for any taxable year a corporation
has a net capital gain, then, in lieu of the tax imposed by
sections 11, 511, and 831 (whichever is applicable), there is
hereby imposed a tax (if such tax is less than the tax
imposed by such sections) which shall consist of the sum of--
``(1) a tax computed on the taxable income reduced by the
amount of the net capital gain, at the rates and in the
manner as if this subsection had not been enacted, plus
``(2) a tax of 25 percent of the net capital gain.
``(b) Transitional Rule.--
``(1) In general.--In the case of any taxable year ending
after December 31, 1996, and beginning before January 1,
1998, in applying subsection (a), net capital gain for such
taxable year shall not exceed such net capital
[[Page S445]]
gain determined by taking into account only gain or loss
properly taken into account for the portion of the taxable
year after December 31, 1996.
``(2) Special rule for pass-thru entities.--Section
1202(d)(2) shall apply for purposes of paragraph (1).
``(c) Cross References.--
``For computation of the alternative tax--
``(1) in the case of life insurance companies, see section 801(a)(2),
``(2) in the case of regulated investment companies and their
shareholders, see section 852(b)(3)(A) and (D), and
``(3) in the case of real estate investment trusts, see section
857(b)(3)(A).''.
(b) Conforming Amendment.--Section 852(b)(3)(D)(iii) is
amended by striking ``65 percent'' and inserting ``75
percent''.
(c) Effective Date.--The amendments made by this section
apply to taxable years ending after December 31, 1996.
Subtitle C--Capital Loss Deduction Allowed With Respect to Sale or
Exchange of Principal Residence
SEC. 121. CAPITAL LOSS DEDUCTION ALLOWED WITH RESPECT TO SALE
OR EXCHANGE OF PRINCIPAL RESIDENCE.
(a) In General.--Section 165(c) (relating to limitation on
losses of individuals) is amended by striking ``and'' at the
end of paragraph (2), by striking the period at the end of
paragraph (3) and inserting ``; and'', and by adding at the
end the following:
``(4) losses arising from the sale or exchange of the
principal residence (within the meaning of section 1034) of
the taxpayer.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to sales and exchanges after December 31, 1996, in
taxable years ending after such date.
TITLE II--SMALL BUSINESS VENTURE CAPITAL STOCK
SEC. 201. MODIFICATIONS TO EXCLUSION OF GAIN ON CERTAIN SMALL
BUSINESS STOCK.
(a) Increase in Exclusion Percentage.--
(1) In general.--Section 1203(a), as redesignated by
section 101, is amended--
(A) by striking ``50 percent'' and inserting ``75
percent''; and
(B) in the heading, by striking ``50-Percent'' and
inserting ``Partial''.
(2) Conforming amendments.--
(A) Section 1203, as so redesignated, is amended by adding
at the end the following:
``(l) Cross Reference.--
``For treatment of eligible gain not excluded under subsection (a),
see sections 1201 and 1202.''.
(B) The heading for section 1203, as so redesignated, is
amended by striking ``50-Percent'' and inserting ``Partial''.
(C) The table of sections for part I of subchapter P of
chapter 1, as amended by section 101(d), is amended by
striking ``50-percent'' in the item relating to section 1203
and inserting ``Partial''.
(b) Reduction in Holding Period.--Subsection (a) of section
1202 is amended by striking ``5 years'' and inserting ``3
years''.
(c) Exclusion Available to Corporations.--
(1) In general.--Section 1203(a), as redesignated by
section 101, is amended by striking ``other than a
corporation''.
(2) Conforming amendment.--Section 1203(c), as so
redesignated, is amended by adding at the end the following:
``(4) Stock held among members of controlled group not
eligible.--Stock of a member of a parent-subsidiary
controlled group (as defined in subsection (d)(3)) shall not
be treated as qualified small business stock while held by
another member of such group.''.
(d) Repeal of Minimum Tax Preference.--
(1) In general.--Section 57(a) is amended by striking
paragraph (7).
(2) Conforming amendment.--Section 53(d)(1)(B)(ii)(II) is
amended by striking ``, (5), and (7)'' and inserting ``and
(5)''.
(e) Stock of Larger Businesses Eligible for Exclusion.--
(1) In general.--Section 1203(d)(1), as redesignated by
section 101, is amended by striking ``$50,000,000'' each
place it appears and inserting ``$100,000,000''.
(2) Inflation adjustment.--Section 1203(d), as so
redesignated, is amended by adding at the end the following:
``(4) Inflation adjustment of asset limitation.--In the
case of stock issued in any calendar year after 1998, the
$100,000,000 amount contained in paragraph (1) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 1997'
for `calendar year 1992' in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not
a multiple of $10,000, such amount shall be rounded to the
nearest multiple of $10,000.''.
(f) Repeal of Per-Issuer Limitation.--Section 1203, as
redesignated by section 101, is amended by striking
subsection (b).
(g) Other Modifications.--
(1) Repeal of working capital limitation.--Section
1203(e)(6), as redesignated by section 101, is amended--
(A) in subparagraph (B), by striking ``2 years'' and
inserting ``5 years''; and
(B) by striking the last sentence.
(2) Exception from redemption rules where business
purpose.--Section 1203(c)(3), as so redesignated, is amended
by adding at the end the following:
``(D) Waiver where business purpose.--A purchase of stock
by the issuing corporation shall be disregarded for purposes
of subparagraph (B) if the issuing corporation establishes
that there was a business purpose for such purchase and one
of the principal purposes of the purchase was not to avoid
the limitations of this section.''.
(h) Qualified Trade or Business.--Section 1203(e)(3), as
redesignated by section 101, is amended by inserting ``and''
at the end of subparagraph (C), by striking ``, and'' at the
end of subparagraph (D) and inserting a period, and by
striking subparagraph (E).
(i) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section apply to stock issued after
the date of enactment of this Act.
(2) Special rule.--The amendments made by subsections (a),
(c), (e), and (f) apply to stock issued after August 10,
1993.
SEC. 202. ROLLOVER OF GAIN FROM SALE OF QUALIFIED STOCK.
(a) In General.--Part III of subchapter O of chapter 1 is
amended by adding at the end the following:
``SEC. 1045. ROLLOVER OF GAIN FROM QUALIFIED SMALL BUSINESS
STOCK TO ANOTHER QUALIFIED SMALL BUSINESS
STOCK.
``(a) Nonrecognition of Gain.--In the case of any sale of
qualified small business stock with respect to which the
taxpayer elects the application of this section, eligible
gain from such sale shall be recognized only to the extent
that the amount realized on such sale exceeds--
``(1) the cost of any qualified small business stock
purchased by the taxpayer during the 60-day period beginning
on the date of such sale, reduced by
``(2) any portion of such cost previously taken into
account under this section.
This section shall not apply to any gain which is treated as
ordinary income for purposes of this title.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified small business stock.--The term `qualified
small business stock' has the meaning given such term by
section 1203(c).
``(2) Eligible gain.--The term `eligible gain' means any
gain from the sale or exchange of qualified small business
stock held for more than 5 years.
``(3) Purchase.--A taxpayer shall be treated as having
purchased any property if, but for paragraph (4), the
unadjusted basis of such property in the hands of the
taxpayer would be its cost (within the meaning of section
1012).
``(4) Basis adjustments.--If gain from any sale is not
recognized by reason of subsection (a), such gain shall be
applied to reduce (in the order acquired) the basis for
determining gain or loss of any qualified small business
stock which is purchased by the taxpayer during the 60-day
period described in subsection (a).
``(c) Special Rules for Treatment of Replacement Stock.--
``(1) Holding period for accrued gain.--For purposes of
this chapter, gain from the disposition of any replacement
qualified small business stock shall be treated as gain from
the sale or exchange of qualified small business stock held
more than 5 years to the extent that the amount of such gain
does not exceed the amount of the reduction in the basis of
such stock by reason of subsection (b)(4).
``(2) Tacking of holding period for purposes of deferral.--
Solely for purposes of applying this section, if any
replacement qualified small business stock is disposed of
before the taxpayer has held such stock for more than 5
years, gain from such stock shall be treated eligible gain
for purposes of subsection (a).
``(3) Replacement qualified small business stock.--For
purposes of this subsection, the term `replacement qualified
small business stock' means any qualified small business
stock the basis of which was reduced under subsection
(b)(4).''.
(b) Conforming Amendments.--
(1) Section 1016(a)(23) is amended--
(A) by striking ``or 1044'' and inserting ``, 1044, or
1045''; and
(B) by striking ``or 1044(d)'' and inserting ``, 1044(d),
or 1045(b)(4)''.
(2) The table of sections for part III of subchapter O of
chapter 1 is amended by adding at the end the following:
``Sec. 1045. Rollover of gain from qualified small business stock to
another qualified small business stock.''.
(c) Effective Date.--The amendments made by this section
apply to stock sold or exchanged after the date of enactment
of this Act.
____
SUMMARY OF CAPITAL FORMATION ACT OF 1997
The Capital Formation Act of 1997 would reduce the tax rate
on capital gains and encourage investment in new and growing
business enterprises through the following provisions:
I. Broad-Based Tax Relief:
(1) Individual taxpayers would be allowed a deduction of 50
percent of any net capital gain. The top effective rate on
capital gains would thus be 19.8 percent.
(2) Corporations would have a maximum capital gains tax
rate of 25 percent.
[[Page S446]]
(3) Capital loss treatment would be allowed with respect to
the sale of a taxpayer's principal residence.
(4) Indexing of capital assets would not be included.
(5) Would be effective for taxable years ending after
December 31, 1996.
II. Targeted Incentives to Invest in Small Business
Enterprises:
(1) Provides an exclusion of 75 percent of capital gains
from the sale of investments in qualified small business
stock held for more than three years.
(2) Allows 100 percent deferral of capital gains tax, after
the three year period, if proceeds from the sale of qualified
small business stock are rolled over within 60 days into
another qualified small business stock. Gains accrued after
the rollover would qualify for a 50 percent deduction if held
for more than one year, 75 percent exclusion if held for more
than another three years, or, at any time, could be rolled
over yet again into another qualified small business stock
for 100 percent deferral.
(3) Would be effective upon date of enactment.
Example: A taxpayer buys qualified small business stock in
1997 for $10,000. She sells the stock in 2001 for $20,000.
She would be allowed to exclude 75 percent of the gain, or
$7,500, and then deduct 50 percent of the remaining gain of
$2,500. Thus, she would pay tax on only $1,250. Or, if she
chose to roll over the $20,000 proceed from the sale into
another qualified small business stock within 60 days, she
would defer all tax until she ultimately sold the second
stock.
Qualified small business stock is defined as newly issued
stock of corporations with up to $100 million in assets and
is an expansion of the current law targeted small business
capital gains exclusion added by the 1993 tax act. The
changes in the targeted small business stock incentive from
current law would include:
(1) Allow corporations to participate.
(2) Remove the current law per-issuer limitation.
(3) Expand the working capital limitation.
Mr. LIEBERMAN. Mr. President, I am proud to join Senator Hatch is
introducing this important capital gains legislation today.
This bill is nearly identical to S. 959, legislation that I
introduced with Senator Hatch in the last Congress. Ultimately that
bill had over 40 cosponsors. A variation of that bill was included in
the broader budget and tax bill which was approved by the Congress in
1995 but failed to become law. In addition, a version of S. 959 was
included in the Centrist Coalition budget, a budget which was crafted
by a group of 22 Senators evenly divided between Republicans and
Democrats. That package was offered on the floor of the Senate in May
of 1996 and received a very respectable 46 votes.
The capital gains bill we are introducing today contains a broad-
based capital gains cut which would allow individuals to deduct 50
percent of their capital gains and a corporate rate of 25 percent. It
also has a targeted provision which provides a ``sweetener'' for
investments in qualified small businesses. In addition, it allows
taxpayers to deduct losses on the sale of a principal residence,
something which is very important in places like my home state of
Connecticut as well as in California and Texas.
This bill gives people at all income levels a reason to put their
money in places where that money will help businesses start and grow
and that means more jobs for Americans and more economic prosperity for
our country. The benefits of this capital gains cut will not flow just
to people of wealth. Anyone who has stock, who has money invested in a
mutual fund, who owns a home, who has a stock option plan at work, has
a stake in capital gains tax relief. This means millions and millions
of middle-class American families stand to benefit from this
legislation. I often cite data on employee stock options and stock
purchase plans in talking about stakeholders in a capital gains cut. A
recent count showed that over three hundred American companies with
over seven million workers offered these plans. Each of those workers
and their spouses and their children stand to gain from this
legislation.
This capital gains bill rewards those people who are willing to
invest their money and not spend it. It rewards people who put their
money in places where it will add to our national pool of savings.
Businesses can draw on this pool of savings to meet their capital
needs, expand their businesses and hire more workers. The 1995 Nobel
Prize winner in Economics, Robert Lucas, had this to say about capital
gains taxes in the fall of 1995: ``When I left graduate school in 1963,
I believed that the single most desirable change in the U.S. tax
structure would be the taxation of gains as ordinary income. I now
believe that neither capital gains nor any of the income from capital
should be taxed at all.'' Professor Lucas went on to say that his
analysis shows that even under conservative assumptions, eliminating
capital gains taxes would increase available capital in this country by
about 35 percent. While we reduce not eliminate the tax on capital in
this country, we hope you will consider joining us in cosponsoring this
important legislation.
I would also like to point out that this bill contains a targeted
sweetener for investments in qualified small businesses. This is an
attempt to promote investments in small businesses, the firms that are
driving job creation in our economy. We expect these provisions to be
very helpful to the kinds of small businesses we need for our future,
the high technology companies that will be the source of new jobs in
the next century. The bill provides a 75 percent exclusion of capital
gains from sales of investment in qualified small business stock held
more than three years. In addition, it allows a 100 percent deferral of
capital gains, after the three year period, if proceeds from the sale
of qualified small business stock are rolled over within 60 days into
another qualified small business stock. If the taxpayer continues to
roll into qualified stock, and holds that stock for at least a year,
this deferral could continue indefinitely.
Before I go any further, I must give credit where credit is due. The
targeted provisions of this legislation build on the fine work of
Senator Dale Bumpers, who has been a leader in providing incentives for
start-up businesses to attract capital. He worked mightily to have a
targeted incentive piece included in the 1993 reconciliation bill and
he succeeded. The legislation we are introducing today builds on, and
we hope, improves, on that targeted incentive.
I would also like to note that I am also joining Minority Leader
Daschle today as a cosponsor of his Targeted Investment Incentive and
Economic Growth Act of 1997. That proposal contains a capital gains
rollover provision which contains features of a targeted rollover piece
I introduced in the last Congress, S. 1053, as well as features from
the targeted section of the bill I am introducing with Senator Hatch
today. Senator Daschle's legislation is also very helpful insofar as he
improves upon the targeted capital gains bill we passed in 1993, much
in the same way the broader capital gains bill being introduced today
does.
I am also delighted that Senator Daschle's bill incorporates a
version of a bill I introduced in June of 1993, The Equity Expansion
Act of 1993. That bill created a preferred type of stock options for
companies willing to offer stock options to a wide cross section of
their employees. Under current law, taxpayers are taxed on a stock
option when they exercise their right to buy stock, not when they sell
that stock. The perverse effect of taxing this paper gain is that many
people feel compelled to sell their stock when they exercise their
option to buy it in order to pay the tax. The Equity Expansion Act
began with the premise that we ought to encourage people to hold their
investment in their company. It changed the taxable event from the date
of exercise to the date of sale for a new class of stock options known
as performance-based stock options [PSOs]. Under my bill, as under the
bill being introduced by the Minority Leader, in order to qualify for
this new class of stock options, at least half of a company's stock
options would have to go to non-highly compensated employees.
In addition, 50 percent of any capital gain on these PSO's would be
exempt from tax if they are held by the taxpayer for more than two
years. I hope this will prove a powerful incentive for employees to buy
and hold the investments they are making in their company.
In closing, I applaud both Senator Hatch and Minority Leader Daschle,
in their efforts to promote economic growth by changing the way we tax
investment in this country. They have done yeoman's work on this issue
and I hope that we will be able to move forward in a bipartisan way to
make these incentives a reality in the very near future.
______
By Ms. SNOWE:
[[Page S447]]
S. 67. A bill to amend the Public Health Service Act to extend the
program of research on breast cancer; to the Committee on Labor and
Human Resources.
the breast cancer research extension act of 1997
Ms. SNOWE. Mr. President, I am extremely pleased that one of the
first resolutions introduced in the 105th Congress by the Republican
leadership will significantly increase biomedical research funding at
NIH. I truly believe that this is a momentous occasion which will reap
enormous benefits for all Americans. Building on this, I rise to
introduce legislation which authorizes increased funding for breast
cancer research.
Over the past six years, Congress has demonstrated an increased
commitment to the fight against breast cancer. Back in 1991, less than
$100 million dollars was spent on breast cancer research. Since then,
Congress has steadily increased this allocation. These increases have
stimulated new and exciting research that has begun to unravel the
mysteries of this devastating disease and is moving us closer to a
cure. Today, we must send a message through our authorization level to
scientists and research policy makers that we are committed to
continued funding for this important research.
This increase in funding is necessary because breast cancer has
reached crisis levels in America. In 1997, it is estimated that 180,200
new cases of breast cancer will be diagnosed in this country, and
43,900 women will die from this disease. Breast cancer is the most
common form of cancer and the second leading cause of cancer deaths
among American women. Today, over 2.6 million American women are living
with this disease. In my home state of Maine, it is the most commonly-
diagnosed cancer among women, representing more than 30 percent of all
new cancers in Maine women.
In addition to these enormous human costs, breast cancer also exacts
a heavy financial toll--over $6 billion of our health care dollars are
spent on breast cancer annually.
Today, however, there is cause for hope. Recent scientific progress
made in the fight to conquer breast cancer is encouraging. Researchers
have isolated the genes responsible for inherited breast cancer, and
are beginning to understand the mechanism of the cancer cell itself. It
is imperative that we capitalize upon these advances by continuing to
support the scientists investigating this disease and their innovative
research.
For this reason, my bill increases the FY98 funding authorization
level for breast cancer research to $590 million. This level represents
the funding level scientists believe is necessary to make progress
against this disease. This increased funding will contribute
substantially toward solving the mysteries surrounding breast cancer.
Our continued investment will save countless lives and health care
dollars, and prevent undue suffering in millions of American women and
families.
On behalf of the 2.6 million women living with breast cancer, I urge
my colleagues to support this important bill.
______
By Mr. KYL:
S. 68. A bill to establish a commission to study the impact on voter
turnout of making the deadline for filing Federal income tax returns
conform to the date of Federal elections; to the Committee on Rules and
Administration.
THE VOTER TURNOUT ENHANCEMENT STUDY COMMISSION ACT
Mr. KYL. Mr. President, I rise today to introduce the Voter Turnout
Enhancement Study (VoTES) Commission Act, a bill designed to promote
fiscal responsibility while helping to motivate more Americans to get
to the polls on Election Day.
Mr. President, there are far too many people who, for one reason or
another, choose not to exercise their right to vote. Although the
reasons for their non-participation are undoubtedly varied, I suspect
that it comes down to a perception that the choices they will make on
the ballot will not make enough of a difference. One person, explaining
why she chose not to participate in last November's election, told the
Tucson Citizen that ``it doesn't make any difference in my life who's
president.'' This is a common enough sentiment that the election last
fall posted one of the lowest voter turnout rates this century.
The ``Motor Voter'' bill that President Clinton championed a few
years ago as a way to get out the vote apparently had little effect,
other than to impose additional costs and mandates on state and local
governments and their taxpayers. Although the bill did help increase
voter registration, it did little, if anything, to motivate people to
get to the polls. Like the woman in Tucson, too many people did not
believe they had enough of a stake in the outcome of the election to
take the time to vote.
Of course, people do have a stake in the outcome of every election.
For one thing, the candidates chosen determine how much and for what
purpose citizens are taxed. Most people I hear from say that is one
area where the majority of those elected in the past failed to heed
their concerns; they say their taxes are far too high.
One survey, which was published in Reader's Digest last year, found
that more than two-thirds of Americans felt their own taxes were ``too
high.'' According to the poll, the maximum tax burden that Americans
think a family of four should bear is 25 percent of its total income,
even if the family's income is $200,000 per year.
But the government takes far more than that. The average family--
whose income is not $200,000, but something far less than that--now
pays nearly 40 percent of its income in taxes. That is more than it
spends on food, clothing, and shelter combined. People around the
country are reacting to that heavy burden. The new faces in the House
and Senate in recent years have been those of people pledging to oppose
tax increases and support tax cuts. President Clinton won reelection,
promising to support tax cuts. In some cases, people around the country
have also placed limits on how much their state governments can tax
them. But advocates of tax cuts, and tax limits themselves, can only
achieve their purpose if people are willing to go to the polls to
support them.
With that in mind, one way to demonstrate to people that their
choices at the polls have a real effect on their lives would be to move
the deadline for filing income tax returns to Election Day. That would
give people a reason to vote by focusing their attention on the role of
government--and how much it actually takes from them in taxes--on the
day of the year that they have the greatest opportunity to influence
change. Moving Tax Day to Election Day would probably result in more
voter turnout and more change in Washington than anything else we could
do. And of course, maximizing voter turnout is the best way to ensure
that government officials heed the will of the people and make sound
public policy.
The bill I am introducing today would provide for a thoughtful and
thorough analysis of a change in the tax-filing deadline from April to
November, its potential effect on voter turnout, as well as any
economic impact it might have. The bill explicitly requires that an
independent commission conduct a cost-benefit analysis--a requirement
that Congress would be wise to impose routinely on legislative
initiatives to separate the good ideas from the bad, and save taxpayers
a lot of money in the process. A number of other cost-limiting
provisions have been included to protect taxpayers' interests.
While just about every day of the year is celebrated by special
interest groups around the country for the government largesse they
receive, the taxpayers--the silent majority--have only one day of the
year to focus on what that largesse means to them--how much it costs
them--and that is Tax Day. I believe that it ought to coincide with
Election Day.
I invite my colleagues to join me as cosponsors of this initiative,
and I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 68
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Voter Turnout Enhancement
Study Commission Act''.
[[Page S448]]
SECTION 2. FINDINGS.
(a) Findings.--The Congress finds that:
(1) The right of citizens of the United States to vote is a
fundamental right.
(2) It is the duty of federal, state, and local governments
to promote the exercise of that right to vote to the greatest
extent possible.
(3) The power to tax is a power that citizens of the United
States only guardedly vest in their elected representatives
to the federal, state, and local governments.
(4) The only regular contacts most Americans have with
their government are the filing of their personal income tax
returns and their participation in federal, state, and local
elections.
(5) About 14 million individual income tax returns were
filed in 1996, but only about 92 million Americans cast votes
in that year's presidential election.
SECTION 3. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a commission to be
known as the Voter Turnout Enhancement Study Commission
(hereafter in this Act referred to as the `Commission').
(b) Membership.--
(1) Composition.--The Commission shall be composed of nine
members of whom--
(A) 3 shall be appointed by the President;
(B) 3 shall be appointed by the Majority Leader of the
Senate, and
(C) 3 shall be appointed by the Speaker of the House of
Representatives.
(c) Period of Appointment, Vacancies.--Members shall be
appointed no later than 30 days after the date of the
enactment of this Act, and serve for the life of the
Commission. Any vacancy in the Commission shall not affect
its powers, but shall be filled in the same manner as the
original appointment.
(d) Compensation.--
(1) Rates of pay.--Except as provided in paragraph (2),
members of the Commission shall serve without pay.
(2) Travel expenses.--Each member of the Commission shall
receive travel expenses, include per diem in lieu of
subsistence, in accordance with sections 5702 and 5703 of
title 5, United States Code.
(e) Initial Meeting.--No later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold its first meeting.
(f) Meetings.--After the initial meeting, the Commission
shall meet at the call of the Chairman.
(g) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(h) Chairman and Vice Chairman.--The Commission shall
select a Chairman and Vice Chairman from among its members.
SECTION 4. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--The Commission shall conduct a thorough
study of all matters relating to the propriety of conforming
the annual filing date for federal income tax returns with
the date for holding biennial federal elections.
(2) Matters studied.--The matters studied by the Commission
shall include:
(A) whether establishment of a single date on which
individuals can fulfill their obligations of citizenship as
both electors and taxpayers would increase participation in
federal, state, and local elections; and
(B) a cost-benefit analysis of any change in tax filing
deadlines.
(b) Report.--No later than 12 months after the date of the
enactment of this Act, the Commission shall submit a report
to the President and the Congress which shall contain a
detailed statement of the findings and conclusions of the
Commission, together with its recommendations for such
legislation and administrative actions as it considers
appropriate.
SECTION 5. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such information as the Commission considers
advisable to carry out the purposes of this Act.
(b) Information To Be Gathered.--The Commission shall
obtain information from sources as it deems appropriate,
including, but not limited to, taxpayers and their
representatives, Governors, state and federal election
officials, and the Commissioner of the Internal Revenue
Service.
SECTION 6. TERMINATION OF THE COMMISSION.
The Commission shall terminate upon the submission of the
report under section 4.
SECTION 7. AUTHORIZATION OF APPROPRIATIONS
There is authorized to be appropriated such sums as may be
necessary to carry out the purposes of this Act.
______
By Mr. KYL:
S. 69. A bill to amend the Internal Revenue Code of 1986 to allow a
one-time election of the interest rate to be used to determine present
value for purposes of pension cash-out restrictions, and for other
purposes; to the Committee on Finance.
the retirement protection act amendment act of 1997
Mr. KYL. Mr. President, today I am introducing the Retirement
Protection Act Amendments of 1997, a bill that will make a small but
very important change in the pension-related provisions of the 1994
Uruguay Round Agreements Act.
Mr. President, the 1994 trade act made some very significant changes
in pension law, including a modification in the interest rate used to
calculate lump-sum distributions from defined benefit pension plans.
The act required such plans to use the interest rate on 30-year
Treasury securities, a rate that is proving too volatile for many
retirement plans, particularly small plans.
Bruce Tempkin, an actuary and small business pension specialist at
Louis Kravitz & Associates, described the effect of the change this
way: ``it is similar to taking out a variable-rate mortgage with no
cap.'' You could find yourself getting ready to retire and expecting a
lump-sum distribution of a given amount, but being told that you will
actually get a third less because the government just mandated an
interest-rate change. That is not only unfair, it discourages people
from participating in private pension plans at the very time we need to
be encouraging more such planning.
Recognizing the problem created by the 1994 law, legislators included
language in the Small Business Job Protection Act last year to delay
the effective date of the change for plans adopted and in effect before
December 8, 1995. While I supported that delay, it is, at best, only a
temporary solution.
The bill I am introducing today proposes a permanent solution. It
would give plans a one-time option to choose a fixed interest rate
between five percent and eight percent instead of the floating 30-year
Treasury rate. That will make it easier for employers to plan for the
required contributions, and for employers and employees alike to
understand what their lump-sum benefits will ultimately be.
Mr. President, I invite my colleagues to join me as cosponsors of
this initiative.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 69
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Retirement Protection Act
Amendments of 1997''.
SECTION 2. INTEREST RATE FOR DETERMINATION OF PRESENT VALUE
FOR PURPOSES OF PENSION CASH-OUT RESTRICTIONS.
(a) In General.--Subclause (II) of section 417(e)(3)(A)(ii)
of the Internal Revenue Code of 1986 (relating to
determination of present value) is amended by inserting ``,
or, at the irrevocable election of the plan, an annual
interest rate specified in the plan, which may not be less
than 5 percent nor more than 8 percent'' after ``prescribe''.
(b) Conforming Amendment.--Subclause (II) of section
205(g)(3)(A)(ii) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1055(g)(3)(A)(ii)) is amended by
inserting ``, or, at the irrevocable election of the plan, an
annual interest rate specified in the plan, which may not be
less than 5 percent nor more than 8 percent'' after
``perscribe''.
(c) Effective Date.--The amendments made by this section
shall take effect as if included in the enactment of the
amendments made by section 767 of the Uruguay Round
Agreements Act.
______
By Mrs. BOXER (for herself, Mr. Chafee, Mr. Reed, and Mr.
Durbin):
S. 70. A bill to apply the same quality and safety standards to
domestically manufactured handguns that are currently applied to
imported handguns; to the Committee on the Judiciary.
the american handgun standards act
Mrs. BOXER. Mr. President, today I am to introducing the American
Handgun Standards Act, a bill to require that handguns made in the
United States meet the same quality and safety standards currently
required of imported handguns. I am joined in this effort by Senators
John Chafee, Jack Reed, and Dick Durbin.
This bill is aimed at junk guns--the cheap, unsafe, and easily
concealable handguns that are the criminals' clear favorite. Under our
bill, junk guns will no longer be allowed to be manufactured or sold in
the United States of America.
Nearly 30 years ago, Congress thought it had solved the problem of
junk guns. Following the assassination of Senator Robert Kennedy,
Congress passed the Gun Control Act of 1968, which banned the
importation of junk
[[Page S449]]
guns. At the time, virtually all junk guns were imported, so
restricting their domestic manufacture was not considered necessary.
To implement the new law, a quality and safety test was designed to
measure a gun's suitability for import. Any foreign-made firearm that
fails this test is, by definition, a junk gun, and it cannot be
imported into the United States. This bill would require that all
handguns made in the United States pass this common sense quality and
safety test.
The Gun Control Act of 1968 created a junk gun double standard.
Imported handguns were subjected to rigorous quality and safety
standards, but guns made in the United States were left totally
unregulated. Even toy guns are subject to quality and safety standards,
but real handguns made in the United States are not required to meet
even one.
The need for strong action is clear. Gunshots are now the leading
cause of death among children in California. A child dies from gunfire
every 92 minutes in the United States. A total of 39,720 people died
from gunshot wounds in 1994 and approximately 250,000 Americans were
injured. If we were in a war with this many casualties, there would be
protests in the streets to end it. Let us end now, end this junk gun
war.
For each person killed by gunfire, up to 8 are wounded. Many
survivors of gun violence face debilitating injuries that require
constant medical attention. The economic costs of gun violence are
staggering. Direct medical costs alone cost Americans more than $20
billion. When indirect costs, such as lost productivity, are
considered, the total economic cost of gun injuries soars to over $120
billion.
I first introduced junk gun legislation less than a year ago. Since
then, I have received support so strong that it has surpassed even my
most optimistic hopes. More than two dozen California cities and
counties have passed local ordinances banning junk gun sales, and my
legislation has been endorsed by the California Police Chiefs
Association and 36 individual police chiefs and sheriffs representing
some of California's largest cities, including Los Angeles, San
Francisco, San Jose and Sacramento.
This legislation has generated such strong support in the law
enforcement community because police know the danger of these junk guns
first hand. They know that junk guns are the criminals' favorite
firearms.
Junk guns are 3.4 times as likely to be used in crimes as are other
firearms. And newly compiled ATF data shows that in 1996, the three
firearms most frequently traced at crime scenes were junk guns made in
America.
I ask unanimous consent that the full text of the bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 70
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Handgun Standards
Act of 1997''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) the Gun Control Act of 1968 prohibited the importation
of handguns that failed to meet minimum quality and safety
standards;
(2) the Gun Control Act of 1968 did not impose any quality
and safety standards on domestically produced handguns;
(3) domestically produced handguns are specifically
exempted from oversight by the Consumer Product Safety
Commission and are not required to meet any quality and
safety standards;
(4) each year--
(A) gunshots kill more than 35,000 Americans and wound
approximately 250,000;
(B) approximately 75,000 Americans are hospitalized for the
treatment of gunshot wounds;
(C) Americans spend more than $20 billion for the medical
treatment of gunshot wounds; and
(D) gun violence costs the United States economy a total of
$135 billion;
(5) the disparate treatment of imported handguns and
domestically produced handguns has led to the creation of a
high-volume market for junk guns, defined as those handguns
that fail to meet the quality and safety standards required
of imported handguns;
(6) traffic in junk guns constitutes a serious threat to
public welfare and to law enforcement officers;
(7) junk guns are used disproportionately in the commission
of crimes; and
(8) the domestic manufacture, transfer, and possession of
junk guns should be restricted.
SEC. 3. DEFINITION OF JUNK GUN.
Section 921(a) of title 18, United States Code, is amended
by adding at the end the following new paragraph:
``(33)(A) The term `junk gun' means any handgun that does
not meet the standard imposed on imported handguns as
described in section 925(d)(3), and any regulations issued
under such section.''.
SEC. 4. RESTRICTION ON MANUFACTURE, TRANSFER, AND POSSESSION
OF CERTAIN HANDGUNS.
Section 922 of title 18, United States Code, is amended by
adding at the end the following new subsection:
``(y)(1) It shall be unlawful for a person to manufacture,
transfer, or possess a junk gun that has been shipped or
transported in interstate or foreign commerce.
``(2) Paragraph (1) shall not apply to--
``(A) the possession or transfer of a junk gun otherwise
lawfully possessed under Federal law on the date of the
enactment of the American Handgun Standards Act of 1997;
``(B) a firearm or replica of a firearm that has been
rendered permanently inoperative;
``(C)(i) the manufacture for, transfer to, or possession
by, the United States or a State or a department or agency of
the United States, or a State or a department, agency, or
political subdivision of a State, of a junk gun; or
``(ii) the transfer to, or possession by, a law enforcement
officer employed by an entity referred to in clause (i) of a
junk gun for law enforcement purposes (whether on or off-
duty);
``(D) the transfer to, or possession by, a rail police
officer employed by a rail carrier and certified or
commissioned as a police officer under the laws of a State of
a junk gun for purposes of law enforcement (whether on or
off-duty); or
``(E) the manufacture, transfer, or possession of a junk
gun by a licensed manufacturer or licensed importer for the
purposes of testing or experimentation authorized by the
Secretary.''.
______
By Mr. DASCHLE (for himself, Mr. Kerry, Mr. Leahy, Ms. Mikulski,
Mrs. Murray, Mr. Reid, Mr. Wyden, Mrs. Boxer, Ms. Moseley-
Braun, Mr. Harkin, and Mr. Lautenberg):
S. 71. A bill to amend the Fair Labor Standards Act of 1938 and the
Civil Rights Act of 1964 to provide more effective remedies to victims
of discrimination in the payment of wages on the basis of sex, and for
other purposes; to the Committee on Labor and Human Resources.
paycheck fairness act
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 71
By the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Paycheck Fairness Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Women have entered the workforce in record numbers.
(2) Even in the 1990s, women earn significantly lower pay
than men for work on jobs that require equal skill, effort,
and responsibility and that are performed under similar
working conditions.
(3) The existence of such pay disparities--
(A) depresses the wages of working families who rely on the
wages of all members of the family to make ends meet;
(B) prevents the optimum utilization of available labor
resources;
(C) has been spread and perpetuated, through commerce and
the channels and instrumentalities of commerce, among the
workers of the several States;
(D) burdens commerce and the free flow of goods in
commerce;
(E) constitutes an unfair method of competition in
commerce;
(F) leads to labor disputes burdening and obstructing
commerce and the free flow of goods in commerce; and
(G) interferes with the orderly and fair marketing of goods
in commerce.
(4)(A) Artificial barriers to the elimination of
discrimination in the payment of wages on the basis of sex
continue to exist more than 3 decades after the enactment of
the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.)
and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.).
(B) Elimination of such barriers would have positive
effects, including--
(i) providing a solution to problems in the economy created
by unfair pay disparities;
(ii) substantially reducing the number of working women
earning unfairly low wages, thereby reducing the dependence
on public assistance; and
(iii) promoting stable families by enabling all family
members to earn a fair rate of pay.
(5) Only with increased information about the provisions
added by the Equal Pay Act of 1963 and generalized wage data,
along with more effective remedies, will women recognize and
enforce their rights to equal pay for
[[Page S450]]
work on jobs that require equal skill, effort, and
responsibility and that are performed under similar working
conditions.
(6) Certain employers have already made great strides in
eradicating unfair pay disparities in the workplace and their
achievements should be recognized.
SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.
(a) Nonretaliation Provision.--Section 15(a)(3) of the Fair
Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)) is
amended--
(1) by striking ``or has'' each place it appears and
inserting ``has''; and
(2) by inserting before the semicolon the following: ``, or
has inquired about, discussed, or otherwise disclosed the
wages of the employee or another employee''.
(b) Enhanced Penalties.--Section 16(b) of such Act (29
U.S.C. 216(b)) is amended--
(1) by inserting after the first sentence the following:
``Any employer who violates section 6(d) shall additionally
be liable for such compensatory or punitive damages as may be
appropriate.'';
(2) in the sentence beginning ``An action to'', by striking
``either of the preceding sentences'' and inserting ``any of
the preceding sentences of this subsection'';
(3) in the sentence beginning ``No employees shall'', by
striking ``No employees'' and inserting ``Except with respect
to class actions brought to enforce section 6(d), no
employee'';
(4) by inserting after such sentence the following:
``Notwithstanding any other provision of Federal law, any
action brought to enforce section 6(d) may be maintained as a
class action as provided by the Federal Rules of Civil
Procedure.''; and
(5) in the sentence beginning ``The court in''--
(A) by striking ``in such action'' and inserting ``in any
action brought to recover the liability prescribed in any of
the preceding sentences of this subsection''; and
(B) by inserting before the period the following: ``,
including expert fees''.
(c) Action by Secretary.--Section 16(c) of such Act (29
U.S.C. 216(c)) is amended--
(1) in the first sentence--
(A) by inserting ``or, in the case of a violation of
section 6(d), additional compensatory or punitive damages,''
before ``and the agreement''; and
(B) by inserting before the period the following: ``, or
such compensatory or punitive damages, as appropriate'';
(2) in the second sentence, by inserting before the period
the following: `` and, in the case of a violation of section
6(d), additional compensatory or punitive damages'';
(3) in the third sentence, by striking ``the first
sentence'' and inserting ``the first or second sentence'';
and
(4) in the last sentence, by inserting after ``in the
complaint'' the following: ``or becomes a party plaintiff in
a class action brought to enforce section 6(d)''.
SEC. 4. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION.
Section 705 of the Civil Rights Act of 1964 (42 U.S.C.
2000e-4) is amended by adding at the end the following new
subsection:
``(l)(1) The Commission shall, by regulation, require each
employer who has 100 or more employees for each working day
in each of 20 or more calendar weeks in the current or
preceding calendar year to maintain payroll records and to
prepare and submit to the Commission reports containing
information from the records. The reports shall contain pay
information, analyzed by the race, sex, and national origin
of the employees. The reports shall not disclose the pay
information of an employee in a manner that permits the
identification of the employee.
``(2) The third through fifth sentences of section 709(c)
shall apply to employers, regulations, and records described
in paragraph (1) in the same manner and to the same extent as
the sentences apply to employers, regulations, and records
described in such section.''.
SEC. 5. TRAINING.
The Equal Employment Opportunity Commission, subject to the
availability of funds appropriated under section 8(b), shall
provide training to Commission employees and affected
individuals and entities on matters involving discrimination
in the payment of wages.
SEC. 6. RESEARCH, EDUCATION, AND OUTREACH.
The Secretary of Labor shall conduct studies and provide
information to employers, labor organizations, and the
general public concerning the means available to eliminate
pay disparities between men and women, including--
(1) conducting and promoting research to develop the means
to correct expeditiously the conditions leading to the pay
disparities;
(2) publishing and otherwise making available to employers,
labor organizations, professional associations, educational
institutions, the media, and the general public the findings
resulting from studies and other materials, relating to
eliminating the pay disparities;
(3) sponsoring and assisting State and community
informational and educational programs;
(4) providing information to employers, labor
organizations, professional associations, and other
interested persons on the means of eliminating the pay
disparities;
(5) recognizing and promoting the achievements of
employers, labor organizations, and professional associations
that have worked to eliminate the pay disparities; and
(6) convening a national summit to discuss, and consider
approaches for rectifying, the pay disparities.
SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN
THE WORKPLACE.
(a) In General.--There is established the Robert Reich
National Award for Pay Equity in the Workplace, which shall
be evidenced by a medal bearing the inscription ``Robert
Reich National Award for Pay Equity in the Workplace''. The
medal shall be of such design and materials, and bear such
additional inscriptions, as the Secretary may prescribe.
(b) Criteria for Qualification.--To qualify to receive an
award under this section a business shall--
(1) submit a written application to the Secretary, at such
time, in such manner, and containing such information as the
Secretary may require, including at a minimum information
that demonstrates that the business has made substantial
effort to eliminate pay disparities between men and women,
and deserves special recognition as a consequence; and
(2) meet such additional requirements and specifications as
the Secretary determines to be appropriate.
(c) Making and Presentation of Award.--
(1) Award.--After receiving recommendations from the
Secretary, the President or the designated representative of
the President shall annually present the award described in
subsection (a) to businesses that meet the qualifications
described in subsection (b).
(2) Presentation.--The President or the designated
representative of the President shall present the award with
such ceremonies as the President or the designated
representative of the President may determine to be
appropriate.
(3) Publicity.--A business that receives an award under
this section may publicize the receipt of the award and use
the award in its advertising, if the business agrees to help
other United States businesses improve with respect to the
elimination of pay disparities between men and women.
(d) Business.--For the purposes of this section, the term
``business'' includes--
(1)(A) a corporation, including a nonprofit corporation;
(B) a partnership;
(C) a professional association;
(D) a labor organization; and
(E) a business entity similar to an entity described in any
of subparagraphs (A) through (D);
(2) an entity carrying out an education referral program, a
training program, such as an apprenticeship or management
training program, or a similar program; and
(3) an entity carrying out a joint program, formed by a
combination of any entities described in paragraph (1) or
(2).
SEC. 8. INCREASED RESOURCES FOR ENFORCEMENT AND EDUCATION.
(a) General Resources.--There is authorized to be
appropriated to the Equal Employment Opportunity Commission,
for necessary expenses of the Commission in carrying out
title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et
seq.), title I of the Americans with Disabilities Act of 1990
(42 U.S.C. 12111 et seq.), the Age Discrimination in
Employment Act of 1967 (29 U.S.C. 621 et seq.), and section
6(d) of the Fair Labor Standards Act of 1938 (29 U.S.C.
206(d)), $36,000,000, in addition to sums otherwise
appropriated for such expenses. Any amounts so appropriated
shall remain available until expended.
(b) Targeted Resources.--There is authorized to be
appropriated to the Equal Employment Opportunity Commission
to carry out section 5, $500,000, in addition to sums
otherwise appropriated for providing training described in
such section. Any amounts so appropriated shall remain
available until expended.
(c) Research, Education, Outreach, and National Award.--
There is authorized to be appropriated to the Secretary of
Labor to carry out sections 6 and 7, $1,000,000. Any amounts
so appropriated shall remain available until expended.
______
By Mr. KYL:
S. 72. A bill to amend the Internal Revenue Code of 1986 to provide a
reduction in the capital gain rates for all taxpayers, and for other
purposes; to the Committee on Finance.
S. 73. A bill to amend the Internal Revenue Code of 1986 to repeal
the corporate alternative minimum tax; to the Committee on Finance.
S. 74. A bill to amend the Internal Revenue Code of 1986 to limit the
tax rate for certain small businesses, and for other purposes; to the
Committee on Finance.
AGENDA FOR ECONOMIC GROWTH AND OPPORTUNITY
Mr. KYL. Mr. President, I rise today to introduce a series of bills
aimed at improving our Nation's rate of economic growth, encouraging
investment in small businesses, enhancing wages of American workers,
and making our country more competitive in the global economy. The
bills make up what I will call the Agenda for Economic Growth and
Opportunity.
Mr. President, it was just over 34 years ago that President John F.
Kennedy made the following observation in his State of the Union
message--an observation that someone could just as
[[Page S451]]
easily make about today's economy. He said, ``America has enjoyed 22
months of uninterrupted economic recovery''. The current expansion,
albeit one of the weakest this century, has gone on a little longer.
``But'', President Kennedy went on to say, ``recovery is not enough. If
we are to prevail in the long run, we must expand the long-run strength
of our economy. We must move along the path to a higher rate of
economic growth''.
Economic growth. Tracking it is the domain of economists and
statisticians, but what does it mean for the average American family,
and why should policy-makers be so concerned about the slow rate of
economic growth during the last 4 years?
Slow growth means fewer job opportunities for young Americans just
entering the work force and for those people seeking to free themselves
from the welfare rolls. It means stagnant wages and salaries, and fewer
opportunities for career advancement for those who do have jobs. It
means less investment in new plant and equipment, and new technology--
things needed to enhance workers' productivity and ensure that American
businesses can remain competitive in the global marketplace. It means
less revenue for the U.S. Treasury, compared to what we could collect
with higher rates of economic growth, for the critical programs serving
the American people. And it means that interest rates are higher than
they need to be because national debt as a share of Gross Domestic
Product is higher. As a result, we all pay more for such things as home
mortgages, college loans, and car loans.
For most of the 20th century, our Nation enjoyed very strong rates of
economic growth and the dividends that came with it. The 1920s saw
annual economic growth above 5 percent. In the 1950s, it was above 6
percent. Economic growth during the Kennedy and Johnson years averaged
4.8 percent annually. During the decade before President Clinton took
office, the economy grew at an average rate of 3.2 percent a year,
according to data supplied by the Joint Economic Committee.
The Clinton years, by contrast, have seen the economy grow at an
average rate of only about 2.3 percent. What that means is that, while
we may not exactly be hurting as a Nation, we are not becoming much
better off, either. And we are certainly not leaving much of a legacy
for our children and grandchildren to meet the needs of tomorrow.
So what do we do to enhance economic growth--to ensure that jobs are
available for those who want them, that families can earn better wages,
and that American business maintains a dominant role in the global
economy? Those are, after all, the goals of the agenda I am laying out
today--an agenda for economic growth and opportunity for all Americans,
for those struggling to make ends meet today, and for our children when
they enter the work force tomorrow.
Let me answer then, beginning with another quotation from John
Kennedy:
``[I]t is increasingly clear--to those in Government,
business, and labor who are responsible for our economy's
success--that our obsolete tax system exerts too heavy a drag
on private purchasing power, profits, and employment.
Designed to check inflation in earlier years, it now checks
growth instead. It discourages extra effort and risk. It
distorts use of resources. It invites recurrent recessions,
depresses our Federal revenues, and causes chronic budget
deficits.''
Mr. President, the agenda I am proposing attacks some of the most
significant deficiencies in our Nation's Tax Code that are inhibiting
savings and investment, and job creation--deficiencies that are
preventing us from reaching our potential as a Nation. I do not make
these proposals as a substitute for fundamental tax reform, which I
believe is the ultimate solution to the problem. But fundamental tax
reform is going to take some time to accomplish, maybe several years.
What we need now are interim steps--things we can do quickly--to make
sure our movement into the 21st century is based on the bedrock of a
strong and growing economy.
I believe these Tax Code changes will help strengthen the economy
and, in turn, produce more revenue for the Federal Government to assist
in deficit reduction. Still, I recognize that under existing budget
rules which require static scoring of tax bills, there may be a need to
find offsetting spending cuts. With that in mind, I am asking the Joint
Committee on Taxation, as well as the respected Institute for Policy
Innovation, to estimate the economic impact of these proposals,
including the effect on federal revenues. Should the result of those
analyses indicate that there will be some revenue loss--most likely
because of rules requiring static scoring--my intention would be to
propose some offsetting spending cuts.
Mr. President, the cuts I would identify would come in so-called
corporate welfare programs. In other words, in exchange for the
targeted subsidies from corporate welfare programs, we would adopt
broadly applicable tax incentives to support activities vetted by the
free market. That is what free enterprise is all about.
THE CAPITAL GAINS REFORM ACT
Mr. KYL. Mr. President, the first of the five tax-related bills I am
introducing is based upon President John Kennedy's own growth package
from three decades ago. Like the Kennedy plan, the legislation would
reduce the percentage of long-term capital gains included in individual
income subject to tax to 30 percent. It would reduce the alternative
tax on the capital gains of corporations to 22 percent.
I would note that Democratic President John Kennedy's plan called for
a deeper capital gains tax cut than the Republican-controlled Congress
proposed last year.
There was a reason that John Kennedy called for a significant cut in
the capital gains tax. ``The present tax treatment of capital gains and
losses is both inequitable and a barrier to economic growth'', the
President said. ``The tax on capital gains directly affects investment
decisions, the mobility and flow of risk capital from static to more
dynamic situations, the ease or difficulty experienced by new ventures
in obtaining capital, and thereby the strength and potential for growth
of the economy.''
So, if we are concerned whether new jobs are being created, whether
new technology is developed, whether workers have the tools they need
to do a better, more efficient job, we should support measures that
reduce the cost of capital to facilitate the achievement of all these
things. Remember, for every employee, there is an employer who took
risks, made investments, and created jobs. But that employer needed
capital to start.
Also remember that the capital gains tax represents a second tax on
amounts saved and invested. As a result, individuals and businesses
that save and invest end up paying more taxes over time than if all
income is consumed and no saving takes place at all. To make matters
even worse, the tax is applied to gains due solely to inflation.
Mr. President, it may come as a surprise to some people, but
experience shows that lower capital gains tax rates have a positive
effect on federal revenues. The most impressive evidence, as noted in a
recent report by the American Council for Capital Formation, can be
found in the period from 1978 to 1985. During those years, the top
marginal federal tax rate on capital gains was cut by almost 45
percent--from 35 percent to 20 percent--but total individual capital
gains tax receipts nearly tripled--from $9.1 billion to $26.5 billion
annually.
Research by experts at the prestigious National Bureau of Economic
Research indicates that the maximizing capital gains tax rate--that is,
the rate that would bring in the most Treasury revenue--is somewhere
between nine and 21 percent. The bill I am introducing today would set
an effective top rate on capital gains earned by individuals, by virtue
of the 70 percent exclusion, at 11.88 percent.
Mr. President, when capital gains tax rates are too high, people need
only hold onto their assets to avoid the tax indefinitely. No sale, no
tax. But that means less investment, fewer new businesses and new jobs,
and--as historical records show--far less revenue to the Treasury than
if capital gains taxes were set at a lower level. Just as the Target
store down the street does not lose money on weekend sales--because
volume more than makes up for lower prices--lower capital gains tax
rates can encourage more economic activity and, in turn, produce more
revenue for the government.
Capital gains reform will help the Treasury. A capital gains tax
reduction would help unlock a sizable share of the estimated $7
trillion of capital that
[[Page S452]]
is left virtually unused because of high tax rates. More importantly,
it will help the family that has a small plot of land it would like to
sell, and the business that could expand, buy new equipment and create
new jobs.
And evidence shows that most of the benefits will go to Americans of
modest means. A special U.S. Treasury study covering 1985 showed that
nearly half of all capital gains that year were realized by taxpayers
with wage and salary income of less than $50,000 a year. An update of
the Treasury study by the Barents Group, a subsidiary of the public
accounting firm of KPMG Peat Marwick, estimates that for 1995, middle-
income wage and salary earners making $50,000 or less in inflation-
adjusted dollars will continue to receive almost half of all capital
gains.
President Clinton recognized the importance of lessening the capital
gains tax burden by proposing to eliminate the tax on most gains earned
on the sale of a home. I would support the President's proposal, but I
would also ask, if a capital gains tax cut is good for homeowners, is
it not also good policy to apply a tax cut to other kinds of gains that
help create new businesses and new jobs?
I believe John Kennedy's plan was far superior--far more beneficial
for the Nation's economy--than the very limited one Bill Clinton has
proposed. That is why I encourage the Senate to take up the Capital
Gains Reform Act, which is based on the Kennedy plan, and which I am
introducing today.
CORPORATE TAX EQUITY ACT
Mr. KYL. Mr. President, the second in this series of bills is the
Corporate Tax Equity Act, a bill designed to help U.S. businesses make
larger capital expenditures and thereby enhance productivity growth and
job creation by repealing the corporate Alternative Minimum Tax (AMT).
Mr. President, the original intent of the AMT was to make it harder
for large, profitable corporations to avoid paying any federal income
tax. But the way to have accomplished that objective was not, in my
view, to impose an AMT, but to identify and correct the provisions of
law that allowed large companies to inappropriately lower their federal
tax liabilities to begin with. Ironically, the primary shelters
corporations were using to minimize their tax liability--that is, the
accelerated depreciation and safe harbor leasing of the old Tax Code--
were being corrected at the time the AMT was enacted.
I would point out that the AMT is not a tax, per se. As indicated in
an April 3, 1996 report by the Congressional Research Service, the AMT
is merely intended to serve as a prepayment of the regular corporate
income tax, not a permanent increase in overall corporate tax
liability. What that means in practical terms is that businesses are
forced to make interest-free loans to the federal government under the
guise of the AMT. Corporations pay a tax for which they are not liable,
but which they are able to apply toward their future regular tax
liability.
I would also point out that most of the corporations paying the AMT
are relatively small. The General Accounting Office, in a 1995 report
on the issue, found that, in most years between 1987 and 1992, more
than 70 percent of corporations paying the AMT had less than $10
million in assets.
The AMT's effect on the economy, moreover, is disproportionate to the
small amount of revenue raised, due in large part to its requirement
that corporations calculate their tax liability under two separate but
parallel income tax systems. Firms must calculate their AMT liability
even if they end up paying the regular tax. At a minimum, that means
that firms must maintain two sets of records for tax purposes.
The compliance costs are substantial. In 1992, for example, while
only about 28,000 corporations paid the AMT, more than 400,000
corporations filed the AMT form, and an even greater--but unknown--
number of firms performed the calculations needed to determine their
AMT liability. A 1993 analysis by the Joint Committee on Taxation found
that the AMT added 16.9 percent to a corporation's total cost of
complying with federal income tax laws.
Mr. President, repealing the corporate AMT would help free up badly
needed capital to assist in business expansion and job creation.
According to a study by DRI/McGraw-Hill, repeal of the AMT would, over
the 1996-2005 time period, increase fixed investment by a total of 7.9
percent, raise Gross Domestic Product by 1.6 percent, and increase
labor productivity by 1.6 percent. The study also projected repeal
would produce an additional 100,000 jobs a year during the years 1998
to 2002.
SMALL BUSINESS INVESTMENT AND GROWTH ACT
Mr. KYL. Mr. President, the third bill in this package is the Small
Business Investment and Growth Act, which would ensure that small
businesses do not pay a higher income tax rate than large corporations.
Congressman Phil Crane of Illinois has promoted similar legislation in
the House of Representatives.
Mr. President, the 1990 and 1993 increases in the marginal income tax
rates applicable to individuals put a tremendous strain on small
businesses organized as S corporations, because they pay taxes at the
individual rate. S corporations, facing 36 percent and 39.6 percent tax
rates at the highest levels, are forced to compete against larger
corporations, which pay a top rate of 34 percent.
The bill I am introducing would establish 34 percent as the top rate
that small businesses must pay. Taxable small business income would be
limited to income from the trade or business of certain eligible small
businesses, specifically excluding passive income. To benefit from the
maximum 34 percent rate, businesses must reinvest their after-tax
income into the business.
The intent is to provide relief for those small businesses that
invest income into their business operations, thereby creating new
jobs. In fact, successful small manufacturers have been able to create
three to four new jobs for every additional $100,000 they retain in the
business.
FAMILY HERITAGE PRESERVATION ACT
Mr. KYL. Mr. President, the fourth in the series of economic growth
incentives is a bill to enhance the economic security of older
Americans and small businesses around the country, a bill known as the
Family Heritage Preservation Act. It would repeal the onerous Federal
estate and gift tax, and the tax on generation-skipping transfers. A
companion bill will be introduced in the House of Representatives by
Congressman Chris Cox of California.
Mr. President, most Americans know the importance of planning ahead
for retirement. Sometimes that means buying a less expensive car,
wearing clothes a little longer, or foregoing a vacation or two. But by
doing with a little less during one's working years, people know they
can enjoy a better and more secure life during retirement, and maybe
even leave their children and grandchildren a little better off when
they are gone.
Savings not only create more personal security, they help create new
opportunities for others, too. Savings are really investments that help
others create new jobs in the community. They make our country more
competitive. And ultimately they make a citizen's retirement more
secure by providing a return on the money invested during his or her
working years.
So how does the government reward all of this thrift and careful
planning? It imposes a hefty tax on the end result of such activity--up
to 55 percent of a person's estate. The respected liberal Professor of
Law at the University of Southern California, Edward J. McCaffrey,
observed that ``polls and practices show that we like sin taxes, such
as on alcohol and cigarettes.'' ``The estate tax,'' he went on to say,
``is an anti-sin, or a virtue, tax. It is a tax on work and savings
without consumption, on thrift, on long term savings. There is no
reason even a liberal populace need support it.''
At one time, the estate tax was required of only the wealthiest
Americans. Now inflation, a nice house, and a good insurance policy can
push people of even modest means into its grip. The estate tax is
applied to all of the assets owned by an individual at the time of
death. The tax rate, which starts at 37 percent, can quickly rise to a
whopping 55 percent--the highest estate tax rate in the world.
It is true that each person has a $600,000 exemption, but that does
not provide as much relief as one might expect. Unless a couple goes
through expensive estate planning so that trusts are written into their
wills and at least $600,000 of the assets are owned by each spouse--
that is, not held jointly--the
[[Page S453]]
couple will end up with only one $600,000 exemption. Many people do not
realize that literally every asset they own, including the face value
of life insurance policies, all retirement plan assets, including
Individual Retirement Accounts, is counted toward the $600,000 limit.
As detrimental as the tax is for couples, it is even more harmful to
small businesses, including those owned by women and minorities. The
tax is imposed on a family business when it is least able to afford the
payment--upon the death of the person with the greatest practical and
institutional knowledge of that business's operations. It should come
as no surprise then that a 1993 study by Prince and Associates--a
Stratford, Connecticut research and consulting firm--found that nine
out of 10 family businesses that failed within three years of the
principal owner's death attributed their companies' demise to trouble
paying estate taxes. Six out of 10 family-owned businesses fail to make
it to the second generation. Nine out of 10 never make it to the third
generation. The estate tax is a major reason why.
Think of what that means to women and minority-owned businesses.
Instead of passing a hard-earned and successful business on to the next
generation, many families have to sell the company in order to pay the
estate tax. The upward mobility of such families is stopped in its
tracks. The proponents of this tax say they want to hinder
``concentrations of wealth.'' What the tax really hinders is new
American success stories.
With that in mind, the 1995 White House Conference on Small Business
identified the estate tax as one of small business's top concerns.
Delegates to the conference voted overwhelming to endorse its repeal.
Obviously, there is a great deal of peril to small businesses when
they fail to plan ahead for estate taxes. So many small business owners
try to find legal means of avoiding the tax or preparing for it, but
that, too, comes at a significant cost. Some people simply slow the
growth of their businesses to limit their estate tax burden. Of course,
that means less investment in our communities and fewer jobs created.
Others divert money they would have spent on new equipment or new hires
to insurance policies designed to cover estate tax costs. Still others
spend millions on lawyers, accountants, and other advisors for estate
tax planning purposes. But that leaves fewer resources to invest in the
company, start up new businesses, hire additional people, or pay better
wages.
The inefficiencies surrounding the tax can best be illustrated by the
findings of a 1994 study published in the Seton Hall Law Review. That
study found that compliance costs totalled a whopping $7.5 billion in
1992, a year when the estate tax raised only $11 billion.
The estate tax raises only about one percent of the federal
government's annual revenue, but it consumes eight percent of each
year's private savings. That is about $15 billion sidelined from the
Nation's economy. Economists calculate that if the money paid in estate
taxes since 1971 had been invested instead, total savings in 1991 would
have been $399 billion higher, the economy would have been $46 billion
larger, and we would have 262,000 more jobs. Obviously, the income and
payroll taxes that would have been paid on these gains would have
topped the amount collected by the government in estate taxes.
There have been nine attempts to reform the estate tax during the
last 50 years. Few would contend that it has been made any fairer or
more efficient. The only thing that has really changed is that
lobbyists and estate planners have gotten a little wealthier. Probably
the best thing we could do is repeal the estate tax altogether. That is
what I am proposing in the Family Heritage Preservation Act.
Mr. President, the National Commission on Economic Growth and Tax
Reform, which studied ways to make the tax code simpler, looked at the
estate tax during the course of its deliberations just over a year ago.
The Commission concluded that ``[i]t makes little sense and is patently
unfair to impose extra taxes on people who choose to pass their assets
on to their children and grandchildren instead of spending them
lavishly on themselves.'' It went on to endorse repeal of the estate
tax.
INVEST MORE IN AMERICA ACT
Mr. KYL. Mr. President, the last in the series of bills that make up
what I call the Agenda for Economic Growth and Opportunity is the
Invest More in America Act, a bill that would allow small businesses to
fully deduct the first $250,000 they invest in equipment in the year it
is purchased. The bill is based on another recommendation made by the
White House Conference on Small Business in 1995.
Mr. President, Congress last year approved legislation to phase in an
increase in the expensing limit to $25,000 by the year 2003. That is a
step in the right direction, but it is not nearly enough.
Businesses investing more than the annual expensing allowance must
recover the cost of their investments over several years using the
current depreciation system. Inflation, however, erodes the present
value of their depreciation deductions taken in future years. Moreover,
many businesses are required to make significant capital investments to
comply with various government regulations, including environmental
regulations, yet in many cases are unable to immediately expense such
costs.
The increased expensing allowance provided by the Invest More in
America Act would spur additional investment in business assets and
lead to increased productivity and more jobs.
CONCLUSION
Mr. KYL. Mr. President, as I said at the beginning of my remarks, I
am asking the Joint Tax Committee and the Institute for Policy
Innovation to analyze the economic and revenue effects of this economic
growth package. It is my intention that, if there is a revenue loss to
the Treasury associated with it, the loss could at least partially be
offset by reductions in corporate welfare spending.
Mr. President, the Agenda for Economic Growth and Opportunity will
help improve the standard of living for all Americans. It will help
eliminate from the federal budget much of the largesse the government
showers on a select group of business enterprises through corporate
welfare.
I invite my colleagues' support for this very important initiative.
______
By Mr. BREAUX:
S. 77. A bill to provide for one additional Federal judge for the
middle district of Louisiana by transferring one Federal judge from the
eastern district of Louisiana; to the Committee on the Judiciary.
louisiana judicial districts legislation
Mr. BREAUX. Mr. President, I rise today to offer legislation that
will correct a serious inequity in Louisiana's judicial districts.
My legislation adds an additional judge to the middle district of
Louisiana, based in Baton Rouge. U.S. District Judges John Parker and
Frank Polozola, the two Baton Rouge, judges, each have almost 2,000
cased pending. The national average for federal judges is 400 cased
pending. Case filings in the Middle District have totaled more than
four times the national average. The Baton Rouge district also ranks
first among the Nation's 97 federal court districts in total filings,
civil filings, weighted filings and in the percent change in total
filings last year.
Louisiana's Middle District is composed of nine parishes. The state
capital and many of the State's adult and juvenile prisons and forensic
facilities are located in this district. The Court is regularly
required to hear most of the litigation challenging the
constitutionality of State laws and the actions of State agencies and
officials. The District now has several reapportionment and election
cases pending on the docket which generally require the immediate
attention of the court. Additionally, because numerous chemical, oil,
and industrial plants and hazardous waste sites are located in the
Middle District, the Court has in the past and will continue to handle
complex mass tort cases. One environmental case alone, involving over
7,000 plaintiffs and numerous defendants, is being handled by a judge
from another district because both of the Middle District's judges were
recused.
Since 1984, the Middle District has sought an additional judge
because of its concern that its caseload would continue to rise despite
the fact that its judges' termination rate exceeded that national
average and ranked among the highest in numerical standing within the
United States and the
[[Page S454]]
Fifth Circuit. Both the Judicial Conference and the Judicial Council of
the Fifth Circuit have approved the Middle District's request for an
additional judgeship after each biennial survey from 1984 through 1994.
Mr. President, I know that my colleagues will agree with me that the
clear solution to this obvious inequity is to assign an additional
judge to Louisiana's Middle District. I look forward to the Senate's
resolution of this important matter.
______
By Mr. HATCH (for himself and Mr. Thomas):
S. 78. A bill to provide a fair and balanced resolution to the
problem of multiple imposition of punitive damages, and for other
purposes; to the Committee on the Judiciary.
the multiple punitive damages fairness act of 1997
Mr. HATCH. Mr. President, I rise today to introduce legislation which
will at last deal with one of the most unfair aspects of our civil
justice system--the availability of multiple awards of punitive damages
for the same wrongful act. I introduced identical legislation last
Congress, in the form of S. 671, and I hope that we can move this bill
in the 105th Congress.
While there are countless abuses and excesses in our civil justice
system, the fact that one defendant may face repeated punishment for
the same conduct is one of the most egregious and unconscionable. This
can happen in a variety of ways, but in any case is unjust and unfair.
A defendant might, for example, be sued by a different plaintiff for
essentially the same action, or might be sued by the same parties in a
different state based on essentially the same conduct. The only
effective means of addressing these problems is through a nationwide
solution, which the legislation I introduce today would provide.
Significantly, this legislation will not affect the compensatory
damages that injured parties will be entitled to receive. Even in cases
of multiple lawsuits based on the same conduct, under this legislation
injured parties will be entitled to receive full compensatory damages
when they are wrongfully harmed. My legislation deals only with
punitive damages. Punitive damages are not intended to compensate
injured plaintiffs or make them whole, but rather constitute punishment
and an effort to deter future egregious misconduct. Punitive damages
reform is not about shielding wrongdoers from liability, nor does such
reform prevent victims of wrongdoing from being rightfully compensated
for their damages. It is about ensuring that wrongdoers do not face
excessive and unfair punishments.
I certainly do not argue that a person or company that acts
maliciously should not be subject to punitive damages. But it is
neither just nor fair for a defendant to face the repeated imposition
of punitive damages in several states for the same act or conduct, as
our system currently permits. Exorbitant and out-of-control punitive
damage awards also have the effect of punishing innocent people:
employees, consumers, shareholders, and others who ultimately pay the
price of these outrageous awards.
This is not a hypothetical problem. Last Term, the Supreme Court
considered a case, BMW v. Gore, in which a state court let stand a
multimillion dollar punitive damage award against an automobile
distributor who failed to inform a buyer that his new vehicle had been
refinished to cure superficial paint damage. The defendant in that case
could be exposed to thousands of claims based on the same conduct.
The plaintiff, a purchaser of a $40,000 BMW automobile, learned nine
months after his purchase that his vehicle might have been partially
refinished. As a result of the discovery, he sued the automobile
dealer, the North American distributor, and the manufacturer for fraud
and breach of contract. He also sought an award for punitive damages.
He won a ridiculously high award of punitive damages.
At trial, the jury was allowed to assess damages for each of the
partially refinished vehicles that had been sold throughout the United
States over a period of ten years. As sought by the plaintiff's
attorney, the jury returned a verdict of $4,000 in compensatory damages
and $4,000,000 in punitive damages. On appeal to the state supreme
court, the punitive damage award was reduced to $2 million, applicable
to the North American distributor.
On reviewing the BMW v. Gore case, the United States Supreme Court
recognized that excessive punitive damages ``implicate the federal
interest in preventing individual states from imposing undue burdens on
interstate commerce.'' While that decision for the first time
recognizes some outside limits on punitive damage awards, the Court's
decision leaves ample room for legislative action. Legislative reforms
are now--more than ever before--desperately needed to set up the
appropriate boundaries.
In the 5-4 decision, the Supreme Court held that the $2 million
punitive damages award was grossly excessive and therefore violated the
due process clause of the Fourteenth Amendment. The Court remanded the
case, and the majority opinion set out three guideposts for assessing
the excessiveness of a punitive damages award: the reprehensibility of
the conduct being punished, the ratio between compensatory and punitive
damages, and the difference between the punitive award and criminal or
civil sanctions that could be imposed for comparable conduct.
Unfortunately, even under the Supreme Court's decision, this same
defendant can be sued again and again for punitive damages by every
owner of a partially refinished vehicle. The company could still be
sued for punitive damages for the same act in every other state in
which it sold one of its vehicles. In fact, the very same plaintiffs'
attorney who filed the BMW v. Gore case filed numerous similar lawsuits
against BMW.
Defendants and consumers are not the only ones hurt by excessive,
multiple punitive damage awards. Ironically, other victims can be those
the system is intended to benefit--the injured parties themselves.
Funds that might otherwise be available to compensate later victims can
be wiped out at any early stage by excessive punitive damage awards.
The imposition of multiple punitive damage awards in different states
for the same act is an issue that can be addressed only through federal
legislation. If only one state limits such awards, other states still
remain free to impose multiple punitive damages. The fact is that a
federal response in this area is the only viable solution.
This bill provides that response by generally prohibiting the award
of multiple punitive damages. With one exception, the bill prevents
courts from awarding punitive damages based on the same act or course
of conduct for which punitive damages have already been awarded against
the same defendant. Under the exception, an additional award of
punitive damages may be permitted if the court determines that the
claimant will offer new and substantial evidence of previously
undiscovered, wrongful behavior on the part of the defendant. In those
circumstances, the court must make specific findings of fact to support
the award, must reduce the amount of punitive damages awarded by the
amounts of prior punitive damages based on the same acts, and may not
disclose to the jury the court's determination and action under the
provisions. The provisions would not apply to any action brought under
a federal or state statute that specifically mandates the amount of
punitive damages to be awarded.
This legislation is needed to correct a glaring injustice. I hope my
colleagues will join me in supporting it, and I ask unanimous consent
that the full text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 78
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Multiple Punitive Damages
Fairness Act of 1997''.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Claimant.--The term ``claimant'' means any person who
brings a civil action and any person on whose behalf such an
action is brought. If such an action is brought through or on
behalf of an estate, the term includes the claimant's
decedent. If such action is brought through or on behalf of a
minor or incompetent, the term includes the claimant's legal
guardian.
(2) Harm.--The term ``harm'' means any legally cognizable
wrong or injury for which punitive damages may be imposed.
[[Page S455]]
(3) Defendant.--The term ``defendant'' means any
individual, corporation, company, association, firm,
partnership, society, joint stock company, or any other
entity (including any governmental entity).
(4) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person or entity to punish or
deter such person or entity, or others, from engaging in
similar behavior in the future.
(5) Specific findings of fact.--The term ``specific
findings of fact'' means findings in written form focusing on
specific behavior of a defendant.
(6) State.--The term ``State'' means any State of the
United States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, the Virgin Islands, Guam, American
Samoa, and any other territory or possession of the United
States, or any political subdivision thereof.
SEC. 3. MULTIPLE PUNITIVE DAMAGES FAIRNESS.
(a) Findings.--The Congress finds the following:
(1) Multiple or repetitive imposition of punitive damages
for harms arising out of a single act or course of conduct
may deprive a defendant of all the assets or insurance
coverage of the defendant, and may endanger the ability of
future claimants to receive compensation for basic out-of-
pocket expenses and damages for pain and suffering.
(2) The detrimental impact of multiple punitive damages
exists even in cases that are settled, rather than tried,
because the threat of punitive damages being awarded results
in a higher settlement than would ordinarily be obtained. To
the extent this premium exceeds what would otherwise be a
fair and reasonable settlement for compensatory damages,
assets that could be available for satisfaction of future
compensatory claims are dissipated.
(3) Fundamental unfairness results when anyone is punished
repeatedly for what is essentially the same conduct.
(4) Federal and State appellate and trial judges, and well-
respected commentators, have expressed concern that multiple
imposition of punitive damages may violate constitutionally
protected due process rights.
(5) Multiple imposition of punitive damages may be a
significant obstacle to comprehensive settlement negotiations
in repetitive litigation.
(6) Limiting the imposition of multiple punitive damages
awards would facilitate resolution of mass tort claims
involving thousands of injured claimants.
(7) Federal and State trial courts have not provided
adequate solutions to problems caused by the multiple
imposition of punitive damages because of a concern that such
courts lack the power or authority to prohibit subsequent
awards in other courts.
(8) Individual State legislatures can create only a partial
remedy to address problems caused by the multiple imposition
of punitive damages, because each State lacks the power to
control the imposition of punitive damages in other States.
(b) General Rule.--Except as provided in subsection (c),
punitive damages shall be prohibited in any civil action in
any State or Federal court in which such damages are sought
against a defendant based on the same act or course of
conduct for which punitive damages have already been sought
or awarded against such defendant.
(c) Circumstances for Award.--If the court determines in a
pretrial hearing that the claimant will offer new and
substantial evidence of previously undiscovered, additional
wrongful behavior on the part of the defendant, other than
the injury to the claimant, the court may award punitive
damages in accordance with subsection (d).
(d) Limitations on Award.--A court awarding punitive
damages pursuant to subsection (c) shall--
(1) make specific findings of fact on the record to support
the award;
(2) reduce the amount of the punitive portion of the damage
award by the sum of the amounts of punitive damages
previously paid by the defendant in prior actions based on
the same act or course of conduct; and
(3) prohibit disclosure to the jury of the court's
determination and action under this subsection.
(e) Applicability and Preemption.--
(1) In general.--Except as provided in paragraph (3), this
section shall apply to--
(A) any civil action brought on any theory where punitive
damages are sought based on the same act or course of conduct
for which punitive damages have already been sought or
awarded against the defendant; and
(B) all civil actions in which the trial has not commenced
before the effective date of this Act.
(2) Applicability.--Except as provided in paragraph (3),
this section shall apply to all civil actions in which the
trial has not commenced before the effective date of this
Act.
(3) Nonapplicability.--This section shall not apply to any
civil action involving damages awarded under any Federal or
State statute that prescribes the precise amount of punitive
damages to be awarded.
(4) Exception.--This section shall not preempt or supersede
any existing Federal or State law limiting or otherwise
restricting the recovery for punitive damages to the extent
that such law is inconsistent with the provisions of this
section.
SEC. 4. EFFECT ON OTHER LAW.
Nothing in this Act shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any law;
(2) supersede any Federal law;
(3) waive or affect any defense of sovereign immunity
asserted by the United States;
(4) affect the applicability of any provision of chapter 97
of title 28, United States Code;
(5) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation;
(6) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum; or
(7) create a cause of action for punitive damages.
______
By Mr. HATCH (for himself, Mr. Kyl, and Mr. Thomas):
S. 79. A bill to provide a fair and balanced resolution to the
problem of multiple imposition of punitive damages, and for the reform
of the civil justice system; to the Committee on the Judiciary.
the civil justice fairness act of 1997
Mr. HATCH. Mr. President, today I introduce the Civil Justice
Fairness Act of 1997. Last Congress, I introduced a similar bill that,
had it been enacted, would have granted significant relief from
litigation abuses to individuals, consumers, small businesses and
others. Unfortunately, given President Clinton's repeated vetoes of
litigation reform measures in the 104th Congress, it was clear that we
would be unable to enact more broad-reaching civil justice reform.
This Congress, I urge my colleagues to revisit the important issue of
litigation reform. Product liability reform remains badly needed, as do
the more comprehensive reforms of the civil litigation system embodied
in my civil justice reform bill, the Civil Justice Fairness Act of
1997.
Americans in Utah and every other State overwhelmingly agree that
there is a crying need for reform of our civil justice system. They are
sick and tired of the abuses of our system, and are fed up with million
dollar awards for scratched paint jobs, spilled coffee, and other minor
harms. The system fails to deliver justice in far too many cases.
Success for plaintiffs can depend more on chance than the merits of the
case, and defendants may find themselves forced to settle for
significant sums in circumstances in which they have done little or no
wrong, simply due to the high litigation costs involved in defending
against a weak or frivolous lawsuit.
I have gone through the litany of problems with our civil justice
system time and time again. They continue to include excessive legal
fees and costs, dilatory and sometimes abusive litigation practices,
the increasing use of ``junk science'' as evidence, and the risk of
unduly large punitive damage awards.
The problems with our current civil justice system have resulted in
several perverse effects. First, all too often the system fails to
accomplish its most important function--to compensate deserving
plaintiffs adequately. Second, it imposes unnecessarily high litigation
costs on all parties. Those costs are passed along to consumers--in
effect, to each and every American--in the form of higher prices for
products and services we buy. Those costs can even harm our nation's
competitiveness in the global economy.
Congress must face these problems and enact meaningful legislation
reforming our civil justice system. Reforms are needed to eliminate
abuses and procedural problems in litigation, and to restore to the
American people a civil justice system deserving of their trust,
confidence and support. To achieve this goal, I am introducing civil
justice reform legislation. This bill will correct some of the more
serious abuses in our present civil justice system through a number of
provisions.
The legislation will address the problems of excessive punitive
damage awards and of multiple punitive damage awards. We all know that
punitive damage awards are out of control in this country. Further, the
imposition of multiple punitive damages for the same wrongful act
raises particular concerns about the fairness of punitive damages and
their ability to serve the purposes of punishment and deterrence for
which they are intended.
The Supreme Court, legal scholars, practicing litigators, and others
have acknowledged for years that punitive damages may raise serious
constitutional issues. A decision from the U.S.
[[Page S456]]
Supreme Court last term finally held that in certain circumstances a
punitive damage award may violate due process and provided guidance as
to when that would occur.
In the case, BMW versus Gore, the Supreme Court acknowledged that
excessive punitive damages ``implicate the federal interest in
preventing individual states from imposing undue burdens on interstate
commerce.'' The decision for the fist time recognizes some outside
limits on punitive damage awards. The Court's decision leaves plenty of
room for legislative action, and legislative reforms are now needed
more than ever to set up the appropriate boundaries.
The decision also highlights some of the extreme abuses in our civil
justice system. The BMW versus Gore case was brought by a doctor who
had purchased a BMW automobile for $40,000 and later discovered that
the car had been partially refinished prior to sale. He sued the
manufacturer in Alabama State court on a theory of fraud, seeking
compensatory and punitive damages. The jury found BMW liable for $4,000
in compensatory damages and $4 million in punitive damages. On appeal,
the Alabama Supreme Court reduced the punitive damages award to $2
million--which still represents an astonishing award for such
inconsequential harm.
In its 5 to 4 decision, the Supreme Court held that the $2 million
punitive damages award was grossly excessive and therefore violated the
due process clause of the 14th amendment. The court remanded the case
for further proceedings. The majority opinion set out three guideposts
for courts to employ in assessing the constitutional excessiveness of a
punitive damages award: the reprehensibility of the conduct being
punished, the ratio between compensatory and punitive damages, and the
difference between the punitive award and criminal or civil sanctions
that could be imposed for comparable conduct.
Justice Breyer, in a concurring opinion joined by Justices O'Connor
and Souter, emphasized that, although constitutional due process
protections generally cover purely procedural protections, the narrow
circumstances of the case justified added protections to ensure that
legal standards providing for discretion are adequately enforced so as
to provide for the ``application of law, rather than a decisionmaker's
caprice.'' Congress has a similar responsibility to ensure fairness in
the litigation system and the application of law in that system. It is
high time for Congress to provide specific guidance to courts on the
appropriate level of damage awards, and to address other issues in the
civil litigation system.
The BMW case also illustrates the potential abuses of the system that
can occur through the availability of multiple awards of punitive
damages for essentially the same conduct. Under current law, the
company can still, in every other state in which it sold one of its
vehicles, be sued for punitive damages for the same act.
Multiple punitive damage awards can hurt not only defendants but also
injured parties. Funds that would otherwise be available to compensate
later victims can be wiped out at any early stage by excessive punitive
damage awards. A Federal response is critical: if only the one State
limits such awards, other States still remain free to impose multiple
punitive damages. An important provision in my bill limits these
multiple punitive damage awards. I am also today introducing separate
legislation that would deal only with the multiple punitive damages
problem.
In addition to reforming multiple punitive damage awards, my broad
civil justice reform legislation addresses general abuses of punitive
damages litigation. It includes a heightened standard of proof to
ensure that punitive damages are awarded only if there is clear and
convincing evidence that the harm suffered was the result of conduct
either specifically intended to cause that harm, or carried out with
conscious, flagrant indifference to the right or the safety of the
claimant.
The bill also provides that punitive damages may not be awarded
against the seller of a drug or medical device that received pre-market
approval from the Food and Drug Administration.
Additionally, this legislation would allow a bifurcated trial, at the
defendant's request, on the issue of punitive damages and limits the
amount of the award to either $250,000 or three times the economic
damages suffered by the claimant, whichever is greater. The bill
provides a special limit in the cases of small business or individuals;
in those cases, punitive damages will be limited to the lesser of
$250,000 or three times economic damages.
The legislation would also limit a defendant's joint liability for
non-economic damages. In any civil case for personal injury, wrongful
death, or based upon the principles of comparative fault, a defendant's
liability for non-economic loss shall be several only and shall not be
joint. The trier of fact will determine the proportional liability of
each person, whether or not a party to the action, and enter separate
judgments against each defendant.
Another provision of this bill would shift costs and attorneys fees
in circumstances in which a party has rejected a settlement offer,
forcing the litigation to proceed, and then obtain a less favorable
judgment. This provision encourages parties to act reasonably, rather
than pursue lengthy and costly litigation. It allows a plaintiff or a
defendant to be compensated for their reasonable attorneys fees and
costs from the point at which the other party rejects a reasonable
settlement offer.
Another widely reported problem in our civil justice system is abuse
in contingency fee cases. This bill encourages attorneys to disclose
fully to clients the hours worked and fees paid in all contingency fee
cases. The bill calls upon the Attorney General to draft model State
legislation requiring such disclosure to clients. It also requires the
Attorney General to study possible abuses in the area of contingency
fees and, where such abuses are found, to draft model State legislation
specifically addressing those problems.
This legislation restricts the use of so-called ``junk science'' in
the courtroom. This long overdue reform will improve the reliability of
expert scientific evidence and permit juries to consider only
scientific evidence that is objectively reliable.
This legislation includes a provision for health care liability
reform. It limits, in any health care liability action, the maximum
amount of non-economic damages that may be awarded to a claimant of
$250,000. This limit would apply regardless of the number of parties
against whom the action is brought, and regardless of the number of
claims or actions brought. To avoid prejudice to any parties, the jury
would not be informed about the limitations on non-economic damages.
This legislation would also establish a reasonable, uniform statute
of limitations for the bringing of health care liability actions.
Further, if damages for losses incurred after the date of judgment
exceed $100,000, the Court shall allow the parties to have 60 days in
which to negotiate an agreement providing for the payment of such
damages in a lump sum, periodic payments, or a combination of both. If
no agreement is reached, a defendant may elect to pay the damages on a
periodic basis. Periodic payments for future damages would terminate in
the event of the claimant's return to work, or upon the claimant's
death. This is an exception for the portion of such payments allocable
to future earnings, which shall be paid to any individual to whom the
claimant owed a duty of support immediately prior to death, to the
extent required by law at the time of the claimant's death.
This legislation also allows states the freedom to experiment with
alternative patient compensation systems based upon no-fault
principles. The Secretary of Health and Human Services would award
grants based on applications by interested states according to
enumerated criteria and subject to enumerated reporting requirements.
Persons or entities participating in such experimental systems may
obtain from the Secretary a waiver from the provisions of this
legislation for the duration of the experiment. The Secretary would
collect information regarding these experiments and submit an annual
report to Congress, including an assessment of the feasibility of
implementing no-fault systems, and legislative recommendations, if any.
I urge my colleagues to take a serious look at these problems within
our civil justice system. I believe this bill
[[Page S457]]
addresses these issues in a common sense way, and I hope my colleagues
will join me in supporting this legislation.
I ask for unanimous consent that a section-by-section description of
the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Section-by-Section Description of The Civil Justice Fairness Act of
1997
title I--punitive damages reform
Sec. 101. Definitions.--This section defines various terms
used in Title I of the bill.
Sec. 102. Multiple Punitive Damages Fairness.--This section
generally prohibits the award of multiple punitive damages.
With one exception, it prevents courts from awarding punitive
damages based on the same act or course of conduct for which
punitive damages have already been awarded against the same
defendant. Under the exception, an additional award of
punitive damages may be permitted if the court determines in
a pretrial hearing that the claimant will offer new and
substantial evidence of previously undiscovered, additional
wrongful behavior on the part of the defendant, other than
injury to the claimant. In those circumstances, the court
must make specific findings of fact to support the award,
must reduce the amount of punitive damages awarded by the
amounts of prior punitive damages based on the same acts, and
may not disclose to the jury the court's determination and
action under the section. This section would not apply to any
action brought under a federal or state statute that
specifically mandates the amount of punitive damages to be
awarded.
Sec. 103. Uniform Standards for Award of Punitive
Damages.--This section sets the following uniform standards
for the award of punitive damages in any State or Federal
Court action: (1) In general, punitive damages may be awarded
only if the claimant establishes by clear and convincing
evidence that the conduct causing the harm was either
specifically intended to cause harm or carried out with
conscious, flagrant indifference to the rights or the safety
of the claimant. (2) Punitive damages may not be awarded in
the absence of an award of compensatory damages exceeding
nominal damages. (3) Punitive damages may not be awarded
against a manufacturer or product seller of a drug or medical
device which was the subject of pre-market approval by the
Food and Drug Administration (FDA). This FDA exemption is not
applicable where a party has withheld or misrepresented
relevant information to the FDA. (4) Punitive damages may not
be pleaded in a complaint. Instead, a party must establish at
a pretrial hearing that it has a reasonable likelihood of
proving facts at trial sufficient to support an award of
punitive damages, and may then amend the pleading to include
a prayer for relief seeking punitive damages. (5) At the
defendant's request, the trier of fact shall consider in
separate proceedings whether punitive damages are warranted
and, if so, the amount of such damages. If a defendant
requests bifurcated proceedings, evidence relevant only to
the claim for punitive damages may not be introduced in the
proceeding on compensatory damages. Evidence of the
defendant's profits from his misconduct, if any, is
admissible, but evidence of the defendant's overall wealth is
inadmissible in the proceeding on punitive damages. (6) In
any civil action where the plaintiff seeks punitive
damages under this title, the amount awarded shall not
exceed three times the economic damages or $250,000,
whichever is greater. This provision shall be applied by
the court and shall not be disclosed to the jury. (7) A
special rule applies to small businesses and individuals.
In any action against an individual whose net worth does
not exceed $500,000, or a business or organization having
25 or fewer employees, punitive damages may not exceed the
lesser of $250,000 or 3 times the amount awarded for
economic loss.
Sec. 104. Effect on Other Law.--This section specifies that
certain state and federal laws are not superseded or affected
by this legislation. Choice-of-law and forum nonconveniens
rules are similarly unaffected.
title ii--joint and several liability reform
Sec. 201. Several Liability for Non-Economic Loss.--This
section limits a defendant's joint liability for non-economic
damages. In any civil case, a defendant's liability for non-
economic loss shall be several only and shall not be joint.
The trier of fact will determine the proportional liability
of each defendant and enter separate judgments against each
defendant.
title iii--civil procedural reform
Sec. 301. Trial Lawyer Accountability.--This section
contains two major provisions. The first provides that it is
the sense of the Congress that each State should require
attorneys who enter into contingent fee agreements to
disclose to their clients the actual services performed and
hours expended in connection with such agreements. The second
provision directs the Attorney General to study and evaluate
contingent fee awards and their abuses in State and Federal
court; to develop model legislation to require attorneys who
enter into contingency fee agreements to disclose to clients
the actual services performed and hours expended, and to curb
abuses in contingency fee awards based on the study; and to
report the Attorney General's findings and recommendations to
Congress within one year of enactment.
Sec. 302. Honesty in Evidence.--This section amends Federal
Rule of Evidence 702 to reform the rules regarding the use of
expert testimony. It clarifies that courts retain substantial
discretion to determine whether the testimony of an expert
witness that is premised on scientific, technical, or medical
knowledge is based on scientifically valid reasoning, is
sufficiently reliable, and is sufficiently established to
have gained general acceptance in the particular field in
which it belongs. The section follows the standard for
admissibility of expert testimony enunciated in Daubert v.
Merrell Dow Pharmaceuticals, Inc., 113 S. Ct. 2786 (1993).
It also mirrors the common law Frye rule that requires
that scientific evidence have ``general acceptance'' in
the relevant scientific community to be admissible. This
section further clarifies that expert witnesses have
expertise in the particular field on which they are
testifying. Finally, this section mandates that the
testimony of an expert retained on a contingency fee basis
is inadmissible.
Sec. 303. Fair Shifting of Costs and Reasonable Attorney
Fees.--This section modifies Federal Rule of Civil Procedure
68 to allow either party, not just the defendant, to make a
written offer of settlement or to allow a judgment to be
entered against the offering party. It expands the time
period during which an offer can be made from 10 days before
trial to any time during the litigation. If within 21 days
the offer is accepted, a judgment may be entered by the
court. If, however, a final judgment is not more favorable to
an offeree than the offer, the offeree must pay attorney fees
and costs incurred after the time expired for acceptance of
the offer. Thus, this is not a true ``loser pays'' provision
where a loser pays the winner's attorney's fees, but rather a
narrower attorney fee and cost-shifting idea applicable only
when a party has made an offer of settlement or judgment.
This section also significantly expands the definition of
recoverable costs. Currently, costs are narrowly defined and
do not create enough of a financial incentive for a party to
make an offer that allows judgment to be entered. Finally,
this section also allows a party to make an offer of judgment
after liability has already been determined but before the
amount or extent has been adjudged.
title iv--health care liability reform
Sec. 401. Definitions.--This section sets up definitions
for various terms used in Title IV of the bill.
Sec. 402. Limitations on Noneconomic Damages.--In any
health care liability action the maximum amount of
noneconomic damages that may be awarded to a claimant is
$250,000. This limit shall apply regardless of the number of
parties against whom the action is brought, and regardless of
the number of claims or actions brought. The jury shall not
be informed about the limitations on non-economic damages.
Sec. 403. Statute of Limitations.--This section provides a
reasonable uniform statute of limitations for health care
liability actions, with one exception for minors. The general
rule is that an action must be brought within two years from
the date the injury and its cause was or reasonably should
have been discovered, but in no event can an action be
brought more than six years after the alleged date of injury.
This section also allows an exception for young children. The
rule for children under six years of age is that an action
must be brought within two years from the date the injury
and its cause was or reasonably should have been
discovered, but in no event can an action be brought more
than six years after the alleged date of injury or the
date on which the child attains 12 years of age, whichever
is later.
Sec. 404. Periodic Payment of Future Damages.--This section
allows for the periodic payment of large awards for losses
accruing in the future. If damages for losses incurred after
the date of judgment exceed $100,000, the court shall allow
the parties to have 60 days in which to negotiate an
agreement providing for the payment of such damages in a lump
sum, periodic installments, or a combination of both. If no
agreement is reached within those 60 days, a defendant may
elect to pay the damages on a periodic basis. The court will
determine the amount and periods for such payments, reducing
amounts to present value for purposes of determining the
funding obligations of the individual making the payments.
Periodic payments for future damages terminate in the event
of the claimant's recovery or return to work; or upon the
claimant's death, except for the portion of the payments
allocable to future earnings which shall be paid to any
individual to whom the claimant owed a duty of support
immediately prior to death to the extent required by law at
the time of death. Such payments shall expire upon the death
of the last person to whom a duty of support is owed or the
expiration of the obligation pursuant to the judgment for
periodic payments.
Sec. 405. State No-Fault Demonstration Projects.--This
section allows states to experiment with alternative patient
compensation systems based upon no-fault principles. Grants
shall be awarded by the Secretary of Health and Human
Services based on applications made by interested states
according to enumerated criteria and subject to enumerated
reporting requirements. Persons or entities involved in the
demonstrations involved may obtain a waiver from the
Secretary from the provisions of this Title for
[[Page S458]]
the duration of the experiment, which shall be not greater
than five years. The Secretary shall collect information
regarding these experiments and submit an annual report to
Congress including an assessment of the feasibility of
implementing no-fault systems and legislative
recommendations, if any.
title v--miscellaneous provisions
Sec. 501. Federal Cause of Action Precluded.--This section
provides that the bill does not provide any new basis for
federal court jurisdiction. The resolution of punitive
damages claims is left to state courts or to federal courts
that currently have jurisdiction over those claims.
Sec. 502. Effective Date.--This section states that the
bill, except as otherwise provided, shall be effective 30
days after the date of enactment and apply to all civil
actions commenced on or after such date, including those in
which the harm, or harm-causing conduct, predates the bill's
enactment.
______
By Mr. KOHL:
S. 80. A bill to amend the Internal Revenue Code of 1986 to provide
for the rollover of gain from the sale of farm assets into an
individual retirement account; to the Committee on Finance.
family farm retirement equity act of 1997
Mr. KOHL. Mr. President, I rise today to introduce the Family Farm
Retirement Equity Act of 1995, a bill to help improve the retirement
security of our nation's farmers.
As we begin the 105th Congress, we can anticipate legislative action
dealing with pension reform and the tax treatment of retirement
savings. In his 1996 State of the Union address, President Clinton
mentioned his concerns about the retirement security of farmers and
ranchers, and many of us in Congress have sought to address this
concern, as well.
Last year, Congress passed the 1996 farm bill, bringing sweeping
changes to the traditional farm support programs, and greatly affecting
the income side of the average farmer's financial sheet. But it is
equally important that we address the other side of the farmers'
financial equation--the cost side. And some of the biggest costs that
farmers face are the costs associated with retirement planning. In
fact, those costs are sometimes so monumental that farmers reach
retirement age without having made the appropriate provisions for their
security.
In the last Congress, efforts were made to address the financial
concerns of retiring farmers and ranchers. In fact, the Senate version
of the 1995 Budget Reconciliation Act included the legislation that I
am reintroducing today, the Family Farm Retirement Equity Act.
Unfortunately, that important provision did not survive the conference
negotiations between House and Senate budget leaders. It is my hope
that we will be able to revisit this matter this year, and address this
growing concern in rural America.
Farming is a highly capital-intensive business. To the extent that
the average farmer reaps any profits from his or her farming operation,
much of that income is directly reinvested into the farm. Rarely are
there opportunities for farmers to put money aside in individual
retirement accounts. Instead, farmers tend to rely on the sale of their
accumulated capital assets, such as real estate, livestock, and
machinery, in order to provide the income to sustain them during
retirement. All too often, farmers are finding that the lump-sum
payments of capital gains taxes levied on those assets leave little for
retirement.
The legislation that I am reintroducing today would provide retiring
farmers the opportunity to rollover the proceeds from the sale of their
farms into a tax-deferred retirement account. Instead of paying a large
lump-sum capital gains tax at the point of sale, the income from the
sale of a farm would be taxed only as it is withdrawn from the
retirement account. Such a change in method of taxation would help
prevent the financial distress that many farmers now face upon
retirement.
Another concern that I have about rural America is the diminishing
interest of our younger rural citizens in continuing in farming.
Because this legislation will facilitate the transition of our older
farmers into a successful retirement, the Family Farm Retirement Equity
Act will also pave the way for a more graceful transition of our
younger farmers toward farm ownership. While low prices and low profits
in farming will continue to take their toll on our younger farmers, I
believe that this will be one tool we can use to make farming more
viable for the next generation.
This proposal is supported by farmers and farm organizations
throughout the country. It has been endorsed by the American Farm
Bureau Federation, the American Sheep Industry Association, the
American Sugar Beet Association, the National Association of Wheat
Growers, the National Cattleman's Beef Association, the National Corn
Growers Association, National Pork Producers Council, and the
Southwestern Peanut Growers Association.
Further, I am very pleased that a modified version of this
legislation has also been included in the Targeted Investment Incentive
and Economic Growth Act of 1997, as introduced today by Minority Leader
Daschle and other Senators. I look forward to swift action on that
legislation, so that the working families and small businesses targeted
for assistance can enjoy tax relief as soon as possible.
I ask unanimous consent that the full text of the bill and a summary
be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 80
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE TO INTERNAL REVENUE CODE.
(a) Short Title.--This Act may be cited as the ``Family
Farm Retirement Equity Act of 1997''.
(b) Reference to Internal Revenue Code of 1986.--Except as
otherwise expressly provided, whenever in this Act an
amendment or repeal is expressed in terms of an amendment to,
or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. ROLLOVER OF GAIN FROM SALE OF FARM ASSETS TO
INDIVIDUAL RETIREMENT PLANS.
(a) In General.--Part III of subchapter O of chapter 1
(relating to common nontaxable exchanges) is amended by
inserting after section 1034 the following new section:
``SEC. 1034A. ROLLOVER OF GAIN ON SALE OF FARM ASSETS INTO
ASSET ROLLOVER ACCOUNT.
``(a) Nonrecognition of Gain.--Subject to the limits of
subsection (c), if for any taxable year a taxpayer has
qualified net farm gain from the sale of qualified farm
assets, then, at the election of the taxpayer, such gain
shall be recognized only to the extent it exceeds the
contributions to 1 or more asset rollover accounts of the
taxpayer for the taxable year in which such sale occurs.
``(b) Asset Rollover Account.--
``(1) General rule.--Except as provided in this section, an
asset rollover account shall be treated for purposes of this
title in the same manner as an individual retirement plan.
``(2) Asset rollover account.--For purposes of this title,
the term `asset rollover account' means an individual
retirement plan which is designated at the time of the
establishment of the plan as an asset rollover account. Such
designation shall be made in such manner as the Secretary may
prescribe.
``(c) Contribution Rules.--
``(1) No deduction allowed.--No deduction shall be allowed
under section 219 for a contribution to an asset rollover
account.
``(2) Aggregate contribution limitation.--Except in the
case of rollover contributions, the aggregate amount for all
taxable years which may be contributed to all asset rollover
accounts established on behalf of an individual shall not
exceed--
``(A) $500,000 ($250,000 in the case of a separate return
by a married individual), reduced by
``(B) the amount by which the aggregate value of the assets
held by the individual (and spouse) in individual retirement
plans (other than asset rollover accounts) exceeds $100,000.
The determination under subparagraph (B) shall be made as of
the close of the taxable year for which the determination is
being made.
``(3) Annual contribution limitations.--
``(A) General rule.--The aggregate contribution which may
be made in any taxable year to all asset rollover accounts
shall not exceed the lesser of--
``(i) the qualified net farm gain for the taxable year, or
``(ii) an amount determined by multiplying the number of
years the taxpayer is a qualified farmer by $10,000.
``(B) Spouse.--In the case of a married couple filing a
joint return under section 6013 for the taxable year,
subparagraph (A) shall be applied by substituting `$20,000'
for `$10,000' for each year the taxpayer's spouse is a
qualified farmer.
``(4) Time when contribution deemed made.--For purposes of
this section, a taxpayer shall be deemed to have made a
contribution to an asset rollover account on the last day of
the preceding taxable year if the contribution is made on
account of such taxable year and is made not later than the
time prescribed by law for filing the return for such taxable
year (not including extensions thereof).
[[Page S459]]
``(d) Qualified Net Farm Gain; Etc.--For purposes of this
section--
``(1) Qualified net farm gain.--The term `qualified net
farm gain' means the lesser of--
``(A) the net capital gain of the taxpayer for the taxable
year, or
``(B) the net capital gain for the taxable year determined
by only taking into account gain (or loss) in connection with
dispositions of qualified farm assets.
``(2) Qualified farm asset.--The term `qualified farm
asset' means an asset used by a qualified farmer in the
active conduct of the trade or business of farming (as
defined in section 2032A(e)).
``(3) Qualified farmer.--
``(A) In general.--The term `qualified farmer' means a
taxpayer who--
``(i) during the 5-year period ending on the date of the
disposition of a qualified farm asset materially participated
in the trade or business of farming, and
``(ii) owned (or who with the taxpayer's spouse owned) 50
percent or more of such trade or business during such 5-year
period.
``(B) Material participation.--For purposes of this
paragraph, a taxpayer shall be treated as materially
participating in a trade or business if the taxpayer meets
the requirements of section 2032A(e)(6).
``(4) Rollover contributions.--Rollover contributions to an
asset rollover account may be made only from other asset
rollover accounts.
``(e) Distribution Rules.--For purposes of this title, the
rules of paragraphs (1) and (2) of section 408(d) shall apply
to any distribution from an asset rollover account.
``(f) Individual Required To Report Qualified
Contributions.--
``(1) In general.--Any individual who--
``(A) makes a contribution to any asset rollover account
for any taxable year, or
``(B) receives any amount from any asset rollover account
for any taxable year,
shall include on the return of tax imposed by chapter 1 for
such taxable year and any succeeding taxable year (or on such
other form as the Secretary may prescribe) information
described in paragraph (2).
``(2) Information required to be supplied.--The information
described in this paragraph is information required by the
Secretary which is similar to the information described in
section 408(o)(4)(B).
``(3) Penalties.--For penalties relating to reports under
this paragraph, see section 6693(b).''.
(b) Contributions Not Deductible.--Section 219(d) (relating
to other limitations and restrictions) is amended by adding
at the end the following new paragraph:
``(5) Contributions to asset rollover accounts.--No
deduction shall be allowed under this section with respect to
a contribution under section 1034A.''.
(c) Excess Contributions.--
(1) In general.--Section 4973 (relating to tax on excess
contributions to individual retirement accounts, certain
section 403(b) contracts, and certain individual retirement
annuities) is amended by adding at the end the following new
subsection:
``(e) Asset Rollover Accounts.--For purposes of this
section, in the case of an asset rollover account referred to
in subsection (a)(1), the term `excess contribution' means
the excess (if any) of the amount contributed for the taxable
year to such account over the amount which may be contributed
under section 1034A.''.
(2) Conforming amendments.--
(A) Section 4973(a)(1) is amended by striking ``or'' and
inserting ``an asset rollover account (within the meaning of
section 1034A), or''.
(B) The heading for section 4973 is amended by inserting
``ASSET ROLLOVER ACCOUNTS,'' after ``CONTRACTS''.
(C) The table of sections for chapter 43 is amended by
inserting ``asset rollover accounts,'' after ``contracts'' in
the item relating to section 4973.
(d) Technical Amendments.--
(1) Section 408(a)(1) (defining individual retirement
account) is amended by inserting ``or a qualified
contribution under section 1034A,'' before ``no
contribution''.
(2) Section 408(d)(5)(A) is amended by inserting ``or
qualified contributions under section 1034A'' after
``rollover contributions''.
(3)(A) Section 6693(b)(1)(A) is amended by inserting ``or
1034A(f)(1)'' after ``408(o)(4)''.
(B) Section 6693(b)(2) is amended by inserting ``or
1034A(f)(1)'' after ``408(o)(4)''.
(4) The table of sections for part III of subchapter O of
chapter 1 is amended by inserting after the item relating to
section 1034 the following new item:
``Sec. 1034A. Rollover of gain on sale of farm assets into asset
rollover account.''.
(e) Effective Date.--The amendments made by this section
shall apply to sales and exchanges after the date of the
enactment of this Act.
Family Farm Retirement Equity Act of 1997
Allows retiring farmers to roll over up to $500,000 from the sale of
their farm assets into a tax-deferred individual retirement account,
called an Asset Rollover Account [ARA]. In this manner, they avoid
paying lump-sum capital gains, and instead pay taxes only as they
withdraw the funds from the retirement account.
Each farmer would be allowed to rollover an amount equal to $10,000--
$20,000 for a couple--for each year that he or she was a ``qualified
farmer,'' with a maximum contribution of $250,000--or $500,000 per farm
couple.
The maximum allowed contribution to the ARA would be reduced by any
amount in excess of $100,000 that the qualified farmer and spouse
already have in a separate IRA.
A qualified farmer is a farmer who: For the 5-year period ending on
the date of sale of the farm, was materially participating in the
business of the farm. A farmer is determined to be materially
participating in the farm operation if they meet the requirements of
section 2032A individually, or jointly in the case of a couple, owns at
least 50 percent of the farm asset during the 5-year period.
______
By Mr. KOHL (for himself and Mr. Feingold):
S. 81. A bill to amend the Dairy Production Stabilization Act of 1983
to require that members of the National Dairy Promotion and Research
Board be elected by milk producers and to prohibit bloc voting by
cooperative associations of milk producers in the election of the
producers, and for other purposes; to the Committee on Agriculture,
Nutrition, and Forestry.
national dairy promotion reform act of 1997
Mr. KOHL. Mr. President, one of the basic tenets upon which this
Nation was founded was that there should be no taxation without
representation. But the dairy farmers of this nation know all too well
that taxation without representation continues today. They live with
that reality in their businesses every day.
Dairy farmers are required to pay a 15 cent tax, in the form of an
assessment, on every hundred pounds of milk that they sell. This tax
goes to fund dairy promotion activities, such as those conducted by the
National Dairy Promotion and Research Board, commonly known as the
National Dairy Board. Yet these same farmers that pay hundreds, or in
some cases thousands, of dollars every year for these mandatory
promotion activities have no direct say over who represents them on
that Board.
In the summer of 1993, a national referendum was held giving dairy
producers the opportunity to vote on whether or not the National Dairy
Board should continue. The referendum was held after 16,000 dairy
producers, more than 10 percent of dairy farmers nationwide, signed a
petition to the Secretary of Agriculture calling for the referendum.
Farmers signed this petition for a number of reasons. Some felt they
could no longer afford the promotion assessment that is taken out of
their milk checks every month. Others were frustrated with what they
perceived to be a lack of clear benefits from the promotion activities.
And still others were alarmed by certain promotion activities
undertaken by the Board with which they did not agree. But overriding
all of these concerns was the fact that dairy farmers have no direct
power over the promotion activities which they fund from their own
pockets.
When the outcome of the referendum on continuing the National Dairy
Board was announced, it had passed overwhelmingly. But because nearly
90 percent of all votes cast in favor of continuing the Board were cast
by bloc-voting cooperatives, there has been skepticism among dairy
farmers about the validity of the vote.
While I believe that dairy promotion activities are important for
enhancing markets for dairy products, it matters more what dairy
farmers believe. After all, they are the ones who pay hundreds or
thousands of dollars every year for these promotion activities. And
they are the ones who have no direct say over who represents them on
that Board.
It is for this reason that I rise today to reintroduce the National
Dairy Promotion Reform Act of 1997.
Some in the dairy industry have argued that this issue is dead, and
that to reintroduce such legislation will only reopen old wounds. But I
must respectfully disagree.
The intent of this legislation is not to rehash the referendum
debate, which was a contentious one. Instead, the intent is to look
forward.
[[Page S460]]
Farmers in my state have traditionally been strong supporters of the
cooperative movement, because the cooperative business structure has
given them the opportunity to be equal partners in the businesses that
market their products and supply their farms. I have been a strong
supporter of the cooperative movement for the same reason.
But there is a growing dissention among farmers that I believe is
dangerous to the long-term viability of agricultural cooperatives. As I
talk to farmers around Wisconsin, I hear a growing concern that their
voices are not being heard by their cooperatives. They frequently cite
the 1993 National Dairy Board referendum as an example. The bill that I
am reintroducing today seeks to address one small part of that concern,
by giving dairy farmers a more direct role in the selection of their
representatives on the National Dairy Board. Whereas current law
requires that members of the National Dairy Board be appointed by the
Secretary of Agriculture, this legislation would require that the Board
be an elected body.
Further, although the legislation would continue the right of farmer
cooperatives to nominate individual members to be on the ballot, bloc
voting by cooperatives would be prohibited for the purposes of the
election itself. There are many issues for which the cooperatives can
and should represent their members. But on this issue, farmers ought to
speak for themselves.
It is my hope that this legislation will help restore the confidence
of the U.S. dairy farmer in dairy promotion. To achieve that
confidence, farmers need to know that they have direct power over their
representatives on the Board. This bill gives them that power.
I welcome my colleague from Wisconsin, Senator Feingold, as an
original cosponsor of this bill, and I am also pleased to join today as
an original cosponsor of two pieces of legislation that he is
introducing today, as well.
Senator Feingold's two bills would make other needed improvements in
the national dairy promotion program. Specifically, one bill would
require that imported dairy products be subject to the same dairy
promotion assessment as are paid on domestic dairy products today. The
other would prohibit the practice of bloc voting by cooperatives for
the purpose of any future farmer referenda regarding the National Dairy
Board.
I thank my colleague Senator Feingold for his efforts on these
matters, and I believe that our three bills provide dairy promotion
program reforms that are both complementary and necessary.
I ask unanimous consent that the full text of the bill and summary be
included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 81
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Dairy Promotion
Reform Act of 1997''.
SEC. 2. DAIRY VOTING REFORM.
Section 113(b) of the Dairy Production Stabilization Act of
1983 (7 U.S.C. 4504(b)) is amended--
(1) by designating the first and second sentences as
paragraphs (1) and (2), respectively;
(2) by designating the third through fifth sentences as
paragraph (3);
(3) by designating the sixth sentence as paragraph (4);
(4) by designating the seventh and eighth sentences as
paragraph (5);
(5) by designating the ninth sentence as paragraph (6);
(6) in paragraph (1) (as so designated), by striking ``and
appointment'';
(7) by striking paragraph (2) (as so designated) and
inserting the following:
``(2) Qualifications, nomination, and election of
members.--
``(A) Qualifications and election.--
``(i) In general.--Subject to clause (ii), each member of
the Board shall be a milk producer nominated in accordance
with subparagraph (B) and elected by a vote of producers
through a process established by the Secretary.
``(ii) Bloc voting.--In carrying out clause (i), the
Secretary shall not permit an organization certified under
section 114 to vote on behalf of the members of the
organization.
``(B) Nominations.--
``(i) Source.--Nominations shall be submitted by
organizations certified under section 114, or, if the
Secretary determines that a substantial number of milk
producers are not members of, or the interests of the
producers are not represented by, a certified organization,
from nominations submitted by the producers in the manner
authorized by the Secretary.
``(ii) Consultation with members.--In submitting
nominations, each certified organization shall demonstrate to
the satisfaction of the Secretary that the milk producers who
are members of the organization have been fully consulted in
the nomination process.'';
(8) in the first sentence of paragraph (3) (as so
designated), by striking ``In making such appointments,'' and
inserting ``In establishing the process for the election of
members of the Board,''; and
(9) in paragraph (4) (as so designated)--
(A) by striking ``appointment'' and inserting ``election'';
and
(B) by striking ``appointments'' and inserting
``elections''.
____
National Dairy Promotion Reform Act of 1997
Summary of the Bill
The bill would amend the Dairy Production Stabilization Act
of 1983 to require that future members of the National Dairy
Board be elected directly by dairy producers, and not
appointed by the Secretary of Agriculture as they are
currently.
The bill would also prohibit the practice of bloc voting of
members by producer cooperatives for the purposes of the
Board elections.
However, cooperatives could continue to nominate members to
be on the ballot, as long as they adequately consult with
their membership in the nomination process.
The explicit details of the election process would be
developed by the Secretary of Agriculture.
______
By Mr. KOHL:
S. 82. A bill to amend the Internal Revenue Code of 1986 to provide a
credit against tax for employers who provide child care assistance for
dependents of their employees, and for other purposes; to the Committee
on Finance.
CHILD CARE INFRASTRUCTURE ACT
Mr. KOHL. Mr. President, today I rise to introduce the Child Care
Infrastructure Act. This legislation is designed to give incentives to
private companies to get involved in the provision of quality child
care. I introduced the bill as S. 2088 late last year, and I intend to
make its passage this year one of my highest priorities.
My bill responds to the challenges presented by the landmark welfare
legislation enacted last Congress. And it responds to the fundamental
changes in the American economy that have led to parents entering the
work force in record numbers.
The Child Care Infrastructure Act creates a tax credit for employers
who get involved in increasing the supply of quality child care. The
credit is limited to 50 percent of $150,000 per company per year. The
credit will sunset after 3 years. The credit goes to employers who
engage in activities like: Building and subsidizing an entire child
care center on the site of a company or near it; participating, along
with other businesses, in setting up and running a child care center
jointly; contracting with a child care facility to provide a set number
of places to employees--this gives existing centers the steady cash
flow they need to survive, or it can give a startup center the steady
income it needs to get off the ground; contracting with a resource and
referral agency to provide services such as placement or the design of
a network of local child care providers.
This legislation responds to a great need, a great challenge, and a
great opportunity. The need is to provide a safe and stimulating place
for our youngest children to spend their time while their parents are
at work. The challenge is to make the American workplace more
productive by making it more responsive to the needs of the American
family. And the opportunity is to take what we are learning about the
importance of early childhood education and use it to help our children
become the best educated adults of the 21st century.
The need for quality child care is certainly apparent. As real wages
have stagnated over the last decade, many families have adapted by
having two wage earners per family. Also, over the same period, the
number of children living in mother-only families has increased--in
1950, 6 percent of all children lived in mother-only families; in 1994,
that number was 24 percent. In my home State of Wisconsin, 67 percent
of women with children under 6 years old are in the work force
according to Children's Defense Fund. And in Milwaukee County, about 56
percent of children under the age of 6 have both parents in
[[Page S461]]
the work force or their sole parent in the work force. That translates
into about 67,600 children under the age of 6 in that county who right
now are already in need of or in child care.
With the passage of the welfare reform law, and the implementation of
W-2, Wisconsin's welfare reform State plan, the need for child care
will become even greater. A recent report done for the Community
Coordinated Child Care of Milwaukee found that the implementation of W-
2 will lead to the need for over 8,000 new full-time child care slots
in Milwaukee County alone.
Wisconsin is not unique in facing this overwhelming shortage of child
care slots. Across the Nation, States and communities are facing the
same issue. Where are our youngest children going to spend the day
while their parents are at work?
This is not the sort of market shortage we can or should address
haphazardly. There is nothing less at stake than the welfare of our
children. Study after study has found the enormous importance of early
childhood education and care--and by early education, the experts mean
the education of 0 to 4 year olds. One University of Chicago researcher
has claimed that intelligence appears to develop as much during the
years 0 to 4 as it does from the years 4 to 18.
If we are simply warehousing kids in these early years, we are going
to not only hamper their ability to develop fulfilling and productive
lives, but we are hurting ourselves. We are resigning ourselves to
trying to solve educational and developmental problems--at great
expense--for the rest of these children's lives.
As obvious as this point may seem, the desperate need for quality
early child care is not a problem that this Nation has addressed. As a
Nation--and I mean Federal, State, local, and private resources--over
the last 10 years, we have doubled our expenditures on educating 5 to
25 year olds to $500 billion. Contrast that with the mere $4 billion we
are spending on Head Start, and 95 percent of that is on children 3, 4,
and 5 years old. Only $100 million out of $500 billion is spent on the
period when the most significant development takes place--that's one-
fifth of one thousandth of what we spend on ages 5 through 25.
Obviously, our investment in children has not kept up with what we
now know about how children learn and develop in their earliest year.
There is another reason to care about the supply of quality child
care--especially for businesses to care about quality child care.
Employees who are happy with their child care situations are better
employees. They are more productive, have less absenteeism, and are
more loyal to their company.
Clearly, there is a shortage of quality child care, and equally
clearly, there is a benefit to the private sector if they are involved
in solving that shortage. The approach I take in my legislation is to
try to encourage private businesses to undertake activities that would
increase the supply of quality child care.
The legislation gives flexibility to businesses that want to get
involved in providing child care for their employee's dependents.
Though the shortage of quality child care is definitely a national
problem, it does have uniquely local solutions. What sort of child care
infrastructure works best in a community is going to depend on the sort
of work that community does--whether there are many part-time or odd
hour shifts, whether the local economy has a few very large employers
or a lot of small employers, or some mix. My legislation includes a tax
incentive that would allow many different kinds of businesses to take
advantage of it--and that would allow them to be as creative as
possible.
The 21st century economy will be one in which more of us are working,
and more of us are trying to balance work and family. How well we
adjust to that balance will determine how strong we are as an economy
and as a Nation of families. My legislation is an attempt to encourage
businesses to play an active role in this deeply important transition.
In the 1950's, Federal, State, local governments, communities, and
businesses banded together to build a highway system that is the most
impressive in the world. Those roads allowed our economy to flourish
and our people to move safely and quickly to work. In the 1990's, we
need the same sort of national, comprehensive effort to build safe and
affordable child care for our children. As more and more parents--of
all income levels--move into the work force, they need access to
quality child care just as much as their parents needed quality
highways to drive to work. And if we are successful--and I plan to be
successful--in the 21st century excellent child care will be as common
as interstate highways.
Child care is an investment that is good for children, good for
business, good for our States, and good for the Nation. We need to
involve every level of government--and private communities and private
businesses--in building a child care infrastructure that is the best in
the world. My legislation is a first, essential step toward this end.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 82
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Child Care Infrastructure
Act of 1997''.
SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by adding at the end the
following new section:
``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.
``(a) In General.--For purposes of section 38, the
employer-provided child care credit determined under this
section for the taxable year is an amount equal to 50 percent
of the qualified child care expenditures of the taxpayer for
such taxable year.
``(b) Dollar Limitation.--The credit allowable under
subsection (a) for any taxable year shall not exceed
$150,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified child care expenditure.--The term
`qualified child care expenditure' means any amount paid or
incurred--
``(A) to acquire, construct, rehabilitate, or expand
property--
``(i) which is to be used as part of a qualified child care
facility of the taxpayer,
``(ii) with respect to which a deduction for depreciation
(or amortization in lieu of depreciation) is allowable, and
``(iii) which does not constitute part of the principal
residence (within the meaning of section 1034) of the
taxpayer or any employee of the taxpayer,
``(B) for the operating costs of a qualified child care
facility of the taxpayer, including costs related to the
training of employees, to scholarship programs, and to the
providing of increased compensation to employees with higher
levels of child care training,
``(C) under a contract with a qualified child care facility
to provide child care services to employees of the taxpayer,
or
``(D) under a contract to provide child care resource and
referral services to employees of the taxpayer.
``(2) Qualified child care facility.--
``(A) In general.--The term `qualified child care facility'
means a facility--
``(i) the principal use of which is to provide child care
assistance, and
``(ii) which meets the requirements of all applicable laws
and regulations of the State or local government in which it
is located, including, but not limited to, the licensing of
the facility as a child care facility.
Clause (i) shall not apply to a facility which is the
principal residence (within the meaning of section 1034) of
the operator of the facility.
``(B) Special rules with respect to a taxpayer.--A facility
shall not be treated as a qualified child care facility with
respect to a taxpayer unless--
``(i) enrollment in the facility is open to employees of
the taxpayer during the taxable year,
``(ii) the facility is not the principal trade or business
of the taxpayer unless at least 30 percent of the enrollees
of such facility are dependents of employees of the taxpayer,
and
``(iii) the use of such facility (or the eligibility to use
such facility) does not discriminate in favor of employees of
the taxpayer who are highly compensated employees (within the
meaning of section 414(q)).
``(d) Recapture of Acquisition and Construction Credit.--
``(1) In general.--If, as of the close of any taxable year,
there is a recapture event with respect to any qualified
child care facility of the taxpayer, then the tax of the
taxpayer under this chapter for such taxable year shall be
increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed under
section 38 for all prior taxable years which would have
resulted if the qualified child care expenditures of the
taxpayer
[[Page S462]]
described in subsection (c)(1)(A) with respect to such
facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the
applicable recapture percentage shall be determined from the
following table:
The applicable
recapture
``If the recapture evpercentage is:
Years 1-3....................................................100
Year 4........................................................85
Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.
``(B) Years.--For purposes of subparagraph (A), year 1
shall begin on the first day of the taxable year in which the
qualified child care facility is placed in service by the
taxpayer.
``(3) Recapture event defined.--For purposes of this
subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the
operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the
disposition of a taxpayer's interest in a qualified child
care facility with respect to which the credit described in
subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i)
shall not apply if the person acquiring such interest in the
facility agrees in writing to assume the recapture liability
of the person disposing of such interest in effect
immediately before such disposition. In the event of such an
assumption, the person acquiring the interest in the facility
shall be treated as the taxpayer for purposes of assessing
any recapture liability (computed as if there had been no
change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall
be increased under paragraph (1) only with respect to credits
allowed by reason of this section which were used to reduce
tax liability. In the case of credits not so used to reduce
tax liability, the carryforwards and carrybacks under section
39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under
this subsection shall not be treated as a tax imposed by this
chapter for purposes of determining the amount of any credit
under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The
increase in tax under this subsection shall not apply to a
cessation of operation of the facility as a qualified child
care facility by reason of a casualty loss to the extent such
loss is restored by reconstruction or replacement within a
reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as
a single employer under subsections (a) and (b) of section 52
shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case
of partnerships, the credit shall be allocated among partners
under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this
section with respect to any property by reason of
expenditures described in subsection (c)(1)(A), the basis of
such property shall be reduced by the amount of the credit so
determined.
``(B) Certain dispositions.--If during any taxable year
there is a recapture amount determined with respect to any
property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event
resulting in such recapture) shall be increased by an amount
equal to such recapture amount. For purposes of the preceding
sentence, the term `recapture amount' means any increase in
tax (or adjustment in carrybacks or carryovers) determined
under subsection (d).
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter
with respect to the amount of the credit determined under
this section.
``(g) Termination.--This section shall not apply to taxable
years beginning after December 31, 1999.''
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is
amended--
(A) by striking out ``plus'' at the end of paragraph (11),
(B) by striking out the period at the end of paragraph
(12), and inserting a comma and ``plus'', and
(C) by adding at the end the following new paragraph:
``(13) the employer-provided child care credit determined
under section 45D.''
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 45D. Employer-provided child care credit.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
______
Mr. AKAKA:
S. 83. A bill to consolidate and revise the authority of the
Secretary of Agriculture relating to plant protection and quarantine,
and for other purposes; to the Committee on Agriculture, Nutrition, and
Forestry.
plant protection act
Mr. AKAKA.
Mr. President, today I am introducing the Plant Protection Act, a
comprehensive consolidation of Federal laws governing plant pests and
diseases, noxious weeds, and the plant products that harbor pests and
weeds.
During the past century, numerous Federal laws were enacted to
address problems caused by plant pests and noxious weeds. While some of
these laws continue to protect agriculture and the environment, others
are ambiguous, outmoded, or difficult to enforce. The Nation's
agricultural community, as well as private, state, and Federal land
managers, cannot afford the continuing uncertainty caused by the
hodgepodge of Federal plant pest laws, some of which were enacted
before World War I. Legislation to revise and consolidate federal plant
pest laws is urgently needed and long overdue.
Agriculture Secretary Dan Glickman highlighted the problem created by
federal plant protection laws when he told Congress that ``in some
instances, it is unclear which statutes should be relied upon for
authority. It is difficult to explain to the public why some apparently
similar situations have to be treated differently because different
authorities are involved.''
A 1993 report issued by the Office of Technology Assessment reached
the same conclusion. The OTA found that Federal and State statutes,
regulations, and programs are not keeping pace with new and spreading
alien pests.
The Plant Protection Act will address many of these problems. The
bill I introduced today will enhance the Federal Government's ability
to combat weeds, plant pests, and diseases, and protect our farms,
environment, and economy from the harm they cause.
Plant pests are a problem of monumental proportions. Insects such as
Mediterranean fruit fly, fire ant, and gypsy moth plague America's
farmers and cause billions of dollars in crop losses annually.
Destructive plant diseases include chestnut blight, which wiped out the
most common tree of our Appalachian forests, elm blight, which
destroyed many splendid trees throughout our towns and cities, and the
white pine blister rust, which eliminated western white pine as a
source of timber for several decades.
Alien weeds also cause havoc, and nowhere is this problem more
apparent than in Hawaii. Because our climate is so accommodating,
Hawaii is heaven-on-earth for weeds. Weeds such as gorse, ivy gourd,
miconia, and banana poka are ravaging our tropical and subtropical
landscape.
Invasive noxious weeds do more than just compete with domestic
species. They transform the landscape, change the rules by which native
plants and animals live, and undermine the economic and environmental
health of the areas they infest.
Alien weeds fuel grass and forest fires, promote soil erosion, and
destroy critical water resources. They significantly increase the cost
of farming and ranching. Noxious weeds destroy or alter natural
habitat, damage waterways and powerlines, and depress property values.
Some are toxic to humans, livestock, and wildlife.
Alien weeds are biological pollution, pure and simple. Due to the
worldwide growth in trade and travel we are witnessing an explosion in
the number of foreign weeds that plague our Nation.
Just how big is this problem? Let me offer an example. Last year, on
Federal lands alone, we lost 4,500 acres each day to noxious weeds.
That's a million-and-a-half acres a year, or an area the size of
Delaware. By comparison, forest fires--one of the most fearsome natural
disasters--claimed only half as many Federal acres as weeds.
Noxious weeds have also been called biological wildfire, and for good
reason. Forests, national parks, recreation areas, urban landscapes,
wilderness, grasslands, waterways, farm and range land across the
Nation are overrun by noxious weeds.
[[Page S463]]
Farmers experience the greatest economic impact of this problem. The
Office of Technology Assessment estimates that exotic weeds cost U.S.
farmers $3.6 to $5.4 billion annually due to reduced yields, crops of
poor quality, increased herbicide use, and other weed control costs.
Noxious weeds are a significant drain on farm productivity.
Despite the magnitude of this problem, few people get alarmed about
weeds. The issue certainly doesn't appear on the cover of Time or
Newsweek. Perhaps if kudzu, a weed known as the ``vine that ate the
South,'' attacked the Capitol grounds, weeds would finally get the
attention they deserve.
Several of these foreign weeds are truly the King Kong of plants.
Some are 50 feet tall. Others have 4 inch thorns. Some have roots 25
feet deep, and others produce 20 million seeds each year.
My least-favorite weed is the tropical soda apple, a thorny plant
with a sweet-sounding name. It bears small yellow and green fruit. But,
like fruit from the forbidden tree, tropical soda apples are a source
of great strife.
This import from Brazil has inch-long spikes covering its stems and
leaves. The fruit is a favorite among cattle, and when they pass the
seeds in their manure new weeds quickly sprout. As cattle are shipped
from state to state with soda apple seeds in their stomachs you can
easily imagine how the problem rapidly spreads. Tropical soda apple is
a weed control nightmare.
The saga of tropical soda apple prompted me to introduce S. 690, the
Federal Noxious Weed Improvement Act during the 104th Congress. S. 690
would grant the Secretary of Agriculture emergency powers to restrict
the entry of a foreign weed until formal action can be taken to place
it on the noxious weed list. This legislation would prevent future
tropical soda apples from taking root.
I have incorporated the text of S. 690 into section 4 of the Plant
Protection Act. Other provisions of the legislation I have introduced
today are drawn from USDA recommendations for consolidating weed and
plant pest authorities.
Because the U.S. Department of Agriculture's authority over plant
pests and noxious weeds is dispersed throughout many statutes, Federal
efforts to protect agriculture, forestry, and our environment are
seriously hindered. To enable the Department to respond more
efficiently to this challenge, the Plant Protection Act will
consolidate these authorities into a single statute.
I ask unanimous consent that the text of the Plant Protection Act be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 83
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Plant Protection Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the detection, control, eradication, suppression,
prevention, and retardation of the spread of plant pests and
noxious weeds is necessary for the protection of the
agriculture, environment, and economy of the United States;
(2) biological control--
(A) is often a desirable, low-risk means of ridding crops
and other plants of plant pests and noxious weeds; and
(B) should be facilitated by the Secretary of Agriculture,
Federal agencies, and States, whenever feasible;
(3) markets could be severely impacted by the introduction
or spread of pests or noxious weeds into or within the United
States;
(4) the unregulated movement of plant pests, noxious weeds,
plants, biological control organisms, plant products, and
articles capable of harboring plant pests or noxious weeds
would present an unacceptable risk of introducing or
spreading plant pests or noxious weeds;
(5) the existence on any premises in the United States of a
plant pest or noxious weed new to or not known to be widely
prevalent in or distributed within and throughout the United
States could threaten crops, other plants, plant products,
and the natural resources and environment of the United
States and burden interstate commerce or foreign commerce;
and
(6) all plant pests, noxious weeds, plants, plant products,
or articles capable of harboring plant pests or noxious weeds
regulated under this Act are in or affect interstate commerce
or foreign commerce.
SEC. 3. DEFINITIONS.
In this Act:
(1) Article.--The term ``article'' means any material or
tangible object that could harbor a pest, disease, or noxious
weed.
(2) Biological control organism.--The term ``biological
control organism'' means a biological entity, as defined by
the Secretary, that suppresses or decreases the population of
another biological entity.
(3) Enter.--The term ``enter'' means to move into the
commerce of the United States.
(4) Entry.--The term ``entry'' means the act of movement
into the commerce of the United States.
(5) Export.--The term ``export'' means to move from the
United States to any place outside the United States.
(6) Exportation.--The term ``exportation'' means the act of
movement from the United States to any place outside the
United States.
(7) Import.--The term ``import'' means to move into the
territorial limits of the United States.
(8) Importation.--The term ``importation'' means the act of
movement into the territorial limits of the United States.
(9) Indigenous.--The term ``indigenous'' means a plant
species found naturally as part of a natural habitat in a
geographic area in the United States.
(10) Interstate.--The term ``interstate'' means from 1
State into or through any other State, or within the District
of Columbia, Guam, the Virgin Islands of the United States,
or any other territory or possession of the United States.
(11) Interstate commerce.--The term ``interstate commerce''
means trade, traffic, movement, or other commerce--
(A) between a place in a State and a point in another
State;
(B) between points within the same State but through any
place outside the State; or
(C) within the District of Columbia, Guam, the Virgin
Islands of the United States, or any other territory or
possession of the United States.
(12) Means of conveyance.--The term ``means of conveyance''
means any personal property or means used for or intended for
use for the movement of any other personal property.
(13) Move.--The term ``move'' means to--
(A) carry, enter, import, mail, ship, or transport;
(B) aid, abet, cause, or induce the carrying, entering,
importing, mailing, shipping, or transporting;
(C) offer to carry, enter, import, mail, ship, or
transport;
(D) receive to carry, enter, import, mail, ship, or
transport; or
(E) allow any of the activities referred to this paragraph.
(14) Noxious weed.--The term ``noxious weed'' means a
plant, seed, reproductive part, or propagative part of a
plant that--
(A) can directly or indirectly injure or cause damage to a
crop, other useful plant, plant product, livestock, poultry,
or other interest of agriculture (including irrigation),
navigation, public health, or natural resources or
environment of the United States; and
(B) belongs to a species that is not indigenous to the
geographic area or ecosystem in which it is causing injury or
damage.
(15) Permit.--The term ``permit'' means a written or oral
authorization (including electronic authorization) by the
Secretary to move a plant, plant product, biological control
organism, plant pest, noxious weed, or article under
conditions prescribed by the Secretary.
(16) Person.--The term ``person'' means an individual,
partnership, corporation, association, joint venture, or
other legal entity.
(17) Plant.--The term ``plant'' means a plant or plant part
for or capable of propagation, including a tree, shrub, vine,
bulb, root, pollen, seed, tissue culture, plantlet culture,
cutting, graft, scion, and bud.
(18) Plant pest.--The term ``plant pest'' means--
(A) a living stage of a protozoan, animal, bacteria,
fungus, virus, viroid, infection agent, or parasitic plant
that can directly or indirectly injure or cause damage to, or
cause disease in, a plant or plant product; or
(B) an article that is similar to or allied with an article
referred to in subparagraph (A).
(19) Plant product.--The term ``plant product'' means a
flower, fruit, vegetable, root, bulb, seed, or other plant
part that is not considered a plant or a manufactured or
processed plant or plant part.
(20) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(21) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana
Islands, and any other territory or possession of the United
States.
(22) United states.--The term ``United States'', when used
in a geographical sense, means all of the States.
SEC. 4. RESTRICTIONS ON MOVEMENT OF PLANTS, PLANT PRODUCTS,
BIOLOGICAL CONTROL ORGANISMS, PLANT PESTS,
NOXIOUS WEEDS, ARTICLES, AND MEANS OF
CONVEYANCE.
(a) In General.--The Secretary may prohibit or restrict the
importation, entry, exportation, or movement in interstate
commerce of a plant, plant product, biological control
organism, plant pest, noxious weed,
[[Page S464]]
article, or means of conveyance if the Secretary determines
that the prohibition or restriction is necessary to prevent
the introduction into the United States or the interstate
dissemination of a plant pest or noxious weed.
(b) Mail.--
(1) In general.--No person shall convey in the mail, or
deliver from a post office or by a mail carrier, a letter or
package containing a plant pest, biological control organism,
or noxious weed unless it is mailed in accordance with such
regulations as the Secretary may issue to prevent the
introduction into the United States, or interstate
dissemination, of plant pests or noxious weeds.
(2) Postal employees.--This subsection shall not apply to
an employee of the United States in the performance of the
duties of the employee in handling the mail.
(3) Postal laws and regulations.--Nothing in this
subsection authorizes a person to open a mailed letter or
other mailed sealed matter except in accordance with the
postal laws and regulations.
(c) State Restrictions on Noxious Weeds.--No person shall
move into a State, or sell or offer for sale in the State, a
plant species the sale of which is prohibited by the State
because the plant species is designated as a noxious weed or
has a similar designation.
(d) Administration.--The Secretary may issue regulations to
carry out this section, including regulations requiring that
a plant, plant product, biological control organism, plant
pest, noxious weed, article, or means of conveyance imported,
entered, to be exported, or moved in interstate commerce--
(1) be accompanied by a permit issued by the Secretary
prior to the importation, entry, exportation, or movement in
interstate commerce;
(2) be accompanied by a certificate of inspection issued in
a manner and form required by the Secretary or by an
appropriate official of the country or State from which the
plant, plant product, biological control organism, plant
pest, noxious weed, article, or means of conveyance is to be
moved;
(3) be subject to remedial measures the Secretary
determines to be necessary to prevent the spread of plant
pests; and
(4) in the case of a plant or biological control organism,
be grown or handled under post-entry quarantine conditions by
or under the supervision of the Secretary for the purpose of
determining whether the plant or biological control organism
may be infested with a plant pest or noxious weed, or may be
a plant pest or noxious weed.
(e) List of Restricted Noxious Weeds.--
(1) Publication.--The Secretary may publish, by regulation,
a list of noxious weeds that are prohibited or restricted
from entering the United States or that are subject to
restrictions on interstate movement within the United States.
(2) Petitions to add or remove plant species.--
(A) In general.--A person may petition the Secretary to add
or remove a plant species from the list required under
paragraph (1).
(B) Action on petition.--The Secretary shall--
(i) act on a petition not later than 1 year after receipt
of the petition by the Secretary; and
(ii) notify the petitioner of the final action the
Secretary takes on the petition.
(C) Basis for determination.--The Secretary's determination
on the petition shall be based on sound science, available
data and technology, and information received from public
comment.
(D) Inclusion on list.--To include a plant species on the
list, the Secretary must determine that--
(i) the plant species is nonindigenous to the geographic
region or ecosystem in which the species is spreading and
causing injury; and
(ii) the dissemination of the plant in the United States
may reasonably be expected to interfere with natural
resources, agriculture, forestry, or a native ecosystem of a
geographic region, or management of an ecosystem, or cause
injury to the public health.
(f) Conforming Amendments.--
(1) Section 102 of the Act of September 21, 1944 (58 Stat.
735, chapter 412; 7 U.S.C. 147a) is amended by striking
``(a)'' in subsection (a) and all that follows through
``(2)'' in subsection (f)(2).
(2) The matter under the heading ``Enforcement of the
Plant-quarantine Act:'' under the heading ``Miscellaneous''
of the Act of March 4, 1915 (commonly known as the ``Terminal
Inspection Act'') (38 Stat. 1113, chapter 144; 7 U.S.C. 166)
is amended--
(A) in the second paragraph--
(i) by striking ``plants and plant products'' each place it
appears and inserting ``plants, plant products, animals, and
other organisms'';
(ii) by striking ``plants or plant products'' each place it
appears and inserting ``plants, plant products, animals, or
other organisms'';
(iii) by striking ``plant-quarantine law or plant-
quarantine regulation'' each place it appears and inserting
``plant-quarantine or other law or plant-quarantine
regulation'';
(iv) in the second sentence--
(I) by striking ``Upon his approval of said list, in whole
or in part, the Secretary of Agriculture'' and inserting ``On
the receipt of the list by the Secretary of Agriculture, the
Secretary''; and
(II) by striking ``said approved lists'' and inserting
``the lists'';
(v) by inserting after the second sentence the following:
``On the request of a representative of a State, a Federal
agency shall act on behalf of the State to obtain a warrant
to inspect mail to carry out this paragraph.''; and
(vi) in the last sentence, by striking ``be forward'' and
inserting ``be forwarded''; and
(B) in the third paragraph, by striking ``plant or plant
product'' and inserting ``plant, plant product, animal, or
other organism''.
SEC. 5. NOTIFICATION OF ARRIVAL AND INSPECTION BEFORE
MOVEMENT OF PLANTS, PLANT PRODUCTS, BIOLOGICAL
CONTROL ORGANISMS, PLANT PESTS, NOXIOUS WEEDS,
ARTICLES, AND MEANS OF CONVEYANCE.
(a) Notification and Holding by Secretary of the
Treasury.--
(1) In general.--Except as provided in paragraph (2), the
Secretary of the Treasury shall--
(A) promptly notify the Secretary of the arrival of a
plant, plant product, biological control organism, plant
pest, noxious weed, article, or means of conveyance at a port
of entry; and
(B) hold the plant, plant product, biological control
organism, plant pest, noxious weed, article, or means of
conveyance until inspected and authorized for entry into or
transit movement through the United States, or otherwise
released by the Secretary.
(2) Application.--Paragraph (1) shall not apply to a plant,
plant product, biological control organism, plant pest,
noxious weed, article, or means of conveyance that is
imported from a country or region of countries that the
Secretary designates as exempt from paragraph (1), pursuant
to such regulations as the Secretary may issue.
(b) Notification by Responsible Person.--The person
responsible for a plant, plant product, biological control
organism, plant pest, noxious weed, article, or means of
conveyance subject to subsection (a) shall promptly, on
arrival at the port of entry and before the plant, plant
product, biological control organism, plant pest, noxious
weed, article, or means of conveyance is moved from the port
of entry, notify the Secretary or, at the Secretary's
direction, the proper official of the State to which the
plant, plant product, biological control organism, plant
pest, noxious weed, article, or means of conveyance is
destined, or both, as the Secretary may prescribe, of--
(1) the name and address of the consignee;
(2) the nature and quantity of the plant, plant product,
biological control organism, plant pest, noxious weed,
article, or means of conveyance proposed to be moved; and
(3) the country and locality where the plant, plant
product, biological control organism, plant pest, noxious
weed, article, or means of conveyance was grown, produced, or
located.
(c) No Movement Without Inspection and Authorization.--No
person shall move from the port of entry or interstate an
imported plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
unless the imported plant, plant product, biological control
organism, plant pest, noxious weed, article, or means of
conveyance has been inspected and authorized for entry into
or transit movement through the United States, or otherwise
released by the Secretary.
SEC. 6. REMEDIAL MEASURES OR DISPOSAL FOR PLANT PESTS OR
NOXIOUS WEEDS; EXTRAORDINARY EMERGENCY.
(a) Remedial Measures or Disposal for Plant Pests or
Noxious Weeds.--
(1) In general.--Except as provided in subsection (c), if
the Secretary considers it necessary to prevent the
dissemination of a plant pest or noxious weed new to or not
known to be widely prevalent or distributed within and
throughout the United States, the Secretary may hold, seize,
quarantine, treat, apply other remedial measures to, destroy,
or otherwise dispose of--
(A) a plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
that is moving into or through the United States or
interstate and that the Secretary has reason to believe is
infested with the plant pest or noxious weed;
(B) a plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
that has moved into the United States or interstate and that
the Secretary has reason to believe was infested with the
plant pest or noxious weed at the time of the movement;
(C) a plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
that is moving into or through the United States or
interstate, or has moved into the United States or
interstate, in violation of this Act;
(D) a plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
that has not been maintained in compliance with a post-entry
quarantine requirement;
(E) a progeny of a plant, plant product, biological control
organism, plant pest, or noxious weed that is moving into or
through the United States or interstate, or has moved into
the United States or interstate, in violation of this Act; or
(F) a plant, plant product, biological control organism,
plant pest, noxious weed, article, or means of conveyance
that is infested
[[Page S465]]
with a plant pest or noxious weed that the Secretary has
reason to believe was moved into the United States or in
interstate commerce.
(2) Ordering treatment or disposal by the owner.--Except as
provided in subsection (c), the Secretary may order the owner
of a plant, plant product, biological control organism, plant
pest, noxious weed, article, or means of conveyance subject
to disposal under paragraph (1), or the owner's agent, to
treat, apply other remedial measures to, destroy, or
otherwise dispose of the plant, plant product, biological
control organism, plant pest, noxious weed, article, or means
of conveyance, without cost to the Federal Government and in
a manner the Secretary considers appropriate.
(3) Classification system for noxious weeds.--
(A) In general.--To facilitate control of noxious weeds,
the Secretary shall develop a classification system to
describe the status and action levels for noxious weeds.
(B) Categories.--The classification system shall
differentiate between--
(i) noxious weeds that are not known to be introduced into
the United States;
(ii) noxious weeds that are not known to be widely
disseminated within the United States;
(iii) noxious weeds that are widely distributed within the
United States; and
(iv) noxious weeds that are not indigenous, including
native plant species that are invasive in limited geographic
areas within the United States.
(C) Other categories.--In addition to the categories
required under subparagraph (B), the Secretary may establish
other categories of noxious weeds for the system.
(D) Varying levels of regulation and control.--The
Secretary shall develop varying levels of regulation and
control appropriate to each of the categories of the system.
(E) Application of regulations.--The regulations issued to
carry out this paragraph shall apply, as the Secretary
considers appropriate, to--
(i) exclude a noxious weed;
(ii) prevent further dissemination of a noxious weed
through movement or commerce;
(iii) establish mandatory controls for a noxious weed; or
(iv) designate a noxious weed as warranting control
efforts.
(F) Revisions.--The Secretary shall revise the
classification system, and the placement of individual
noxious weeds within the system, in response to changing
circumstances.
(G) Integrated management plans.--In conjunction with the
classification system, the Secretary may develop an
integrated management plan for a noxious weed for the
geographic region or ecological range of the United States
where the noxious weed is found or to which the noxious weed
may spread.
(b) Extraordinary Emergencies.--
(1) In general.--Subject to paragraph (2), if the Secretary
determines that an extraordinary emergency exists because of
the presence of a plant pest or noxious weed new to or not
known to be widely prevalent in or distributed within and
throughout the United States and that the presence of the
plant pest or noxious weed threatens a crop, other plant,
plant product, or the natural resources or environment of the
United States, the Secretary may--
(A) hold, seize, quarantine, treat, apply other remedial
measures to, destroy, or otherwise dispose of, a plant, plant
product, biological control organism, plant pest, noxious
weed, article, or means of conveyance that the Secretary has
reason to believe is infested with the plant pest or noxious
weed;
(B) quarantine, treat, or apply other remedial measures to
a premises, including a plant, plant product, biological
control organism, article, or means of conveyance on the
premises, that the Secretary has reason to believe is
infested with the plant pest or noxious weed;
(C) quarantine a State or portion of a State in which the
Secretary finds the plant pest or noxious weed, or a plant,
plant product, biological control organism, article, or means
of conveyance that the Secretary has reason to believe is
infested with the plant pest or noxious weed; or
(D) prohibit or restrict the movement within a State of a
plant, plant product, biological control organism, article,
or means of conveyance if the Secretary determines that the
prohibition or restriction is necessary to prevent the
dissemination of the plant pest or noxious weed or to
eradicate the plant pest or noxious weed.
(2) Requirements for action.--
(A) Inadequate state measures.--After review and
consultation with the Governor or other appropriate official
of the State, the Secretary may take action under this
subsection only on a finding that the measures being taken by
the State are inadequate to eradicate the plant pest or
noxious weed.
(B) Notice to state and public.--Before taking any action
in a State under this subsection, the Secretary shall--
(i) notify the Governor or another appropriate official of
the State;
(ii) issue a public announcement; and
(iii) except as provided in subparagraph (C), publish in
the Federal Register a statement of--
(I) the Secretary's findings;
(II) the action the Secretary intends to take;
(III) the reason for the intended action; and
(IV) if practicable, an estimate of the anticipated
duration of the extraordinary emergency.
(C) Notice after action.--If it is not practicable to
publish a statement in the Federal Register under
subparagraph (B) prior to taking an action under this
subsection, the Secretary shall publish the statement in the
Federal Register within a reasonable period of time, not to
exceed 10 business days, after commencement of the action.
(3) Compensation.--
(A) In general.--The Secretary may pay compensation to a
person for economic losses incurred by the person as a result
of action taken by the Secretary under paragraph (1).
(B) Final determination.--The determination by the
Secretary of the amount of any compensation paid under this
subsection shall be final and shall not be subject to
judicial review.
(c) Least Drastic Action to Prevent Dissemination.--No
plant, plant product, biological control organism, article,
or means of conveyance shall be destroyed, exported, or
returned to the shipping point of origin, or ordered to be
destroyed, exported, or returned to the shipping point of
origin under this section unless, in the opinion of the
Secretary, there is no less drastic action that is feasible,
and that would be adequate, to prevent the dissemination of a
plant pest or noxious weed new to or not known to be widely
prevalent or distributed within and throughout the United
States.
(d) Compensation of Owner for Unauthorized Disposal.--
(1) In general.--The owner of a plant, plant product,
biological control organism, article, or means of conveyance
destroyed or otherwise disposed of by the Secretary under
this section may bring an action against the United States in
the United States District Court of the District of Columbia,
not later than 1 year after the destruction or disposal, and
recover just compensation for the destruction or disposal of
the plant, plant product, biological control organism,
article, or means of conveyance (not including compensation
for loss due to delays incident to determining eligibility
for importation, entry, exportation, movement in interstate
commerce, or release into the environment) if the owner
establishes that the destruction or disposal was not
authorized under this Act.
(2) Source for payments.--A judgment rendered in favor of
the owner shall be paid out of the money in the Treasury
appropriated for plant pest control activities of the
Department of Agriculture.
SEC. 7. INSPECTIONS, SEIZURES, AND WARRANTS.
(a) In General.--Consistent with guidelines approved by the
Attorney General, the Secretary may--
(1) stop and inspect, without a warrant, a person or means
of conveyance moving into the United States to determine
whether the person or means of conveyance is carrying a
plant, plant product, biological control organism, or article
regulated under this Act or is moving subject to this Act;
(2) stop and inspect, without a warrant, a person or means
of conveyance moving in interstate commerce on probable cause
to believe that the person or means of conveyance is carrying
a plant, plant product, biological control organism, or
article regulated under this Act or is moving subject to this
Act;
(3) stop and inspect, without a warrant, a person or means
of conveyance moving in interstate commerce from or within a
State, portion of a State, or premises quarantined under
section 6(b) on probable cause to believe that the person or
means of conveyance is carrying any plant, plant product,
biological control organism, or article regulated under this
Act or is moving subject to this Act; and
(4) enter, with a warrant, a premises in the United States
for the purpose of making inspections and seizures under this
Act.
(b) Warrants.--
(1) In general.--A United States judge, a judge of a court
of record in the United States, or a United States magistrate
judge may, within the judge's or magistrate's jurisdiction,
on proper oath or affirmation showing probable cause to
believe that there is on certain premises a plant, plant
product, biological control organism, article, facility, or
means of conveyance regulated under this Act, issue a warrant
for entry on the premises to make an inspection or seizure
under this Act.
(2) Execution.--The warrant may be executed by the
Secretary or a United States Marshal.
SEC. 8. COOPERATION.
(a) In General.--To carry out this Act, the Secretary may
cooperate with--
(1) other Federal agencies;
(2) States or political subdivisions of States;
(3) national, State, or local associations;
(4) national governments;
(5) local governments of other nations;
(6) international organizations;
(7) international associations; and
(8) other persons.
(b) Responsibility.--The individual or entity cooperating
with the Secretary shall be responsible for conducting the
operations or taking measures on all land and property within
the foreign country or State, other than land and property
owned or controlled by the United States, and for other
facilities and means determined by the Secretary.
(c) Transfer of Biological Control Methods.--At the request
of a Federal or
[[Page S466]]
State land management agency, the Secretary may transfer to
the agency biological control methods utilizing biological
control organisms against plant pests or noxious weeds.
(d) Improvement of Plants, Plant Products, and Biological
Control Organisms.--The Secretary may cooperate with State
authorities in the administration of regulations for the
improvement of plants, plant products, and biological control
organisms.
SEC. 9. PHYTOSANITARY CERTIFICATE FOR EXPORTS.
The Secretary may certify a plant, plant product, or
biological control organism as free from plant pests and
noxious weeds, and exposure to plant pests and noxious weeds,
according to the phytosanitary requirements of the country to
which the plant, plant product, or biological control
organism may be exported.
SEC. 10. ADMINISTRATION.
(a) In General.--The Secretary may acquire and maintain
such real or personal property, employ such persons, make
such grants, and enter into such contracts, cooperative
agreements, memoranda of understanding, or other agreements
as are necessary to carry out this Act.
(b) Personnel of User Fee Services.--Notwithstanding any
other law, the Secretary shall provide adequate personnel for
services provided under this Act that are funded by user
fees.
(c) Tort Claims.--
(1) In general.--The Secretary may pay a tort claim (in the
manner authorized in the first paragraph of section 2672 of
title 28, United States Code) if the claim arises outside the
United States in connection with an activity authorized under
this Act.
(2) Time limitation.--A claim may not be allowed under
paragraph (1) unless the claim is presented in writing to the
Secretary not later than 2 years after the claim accrues.
SEC. 11. REIMBURSABLE AGREEMENTS.
(a) Preclearance.--
(1) In general.--The Secretary may enter into a
reimbursable fee agreement with a person for preclearance (at
a location outside the United States) of plants, plant
products, and articles for movement into the United States.
(2) Account.--All funds collected under this subsection
shall be credited to an account that may be established by
the Secretary and remain available until expended without
fiscal year limitation.
(b) Overtime.--
(1) In general.--Notwithstanding any other law, the
Secretary may pay an employee of the Department of
Agriculture performing services under this Act relating to
imports into and exports from the United States, for all
overtime, night, or holiday work performed by the employee,
at a rate of pay determined by the Secretary.
(2) Reimbursement of secretary.--The Secretary may require
a person for whom the services are performed to reimburse the
Secretary for any funds paid by the Secretary for the
services.
(3) Account.--All funds collected under this subsection
shall be credited to the account that incurs the costs and
remain available until expended without fiscal year
limitation.
(c) Late Payment Penalty and Interest.--
(1) Penalty.--On failure of a person to reimburse the
Secretary in accordance with this section, the Secretary may
assess a late payment penalty against the person.
(2) Interest.--Overdue funds due the Secretary under this
section shall accrue interest in accordance with section 3717
of title 31, United States Code.
(3) Account.--A late payment penalty and accrued interest
shall be credited to the account that incurs the costs and
shall remain available until expended without fiscal year
limitation.
SEC. l2. VIOLATIONS; PENALTIES.
(a) Criminal Penalties.--A person who knowingly violates
this Act, or who knowingly forges, counterfeits, or, without
authority from the Secretary, uses, alters, defaces, or
destroys a certificate, permit, or other document provided
under this Act shall be guilty of a misdemeanor, and, on
conviction, shall be fined in accordance with title 18,
United States Code, or imprisoned for not more than 1 year,
or both.
(b) Civil Penalties.--
(1) In general.--A person who violates this Act, or who
forges, counterfeits, or, without authority from the
Secretary, uses, alters, defaces, or destroys a certificate,
permit, or other document provided under this Act may, after
notice and opportunity for a hearing on the record, be
assessed a civil penalty by the Secretary of not more than
$25,000 for each violation.
(2) Final order.--The order of the Secretary assessing a
civil penalty shall be treated as a final order that is
reviewable under chapter 158 of title 28, United States Code.
(3) Validity of order.--The validity of an order of the
Secretary may not be reviewed in an action to collect the
civil penalty.
(4) Interest.--A civil penalty not paid in full when due
under an order assessing the civil penalty shall (after the
due date) accrue interest until paid at the rate of interest
applicable to a civil judgment of a court of the United
States.
(c) Pecuniary Gains or Losses.--If a person derives
pecuniary gain from an offense described in subsection (a) or
(b), or if the offense results in pecuniary loss to a person
other than the defendant, the defendant may be fined not more
than an amount that is the greater of twice the gross gain or
twice the gross loss, unless imposition of a fine under this
subsection would unduly complicate or prolong the imposition
of a fine or sentence under subsection (a) or (b).
(d) Agents.--For purposes of this Act, the act, omission,
or failure of an officer, agent, or person acting for or
employed by any other person within the scope of the
employment or office of the other person shall be considered
also to be the act, omission, or failure of the other person.
(e) Civil Penalties or Notice in Lieu of Prosecution.--The
Secretary shall coordinate with the Attorney General to
establish guidelines to determine under what circumstances
the Secretary may issue a civil penalty or suitable notice of
warning in lieu of prosecution by the Attorney General of a
violation of this Act.
SEC. 13. ENFORCEMENT.
(a) Investigations, Evidence, and Subpoenas.--
(1) Investigations.--The Secretary may gather and compile
information and conduct any investigations the Secretary
considers necessary for the administration and enforcement of
this Act.
(2) Evidence.--The Secretary shall at all reasonable times
have the right to examine and copy any documentary evidence
of a person being investigated or proceeded against.
(3) Subpoenas.--
(A) In general.--The Secretary shall have power to require
by subpoena the attendance and testimony of any witness and
the production of all documentary evidence relating to the
administration or enforcement of this Act or any matter under
investigation in connection with this Act.
(B) Location.--The attendance of a witness and production
of documentary evidence may be required from any place in the
United States at any designated place of hearing.
(C) Noncompliance with subpoena.--If a person disobeys a
subpoena, the Secretary may request the Attorney General to
invoke the aid of a court of the United States within the
jurisdiction in which the investigation is conducted, or
where the person resides, is found, transacts business, is
licensed to do business, or is incorporated to require the
attendance and testimony of a witness and the production of
documentary evidence.
(D) Order.--If a person disobeys a subpoena, the court may
order the person to appear before the Secretary and give
evidence concerning the matter in question or to produce
documentary evidence.
(E) Noncompliance with order.--A failure to obey the
court's order may be punished by the court as a contempt of
the court.
(F) Fees and mileage.--
(i) In general.--A witness summoned by the Secretary shall
be paid the same fees and reimbursement for mileage that is
paid to a witness in the courts of the United States.
(ii) Depositions.--A witness whose deposition is taken, and
the person taking the deposition, shall be entitled to the
same fees that are paid for similar services in a court of
the United States.
(b) Attorney General.--The Attorney General may--
(1) prosecute, in the name of the United States, a criminal
violation of this Act that is referred to the Attorney
General by the Secretary or is brought to the notice of the
Attorney General by a person;
(2) bring an action to enjoin the violation of or to compel
compliance with this Act, or to enjoin any interference by a
person with the Secretary in carrying out this Act, if the
Secretary has reason to believe that the person has violated
or is about to violate this Act, or has interfered, or is
about to interfere, with the Secretary; and
(3) bring an action for the recovery of any unpaid civil
penalty, funds under a reimbursable agreement, late payment
penalty, or interest assessed under this Act.
(c) Jurisdiction.--
(1) In general.--Except as provided in section 12(b), a
United States district court, the District Court of Guam, the
District Court of the Virgin Islands, the highest court of
American Samoa, and the United States courts of other
territories and possessions shall have jurisdiction over all
cases arising under this Act.
(2) Venue.--Except as provided in subsection (b), an action
arising under this Act may be brought, and process may be
served, in the judicial district where a violation or
interference occurred or is about to occur, or where the
person charged with the violation, interference, impending
violation, impending interference, or failure to pay resides,
is found, transacts business, is licensed to do business, or
is incorporated.
(3) Subpoenas.--A subpoena for a witness to attend court in
a judicial district or to testify or produce evidence at an
administrative hearing in a judicial district in an action or
proceeding arising under this Act may apply to any other
judicial district.
SEC. 14. PREEMPTION.
(a) In General.--Except as provided in subsection (b), no
State or political subdivision of a State may regulate any
article, means of conveyance, plant, biological control
organism, plant pest, noxious weed, or plant product in
foreign commerce to control a plant pest or noxious weed,
eradicate a plant pest or noxious weed, or prevent the
introduction or dissemination of a biological control
organism, plant pest, or noxious weed.
(b) State Noxious Weed Laws.--This Act shall not invalidate
the law of any State or
[[Page S467]]
political subdivision of a State relating to noxious weeds,
except that a State or political subdivision of a State may
not permit any action that is prohibited under this Act.
SEC. 15. REGULATIONS AND ORDERS.
The Secretary may issue such regulations and orders as the
Secretary considers necessary to carry out this Act,
including (at the option of the Secretary) regulations and
orders relating to--
(1) notification of arrival of plants, plant products,
biological control organisms, plant pests, noxious weeds,
articles, or means of conveyance;
(2) prohibition or restriction of or on the importation,
entry, exportation, or movement in interstate commerce of
plants, plant products, biological control organisms, plant
pests, noxious weeds, articles, or means of conveyance;
(3) holding, seizure of, quarantine of, treatment of,
application of remedial measures to, destruction of, or
disposal of plants, plant products, biological control
organisms, plant pests, noxious weeds, articles, premises, or
means of conveyance;
(4) in the case of an extraordinary emergency, prohibition
or restriction on the movement of plants, plant products,
biological control organisms, plant pests, noxious weeds,
articles, or means of conveyance;
(5) payment of compensation;
(6) cooperation with other Federal agencies, States,
political subdivisions of States, national governments, local
governments of other countries, international organizations,
international associations, and other persons, entities, and
individuals;
(7) transfer of biological control methods for plant pests
or noxious weeds;
(8) negotiation and execution of agreements;
(9) acquisition and maintenance of real and personal
property;
(10) issuance of letters of warning;
(11) compilation of information;
(12) conduct of investigations;
(13) transfer of funds for emergencies;
(14) approval of facilities and means of conveyance;
(15) denial of approval of facilities and means of
conveyance;
(16) suspension and revocation of approval of facilities
and means of conveyance;
(17) inspection, testing, and certification;
(18) cleaning and disinfection;
(19) designation of ports of entry;
(20) imposition and collection of fees, penalties, and
interest;
(21) recordkeeping, marking, and identification;
(22) issuance of permits and phytosanitary certificates;
(23) establishment of quarantines, post-importation
conditions, and post-entry quarantine conditions;
(24) establishment of conditions for transit movement
through the United States; and
(25) treatment of land for the prevention, suppression, or
control of plant pests or noxious weeds.
SEC. 16. AUTHORIZATION OF APPROPRIATIONS; TRANSFERS.
(a) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
such sums as are necessary to carry out this Act.
(2) Indemnities.--Except as specifically authorized by law,
no part of the money made available under paragraph (1) shall
be used to pay an indemnity for property injured or destroyed
by or at the direction of the Secretary.
(b) Transfers.--
(1) In general.--In connection with an emergency in which a
plant pest or noxious weeds threatens any segment of the
agricultural production of the United States, the Secretary
may transfer (from other appropriations or funds available to
an agency or corporation of the Department of Agriculture)
such funds as the Secretary considers necessary for the
arrest, control, eradication, and prevention of the spread of
the plant pest or noxious weed and for related expenses.
(2) Availability.--Any funds transferred under this
subsection shall remain available to carry out paragraph (1)
without fiscal year limitation.
SEC. 17. REPEALS.
The following provisions of law are repealed:
(1) Public Law 97-46 (7 U.S.C. 147b).
(2) The Joint Resolution of April 6, 1937 (50 Stat. 57,
chapter 69; 7 U.S.C. 148 et seq.).
(3) Section 1773 of the Food Security Act of 1985 (7 U.S.C.
148f).
(4) The Act of January 31, 1942 (56 Stat. 40, chapter 31; 7
U.S.C. 149).
(5) The Golden Nematode Act (7 U.S.C. 150 et seq.).
(6) The Federal Plant Pest Act (7 U.S.C. 150aa et seq.).
(7) The Act of August 20, 1912 (commonly known as the
``Plant Quarantine Act'') (37 Stat. 315, chapter 308; 7
U.S.C. 151 et seq.).
(8) The Halogeton Glomeratus Control Act (7 U.S.C. 1651 et
seq.).
(9) The Act of August 28, 1950 (64 Stat. 561, chapter 815;
7 U.S.C. 2260).
(10) The Federal Noxious Weed Act of 1974 (7 U.S.C. 2801 et
seq.), other than the first section of the Act (Public Law
93-629; 7 U.S.C. 2801 note) and section 15 of the Act (7
U.S.C. 2814).
______
By Mr. GRAMM:
S. 84. A bill to authorize negotiation of free trade agreements with
the countries of the Americas, and for other purposes; to the Committee
on Finance.
S. 85. A bill to authorize negotiation for the accession of Chile to
the North American Free Trade Agreement, and for other purposes; to the
Committee on Finance.
americas free trade act and nafta accession act
Mr. GRAMM. Mr. President, when America trades, America wins. The
United States of America is the greatest trading Nation the world has
ever known. From beef to computers to engineering, last year American
workers exported more than $830 billion in goods and services. No other
country even came close.
Over the last decade, America's exports in goods of all kinds grew by
131 percent. By comparison, Europe's exports of goods grew by 55
percent, and Japan's total grew less than half the rate of Europe's by
24 percent. The U.S. trade expansion involved virtually every sector of
the economy, but it was particularly pronounced in the export of
manufactured goods. From 1985 to 1995, U.S. exports of manufactured
goods grew by over 180 percent. That growth rate was six times the rate
for Germany and almost nine times Japan's export growth.
In short, trade is our game. American workers, businesses, and farms
are more competitive and far more successful than the merchants of fear
and defeatism advertise.
Fortunately, we have resisted incessant cries to model our economic
and trade policies after those of Japan, Germany, and others, and we
have outperformed them in every respect. Lately, one does not hear much
talk about the Japanese economic miracle, and Germany's double-digit
unemployment rate finds few admirers. Instead, what Pericles said of
ancient Athens in the days of that city's glory may without fear be
said of us. ``The magnitude of our city draws the produce of the world
into our harbor, so that to the Athenian the fruits of other countries
are as familiar a luxury as those of his own.''
In fact, successful economic and trade policies have resulted in the
addition of 18 million jobs to the Nation since 1985, 6 million jobs
more than the total job creation for Japan and the nations of the
European Community combined.
We must not forget that the most valuable products of trade are high-
wage jobs. An export-related job in America pays better, 15 percent
better, than the average pay in the Nation. Today, America exports over
$26,000 in manufactured goods for every man and woman employed in
manufacturing.
In January 1988, President Reagan gave his final State of the Union
address. As a veteran of those trade battles, President Reagan warned
us all: ``A creative, competitive America is the answer to a changing
world, not trade wars that would close doors, create great barriers,
and destroy millions of jobs. We should always remember: protectionism
is destructionism.''
Mr. President, on May 21, 1986, I introduced legislation to begin
negotiations for a free trade agreement with Mexico. On February 26,
1987, I introduced a bill that laid out a framework for negotiating a
North American free trade area, and on June 26 of that same year the
Senate adopted an amendment that I offered to the omnibus trade bill,
authorizing the negotiation of a North American Free Trade Agreement.
On February 7, 1989, I once again introduced trade legislation and
called for a free trade agreement encompassing the entire Western
Hemisphere. I have introduced similar legislation in the 103d and the
104th Congress, providing authority for negotiation of a free trade
agreement with the nations of the Americas.
Today I am introducing two pieces of legislation to extend free trade
from Point Barrow, AK, to Cape Horn at the tip of South America. The
first bill, the Americas Free Trade Act, will provide fast track
authority for consideration of free trade agreements with any or all
of the nations of the Western Hemisphere.
While renewing fast track authority, the legislation provides two
very important reforms made necessary by the abuse of the fast track
authority in the most recent trade agreement. First of all, the
legislation explicitly excludes labor and environmental provisions from
the fast track approval process.
[[Page S468]]
These are important issues to be addressed in our relations with other
nations, but the Senate must not surrender its constitutional treaty
review responsibilities over these important matters.
The legislation also deals with the problem of unrelated matters
being included in a bill implementing a trade agreement. Similar to the
Byrd Rule that excludes extraneous matter from reconciliation
legislation, this bill will permit a point of order to be raised
against any provision in an implementing bill that is not necessary to
carry out the provisions of the trade agreement. This point of order,
as with the Byrd Rule, would strike the offending provision from the
bill rather than cause the entire bill to fail.
As with legislation that I have introduced in the past, this bill
provides special procedures for trade agreements with Cuba. In short,
Fidel Castro's Cuba would not be eligible, but a free trade agreement
with a free Cuba would be made a national priority.
I am also introducing today legislation to provide for Chile to join
the North American Free Trade Agreement. While I would prefer the
extension of fast track authority for free trade agreements for any
nation of the Western Hemisphere, as the Americas Free Trade Act would
do, I do not believe that we should delay the process of including
Chile in NAFTA, or hold Chile hostage to that process, should a broader
trade bill require more time to be enacted. I believe that a free trade
agreement with Chile could and should be concluded this year, and I am
eager to see the progress toward lower barriers to trade and economic
growth move forward.
We are the best competitor the world has ever known, and we have the
biggest stake. Trade and expanding economic opportunity power America's
engines of economic growth and prosperity. Let us embrace them, not
destroy them.
Mr. President, I ask unanimous consent that the text of the Americas
Free Trade Act and the NAFTA Accession Act, together with an outline of
each bill, be included in the Record.
There being no objection, the materials were ordered to be printed in
the Record, as follows:
S. 84
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Americas Free Trade Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The countries of the Western Hemisphere have enjoyed
more success in the twentieth century in the peaceful conduct
of their relations among themselves than have the countries
in the rest of the world.
(2) The economic prosperity of the United States and its
trading partners in the Western Hemisphere is increased by
the reduction of trade barriers.
(3) Trade protection endangers economic prosperity in the
United States and throughout the Western Hemisphere and
undermines civil liberty and constitutionally limited
government.
(4) The successful establishment of a North American Free
Trade Area sets the pattern for the reduction of trade
barriers throughout the Western Hemisphere, enhancing
prosperity in place of the cycle of increasing trade barriers
and deepening poverty that results from a resort to
protectionism and trade retaliation.
(5) The reduction of government interference in the foreign
and domestic sectors of a nation's economy and the
concomitant promotion of economic opportunity and freedoms
promote civil liberty and constitutionally limited
government.
(6) Countries that observe a consistent policy of free
trade, the promotion of free enterprise and other economic
freedoms (including effective protection of private property
rights), and the removal of barriers to foreign direct
investment, in the context of constitutionally limited
government and minimal interference in the economy, will
follow the surest and most effective prescription to
alleviate poverty and provide for economic, social, and
political development.
SEC. 3. FREE TRADE AREA FOR THE WESTERN HEMISPHERE.
(a) In General.--The President shall take action to
initiate negotiations to obtain trade agreements with the
sovereign countries located in the Western Hemisphere, the
terms of which provide for the reduction and ultimate
elimination of tariffs and other nontariff barriers to trade,
for the purpose of promoting the eventual establishment of a
free trade area for the entire Western Hemisphere.
(b) Reciprocal Basis.--An agreement entered into under
subsection (a) shall be reciprocal and provide mutual
reductions in trade barriers to promote trade, economic
growth, and employment.
(c) Bilateral or Multilateral Basis.--Agreements may be
entered into under subsection (a) on a bilateral basis with
any foreign country described in that subsection or on a
multilateral basis with all of such countries or any group of
such countries.
SEC. 4. FREE TRADE WITH FREE CUBA.
(a) Restrictions Prior to Restoration of Freedom in Cuba.--
The provisions of this Act shall not apply to Cuba unless the
President certifies to Congress that--
(1) freedom has been restored in Cuba; and
(2) the claims of United States citizens for compensation
for expropriated property have been appropriately addressed.
(b) Standards for the Restoration of Freedom in Cuba.--The
President shall not make the certification that freedom has
been restored in Cuba, for purpose of subsection (a), unless
the President determines that--
(1) a constitutionally guaranteed democratic government has
been established in Cuba with leaders chosen through free and
fair elections;
(2) the rights of individuals to private property have been
restored and are effectively protected and broadly exercised
in Cuba;
(3) Cuba has a currency that is fully convertible
domestically and internationally;
(4) all political prisoners have been released in Cuba; and
(5) the rights of free speech and freedom of the press in
Cuba are effectively guaranteed.
(c) Priority for Free Trade With Free Cuba.--Upon making
the certification described in subsection (a), the President
shall give priority to the negotiation of a free trade
agreement with Cuba.
SEC. 5. INTRODUCTION AND FAST-TRACK CONSIDERATION OF
IMPLEMENTING BILLS.
(a) Introduction in House and Senate.--When the President
submits to Congress a bill to implement a trade agreement
described in section 3, the bill shall be introduced (by
request) in the House and the Senate as described in section
151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
(b) Restrictions on Content.--A bill to implement a trade
agreement described in section 3--
(1) shall contain only provisions that are necessary to
implement the trade agreement; and
(2) may not contain any provision that establishes (or
requires or authorizes the establishment of) a labor or
environmental protection standard or amends (or requires or
authorizes an amendment of) any labor or environmental
protection standard set forth in law or regulation.
(c) Point of Order in Senate.--
(1) Applicability to all legislative forms of implementing
bill.--For the purposes of this subsection, the term
``implementing bill'' means the following:
(A) The bill.--A bill described in subsection (a), without
regard to whether that bill originated in the Senate or the
House of Representatives.
(B) Amendment.--An amendment to a bill referred to in
subparagraph (A).
(C) Conference report.--A conference report on a bill
referred to in subparagraph (A).
(D) Amendment between houses.--An amendment between the
houses of Congress in relation to a bill referred to in
subparagraph (A).
(E) Motion.--A motion in relation to an item referred to in
subparagraph (A), (B), (C), or (D).
(2) Making of point of order.--
(A) Against single item.--When the Senate is considering an
implementing bill, a Senator may make a point of order
against any part of the implementing bill that contains
material in violation of a restriction under subsection (b).
(B) Against several items.--Notwithstanding any other
provision of law or rule of the Senate, when the Senate is
considering an implementing bill, it shall be in order for a
Senator to raise a single point of order that several
provisions of the implementing bill violate subsection (b).
The Presiding Officer may sustain the point of order as to
some or all of the provisions against which the Senator
raised the point of order.
(3) Effect of sustainment of point of order.--
(A) Against single item.--If a point of order made against
a part of an implementing bill under paragraph (2)(A) is
sustained by the Presiding Officer, the part of the
implementing bill against which the point of order is
sustained shall be deemed stricken.
(B) Against several items.--In the case of a point of order
made under paragraph (2)(B) against several provisions of an
implementing bill, only those provisions against which the
Presiding Officer sustains the point of order shall be deemed
stricken.
(C) Stricken matter not in order as amendment.--Matter
stricken from an implementing bill under this paragraph may
not be offered as an amendment to the implementing bill (in
any of its forms described in paragraph (1)) from the floor.
(4) Waivers and appeals.--
(A) Waivers.--Before the Presiding Officer rules on a point
of order under this subsection, any Senator may move to waive
the point of order as it applies to some or all of the
provisions against which the point of order is raised. Such a
motion to waive is
[[Page S469]]
amendable in accordance with the rules and precedents of the
Senate.
(B) Appeals.--After the Presiding Officer rules on a point
of order under this subsection, any Senator may appeal the
ruling of the Presiding Officer on the point of order as it
applies to some or all of the provisions on which the
Presiding Officer ruled.
(C) Three-fifths majority required.--
(i) Waivers.--A point of order under this subsection is
waived only by the affirmative vote of at least the requisite
majority.
(ii) Appeals.--A ruling of the Presiding Officer on a point
of order under this subsection is sustained unless at least
the requisite majority votes not to sustain the ruling.
(iii) Requisite majority.--For purposes of clauses (i) and
(ii), the requisite majority is three-fifths of the Members
of the Senate, duly chosen and sworn.
(c) Applicability of Fast Track Procedures.--Section 151 of
the Trade Act of 1974 (19 U.S.C. 2191) is amended--
(1) in subsection (b)(1)--
(A) by inserting ``section 5 of the Americas Free Trade
Act,'' after ``the Omnibus Trade and Competitiveness Act of
1988,''; and
(B) by amending subparagraph (C) to read as follows:
``(C) if changes in existing laws or new statutory
authority is required to implement such trade agreement or
agreements or such extension, provisions, necessary to
implement such trade agreement or agreements or such
extension, either repealing or amending existing laws or
providing new statutory authority.''; and
(2) in subsection (c)(1), by inserting ``or under section 5
of the Americas Free Trade Act,'' after ``the Uruguay Round
Agreements Act,''.
The Americas Free Trade Act--Summary
I. The President is directed to undertake negotiations to
establish free trade agreements between the United States and
countries of the Western Hemisphere (including North and
South America and the Caribbean). Agreements may be bilateral
or multilateral.
II. The President, before seeking a free trade agreement
with Cuba under the Act, would have to certify (1) that
freedom has been restored in Cuba, and (2) that the claims of
U.S. citizens for compensation for expropriated property have
been appropriately addressed. The President could make the
certification that freedom has been restored to Cuba only if
he determines that--
A. constitutionally guaranteed democratic government has
been established in Cuba, with leaders freely and fairly
elected;
B. private property rights have been restored and are
effectively protected and broadly exercised;
C. Cuba has a convertible currency;
D. all political prisoners have been released; and
E. free speech and freedom of the press are effectively
guaranteed.
If the President certifies that freedom has been restored
to Cuba, priority will be given to the negotiation of a free
trade agreement with Cuba.
III. Congressional fast track procedures for consideration
of any such agreement (i.e. expedited consideration, no
amendments), are extended permanently.
IV. Fast track procedures are amended to provide that they
apply to an implementing bill only if such bill contains
legislation that is ``necessary'' to implement the trade
agreement. Also, such bills will be subject in the Senate to
a procedure like the Byrd Rule that applies to extraneous
provisions in reconciliation bills. That is, any provision
that does not meet the ``necessary'' standard is subject to a
point of order which, if sustained, causes the offending
provisions to be stricken from the bill (rather than the
whole bill falling), and this point of order can be overruled
only by a vote of three-fifths of the members duly sworn.
V. Labor and environmental standards may not be included as
elements of an implementing bill.
____
S. 85
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``NAFTA Accession Act''.
SEC. 2. ACCESSION OF CHILE TO THE NORTH AMERICAN FREE TRADE
AGREEMENT.
Subject to section 3, the President is authorized to enter
into an agreement which provides for the accession of Chile
to the North American Free Trade Agreement and the provisions
of section 151(c) of the Trade Act of 1974 (19 U.S.C.
2191(c)) shall apply with respect to a bill to implement such
agreement if such agreement is entered into on or before
December 31, 1998.
SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF
IMPLEMENTING BILL.
(a) Introduction in House and Senate.--When the President
submits to Congress a bill to implement a trade agreement
described in section 2, the bill shall be introduced (by
request) in the House and the Senate as described in section
151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
(b) Restrictions on Content.--A bill to implement a trade
agreement described in section 2--
(1) shall contain only provisions that are necessary to
implement the trade agreement; and
(2) may not contain any provision that establishes (or
requires or authorizes the establishment of) a labor or
environmental protection standard or amends (or requires or
authorizes an amendment of) any labor or environmental
protection standard set forth in law or regulation.
(c) Point of Order in Senate.--
(1) Applicability to all legislative forms of implementing
bill.--For the purposes of this subsection, the term
``implementing bill'' means the following:
(A) The bill.--A bill described in subsection (a), without
regard to whether that bill originated in the Senate or the
House of Representatives.
(B) Amendment.--An amendment to a bill referred to in
subparagraph (A).
(C) Conference report.--A conference report on a bill
referred to in subparagraph (A).
(D) Amendment between houses.--An amendment between the
houses of Congress in relation to a bill referred to in
subparagraph (A).
(E) Motion.--A motion in relation to an item referred to in
subparagraph (A), (B), (C), or (D).
(2) Making of point of order.--
(A) Against single item.--When the Senate is considering an
implementing bill, a Senator may make a point of order
against any part of the implementing bill that contains
material in violation of a restriction under subsection (b).
(B) Against several items.--Notwithstanding any other
provision of law or rule of the Senate, when the Senate is
considering an implementing bill, it shall be in order for a
Senator to raise a single point of order that several
provisions of the implementing bill violate subsection (b).
The Presiding Officer may sustain the point of order as to
some or all of the provisions against which the Senator
raised the point of order.
(3) Effect of sustainment of point of order.--
(A) Against single item.--If a point of order made against
a part of an implementing bill under paragraph (2)(A) is
sustained by the Presiding Officer, the part of the
implementing bill against which the point of order is
sustained shall be deemed stricken.
(B) Against several items.--In the case of a point of order
made under paragraph (2)(B) against several provisions of an
implementing bill, only those provisions against which the
Presiding Officer sustains the point of order shall be deemed
stricken.
(C) Stricken matter not in order as amendment.--Matter
stricken from an implementing bill under this paragraph may
not be offered as an amendment to the implementing bill (in
any of its forms described in paragraph (1)) from the floor.
(4) Waivers and appeals.--
(A) Waivers.--Before the Presiding Officer rules on a point
of order under this subsection, any Senator may move to waive
the point of order as it applies to some or all of the
provisions against which the point of order is raised. Such a
motion to waive is amendable in accordance with the rules and
precedents of the Senate.
(B) Appeals.--After the Presiding Officer rules on a point
of order under this subsection, any Senator may appeal the
ruling of the Presiding Officer on the point of order as it
applies to some or all of the provisions on which the
Presiding Officer ruled.
(C) Three-fifths majority required.--
(i) Waivers.--A point of order under this subsection is
waived only by the affirmative vote of at least the requisite
majority.
(ii) Appeals.--A ruling of the Presiding Officer on a point
of order under this subsection is sustained unless at least
the requisite majority votes not to sustain the ruling.
(iii) Requisite majority.--For purposes of clauses (i) and
(ii), the requisite majority is three-fifths of the Members
of the Senate, duly chosen and sworn.
(c) Applicability of Fast Track Procedures.--Section 151 of
the Trade Act of 1974 (19 U.S.C. 2191) is amended--
(1) in subsection (b)(1)--
(A) by inserting ``section 3 of the NAFTA Accession Act,''
after ``the Omnibus Trade and Competitiveness Act of 1988,'';
and
(B) by amending subparagraph (C) to read as follows:
``(C) if changes in existing laws or new statutory
authority is required to implement such trade agreement or
agreements or such extension, provisions, necessary to
implement such trade agreement or agreements or such
extension, either repealing or amending existing laws or
providing new statutory authority.''; and
(2) in subsection (c)(1), by inserting ``or under section 3
of the NAFTA Accession Act,'' after ``the Uruguay Round
Agreements Act,''.
____
The NAFTA Accession Act--Summary
I. The President is directed to undertake negotiations for
the accession of Chile to the North American Free Trade
Agreement.
II. Congressional fast track procedures for consideration
of any such agreement (i.e., expedited consideration, no
amendments), are extended through December 31, 1998.
III. Fast track procedures are amended to provide that they
apply to an implementing bill only if such bill contains
legislation that is ``necessary'' to implement the trade
agreement. Also, such bill will be subject in the
[[Page S470]]
Senate to a procedure like the Byrd rule that applies to
extraneous provisions in reconciliation bills. That is, any
provision that does not meet the ``necessary'' standard is
subject to a point of order which, if sustained, causes the
offending provision to be stricken from the bill (rather than
the whole bill falling), and this point of order can be
overruled only by a vote of three-fifths of the members duly
sworn.
IV. Labor and environmental standards may not be included
as elements of an implementing bill.
______
By Ms. SNOWE (for herself and Mr. Leahy):
S. 86. A bill to amend the Public Health Service Act to provide, with
respect to research on breast cancer, for the increased involvement of
advocates in decision making at the National Cancer Institute; to the
Committee on Labor and Human Resources.
______
By Ms. SNOWE (for herself and Mrs. Feinstein):
S. 87. A bill to amend the Public Health Service Act to provide a
one-stop shopping information service for individuals with serious or
life-threatening diseases; to the Committee on Labor and Human
Resources.
______
By Ms. SNOWE:
S. 88. A bill to permit individuals to continue health plan coverage
of services while participating in approved clinical studies; to the
Committee on Labor and Human Resources.
S. 89. A bill to prohibit discrimination against individuals and
their family members on the basis of genetic information, or a request
for genetic services; to the Committee on Labor and Human Resources.
S. 90. A bill to require studies and guidelines for breast cancer
screening for women ages 40-49, and for other purposes; to the
Committee on Labor and Human Resources.
S. 91. A bill to establish an Office on Women's Health within the
Department of Health and Human Services; to the Committee on Labor and
Human Resources.
women's health legislation
Ms. SNOWE. Mr. President, I rise today to introduce a package of six
bills designed to improve the health of countless women across America.
By introducing these bills during the opening days of the 105th
Congress, I hope to convey that women's health is one of my top
legislative priorities for this Congress, and that I will do everything
I can to ensure that it is a priority for the 105th Congress as well.
For too many years, women's health care needs were ignored or poorly
understood, and women were systematically excluded from important
health research. One famous medical study on breast cancer examined
hundreds of men. Another federally-funded study examined the ability of
aspirin to prevent heart attacks in 20,000 medical doctors, all of whom
were men, despite the fact that heart disease is the leading cause of
death among women.
Today, members of Congress and the American public understand the
importance of ensuring that both genders benefit equally from medical
research and health care services. Unfortunately, equity does not yet
exist in health care, and we have a long way to go. Knowledge about
appropriate courses of treatment for women lags far behind that for men
for many diseases. For years, research into diseases that predominantly
affect women, such as breast cancer, went grossly underfunded. And many
women do not have access to reproductive and other vital health
services.
Throughout my tenure in the House and Senate, I have worked hard to
expose and eliminate this health care gender gap and improve women's
access to affordable, quality health services. As co-chairs of the
Congressional Caucus for Women's Issues (CCWI), Representative Pat
Schroeder and I, along with Representative Henry Waxman, called for a
GAO investigation into the inclusion of women and minorities in medical
research at the National Institutes of Health. This study documented
the widespread exclusion of women from medical research, and spurred
the Caucus to introduce the first Women's Health Equity Act (WHEA) in
1990. This comprehensive legislation provided Congress with its first
broad, forward looking health agenda designed to redress the historical
inequities that face women in medical research, prevention and
services.
Since the initial introduction of WHEA, we have made important
strides on behalf of women's health. Legislation from that first
package became law in June 1993, mandating the inclusion of women and
minorities in clinical trials at NIH. We secured dramatic funding
increases for research into breast cancer, osteoporosis, and cervical
cancer, and my legislation established the Office of Research on
Women's Health at NIH. And last year the Mothers' and Newborns' Health
Protection Act, which I cosponsored, became law. This Act will end the
practice of ``drive-thru deliveries'', where hospitals discharge
mothers and their newborns too soon after delivery.
Despite these achievements, women remain at a stark and singular
disadvantage in our health care system and in health research. Equality
in women's health remains a goal, not a completed task. Legislators
must build on the gains that we have made on behalf of women's health
to take the next crucial steps toward achieving equity. I believe that
the package of bills which I am introducing today provides this
framework for progress.
Several of the bills I am introducing today target one of the major
public health crises facing this nation--breast cancer. This year
alone, 180,000 new cases of breast cancer will be diagnosed in this
country, and more than 44,000 women will die from the disease. Breast
cancer is the most common form of cancer and the second leading cause
of cancer deaths among American women.
Our first priority in the fight against breast cancer must be to
maintain and strengthen our commitment to discovering new treatments
for this deadly disease. As the Federal Government continues to fund
breast cancer research, we also must ensure that funding goes to those
projects which victims of breast cancer believe are important and
meaningful to them in their fight against this disease.
Over the past three years, the Department of Defense has included lay
breast cancer advocates in breast cancer research decision making. The
involvement of these breast cancer advocates has helped foster new and
innovative breast cancer research funding designs and research
projects. While maintaining the highest level of quality assurance
through peer review, breast cancer advocates have helped to ensure that
all breast cancer research reflects the experiences and wisdom of the
individuals who have lived with the disease. In addition, breast cancer
advocates provide a vital educational link between the scientific and
lay communities.
The first bill I am introducing today, which I am introducing with my
colleague from Vermont, Senator Leahy, urges the National Institutes of
Health to follow the DOD's lead. This bill, the Consumer Involvement in
Breast Cancer Research Act, urges NIH to include breast cancer
advocates in breast cancer research decision making, and to report on
progress that the Institute is making next year.
But funding new research alone is not enough--we must ensure that
people who are suffering from deadly diseases such as breast cancer
have access to information about the latest, most-innovative therapies
which are frequently available only through experimental drug trials.
At a breast cancer hearing which I sponsored last year with my
colleagues, Senators Connie Mack and Dianne Feinstein, we heard
testimony from breast cancer advocates on the difficulty patients and
physicians face in learning about ongoing clinical trials. The second
bill I introduce today addresses this knowledge gap, by establishing a
data bank of information on clinical trials and experimental treatments
for all serious or life-threatening illnesses.
This ``one-stop shopping information service'' will include a
registry of all privately and publicly funded clinical trials, and will
contain information describing the purpose of the trial, eligibility
criteria for participating in the trial, as well as the location of the
trial. The database will also contain information on the results of
completed clinical trials, enabling patients to make fully informed
decisions about medical treatments. The bill would allow people with a
serious or life-threatening illness, or the doctor of a family member,
to call a toll-free number to access this critical information so they
could locate a clinical trial near them that may offer hope by
extending their lives or alleviating their
[[Page S471]]
suffering. I am pleased that my colleague from California, Senator
Feinstein, is joining me in introducing this important bill.
Providing people with information about clinical trials is only the
first step in increasing access to experimental treatments--we must
also ensure that they have adequate insurance coverage to cover costs
associated with clinical trials. While pharmaceutical companies
typically cover the costs of the experimental treatment, insurance
companies are expected to cover the costs of non-experimental services.
Yet many insurance companies deny coverage for these non-experimental
services when a patient is enrolled in an experimental trial.
As a result, many patients who could benefit from these potentially
life-saving investigational treatments do not have access to them
because their insurance will not cover these associated costs. Denying
reimbursement for these services also impedes the ability of scientists
to conduct important research, by reducing the number of patients who
are eligible to participate in clinical trials.
The third bill I am introducing today, the Improved Patient Access to
Clinical Studies Act of 1997, addresses this problem. This bill would
prohibit insurance companies from denying coverage for services
provided to individuals participating in clinical trials, if those
services would otherwise be covered by the plan. This bill would also
prevent health plans from discriminating against enrollees who choose
to participate in clinical trials.
Another form of discrimination in health insurance we see today is
based on genetic information. This is a particular concern to women who
inherit or may have inherited a mutated form of the breast cancer gene
[BRCA1 or BRCA2]. Women who inherit either of these mutated genes have
an 85 percent risk of developing breast cancer in their lifetime, and a
50 percent chance of developing ovarian cancer. Although there is no
known treatment to ensure that women who carry the mutated gene do not
develop breast cancer, genetic testing makes it possible for carriers
of these mutated genes to take extra precautions in order to detect
cancer at its earliest stages--precautions such as mammograms and self-
examinations.
The tremendous promise of genetic testing, however, is significantly
threatened when insurance companies use the results of genetic testing
to deny or limit coverage to consumers on the basis of genetic
information. Yet this practice is relatively common today. In fact, a
recent survey of individuals with a known genetic condition in the
family revealed that 22 percent had been denied health insurance
coverage because of genetic information.
In addition to the potentially devastating consequences of being
denied health insurance on the basis of genetic information, the fear
of discrimination has equally harmful consequences for consumers and
for scientific research. For example, many women who might take extra
precautions if they knew they had the breast cancer gene may not seek
testing because they fear losing their health insurance. Patients may
be unwilling to disclose information about their genetic status to
their physicians out of fear, hindering treatment or preventive
efforts. And people may be unwilling to participate in potentially
ground breaking research because they do not want to reveal information
about their genetic status.
The Kassebaum/Kennedy Health Care Reform Act took the first step in
protecting Americans in group health plans from genetic discrimination
by preventing discrimination in health insurance based on a pre-exiting
genetic condition. My bill, the Genetic Information Nondiscrimination
in Health Insurance Act of 1997, takes the next crucial steps to
prohibit genetic discrimination. My bill prevents insurers from
charging higher premiums based on genetic information, prohibits
insurers from requiring or requesting a genetic test as a condition of
coverage, requires informed written consent before an insurance company
can disclose genetic information to a third party, and extends these
important protections to Medigap.
While there is much that we still do not know in the fight against
breast cancer, we do know that mammograms are currently the most
effective weapon we have in the fight against breast cancer. Yet
experts still disagree about the effectiveness of mammograms for women
in their forties. In fact, the National Cancer Institute (NCI) in 1993
reversed its position on the effectiveness of mammograms for women in
their forties, producing widespread confusion in women and their
doctors. To assure that American women have clear guidance from their
government on when to have a mammogram, I am reintroducing my bill, the
Breast Cancer Screening Act of 1997, directing NCI to reissue its
guidelines recommending mammograms for women in this age group. This
legislation is particularly crucial in light of recent studies that
show a reduced death rate for women in their forties who seek
mammograms. In fact, one Swedish study of 150,000 women conducted in
1996 showed a 25 percent lower death rate for women who obtained
mammograms beginning in their forties.
Finally, the sixth bill I am introducing is the Women's Health Office
Act of 1997. This bill creates or codifies offices of women's health at
various federal agencies, including the Office of the Assistant
Secretary at HHS, the Centers for Disease Control, the Agency for
Health Care Policy and Research, the Health Resources and Services
Administration and the Food and Drug Administration. This bill provides
for short and long-range goals and coordination of all activities that
related to disease prevention, health promotion, delivery of health
services and scientific research concerning women. The bill also
creates a clearinghouse for information on women's health.
By statutorily creating Offices of Women's Health, the Deputy
Assistant Secretary for Women's Health will be able to better monitor
various Public Health Service agencies and advise them on scientific,
legal, ethical and policy issues. Agencies would establish a
Coordinating Committee on Women's Health to identify and prioritize
which women's health projects should be conducted. This will also
provide a mechanism for coordination within and across these agencies,
and with the private sector. But most importantly, this bill will
ensure the presence of enduring offices dedicated to addressing the
ongoing needs and gaps in research policy, programs, and education and
training in women'shealth.
Improving the health of American women requires a far greater
understanding of women's health needs and conditions, and ongoing
evaluation in the areas of research, education, prevention, treatment
and the delivery of services. I believe that passage of these important
bills will help ensure that women's health will never again be a
missing page in America's medical textbook.
Mrs. FEINSTEIN. Mr. President, today Senator Snowe and I are
introducing S. 87, a bill to set up a toll-free service so that people
with life-threatening diseases and the medical community can find out
about research projects on new treatments.
There are thousands of serious and life-threatening diseases,
diseases for which we have no cure. For genetic diseases alone, there
are 3,000 to 4,000. We are familiar with diseases like cancer,
Alzheimer's disease and multiple sclerosis. But there are thousands of
others that are not so common, like cystinosis, Tay-Sachs disease,
Wilson's disease, and Sjogren's syndrome. Indeed, there are over 5,000
known rare diseases, diseases most of us have never heard of, affecting
between 10 and 20 million Americans.
Cancer kills half a million Americans per year. Diabetes afflicts 15
million Americans per year, half of whom do not know they have it.
Arthritis affects 40 million Americans every year. 15,000 American
children die every year. Among children, the rates of chronic
respiratory diseases (asthma, bronchitis and sinusitis), heart murmurs,
migraine headaches, anemia, epilepsy and diabetes are increasing. Few
families escape illness today. Every family fears it.
The Bill
Our bill requires the Secretary of Health and Human Services to
establish a ``one-stop shopping'' database, including a toll-free
telephone number, so that patients and physicians can conveniently find
out what clinical research trials are being conducted on experimental
treatments. By accessing
[[Page S472]]
this database, users would be able to find out the purpose of the
study, eligibility requirements, research locations, and a contact
person. Information would have to be presented in ``plain English,''
not ``medicalese,'' so that the average person could understand it.
Our bill is endorsed by the American Cancer Society, the National
Organization for Rare Disorders, AIDS Action and the Alzheimer's
Association.
A Constituent Suggestion
The need for this information center came from my constituent, Nancy
Evans, of San Francisco's Breast Cancer Action, in a June 13, 1996
hearing of the Senate cancer coalition, which I co-chair with Senator
Mack. She described the difficulty that cancer patients have in trying
to find out what experimental treatments might be available, research
trials sponsored by the federal government and by private companies.
Most of them are desperate; most have tried everything. She testfied
that the National Cancer Institute has established 1-800-4-CANCER, but
the NCI information is incomplete. It does not include all trials and
the information is often difficult for the lay person to understand.
In addition, the National Kidney Cancer Association has called for a
central database.
People in Serious Need
It is helpful to think about the plight of the individuals that this
bill could help. These are people who have a terminal illness; their
physicians have tried every treatment they can find. Cancer patients,
for example, have probably had several rounds of chemotherapy, which
has left them, debilitated, virtually lifeless. These patients cling to
slim hopes. They are desperate to try anything. But step one is finding
out what is available, even if it is still in the experimental stage.
One survey found that a majority of patients and families are willing
to use investigational drugs (drugs being researched but not approved
for sale), but find it difficult to locate information on research
projects. A similar survey of physicians found that 42 percent of
physicians are unable to find printed information about rare illnesses.
Help for Physicians
Physicians, no matter how competent and well trained, also cannot be
knowledgeable about experimental treatments being researched. And most
Americans do not have sophisticated computers hookups that provide them
instant access to the latest information. Our witness, Nancy Evans,
testified that she can find out more about a company's clinical trials
by calling her stockbroker than by calling existing data services.
Many desperate families have called me, their U.S. Senator, seeking
help. Others have lodged their pleas at the White House. Others call
lawyers, 911, the local medical society, the local Chamber of Commerce,
anything they can think of. Getting information on health research
projects should not require a ``fishing expedition'' of futiile calls,
``good connections'' or the involvement of elected officials.
In 1988, Congress directed HHS to establish an AIDS Clinical Trials
Information Services. It is now operational (1-800-TRIALS-A) so that
patients, providers and their families can find out about AIDS clinical
trials. All calls are confidential and experienced professionals at the
service can help people.
Improving Health, Research
Facilitating access to information can also strengthen our health
research effort. With a national database enabling people to find
research trials, more people could be available to participate in
research. This can help researchers broaden their pool of research
participants.
Modest Help for the Ill
The bill we introduce does not guarantee that anyone can participate
in a clinical research trial. Researchers would still control who
participates and set the requirements for the research. But for people
who cling to hopes for a cure, for people who want to live longer, for
people who want to feel better, this database can offer a little help.
If you have a life-threatening illness, you should not have to have
political or other connections, computer sophistication or access to
top-flight university medical schools to find out about research on
treatments of disease
I hope this bill will offer some hope to the millions who are
suffering today.
______
By Mr. KERRY:
S. 92. A bill to amend title VII of the Civil Rights Act of 1964 to
establish provisions with respect to religious accommodation in
employment, and for other purposes; to the Committee on Labor and Human
Resources.
WORKPLACE RELIGIOUS FREEDOM ACT
Mr. KERRY. Mr. President, I am proud today to introduce the Workplace
Religious Freedom Act of 1997. This bill would protect workers from on-
the-job discrimination. It represents a milestone in the protection of
religious liberty, assuring that all workers have equal employment
opportunities.
In 1972, Congress amended the Civil Rights Act of 1964 to require
employers to reasonably accommodate an employee's religious practice or
observance unless doing so would impose an undue hardship on the
employer. This 1972 amendment, although completely appropriate, has
been interpreted by the courts so narrowly as to place little restraint
on an employer's refusal to provide religious accommodation. The
``Workplace Religious Freedom Act'' will restore to the religious
accommodation provision the weight that Congress originally intended
and help assure that employers have a meaningful obligation to
reasonably accommodate their employees' religious practices.
The restoration of this protection is no small matter. For many
religiously observant Americans the greatest peril to their ability to
carry out their religious faiths on a day-to-day basis may come from
employers. I have heard accounts from around the country about a small
minority of employers who will not make reasonable accommodation for
employees to observe the Sabbath and other holy days or for employees
who must wear religiously-required garb, such as a yarmulke, or for
employees to wear clothing that meets religious modesty requirements.
The refusal of an employer, absent undue hardship, to provide
reasonable accommodation of a religious practice should be seen as a
form of religious discrimination, as originally intended by Congress in
1972. And religious discrimination should be treated fully as seriously
as any other form of discrimination that stands between Americans and
equal employment opportunities. Enactment of the ``Workplace Religious
Freedom Act'' will constitute an important step towards ensuring that
all members of society, whatever their religious beliefs and practices,
will be protected from an invidious form of discrimination.
It is important to recognize that, in addition to protecting the
religious freedom of employees, this legislation protects employers
from an undue burden. Employees would be allowed to take time off only
if their doing so does not pose a significant difficulty or expense for
the employer. This common sense definition of ``undue hardship'' is
used in the Americans with Disabilities Act and has worked well in that
context.
I believe this bill should receive bipartisan support. The same bill
was endorsed in the last session by a wide range of organizations
including the American Jewish Committee, the Baptist Joint Committee on
Public Affairs, the Christian Legal Society, and the Jewish Community
Relations Council of Greater Boston.
I urge this body to pass this legislation so that all American
workers can both be assured of equal employment opportunities and the
ability to practice their religion.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 92
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Workplace Religious Freedom
Act of 1997''.
SEC. 2. AMENDMENT.
(a) Definitions.--Section 701(j) of the Civil Rights Act of
1964 (42 U.S.C. 2000e(j)) is amended--
[[Page S473]]
(1) by inserting ``(1)'' after ``(j)'';
(2) by inserting ``, after initiating and engaging in an
affirmative and bona fide effort,'' after ``unable''; and
(3) by adding at the end the following:
``(2) As used in this subsection, the term `undue hardship'
means an accommodation requiring significant difficulty or
expense. For purposes of determining whether an accommodation
requires significant difficulty or expense, the factors to be
considered shall include--
``(A) the identifiable cost of the accommodation in
relation to the size and operating cost of the employer; and
``(B) the number of individuals who will need a particular
accommodation to a religious observance or practice.''.
(b) Employment Practices.--Section 703 of such Act (42
U.S.C. 2000e-2) is amended by adding at the end the
following:
``(o)(1) As used in this subsection:
``(A) The term `employee' includes a prospective employee.
``(B) The term `undue hardship' has the meaning given the
term in section 701(j)(2).
``(2) For purposes of determining whether an employer has
committed an unlawful employment practice under this title by
failing to provide a reasonable accommodation to the
religious observance or practice of an employee, an
accommodation by the employer shall not be deemed to be
reasonable if--
``(A) such accommodation does not remove the conflict
between employment requirements and the religious observance
or practice of the employee; or
``(B)(i) the employee demonstrates to the employer the
availability of an alternative accommodation less onerous to
the employee that may be made by the employer without undue
hardship on the conduct of the employer's business; and
``(ii) the employer refuses to make such accommodation.
``(3) It shall not be a defense to a claim of unlawful
employment practice under this title for failure to provide a
reasonable accommodation to a religious observance or
practice of an employee that such accommodation would be in
violation of a bona fide seniority system if, in order for
the employer to reasonably accommodate to such observance or
practice--
``(A) an adjustment would be made in the employee's work
hours (including an adjustment that requires the employee to
work overtime in order to avoid working at a time that
abstention from work is necessary to satisfy religious
requirements), shift, or job assignment, that would not be
available to any employee but for such accommodation; or
``(B) the employee and any other employee would voluntarily
exchange shifts or job assignments, or voluntarily make some
other arrangement between the employees.
``(4)(A) An employer shall not be required to pay premium
wages for work performed during hours to which such premium
wages would ordinarily be applicable, if work is performed
during such hours only to accommodate religious requirements
of an employee.
``(B) As used in this paragraph, the term `premium wages'
includes overtime pay and compensatory time off, pay for
night, weekend, or holiday work, and pay for standby or
irregular duty.''.
SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this Act and the amendments made by section 2 take effect on
the date of enactment of this Act.
(b) Application of Amendments.--The amendments made by
section 2 do not apply with respect to conduct occurring
before the date of enactment of this Act.
______
By Mr. KERRY:
S. 93. A bill to increase funding for child care under the temporary
assistance for needy families program; to the Committee on Finance.
working families child care assistance act
Mr. KERRY. Mr. President, today I am introducing the ``Working
Families' Child Care Assistance Act'' to help the many working families
who face great struggles to find affordable, good-quality child care.
Mr. President, we no longer live in an era when one parent generally
stays at home full time to take care of the children. Today, 60 percent
of women with children younger than six are in the labor force. The
result is that approximately seven million children of working parents
are cared for each month by someone other than a parent. And most of
these children spend 30 hours or more each week in child care,
according to the National Research Council.
New research also confirms that our current social reality has placed
enormous strains on working families' budgets because many families
must pay for child care. According to a new study of 100 child care
centers entitled ``Cost, Quality, and Child Outcomes in Child Care
Centers,'' families spend an average of $4,940 per year to provide
services for each enrolled child. Annual child care costs of this size
represent a whopping 28 percent of $17,481, which is the yearly income
of an average family in the bottom two-fifths of the income scale.
But even for families who can afford the cost of child care, in some
communities child care continues to be hard to obtain at any cost. In
1994, 36 States reported State child care assistance waiting lists,
according to the Children's Defense Fund. Eight States had at least
10,000 children waiting for assistance. Georgia's list was the longest
with 41,000, while in Texas the list had 36,000 names and a wait of
about 2 years. In Massachusetts, the statewide waiting list contains
the names of 4,000 working families. Additionally, a 1995 U.S. General
Accounting Office (GAO) study found that shortages of child care for
infants, sick children, children with special needs, and school-age
children before and after school pose difficulties for many families.
I believe the child care situation may worsen because of a provision
to which I was opposed in last year's welfare reform bill which cuts
the Title XX Social Services Block Grant by 15 percent. Many States use
Title XX funding to pay for child care for working families;
unfortunately, this cut will result in even more families needing child
care assistance.
Mr. President, it is time to provide help to working families to
afford quality child care. My bill would double the funding through the
Child Care Development Block Grant, increasing child care funding by $1
billion per year. In my home State of Massachusetts, this would result
in more than 5,000 families receiving child care help which otherwise
would not receive it.
Working parents face an extraordinary uphill battle in trying to make
ends meet and cover the high cost of child care. Well over half the
women in the work force are parents of preschool children, and they
need access to affordable, quality child care they can trust. This bill
provides real help to working families and hopefully will send a strong
signal that their work and their efforts to provide reliable child care
for their children are valued and supported.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 93
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. INCREASED FUNDING FOR CHILD CARE.
(a) In General.--Section 418(a) of the Social Security Act
(42 U.S.C. 618(a)) is amended by striking paragraph (3) and
inserting the following:
``(3) Appropriation.--For grants under this section, there
are appropriated--
``(A) $2,967,000,000 for fiscal year 1997;
``(B) $3,067,000,000 for fiscal year 1998;
``(C) $3,167,000,000 for fiscal year 1999;
``(D) $3,367,000,000 for fiscal year 2000;
``(E) $3,567,000,000 for fiscal year 2001; and
``(F) $3,717,000,000 for fiscal year 2002.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if enacted on August 22, 1996.
______
By Mr. DORGAN:
S. 95. A bill to provide for Federal campaign finance reform, and for
other purposes; to the Committee on Rules and Administration.
CAMPAIGN FINANCE REFORM LEGISLATION
Mr. DORGAN. Mr President, the current system of electing
Members of Congress is badly in need of reform. Elections are
too long, too negative and too expensive; incumbents have a
decided advantage over challengers, voter participation
continues to decline, and 30-second political attack ads are
polluting the airways. The American people want us to fix the
system, and they want us to do it now. It is my view that
campaign finance reform, along with balancing the budget,
should be the highest priorities on the Senate agenda in the
105th Congress.
Successive Supreme court decisions have made it
increasingly difficult to control campaign spending. In its
review of the Federal Election Campaign Act (FECA) of 1971,
the Court, in Buckley v. Valeo, stuck down the mandatory
spending limits in that law as an infringement of First
Amendment rights. The Court stated unequivocally: ``In the
free society ordained by our Constitution, it is not the
government, but the people--individuals as citizens and
candidates and collectively as associations and political
committees--who must retain control over the quantity and
range of debate on public issues in a political campaign.''
The Court at that time did, however, retain the section of
FECA which limited contributions to political candidates
because of the Court's stated
[[Page S474]]
concern that unlimited gifts to candidates were a recipe for
corruption. Simply put, the Courts have prohibited mandatory
spending limits while preserving contribution limits. In the
long run, it seems to me that we will have to pass a
constitutional amendment to get a handle on the spending side
of the campaign equation, and I intend to cosponsor just such
a measure.
Nevertheless, there are short term solutions that can and
should be addressed, including voluntary spending limits. The
system is awash in money, and the public is disgusted with
the ever increasing amounts of money flowing into
congressional campaign coffers. Whether we like it or not,
the public believes the money is tainted. They know that
money flows towards power, and are convinced that large
campaign contributions buy influence. To put their concerns
in some perspective, one need only look at the statistics.
The average cost of winning a Senate seat rose from $609,100
in 1976 to $3.6 million in the 1996 election cycle, and
incumbents on average have a spending advantage of more than
2-1 over challengers.
There is simply no way to justify these escalating
expenditures. No wonder the American people have grown
cynical of public institutions and officials, and no wonder
talented people in our communities do not want to run for
elective office. If we hope to reverse public attitudes and
restore confidence in our government officials and
institutions, we should begin with campaign finance reform.
We have a unique opportunity this year to pass meaningful and
bipartisan reform, something that has eluded us for more than
a decade. I hope we will seize the moment.
While I intend to support comprehensive reform efforts as I
have in the past, I am introducing legislation today to
address what I perceive to be the most serious problems in
the system now. My bill includes the following provisions
which I will describe briefly:
1. Voluntary Spending Limits/Limitation on Personal Funds/Fee on Non-
Complying Candidates
As a result of the Supreme Court decisions mentioned above,
the only way to control spending in the short term is through
voluntary spending limits. My bill contains voluntary limits
which are based on a percentage of the voting age population
in each state. These are the same limits that were contained
in the campaign finance reform bill that passed the Senate in
the 103rd Congress and which have been the basis of
comprehensive reform proposals in the 104th Congress. In
addition, my bill would limit the amount of personal or
family money that a candidate can contribute to his or her
campaign to $25,000. I don't believe any candidate should be
able to spend unlimited personal funds in an attempt to buy a
seat in the U.S. Senate.
Unlike other bills, however, my proposal imposes a fee on
candidates who choose not to comply with the spending limits.
Under my legislation, non-complying candidates would be
charged a fee of 50 percent on all expenditures exceeding the
spending limits. The fee would be due and payable at the time
candidates are currently required to submit quarterly and
other reports to the Federal Election Commission. The
proceeds from the fee would be distributed by the FEC on a
fair and equitable basis among complying candidates for the
same federal office. It is my hope that this fee will provide
a strong inducement for candidates to comply with the
voluntary spending limits.
2. Soft Money
My bill prohibits national political parties and
congressional campaign committees from raising or spending
so-called ``soft money.'' Only money raised and spent
according to the requirements and restrictions of federal law
can be used to ``expressly advocate'' the election or defeat
of a federal candidate. This is called ``hard money.''
However, unlimited amounts of soft money are being raised by
the national parties and congressional campaign committees,
outside the constraints of federal election law, ostensibly
to support state and local candidates as well as federal
candidates to the extent that they do not directly advocate
the election or defeat of that candidate. In practice,
however, soft money is being raised and spent on federal
elections because of a loophole in federal election law.
Soft money is raised from unions and corporations, which
are prohibited from contributing to federal elections except
through their PACs, and from individuals who have reached the
aggregate federal contribution limits of $25,000 a year. In a
nutshell, soft money contributions are unlimited and
unregulated.
It is this pot of soft money which has dramatically
increased in recent election cycles. The Republican national
committees raised $141.2 million in soft money in the 1996
election cycle, a 183 percent increase over the $49.2 raised
in 1992. The Democratic party committees raised $122 million
in 1996, a 237 percent increase over their 1992 level of
$36.5 million. A substantial portion of soft money spending
by party campaign committees has gone to finance the generic
issue ads we have come to know as attack ads. The figures
above illustrate the problem. My bill would eliminate it by
preventing national committees from raising or spending soft
money which does not comply with the source and dollar
restrictions in federal campaign finance law.
3. Express Advocacy
As mentioned above, only money raised under the
restrictions and prohibitions of federal election law can be
used to advocate the election or defeat of a candidate for
federal office. As currently defined in FEC regulations, only
communications which use such words as ``vote for'',
``elect'', ``support'', ``defeat'', ``reject'' or ``Smith for
Congress'' are considered express advocacy which must be paid
for with money raised under federal election law restraints,
i.e., hard money.
This overly narrow definition of what constitutes express
advocacy has created a giant loophole for attack ads. Simply
by avoiding the magic words mentioned above, political
parties, corporations, unions and other special interest
groups can pay for brutal attack ads which certainly have the
intent of influencing the outcome of federal elections--and
they can do it without having to disclose it to the FEC.
My bill would expand the current express advocacy standard
to include both the content and intent of such ads. It would
not prohibit such ads; it would simply ensure--as Congress
intended--that such ads are paid for with money which is
subject to regulation and disclosure. Any political ads that
clearly identify a candidate(s) and which are broadcast
within 60 days prior to an election (or 90 days prior to a
general election with respect to a candidate for Vice
President or President) will be considered express advocacy
and, therefore, will be subject to the restrictions and
limitations of federal election law. The bottom line is that
you would have to pay for these ads with hard money which is
more difficult to raise and which requires full disclosure to
the FEC.
4. Political advertising
I have long thought that the 30-second political attack ad
does little, if anything, to advance the cause of public
debate. They tend to be hit-and-run ads. Under current
federal communications law, television broadcasters are
required to provide political candidates with their lowest
unit rate--the rate they charge their best customers--for
political ads run in the 45 days prior to a primary election
and 60 days prior to a general election. Unfortunately,
oftentimes the candidate never appears in the ad. My bill
would require broadcasters to provide this reduced rate only
for ads which are at least one minute in length and in which
the candidate appears at least 75 percent of the time.
5. Non-citizens
It is my strong view that people who are not citizens of
the United States should not be able to influence our
election process in any way. Therefore, my bill prohibits
non-citizens from raising funds for or contributing to
federal elections.
6. Voter Participation
I am extremely disheartened by the lack of individual
involvement in the political process and the every increasing
decline in voter participation numbers. Between 1948-1968,
voter turnout for presidential elections was 60.43 percent.
Between 1972-1992, it fell to 53.21 percent. Last year, it
fell below 50 percent. These statistics are a national
disgrace Certainly, there must be something that can be done
to increase voter participation. Unfortunately, past
initiatives have had little or marginal impact on increasing
the number of voters who choose to fulfill their civic
responsibility to vote. I believe we need a comprehensive
analysis of what has worked, what has not worked or what we
might try to change public attitudes, educate voters and
improve participation. Early voting, extended polling hours
and weekend voting are areas that ought to be researched. My
bill provides $150,000 for the Federal Election Commission to
conduct such a study and to make recommendations to Congress.
This is a small amount of money to invest in an increasingly
serious public problem.
7. Tax Credit
If we want to encourage participation by ordinary citizens,
I believe it is in our national interest to restore a tax
credit for small contributors similar to what existed between
1972 and 1986. My bill does that by providing an annual 100%
tax credit for the first $100 ($200 for joint returns) of
contributions to congressional campaigns. It is my belief
that many people who want to participate financially in the
political process simply cannot afford to do so. These voters
believe they have no power or influence. They are
increasingly frustrated, disgusted and disengaged. My bill
will afford them the opportunity to participate in the
process.
The American public and the voters in my state of North
Dakota are clearly appalled by the amount of money involved
in electing federal officials. They are adamant that we clean
up the system--NOW. If we don't, we do so at our personal and
collective peril.
I want the people of North Dakota and the Members of this
body to know that I intend to support and to work as hard as
I can to enact comprehensive campaign finance legislation
this year. I think is in all our best interests to do so, and
I hope my bill will stimulate debate and be incorporated in
the final reform package.
______
By Mr. INOUYE:
S. 96. A bill to require the Secretary of the Army to determine the
validity of the claims of certain Filipinos that they performed
military service on behalf of the United States during World War II; to
the Committee on Armed Services.
military service legislation
Mr. INOUYE. Mr. President, I am
[[Page S475]]
reintroducing legislation today that would direct the Secretary of the
Army to determine whether certain nationals of the Philippine Islands
performed military service on behalf of the United States during World
War II.
Mr. President, our Filipino veterans fought side by side and
sacrificed their lives on behalf of the United States. This legislation
would confirm the validity of their claims and further allow qualified
individuals the opportunity to apply for military and veterans benefits
that, I believe, they are entitled to. As this population becomes
older, it is important for our nation to extend its firm commitment to
the Filipino veterans and their families who participated in making us
the great nation that we are today.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 129
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. DETERMINATIONS BY THE SECRETARY OF THE ARMY.
(a) In General.--Upon the written application of any person
who is a national of the Philippine Islands, the Secretary of
the Army shall determine whether such person performed any
military service in the Philippine Islands in aid of the
Armed Forces of the United States during World War II which
qualifies such person to receive any military, veterans', or
other benefits under the laws of the United States.
(b) Information To Be Considered.--In making a
determination for the purpose of subsection (a), the
Secretary shall consider all information and evidence
(relating to service referred to in subsection (a)) available
to the Secretary, including information and evidence
submitted by the applicant, if any.
SEC. 2. CERTIFICATE OF SERVICE.
(A) Issuance of Certificate of Service.--The Secretary
shall issue a certificate of service to each person
determined by the Secretary to have performed military
service described in section 1(a).
(b) Effect of Certificate of Service.--A certificate of
service issued to any person under subsection (a) shall, for
the purpose of any law of the United States, conclusively
establish the period, nature, and character of the military
service described in the certificate.
SEC. 3. APPLICATIONS BY SURVIVORS.
An application submitted by a surviving spouse, child, or
parent of a deceased person described in section 1(a) shall
be treated as an application submitted by such person.
SEC. 4. LIMITATION PERIOD.
The Secretary may not consider for the purpose of this Act
any application received by the Secretary more than two years
after the date of enactment of this Act.
SEC. 5. PROSPECTIVE APPLICATION OF DETERMINATIONS BY THE
SECRETARY OF THE ARMY.
No benefits shall accrue to any person for any period prior
to the date of enactment of this Act as a result of the
enactment of this Act.
SEC. 6. REGULATIONS.
The Secretary shall issue regulations to carry out sections
1, 3, and 4.
SEC. 7. RESPONSIBILITIES OF THE SECRETARY OF VETERANS
AFFAIRS.
Any entitlement of a person to receive veterans' benefits
by reason of this Act shall be administered by the Department
of Veterans Affairs pursuant to regulations issued by the
Secretary of Veterans Affairs.
SEC. 8. DEFINITIONS.
In this Act:
(1) The term ``Secretary'' means the Secretary of the Army.
(2) The term ``World War II'' means the period beginning on
December 7, 1941, and ending on December 31, 1946.
______
By Mr. KERRY:
S. 97. A bill to amend the Internal Revenue Code of 1986 and the
Social Security Act to require the Internal Revenue Service to collect
child support through wage withholding and to eliminate State
enforcement of child support obligations other than medical support
obligations; to the Committee on Finance.
the uniform child support enforcement act of 1997
Mr. KERRY. Mr. President, I am introducing legislation today to help
ensure that children across this country get the economic support they
need and deserve from both parents in order to have a wholesome
childhood, grow up healthy, and thrive.
Mr. President, child support reform is an urgent public issue because
it affects so many children. In 1994, one out of every four children
lived in a family with only one parent present in the home. Half of all
the 18.7 million children living in single-parent families in 1994 were
poor, compared with only slightly more than one out of every ten
children in two-parent families. Clearly the payment of child support
by the absent parent is an important determinant of the economic status
of these children.
Unfortunately, the failure to pay child support is extraordinarily
widespread, cutting across income and racial lines. Of the 10 million
women raising children with an absent parent, over 4 million had no
support awarded. Of those 5.4 million women who were due support,
slightly over half received the full amount due, while a quarter
received partial payment and a quarter received nothing at all. Let me
repeat that, Mr. President--more than half of the women with child
support orders received no support or less than the full amount.
Mr. President, common sense will tell you that children are hurt when
parents do not pay support. But perhaps some evidence will make the
point even clearer. A recent survey of single parents in Georgia,
Oregon, Ohio, and New York documents the real harm children suffer when
child support is not paid: during the first year after the parent left
the home, more than half the families surveyed faced a serious housing
crisis. Nearly a third reported that their children went hungry at some
point during the year. And over a third reported that their children
lacked appropriate clothing such as a winter coat.
Mr. President, it is also evident that better child support
enforcement can produce a lot more money for children. A 1994 study by
the Urban Institute estimates that if child support orders were
established for all children with a living non-custodial father and
these orders were fully enforced, aggregate child support payments
would have been $47.6 billion dollars in 1990--nearly three times the
amount of child support actually paid in this country.
Unfortunately, this country has made all too little progress in
tackling the child support problem, and this has been true under both
Democratic and Republican Administrations. Over the past decade, the
average child support payment due to all women with a child support
award, the average amount received by those women, as well as the
percentage of women with awards have remained virtually unchanged
(adjusting for inflation). Similarly, the state child support
enforcement system that serves welfare families and non-welfare
families who ask for help has made progress in paternity establishment,
but little progress overall. Over half a million children had their
paternity established by state agencies in FY 1994--a fifty percent
increase from five years earlier. But fewer than one out of every five
cases served by state agencies had any child support paid in FY 1994--a
figure that has risen only slightly since FY 1990. Mr. President, it is
an intolerable situation for our nation's children when state child
support agencies are making absolutely no collection in 80 percent of
their cases.
My bill will help make sure that we achieve real progress for
children. Last year, Congress passed some important improvements in the
child support system in the welfare reform bill that became law. My
bill would give states a chance to implement these new changes and then
assess their success or failure. If these reforms succeed in
dramatically improving the performance of state child support offices,
then this bill would not tinker with success. If, however, we do not
see dramatic improvement in collections within the next three years,
this bill would ensure that we take bold steps to help children. This
bill would leave establishment of paternity and child support orders at
the state level but move collection of support to the national level
where we can more aggressively pursue interstate cases and send a
message to all parents obligated to pay support that making full and
timely support payments is an obligation as serious as making full and
timely payment of taxes. If more than half the states do not achieve a
75 percent collection rate in their child support cases, then the
system of collection would be federalized to ensure that children get
the support they need and deserve.
Mr. President, it has been 13 years since this Congress passed the
first major child support legislation. Despite this legislative effort
and additional reforms in 1988, according to a
[[Page S476]]
recent study there is a higher default rate on child support payments
than on used car loans. I believe that every single member of this body
will agree with me that this is wrong. If, under the newly revised
federal law, states can rectify this situation, we can all take
pleasure and satisfaction from watching them do it. If they cannot, we
must take action. I urge my colleagues to support this bill so that
America's children of every income level will be assured of the support
they need and deserve.
Mr. President, I ask unanimous consent that the full text of the bill
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 97
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Uniform Child Support
Enforcement Act of 1997''.
SEC. 2. EFFECTIVE DATE; AMENDMENTS.
(a) In General.--This Act and the amendments made by this
Act shall take effect on the first day of the first calendar
month that begins after the 3-year period that begins with
the date of the enactment of this Act, if the Secretary of
Health and Human Services certifies to the Congress that on
such first day more than 50 percent of the States have not
achieved a 75 percent collection rate in child support cases
in which child support is awarded and due under the
jurisdiction of such States pursuant to part D of title IV of
the Social Security Act (42 U.S.C. 651 et seq.).
(b) Elimination of Provisions of Law Relating To State
Enforcement of Child Support Obligations Other Than Medical
Support Obligations.--Not later than 90 days after the
effective date of this Act and the amendments made by this
Act, the Secretary of Health and Human Services shall submit
to the appropriate committees of the Congress a legislative
proposal proposing such technical and conforming amendments
as are necessary to eliminate State enforcement of child
support obligations other than medical support obligations
and to bring the law into conformity with the policy embodied
in this Act.
SEC. 3. NATIONAL CHILD SUPPORT ORDER REGISTRY.
(a) Establishment.--
(1) In general.--The Secretary of the Treasury shall
establish in the Internal Revenue Service a national registry
of abstracts of child support orders.
(2) Child support order defined.--As used in this section,
the term ``child support order'' means an order, issued or
modified by a State court or an administrative process
established under State law, that requires an individual to
make payments for support and maintenance of a child or of a
child and the parent with whom the child is living.
(b) Contents of Abstracts.--The abstract of a child support
order shall contain the following information:
(1) The names, addresses, and social security account
numbers of each individual with rights or obligations under
the order, to the extent that the authority that issued the
order has not prohibited the release of such information.
(2) The name and date of birth of any child with respect to
whom payments are to be made under the order.
(3) The dollar amount of child support required to be paid
on a monthly basis under the order.
(4) The date the order was issued or most recently
modified, and each date the order is required or scheduled to
be reviewed by a court or an administrative process
established under State law.
(5) Any orders superseded by the order.
(6) Such other information as the Secretary of the
Treasury, in consultation with the Secretary of Health and
Human Services, shall, by regulation require.
SEC. 4. CERTAIN STATUTORILY PRESCRIBED PROCEDURES REQUIRED AS
A CONDITION OF RECEIVING FEDERAL CHILD SUPPORT
FUNDS.
Section 466(a) of the Social Security Act (42 U.S.C.
666(a)) is amended by inserting after paragraph (19) the
following:
``(20)(A) Procedures which require any State court or
administrative agency that issues or modifies (or has issued
or modified) a child support order to transmit an abstract of
the order to the Internal Revenue Service on the later of--
``(i) the date the order is issued or modified; or
``(ii) the effective date of this paragraph.
``(B) Procedures which--
``(i) require any individual with the right to collect
child support pursuant to an order issued or modified in the
State (whether before or after the effective date of this
paragraph) to be presumed to have assigned to the Internal
Revenue Service the right to collect such support, unless the
individual affirmatively elects to retain such right at any
time; and
``(ii) allow any individual who has made the election
referred to in clause (i) to rescind or revive such election
at any time.''.
SEC. 5. COLLECTION OF CHILD SUPPORT BY INTERNAL REVENUE
SERVICE.
(a) In General.--Chapter 77 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end the following new section:
``SEC. 7525. COLLECTION OF CHILD SUPPORT.
``(a) Employee To Notify Employer of Child Support
Obligation.--
``(1) In general.--Each employee shall specify, on each
withholding certificate furnished to such employee's
employer--
``(A) the monthly amount (if any) of each child support
obligation of such employee, and
``(B) the TIN of the individual to whom each such
obligation is owed.
``(2) When certificate filed.--In addition to the other
required times for filing a withholding certificate, a new
withholding certificate shall be filed within 30 days after
the date of any change in the information specified under
paragraph (1).
``(3) Period certificate in effect.--Any specification
under paragraph (1) shall continue in effect until another
withholding certificate takes effect which specifies a change
in the information specified under paragraph (1).
``(4) Authority to specify smaller child support amount.--
In the case of an employee who is employed by more than 1
employer for any period, such employee may specify less than
the monthly amount described in paragraph (1)(A) to each such
employer so long as the total of the amounts specified to all
such employers is not less than such monthly amount.
``(b) Certain Obligations Exempt.--This section shall not
apply to a child support obligation for any month if the
individual to whom such obligation is owed has so notified
the Secretary and the individual owing such obligation more
than 30 business days before the beginning of such month.
``(c) Employer Obligations.--
``(1) Requirement to deduct and withhold.--
``(A) In general.--Every employer who receives a
certificate under subsection (a) that specifies that the
employee has a child support obligation for any month shall
deduct and withhold from the wages (as defined in section
3401(a)) paid by such employer to such employee during each
month that such certificate is in effect an additional amount
equal to the amount of such obligation or such other amount
as may be specified by the Secretary under subsection (d).
``(B) Limitation on aggregate withholding.--In no event
shall an employer deduct and withhold under this section from
a payment of wages an amount in excess of the amount of such
payment which would be permitted to be garnished under
section 303(b) of the Consumer Credit Protection Act.
``(2) Notice to secretary.--
``(A) In general.--Every employer who receives a
withholding certificate shall, within 30 business days after
such receipt, submit a copy of such certificate to the
Secretary.
``(B) Exception.--Subparagraph (A) shall not apply to any
withholding certificate if--
``(i) a previous withholding certificate is in effect with
the employer, and
``(ii) the information shown on the new certificate with
respect to child support is the same as the information with
respect to child support shown on the certificate in effect.
``(3) When withholding obligation takes effect.--Any
withholding obligation with respect to a child support
obligation of an employee shall commence with the first
payment of wages after the certificate is furnished.
``(d) Secretary To Verify Amount of Child Support
Obligation.--
``(1) Verification of information specified on withholding
certificates.--Within 45 business days after receiving a
withholding certificate of any employee, or a notice from any
person claiming that an employee is delinquent in making any
payment pursuant to a child support obligation, the Secretary
shall determine whether the information available to the
Secretary under section 3 of the Uniform Child Support
Enforcement Act of 1996 indicates that such employee has a
child support obligation.
``(2) Employer notified if increased withholding is
required.--If the Secretary determines that an employee's
child support obligation is greater than the amount (if any)
shown on the withholding certificate in effect with respect
to such employee, the Secretary shall, within 45 business
days after such determination, notify the employer to whom
such certificate was furnished of the correct amount of such
obligation, and such amount shall apply in lieu of the amount
(if any) specified by the employee with respect to payments
of wages by the employer after the date the employer receives
such notice.
``(3) Determination of correct amount.--In making the
determination under paragraph (2), the Secretary shall take
into account whether the employee is an employee of more than
1 employer and shall appropriately adjust the amount of the
required withholding from each such employer.
``(e) Child Support Obligations Required To Be Paid With
Income Tax Return.--
``(1) In general.--The child support obligation of any
individual for months ending with or within any taxable year
shall be paid--
``(A) not later than the last date (determined without
regard to extensions) prescribed for filing his return of tax
imposed by chapter 1 for such taxable year, and
``(B)(i) if such return is filed not later than such date,
with such return, or
[[Page S477]]
``(ii) in any case not described in clause (i), in such
manner as the Secretary may by regulations prescribe.
``(2) Credit for amount previously paid.--The amount
required to be paid by an individual under paragraph (1)
shall be reduced by the sum of--
``(A) the amount collected under this section with respect
to periods during the taxable year, plus
``(B) the amount (if any) paid by such individual under
section 6654 by reason of subsection (f)(3) thereof for such
taxable year.
``(f) Failure To Pay Amount Owing.--If an individual fails
to pay the full amount required to be paid under subsection
(e) on or before due date for such payment, the Secretary
shall assess and collect the unpaid amount in the same
manner, with the same powers, and subject to the same
limitations applicable to a tax imposed by subtitle C the
collection of which would be jeopardized by delay.
``(g) Credit or Refund for Withheld Child Support in Excess
of Actual Obligation.--There shall be allowed as a credit
against the taxes imposed by subtitle A for the taxable year
an amount equal to the excess (if any) of--
``(1) the aggregate of the amounts described in
subparagraphs (A) and (B) of subsection (e)(2), over
``(2) the actual child support obligation of the taxpayer
for such taxable year.
The credit allowed by this subsection shall be treated for
purposes of this title as allowed by subpart C of part IV of
subchapter A of chapter 1.
``(h) Child Support Treated as Taxes.--
``(1) In general.--For purposes of penalties and interest
related to failure to deduct and withhold taxes, amounts
required to be deducted and withheld under this section shall
be treated as taxes imposed by chapter 24.
``(2) Other rules.--Rules similar to the rules of sections
3403, 3404, 3501, 3502, 3504, and 3505 shall apply with
respect to child support obligations required to be deducted
and withheld.
``(3) Special rule for collections.--For purposes of
collecting any unpaid amount which is required to be paid
under this section--
``(A) paragraphs (4), (6), and (8) of section 6334(a)
(relating to property exempt from levy) shall not apply, and
``(B) there shall be exempt from levy so much of the
salary, wages, or other income of an individual as is being
withheld therefrom in garnishment pursuant to a judgment
entered by a court of competent jurisdiction for the support
of his minor children.
``(i) Collections Dispersed to Individual Owed
Obligation.--
``(1) In general.--Payments received by the Secretary
pursuant to this section or by reason of section 6654(f)(3)
which are attributable to a child support obligation payable
for any month shall be paid (to the extent such payments do
not exceed the amount of such obligation for such month) to
the individual to whom such obligation is owed as quickly as
possible. Any penalties and interest collected with respect
to such payments also shall be paid to such individual.
``(2) Shortfalls in payments made by other withheld
amounts.--If the amount payable under a child support
obligation for any month exceeds the payments (referred in
paragraph (1)) received with respect to such obligation for
such month, such excess shall be paid from other amounts
received under subtitle C or section 6654 with respect to the
individual owing such obligation. The treasury of the United
States shall be reimbursed for such other amounts from
collections from the individual owing such obligation.
``(3) Families receiving state assistance.--In the case of
an individual with respect to whom an assignment of child
support payments to a State is in effect--
``(A) of the amounts collected which represent monthly
support payments, the first $50 of any payments for a month
shall be paid to such individual and shall not be
considered as income for purposes of calculating amounts
of State assistance, and
``(B) all other amounts shall be paid to such State
pursuant to such assignment.
``(j) Treatment of Arrearages Under Child Support
Obligations Not Subject To Section For Prior Period.--If--
``(1) this section did not apply to any child support
obligation by reason of subsection (b) for any prior period,
and
``(2) there is a legally enforceable past-due amount under
such obligation for such period,
then such past-due amount shall be treated for purposes of
this section as owed (until paid) for each month that this
section applies to such obligation.
``(k) Definitions and Special Rules.--
``(1) Definitions.--For purposes of this section--
``(A) Withholding certificate.--The term `withholding
certificate' means the withholding exemption certificate used
for purposes of chapter 24.
``(B) Business day.--The term `business day' means any day
other than a Saturday, Sunday, or legal holiday (as defined
in section 7503).
``(2) Timely mailing.--Any notice under subsection (c)(2)
or (d)(2) which is delivered by United States mail shall be
treated as given on the date of the United States postmark
stamped on the cover in which such notice is mailed.
``(l) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''
(b) Withheld Child Support To Be Shown on W-2.--Subsection
(a) of section 6051 of such Code, as amended by section
310(c)(3) of the Health Insurance Portability and
Accountability Act of 1996, is amended by striking ``and'' at
the end of paragraph (10), by striking the period at the end
of paragraph (11) and inserting ``, and'', and by inserting
after paragraph (11) the following new paragraph:
``(12) the total amount deducted and withheld as a child
support obligation under section 7525(c).''
(c) Application of Estimated Tax.--
(1) In general.--Subsection (f) of section 6654 of such
Code (relating to failure by individual to pay estimated
income tax) is amended by striking ``minus'' at the end of
paragraph (2) and inserting ``plus'', by redesignating
paragraph (3) as paragraph (4), and by inserting after
paragraph (2) the following new paragraph:
``(3) the aggregate amount of the child support obligations
of the taxpayer for months ending with or within the taxable
year (other than such an obligation for any month for which
section 7525 does not apply to such obligation), minus''.
(2) Paragraph (1) of section 6654(d) of such Code is
amended by adding at the end the following new subparagraph:
``(D) Determination of required annual payment for
taxpayers required to pay child support.--In the case of a
taxpayer who is required under section 7525 to pay a child
support obligation (as defined in section 7525) for any month
ending with or within the taxable year, the required annual
payment shall be the sum of--
``(i) the amount determined under subparagraph (B) without
regard to subsection (f)(3), plus
``(ii) the aggregate amount described in subsection
(f)(3).''
(3) Credit for withheld amounts, etc.--Subsection (g) of
section 6654 of such Code is amended by adding at the end the
following new paragraph:
``(3) Child support obligations.--For purposes of applying
this section, the amounts collected under section 7525 shall
be deemed to be a payment of the amount described in
subsection (f)(3) on the date such amounts were actually
withheld or paid, as the case may be.''
(d) Penalty For False Information on Withholding
Certificate.--Section 7205 of such Code (relating to
fraudulent withholding exemption certificate or failure to
supply information) is amended by adding at the end the
following new subsection:
``(c) Withholding of Child Support Obligations.--If any
individual willfully makes a false statement under section
7525(a), then such individual shall, in addition to any other
penalty provided by law, upon conviction thereof, be fined
not more than $1,000, or imprisoned not more than 1 year, or
both.''
(e) New Withholding Certificate Required.--Not later than
90 days after the date this Act takes effect, each employee
who has a child support obligation to which section 7525 of
the Internal Revenue Code of 1986 (as added by this section)
applies shall furnish a new withholding certificate to each
of such employee's employers. A certificate required under
the preceding sentence shall be treated as required under
such section 7525.
(f) Repeal of Offset of Past-Due Support Against
Overpayments.--
(1) Section 6402 of such Code, as amended by section
110(l)(7) of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, is amended by striking
subsections (c) and (h) and by redesignating subsections (d),
(e), (f), (g), (i), and (j) as subsections (c), (d), (e),
(f), (g), and (h), respectively.
(2) Subsection (a) of section 6402 of such Code, as so
amended, is amended by striking ``(c), (d), and (e)'' and
inserting ``(c) and (d)''.
(3) Subsection (c) of section 6402 of such Code (as
redesignated by paragraph (1)) is amended--
(A) by striking ``(other than past-due support subject to
the provisions of subsection (c))'' in paragraph (1),
(B) by striking ``after such overpayment is reduced
pursuant to subsection (c) with respect to past-due support
collected pursuant to an assignment under section 402(a)(26)
of the Social Security Act and'' in paragraph (2).
(4) Subsection (d) of section 6402 of such Code (as
redesignated by paragraph (1)) is amended by striking ``or
(d)''.
(g) Repeal of Collection of Past-Due Support.--Section 6305
of such Code is hereby repealed.
(h) Clerical Amendments.--
(1) The table of sections for subchapter A of chapter 64 of
such Code is amended by striking the item relating to section
6305.
(2) The table of sections for chapter 77 of such Code is
amended by adding at the end thereof the following new item:
``Sec. 7525. Collection of child support.''
(h) Use of Parent Locator Service.--Section 453(a) of the
Social Security Act (42 U.S.C. 653(a)) is amended by
inserting ``or the Internal Revenue Service'' before
``information as''.
______
By Mr. GRAMS (for himself, Mr. Hutchinson, Mr. Nickles, Mr. Kyl,
and Mr. Coats):
S. 98. A bill to amend the Internal Revenue Code of 1986 to provide a
family tax credit; to the Committee on Finance.
[[Page S478]]
THE FAMILY TAX FAIRNESS ACT OF 1997
Mr. GRAMS. Madam President, I thank my colleague from Oklahoma for
helping us in supporting this bill.
Madam President, I rise today to introduce legislation, together with
Senator Hutchinson, my distinguished colleague from Arkansas, a bill to
provide the $500 per child tax credit for America's working families.
We are pleased, as I said, to be joined by Senator Nickles, along with
Senators Kyl and Coats, in introducing this bill.
The November election sends us a very clear message that the American
people want us to work together, to work together in a bipartisan
manner, to balance the Federal budget, control the growth of
Government, and to restore its accountability. While we see the tax
burden increase on the middle class, working families need our help,
and it is time that Congress and the President come together to deliver
it.
Since the opening days of the 105th Congress, a renewed spirit of
cooperation has settled in over Washington. Instead of the partisan
politics that have often and too often exploited our disagreements, the
talk from the Capitol Building to the White House has centered on
creating consensus. Just yesterday in his inaugural address the
President affirmed this commitment when he said, ``The American people
returned to office a President of one party and a Congress of another.
Surely they did not do this to advance the politics of petty bickering
and partisanship, which they plainly deplore.''
While a sign of that new commitment, I believe, is the strongest and
the most compassionate statement this Congress and this President can
make in 1997 on behalf of working families is to cut their taxes and to
leave them a little bit more of their own money at the end of the day,
the extensive debate that we have undertaken in the past 2 years over
fiscal policy has helped us to understand that working families are
indeed overtaxed.
The child tax credit is appropriate and necessary to stimulate
economic growth and to allow families to make more of their own
spending decisions. The people of Minnesota sent me to Washington with
their instructions to make the $500-per-child tax credit a top
priority. Like struggling men and women nationwide, Minnesotans have
seen what our outrageous tax burden has done to their families over the
past 40 years. It is far from merely being a fact of life. Taxes today
dominate the family budget.
There is no better argument for tax relief than to consider that
taxpayers today are spending more to feed their Government than they
are spending to feed, clothe, and shelter their families. When we
debated the $500-per-child tax credit in the last Congress, some of my
colleagues expressed their concern that any tax relief now would
jeopardize their efforts to balance the Federal budget. Balance the
budget first, they said, and then cut taxes later. Their concerns
missed a very important part. The budget will never be balanced or stay
balanced until we decide that it is the people who should prosper under
it and not the Government.
Recent economic data reveal that despite a shrinking Federal deficit,
the Government is in fact getting bigger, not smaller. Government
spending and taxes continue to soar, and total taxation now claims the
largest bite in the Nation's income in history. Without significant
policy changes, the deficit will begin climbing again in fiscal year
1998 and reach over $200 billion by the year 2002.
By enacting the $500-per-child tax credit we can begin turning back
the decades of abuse which taxpayers have suffered at the hands of
their own Government, a Government often eager to spend the taxpayers'
money with reckless regard. The $500-per-child tax credit is the right
solution because it takes power out of the hands of Washington's big
spenders and puts it back where it can do the most good, and that is in
the hands of families.
Nobody outside of Washington's insulated fantasy world really thinks
the Government can spend the family's dollars more efficiently than the
family would. By leaving that money in the family bank accounts,
taxpayers are then empowered to use it to directly benefit their own
household. They can make the best decisions on how to spend those
dollars. Beyond the direct benefits, families' tax relief can have a
substantial and a positive impact on the economy as a whole.
It was John F. Kennedy who observed that ``an economy hampered with
high tax rates will never introduce enough revenue to balance the
budget, just as it will never produce enough output and enough jobs.''
President Kennedy was able to put these theories to work in the early
1960's when he enacted significant tax cuts that sparked one of the few
periods of sustained growth that we have experienced in the last half
century.
It was 20 years later when President Ronald Reagan cut taxes once
again that reinvigorated the economy, which responded enthusiastically
with 19 million new jobs that were created, and take-home pay grew 13
percent between 1982 and 1996. It is now President Clinton who has the
opportunity to work alongside Congress as we cut taxes and generate a
new era of growth in the economy and prosperity for American families.
I am encouraged by his public cause for family tax relief, and in
particular his words in support of the $500-per-child tax credit.
With the President truly committed to working with us, there is every
reason to believe that a plan that will balance the budget and reduce
the tax load for working families will pass this Congress and be signed
into law this year. We made a promise to middle class Americans that we
would cut their taxes. We laid the groundwork for the $500-per-child
tax credit in the 104th Congress, so now in the 105th it is time that
we put aside politics and deliver on the promise.
So I ask that S. 9 be introduced and properly referred.
The PRESIDING OFFICER. The bill will be appropriately referred.
Mr. GRAMS. Thank you very much, Madam President.
Mr. HUTCHINSON. Madam President, I rise today in support of America's
families. It is with a deep sense of honor that I stand for the first
time before this great deliberative body. As the first Republican
Senator to be popularly elected from the great state of Arkansas, I
believe it is fitting that my first legislative initiative be on behalf
of those whom we hold most dear--the children of America's families. It
is doubly fitting that I join my dear friend from our days in the House
of Representatives and now Senate colleague, Rod Grams, in
cosponsorship of the Family Tax Fairness Act of 1997.
My career of public service has been grounded in principles of faith,
preservation of the family and honest but less intrusive government.
These tenets will be my guide post as I serve the good people of
Arkansas in the United States Senate.
In my lifetime, I have observed the precipitous decline of the
economic and moral health of the American family. This decline is
attributable to many causes not the least of which is the rising tax
burden. As a member of the baby boomer generation, I, like all of you,
have watched our 2% tax rate of the 1950's grow to 25%, nearly a 300%
increase since World War II. This means that America's families send
one out of every four dollars to Washington. In real terms, the average
American family pays more in federal taxes than it spends on food,
clothing, transportation, insurance, and recreation combined.
What is the payback for millions of hardworking American families? It
is increased crime rates, failing educational systems, intrusive
government, and a very real threat to our overall quality of life by
the shrinking of America's backbone--the middle class. It is my belief
that over taxation is slowly destroying the middle class American
family. Families are working harder and harder and taking home less and
less. Measured by average after-tax per capita income, families with
children are now the lowest income group in America. Their average
after-tax income is below that of elderly households. It is below that
of single individuals, and it is below that of couples without
children. The shrinking family paycheck because of ever-higher taxes
forces families with children to spend more time at work and less time
at home. Less family time translates into children with less parental
supervision with all of its attendant problems.
The Family Tax Fairness Act of 1997 with a $500 tax credit for every
child under the age of 18, provides the stimulus to keep our families
strong. It
[[Page S479]]
translates into over $25 billion of tax relief each year, of which over
78 percent would directly benefit working and middle class families. I
am convinced that parents, not government, can best decide how to
allocate resources. Under this proposal, a family with two children
would receive $1,000 to pay for clothes, college, or health insurance
for the children. The Family Tax Fairness Act of 1997 is a statement by
our government and our society that all our families and all of our
children are valuable.
In closing, I am reminded of the words of William Sumner in his
speech, The Forgotten Man.
``The Forgotten Man . . . delving away in patient industry supporting
his family, paying his taxes, casting his vote, supporting the church
and school . . . but he is the only one for whom there is no provision
in the great scramble and the big divide. Such is the Forgotten Man. He
works, he votes, generally he prays--but his chief business in life is
to pay . . . Who and where is the Forgotten Man in this case? Who will
have to pay for it all?''
Sadly, the Forgotten Man is a metaphor for today's American family.
So, while I urge support for the repeal of the death tax--the
inheritance tax--that killer of the American dream . . . and while I
urge support for dramatically cutting the capital gains tax rate, which
both economists and experience teach will actually increase federal
revenues, let us not forget the American family.
I urge my colleagues to join Senator Grams and myself in support of
the Family Tax Fairness Act of 1997.
I thank the chair and yield the floor.
Mr. NICKLES. Madam President, Senator Grams and Senator Hutchinson
will be introducing legislation dealing with the $500 tax credit per
child. I compliment them on this legislation. I am happy to cosponsor
it with them. It is outstanding legislation that will restore
individual families the opportunity to keep more of their own money. I
might mention that the definition of ``child'' in the legislation which
we are introducing includes children up to age 18 in contrast to that
introduced by the President which is up to age 12, a big difference. It
is a very profamily, very positive protaxpayer piece of legislation of
which I am very happy to cosponsor. And I compliment my colleagues from
Minnesota and Arkansas for their leadership on this issue.
I yield the floor.
Mr. GRAMS addressed the Chair.
The PRESIDING OFFICER. The Senator from Minnesota.
______
By Mrs. BOXER:
S. 99. A bill to amend the Internal Revenue Code of 1986 to allow
companies to donate scientific equipment to elementary and secondary
schools for use in their educational programs, and for other purposes;
to the Committee on Finance.
the computer donation incentive act of 1997
Mrs. BOXER. Mr. President, in March 1996 scores of volunteers
throughout California helped make NetDay 96 one of the most successful
one-day public projects in history. At the time, we all noted that this
electronic barn-raising could be a turning point in educational
history--but only if we followed through with other steps to help our
children travel the information superhighway. I would like to take one
step by introducing the Computer Donation Incentive Act of 1997.
The successful education of America's children is closely linked to
the use of innovative educational technologies, particularly computer-
based instruction and research. Unfortunately, however, far too many
public elementary and secondary school classrooms lack the computers
they need to take advantage of these new educational technologies.
The Computer Donation Incentive Act will help get our students those
computers. Current law allows computer manufacturers to receive a
greater deduction for donations of computers to college and
universities, for scientific and research purposes, than for donations
made to elementary and secondary schools for education purposes. That
limitation may have made sense when this provision was enacted, before
the personal computer boom, but not in the era of the Information
Superhighway, such a limitation is unreasonable.
The Computer Donation Incentive Act provides computer manufacturers
the same enhanced deduction for donating computers for educational
purposes that they currently receive for donating computers to colleges
and universities for scientific purposes. Similarly, the bill will
allow nonmanufacturers to receive a deduction for donating computers to
elementary and secondary schools for educational use.
The Boxer-Chafee bill will provide a reasonable incentive for
businesses to donate computer to the schools. I would like to emphasize
the donated computers must be nearly new; those donated by
manufacturers must be no more than 2 year old, and those donated by
nonmanufacturers must be no more than 3 year old.
Along with computers and software, businesses should also donate
their expertise, providing the training required to bring our schools
fully on-line--and we challenge them to do so. Teachers and students
both need such training in order to integrate computer-based lessons
into their basic curriculum.
Alone, neither NetDay nor an adjustment to the Tax Code can solve all
our educational problems or even make every student computer literate
for the next century. But together, each initiative we take will help
provide our students with the tools they need to drive on the
information Superhighway and compete in a global information-based
marketplace. Such initiatives are investments in the futures of our
children.
Mr. President, I ask unanimous consent that this bill be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 99
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC EQUIPMENT
TO ELEMENTARY AND SECONDARY SCHOOLS.
(a) In General.--Subparagraph (B) of section 170(e)(4) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(B) Qualified research or education contribution.--For
purposes of this paragraph, the term `qualified research or
education contribution' means a charitable contribution by a
corporation of tangible personal property (including computer
software), but only if--
``(i) the contribution is to--
``(I) an educational organization described in subsection
(b)(1)(A)(ii),
``(II) a governmental unit described in subsection (c)(1),
or
``(III) an organization described in section 41(e)(6)(B),
``(ii) the contribution is made not later than 3 years
after the date the taxpayer acquired the property (or in the
case of property constructed by the taxpayer, the date the
construction of the property is substantially completed),
``(iii) the property is scientific equipment or apparatus
substantially all of the use of which by the donee is for--
``(I) research or experimentation (within the meaning of
section 174), or for research training, in the United States
in physical or biological sciences, or
``(II) in the case of an organization described in clause
(i) (I) or (II), use within the United States for educational
purposes related to the purpose or function of the
organization,
``(iv) the original use of the property began with the
taxpayer (or in the case of property constructed by the
taxpayer, with the donee),
``(v) the property is not transferred by the donee in
exchange for money, other property, or services, and
``(vi) the taxpayer receives from the donee a written
statement representing that its use and disposition of the
property will be in accordance with the provisions of clauses
(iv) and (v).''
(b) Donations to Charity for Refurbishing.--Section
170(e)(4) of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subparagraph:
``(D) Donations to charity for refurbishing.--For purposes
of this paragraph, a charitable contribution by a corporation
shall be treated as a qualified research or education
contribution if--
``(i) such contribution is a contribution of property
described in subparagraph (B)(iii) to an organization
described in section 501(c)(3) and exempt from taxation under
section 501(a),
``(ii) such organization repairs and refurbishes the
property and donates the property to an organization
described in subparagraph (B)(i), and
``(iii) the taxpayer receives from the organization to whom
the taxpayer contributed the property a written statement
representing that its use of the property (and any use
[[Page S480]]
by the organization to which it donates the property) meets
the requirements of this paragraph.''
(c) Conforming Amendments.--
(1) Paragraph (4)(A) of section 170(e) of the Internal
Revenue Code of 1986 is amended by striking ``qualified
research contribution'' each place it appears and inserting
``qualified research or education contribution''.
(2) The heading for section 170(e)(4) of such Code is
amended by inserting ``or education'' after ``research''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
______
By Mr. KERRY:
S. 100. A bill to amend title 49, United States Code, to provide
protection for airline employees who provide certain air safety
information, and for other purposes; to the Committee on Labor and
Human Resources.
aviation safety protection act
Mr. KERRY. Mr. President, in an effort to increase overall safety of
the airline industry, I am introducing the ``Aviation Safety Protection
Act of 1997,'' which would establish whistle blower protection for
aviation workers.
The worker protections contained in the Occupational Safety and
Health Act [OSHA] are very important to American workers. OSHA properly
protects both private and Federal Government employees who report
health and safety violations from reprisal by their employers. However,
because of a loophole, aviation employees are not covered by these
protections. Flight attendants and other airline employees are in the
best position to recognize breaches in safety regulations and can be
the critical link in ensuring safer air travel. Currently, those
employees who work for unscrupulous airlines face the possibility of
harassment, negative disciplinary action, and even termination if they
report work violations.
Aviation employees perform an important public service when they
choose to report safety concerns. No employee should be put in the
position of having to choose between his or her job and reporting
violations that threaten the safety of passengers and crew. For that
reason, we need a strong whistle blower law to protect aviation
employees from retaliation by their employers when reporting incidents
to Federal authorities. Americans who travel on commercial airlines
deserve the safeguards that exist when flight attendants and other
airline employees can step forward to help Federal authorities enforce
safety laws.
This bill would close the loophole in OSHA law and provide the
necessary protections for aviation employees who provide safety
violation information to Federal authorities or testify about or assist
in disclosure of safety violations. The act provides a Department of
Labor complaint procedure for employees who experience employer
reprisal for reporting such violations, and assures that there are
strong enforcement and judicial review provisions for fair
implementation of the protections. The act also protects airlines from
frivolous complaints by establishing a fine which will be imposed on an
employee who files a complaint if the Department of Labor determines
that there is no merit to the complaint.
I want to acknowledge the leadership of Representative James Clyburn
who will introduce the bill in the House of Representatives. I am
pleased to introduce the companion legislation in the Senate.
This bill will provide important protections to aviation workers and
the general public. I urge my colleagues to join me in supporting it.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 100
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Aviation Safety Protection
Act of 1997''.
SEC. 2. PROTECTION OF EMPLOYEES PROVIDING AIR SAFETY
INFORMATION.
(a) General Rule.--Chapter 421 of title 49, United States
Code, is amended by adding at the end the following new
subchapter:
``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM
``Sec. 42121. Protection of employees providing air safety
information
``(a) Discrimination Against Airline Employees.--No air
carrier or contractor or subcontractor of an air carrier may
discharge an employee of the air carrier or the contractor or
subcontractor of an air carrier or otherwise discriminate
against any such employee with respect to compensation,
terms, conditions, or privileges of employment because the
employee (or any person acting pursuant to a request of the
employee)--
``(1) provided, caused to be provided, or is about to
provide or cause to be provided to the Federal Government
information relating to air safety under this subtitle or any
other law of the United States;
``(2) has filed, caused to be filed, or is about to file or
cause to be filed a proceeding relating to air carrier safety
under this subtitle or any other law of the United States;
``(3) testified or is about to testify in such a
proceeding; or
``(4) assisted or participated or is about to assist or
participate in such a proceeding.
``(b) Department of Labor Complaint Procedure.--
``(1) Filing and notification.--
``(A) In general.--In accordance with this paragraph, a
person may file (or have a person file on behalf of that
person) a complaint with the Secretary of Labor if that
person believes that an air carrier or contractor or
subcontractor of an air carrier discharged or otherwise
discriminated against that person in violation of subsection
(a).
``(B) Requirements for filing complaints.--A complaint
referred to in subparagraph (A) may be filed not later than
180 days after an alleged violation occurs. The complaint
shall state the alleged violation.
``(C) Notification.--Upon receipt of a complaint submitted
under subparagraph (A), the Secretary of Labor shall notify
the air carrier, contractor, or subcontractor named in the
complaint and the Administrator of the Federal Aviation
Administration of the--
``(i) filing of the complaint;
``(ii) allegations contained in the complaint;
``(iii) substance of evidence supporting the complaint; and
``(iv) opportunities that are afforded to the air carrier,
contractor, or subcontractor under paragraph (2).
``(2) Investigation; preliminary order.--
``(A) In general.--Not later than 60 days after receiving a
complaint under paragraph (1), and after affording the air
carrier, contractor, or subcontractor named in the complaint
the opportunities specified in subparagraph (B), the
Secretary of Labor shall conduct an investigation to
determine whether there is reasonable cause to believe that a
complaint submitted under this subsection has merit.
``(B) Opportunity for response.--Before the date specified
in subparagraph (A), the Secretary of Labor shall afford the
air carrier, contractor, or subcontractor named in the
complaint an opportunity to--
``(i) submit to the Secretary of Labor a written response
to the complaint; and
``(ii) meet with a representative of the Secretary of Labor
to present statements from witnesses.
``(C) Notification.--Upon completion of an investigation
under subparagraph (A), the Secretary of Labor shall notify
the complainant and the air carrier, contractor, or
subcontractor alleged to have committed a violation of
subsection (a) of the findings of the investigation.
``(D) Orders.--If, on the basis of the investigation
conducted under this paragraph, the Secretary of Labor
concludes that there is a reasonable cause to believe that a
violation of subsection (a) has occurred, the Secretary
shall--
``(i) issue a preliminary order providing the relief
prescribed by paragraph (3)(B); and
``(ii) provide a copy of the order to the parties specified
in subparagraph (C).
``(E) Objections.--Not later than 30 days after receiving a
notification under subparagraph (C), the air carrier,
contractor, or subcontractor alleged to have committed a
violation in a complaint filed under this subsection or the
complainant may file an objection to the findings of an
investigation conducted under this paragraph or a preliminary
order issued under this paragraph and request a hearing on
the record. The filing of an objection under this
subparagraph shall not operate to stay any reinstatement
remedy contained in a preliminary order issued under this
paragraph.
``(F) Hearings.--A hearing requested under this paragraph
shall be conducted expeditiously.
``(G) Final order.--If no hearing is requested by the date
specified in subparagraph (E), a preliminary order shall be
considered to be a final order that is not subject to
judicial review.
``(3) Final order.--
``(A) Deadline for issuance; settlement agreements.--
``(i) In general.--Not later than 120 days after conclusion
of a hearing under paragraph (2), the Secretary of Labor
shall issue a final order that--
``(I) provides relief in accordance with this paragraph; or
``(II) denies the complaint.
``(ii) Settlement agreement.--At any time before issuance
of a final order under this paragraph, a proceeding under
this subsection may be terminated on the basis of a
settlement agreement entered into by the Secretary of Labor,
the complainant, and the air carrier, contractor, or
subcontractor alleged to have committed the violation.
[[Page S481]]
``(B) Remedy.--If, in response to a complaint filed under
paragraph (1), the Secretary of Labor determines that a
violation of subsection (a) has occurred, the Secretary of
Labor shall order the air carrier, contractor, or
subcontractor that the Secretary of Labor determines to have
committed the violation to--
``(i) take action to abate the violation;
``(ii) reinstate the complainant to the former position of
the complainant and ensure the payment of compensation
(including back pay) and the restoration of terms,
conditions, and privileges associated with the employment;
and
``(iii) provide compensatory damages to the complainant.
``(C) Costs of complaint.--If the Secretary of Labor issues
a final order that provides for relief in accordance with
this paragraph, the Secretary of Labor, at the request of the
complainant, shall assess against the air carrier,
contractor, or subcontractor named in the order an amount
equal to the aggregate amount of all costs and expenses
(including attorney and expert witness fees) reasonably
incurred by the complainant (as determined by the Secretary
of Labor) for, or in connection with, the bringing of the
complaint that resulted in the issuance of the order.
``(D) Frivolous complaints.--If the Secretary of Labor
finds that a complaint brought under paragraph (1) is
frivolous or was brought in bad faith, the Secretary of Labor
may award to the prevailing employer a reasonable attorney
fee in an amount not to exceed $5,000.
``(4) Review.--
``(A) Appeal to court of appeals.--
``(i) In general.--Not later than 60 days after a final
order is issued under paragraph (3), a person adversely
affected or aggrieved by that order may obtain review of the
order in the United States court of appeals for the circuit
in which the violation allegedly occurred or the circuit in
which the complainant resided on the date of that violation.
``(ii) Requirements for judicial review.--A review
conducted under this paragraph shall be conducted in
accordance with chapter 7 of title 5. The commencement of
proceedings under this subparagraph shall not, unless ordered
by the court, operate as a stay of the order that is the
subject of the review.
``(B) Limitation on collateral attack.--An order referred
to in subparagraph (A) shall not be subject to judicial
review in any criminal or other civil proceeding.
``(5) Enforcement of order by secretary of labor.--
``(A) In general.--If an air carrier, contractor, or
subcontractor named in an order issued under paragraph (3)
fails to comply with the order, the Secretary of Labor may
file a civil action in the United States district court for
the district in which the violation occurred to enforce that
order.
``(B) Relief.--In any action brought under this paragraph,
the district court shall have jurisdiction to grant any
appropriate form of relief, including injunctive relief and
compensatory damages.
``(6) Enforcement of order by parties.--
``(A) Commencement of action.--A person on whose behalf an
order is issued under paragraph (3) may commence a civil
action against the air carrier, contractor, or subcontractor
named in the order to require compliance with the order. The
appropriate United States district court shall have
jurisdiction, without regard to the amount in controversy or
the citizenship of the parties, to enforce the order.
``(B) Attorney fees.--In issuing any final order under this
paragraph, the court may award costs of litigation (including
reasonable attorney and expert witness fees) to any party if
the court determines that the awarding of those costs is
appropriate.
``(c) Mandamus.--Any nondiscretionary duty imposed by this
section shall be enforceable in a mandamus proceeding brought
under section 1361 of title 28.
``(d) Nonapplicability To Deliberate Violations.--
Subsection (a) shall not apply with respect to an employee of
an air carrier, or contractor or subcontractor of an air
carrier who, acting without direction from the air carrier
(or an agent, contractor, or subcontractor of the air
carrier), deliberately causes a violation of any requirement
relating to air carrier safety under this subtitle or any
other law of the United States.''.
(b) Conforming Amendment.--The chapter analysis for chapter
421 of title 49, United States Code, is amended by adding at
the end the following:
``SUBCHAPTER III--WHISTLEBLOWER PROTECTION PROGRAM
``42121. Protection of employees providing air safety information.''.
SEC. 3. CIVIL PENALTY.
Section 46301(a)(1)(A) of title 49, United States Code, is
amended by striking ``subchapter II of chapter 421'' and
inserting ``subchapter II or III of chapter 421''.
______
By Mrs. BOXER:
S. 101. A bill to amend the Public Health Service Act to provide for
the training of health professions students with respect to the
identification and referral of victims of domestic violence; to the
Committee on Labor and Human Resources.
the domestic violence identification and referral act
Mrs. BOXER. Mr. President, I rise today to introduce the Domestic
Violence Identification and Referral Act.
Spousal abuse, child abuse, and elder abuse injures millions of
Americans each year, and is growing at an alarming rate. An estimated 2
to 4 million women are beaten by their spouses or former spouses each
year. In 1993, 2.9 million children were reported abused or neglected,
about triple the number reported in 1980. Studies also showed that
spouse abuse and child abuse often go hand-in-hand.
Doctors, nurses, and other health care professionals are on the front
lines of this abuse, but they cannot stop what they have been trained
to see or talk about. The Domestic Violence Identification and Referral
Act addresses this need by encouraging medical schools to incorporate
training on domestic violence into their curriculums.
There is a need for this legislation. While many medical
specialities, hospitals, and other organizations have made education
about domestic violence a priority, this instruction typically occurs
on the job or as part of a continuing medical education program. A 1994
survey by the Association of American Medical Colleges [AAMC] found
that 60 percent of medical school graduates rated the time devoted to
instruction in domestic violence as inadequate.
The bill I am introducing today would give preference in Federal
funding to those medical and other health professional schools which
provide significant training in domestic violence. It defines
significant training to include identifying victims of domestic
violence and maintaining complete medical records, providing medical
advice regarding the dynamics and nature of domestic violence, and
referring victims to appropriate public and nonprofit entities for
assistance.
The bill also defines domestic violence in the broadest terms, to
include battering, child abuse and elder abuse.
I hope my colleagues agree that this legislation is a critical next
step in the fight to bring the brutality of domestic violence out in
the open. It mobilizes our Nation's health care providers to recognize
and treat its victims--and will ultimately save lives by helping to
break the cycle of violence.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 101
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Domestic Violence
Identification and Referral Act of 1997''.
SEC. 2. ESTABLISHMENT, FOR CERTAIN HEALTH PROFESSIONS
PROGRAMS, OF PROVISIONS REGARDING DOMESTIC
VIOLENCE.
(a) Title VII Programs; Preferences in Financial Awards.--
Section 791 of the Public Health Service Act (42 U.S.C. 295j)
is amended by adding at the end the following:
``(c) Preferences Regarding Training in Identification and
Referral of Victims of Domestic Violence.--
``(1) In general.--In the case of a health professions
entity specified in paragraph (2), the Secretary shall, in
making awards of grants or contracts under this title, give
preference to any such entity (if otherwise a qualified
applicant for the award involved) that has in effect the
requirement that, as a condition of receiving a degree or
certificate (as applicable) from the entity, each student
have had significant training in carrying out the following
functions as a provider of health care:
``(A) Identifying victims of domestic violence, and
maintaining complete medical records that include
documentation of the examination, treatment given, and
referrals made, and recording the location and nature of the
victim's injuries.
``(B) Examining and treating such victims, within the scope
of the health professional's discipline, training, and
practice, including, at a minimum, providing medical advice
regarding the dynamics and nature of domestic violence.
``(C) Referring the victims to public and nonprofit private
entities that provide services for such victims.
``(2) Relevant health professions entities.--For purposes
of paragraph (1), a health professions entity specified in
this paragraph is any entity that is a school of medicine, a
school of osteopathic medicine, a graduate program in mental
health practice, a school of nursing (as defined in section
853), a program for the training of physician assistants, or
a program for the training of allied health professionals.
``(3) Report to congress.--Not later than 2 years after the
date of the enactment of the
[[Page S482]]
Domestic Violence Identification and Referral Act of 1997,
the Secretary shall submit to the Committee on Commerce of
the House of Representatives, and the Committee on Labor and
Human Resources of the Senate, a report specifying the health
professions entities that are receiving preference under
paragraph (1); the number of hours of training required by
the entities for purposes of such paragraph; the extent of
clinical experience so required; and the types of courses
through which the training is being provided.
``(4) Definitions.--For purposes of this subsection, the
term `domestic violence' includes behavior commonly referred
to as domestic violence, sexual assault, spousal abuse, woman
battering, partner abuse, child abuse, elder abuse, and
acquaintance rape.''.
(b) Title VIII Programs; Preferences in Financial Awards.--
Section 860 of the Public Health Service Act (42 U.S.C. 298b-
7) is amended by adding at the end the following:
``(f) Preferences Regarding Training in Identification and
Referral of Victims of Domestic Violence.--
``(1) In general.--In the case of a health professions
entity specified in paragraph (2), the Secretary shall, in
making awards of grants or contracts under this title, give
preference to any such entity (if otherwise a qualified
applicant for the award involved) that has in effect the
requirement that, as a condition of receiving a degree or
certificate (as applicable) from the entity, each student
have had significant training in carrying out the following
functions as a provider of health care:
``(A) Identifying victims of domestic violence, and
maintaining complete medical records that include
documentation of the examination, treatment given, and
referrals made, and recording the location and nature of the
victim's injuries.
``(B) Examining and treating such victims, within the scope
of the health professional's discipline, training, and
practice, including, at a minimum, providing medical advice
regarding the dynamics and nature of domestic violence.
``(C) Referring the victims to public and nonprofit private
entities that provide services for such victims.
``(2) Relevant health professions entities.--For purposes
of paragraph (1), a health professions entity specified in
this paragraph is any entity that is a school of nursing or
other public or nonprofit private entity that is eligible to
receive an award described in such paragraph.
``(3) Report to congress.--Not later than 2 years after the
date of the enactment of the Domestic Violence Identification
and Referral Act of 1997, the Secretary shall submit to the
Committee on Commerce of the House of Representatives, and
the Committee on Labor and Human Resources of the Senate, a
report specifying the health professions entities that are
receiving preference under paragraph (1); the number of hours
of training required by the entities for purposes of such
paragraph; the extent of clinical experience so required; and
the types of courses through which the training is being
provided.
``(4) Definitions.--For purposes of this subsection, the
term `domestic violence' includes behavior commonly referred
to as domestic violence, sexual assault, spousal abuse, woman
battering, partner abuse, child abuse, elder abuse, and
acquaintance rape.''.
______
By Mr. BREAUX (for himself, Mr. Akaka, Mr. Bingaman, Mr. Chafee,
Mr. Cochran, Mr. Craig, Mr. Glenn, Mr. Jeffords, Mr. Leahy, Mr.
Inouye, Ms. Mikulski, and Mr. Reid):
S. 102. A bill to amend title XVIII of the Social Security Act to
improve medicare treatment and education for beneficiaries with
diabetes by providing coverage of diabetes outpatient self-management
training services and uniform coverage of blood-testing strips for
individuals with diabetes; to the Committee on Finance.
Mr. BREAUX. Mr. President, diabetes is the fourth leading cause of
death from diseases in the United States. Deaths accountable to
diabetes or resulting complications number about 250,000 per year.
Diabetes also results in about 12,000 new cases of blindness each year
and greatly increases an individual's chance of heart disease, kidney
failure, and stroke.
The terrible irony, Mr. President, is that diabetes is largely a
treatable condition. While there is no known cure, individuals who have
diabetes can lead completely normal, active lives so long as they stick
to a proper diet, carefully monitor the amount of sugar in their blood,
and take their medicine, which may or may not include insulin. In order
to take proper care of themselves, diabetics need to take self-
maintenance education programs--at least once when they are diagnosed
with the disease and then periodically after that to keep up with the
latest treatments and any changes in their own condition.
Appropriate preventive education services for diabetics have the
potential to save a great deal of money that would otherwise go for
hospitalizations and other acute care costs--not to mention a great
deal of unnecessary pain and suffering. CBO projects that this proposal
would save Medicare money in the long-run.
Medicare currently covers diabetes self-maintenance education
services in inpatient or hospital-based settings and in limited
outpatient settings, specifically hospital outpatient departments or
rural health clinics. Medicare does not cover education services if
they are given in any other outpatient setting, such as a doctor's
office. Even the limited coverage of outpatient settings that is
currently permitted under Medicare is subject to State-by-State
variation according to fiscal intermediaries' interpretation.
Medicare also covers the cost of the paper test strips that are used
to monitor the sugar levels in the blood--but only for diabetics who
require insulin to control their disease. All noninsulin dependent
diabetics must purchase these test strips at their own expense.
Today, I am introducing the Medicare Diabetes Education and Supplies
Amendments of 1997. This legislation would provide Medicare coverage
for outpatient education on a consistent equitable basis throughout the
country. The bill would extend Medicare coverage of outpatient programs
beyond hospital-based programs and rural health clinics and direct the
Secretary of Health and Human Services to do two things: First, to
develop and implement payment amounts for outpatient diabetes education
programs; and second, to adopt quality standards for outpatient
education programs. Only qualified programs would be eligible to
receive Medicare reimbursement. Furthermore, this legislation would
mandate test strip coverage for all diabetics.
This preventive measure is a sensible one that will show savings for
the Medicare Program in the long run. I encourage my colleagues to join
me in supporting its passage this Congress.
______
By Mr. MURKOWSKI (for himself, Mr. Craig, Mr. Grams, Mr.
Kempthorne, Mr. Abraham, Mr. Helms, Mr. Thurmond, Mr. Kyl, Mr.
Hollings, Mr. Mack, Mr. Faircloth, Mr. Hatch, Mr. Warner, Mr.
Bond, Mr. Smith, Mr. Roberts, Mr. Santorum, Mr. Lott, and Mr.
Jeffords):
S. 104. A bill to amend the Nuclear Waste Policy Act of 1982; to the
Committee on Energy and Natural Resources.
the nuclear waste policy act of 1997
Mr. MURKOWSKI. Mr. President, last summer, the U.S. Court of Appeals
issued a ruling that confirmed something that many of us already
understood: the Federal Government has an obligation to provide a safe,
centralized storage place for our Nation's spent nuclear fuel and
nuclear waste, beginning less than 1 year from today.
This is a commitment that Congress, and the Department of Energy,
made 15 years ago. We've collected $12 billion from America's
ratepayers for this purpose. But after spending 6 billion of those
dollars, the Federal Government is still not prepared to deliver on its
promise to take and safely dispose of our Nation's nuclear waste by
1998. Hardworking Americans have paid for this as part of their monthly
electric bill. But they haven't gotten results. So a lawsuit was filed,
and the court confirmed that there is a legal obligation, as well as a
moral one. We have reached a crossroads. The job of fixing this program
is ours. The time for fixing the program is now.
Today, high-level nuclear waste and highly radioactive used nuclear
fuel is accumulating at over 80 sites in 41 States, including waste
stored at DOE weapons facilities. It is stored in populated areas, near
our neighborhoods and schools, on the shores of our lakes and rivers,
in the backyard of constituents young and old all across this land.
Used nuclear fuel is being stored near the east and west coasts, where
most Americans live. It may be in your town. Near your neighborhood.
Unfortunately, used fuel is being stored in pools that were not
designed for long-term storage. Some of this fuel is already over 30
years old. Each year that goes by, our ability to continue storage of
this used fuel at each of these sites in a safe and responsible
[[Page S483]]
way diminishes. It is irresponsible to let this situation continue. It
is unsafe to let this dangerous radioactive material continue to
accumulate at more than 80 sites all across the country. It is unwise
to block the safe storage of this used fuel in a remote area, away from
high populations. This is a national problem that requires a
coordinated, national solution.
Today, on behalf of myself, Mr. Craig, Mr. Grams, Mr. Kempthorne, Mr.
Abraham, Mr. Helms, Mr. Thurmond, Mr. Kyl, Mr. Hollings, Mr. Mack, Mr.
Faircloth, Mr. Hatch, Mr. Warner, Mr. Bond, Mr. Robert Smith, Mr.
Roberts, Mr. Santorum, Mr. Lott, and Mr. Jeffords, I introduce the text
of S. 1936, from the 104th Congress, as the Nuclear Waste Policy Act of
1997. This legislation, which was passed by the Senate last summer by a
63-to-37 vote, sets forth a program that will allow the Department of
Energy to meet its obligation as soon as possible. The bill provides
for an integrated system to manage used fuel from commercial nuclear
powerplants and high-level radioactive waste from DOE's nuclear weapons
facilities. The integrated system includes construction and operation
of a temporary storage center, a safe transportation network to
transfer these byproducts, and continuing scientific studies at Yucca
Mountain, NV, to determine if it is a suitable repository site.
During floor consideration of S. 1936 last year, we received many
constructive suggestions for improving the bill. The final version of
S. 1936 passed by the Senate incorporated many of these changes. The
most important provisions of the bill include:
Role for EPA.--The bill provides that the Environmental Protection
Agency shall issue standards for the protection of the public from
releases of radioactive materials from a permanent nuclear waste
repository. The Nuclear Regulatory Commission is required to base its
licensing determination on whether the repository can be operated in
accordance with EPA's radiation protection standards.
National Environmental Policy Act [NEPA].--The bill complies fully
with NEPA by requiring two full environmental impact statements, one in
advance of operation of the temporary storage facility and one in
advance of repository licensing by the Nuclear Regulatory Commission.
The bill provides that where Congress has statutorily determined need,
location, and size of the facilities, these issues need not be
reconsidered.
Transportation routing.--The bill includes language of an amendment
offered by Senator Moseley-Braun, which provides that, in order to
ensure that spent nuclear fuel and high-level nuclear waste is
transported safely, the Secretary of Energy will use transportation
routes that minimize, to the maximum practicable extent, transportation
through populated and sensitive environmental areas. The language also
requires that the Secretary develop, in consultation with the Secretary
of Transportation, a comprehensive management plan that ensures the
safe transportation of these materials.
Transportation requirements.--The bill contains language clarifying
that transportation of spent fuel under the Nuclear Waste Policy Act
shall be governed by all requirements of Federal, State, and local
governments and Indian tribes to the same extent that any person
engaging in transportation in interstate commerce must comply with
those requirements, as provided by the Hazardous Materials
Transportation Act. The bill also requires the Secretary to provide
technical assistance and funds for training to unions with experience
with safety training for transportation workers. In addition, the bill
clarifies that existing employee protections in title 49 of the United
States Code concerning the refusal to work in hazardous conditions
apply to transportation under this act. Finally, S. 1936 provides
authority for the Secretary of Transportation to establish training
standards, as necessary, for workers engaged in the transportation of
spent fuel and high-level waste.
Interim storage facility.--In order to ensure that the size and scope
of the interim storage facility is manageable in the context of the
overall nuclear waste program, and yet adequate to address the Nation's
immediate spent fuel storage needs, the bill would limit the size of
phase I of the interim storage facility to 15,000 metric tons of spent
fuel and the size of phase II of the facility to 40,000 metric tons.
Phase II of the facility would be expandable to 60,000 metric tons if
the Secretary fails to meet his projected goals with regard to
licensing of the permanent repository site.
Preemption of other laws.--The bill provides that, if any law does
not conflict with the provisions of the Nuclear Waste Policy Act and
the Atomic Energy Act, that law will govern. State and local laws are
preempted only if those laws are inconsistent with or duplicative of
the Nuclear Waste Policy Act or the Atomic Energy Act. This language is
consistent with the preemption authority found in the existing
Hazardous Materials Transportation Act.
Finally, the bill contains bipartisan language that was drafted to
address the administration's objections to the siting of an interim
facility at the Nevada test site before the viability assessment of the
Yucca Mountain permanent repository site was available.--The language
provides that construction shall not begin on an interim storage
facility at Yucca Mountain before December 31, 1998. The bill provides
for the delivery of an assessment of the viability of the Yucca
Mountain site to the President and Congress by the Secretary 6 months
before the construction can begin on the interim facility. If, based
upon the information before him, the President determines, in his
discretion, that Yucca Mountain is not suitable for development as a
repository, then the Secretary shall cease work on both the interim and
permanent repository programs at the Yucca Mountain site. The bill
further provides that, if the President makes such a determination, he
shall have 18 months to designate an interim storage facility site. If
the President fails to designate a site, or if a site he has designated
has not be approved by Congress within 2 years of his determination,
the Secretary is instructed to construct an interim storage facility at
the Yucca Mountain site. This provision ensures that the construction
of an interim storage facility at the Yucca Mountain site will not
occur before the President and Congress have had an ample opportunity
to review the technical assessment of the suitability of the Yucca
Mountain site for a permanent repository and to designate an
alternative site for interim storage based upon that technical
information. However, this provision also ensures that, ultimately, an
interim storage facility site will be chosen. Without this assurance,
we leave open the possibility we will find in 1998 that we have no
interim storage, no permanent repository program and, after more than
15 years and $6 billion spent, that we are back to where we started in
1982 when we passed the first version of the Nuclear Waste Policy Act.
During the debate that will unfold, we will have the Senators from
Nevada oppose the bill with all the arguments that they can muster.
That's understandable. They are merely doing what Nevadans have asked
them to do. Nobody wants nuclear waste in their State, but it has to go
somewhere. Both Senators from Nevada are friends of mine. We've talked
about this issue at length. They are doing what they feel they must do
to satisfy Nevadans. But as U.S. Senators, we must sometimes take a
national perspective. We must do what's best for the country as a
whole.
No one can continue to pretend that there is an unlimited amount of
time to deal with this problem. The Federal Government must act--and
act now--to ensure that there is a safe and secure place to put
radioactive waste it is obligated to accept. Although the court did not
address the issue of remedies, the court was very clear that DOE has an
obligation to take spent nuclear fuel in 1998, whether or not a
repository is ready.
So far, DOE's only response to the court's decision has been to send
out a letter asking for suggestions on how it can meet its obligation
to take spent fuel in 1998. Finally, it is clear that we all agree on
the question. Now is the time for answers.
We have a clear and simple choice. We can choose to have one remote,
safe, and secure nuclear waste storage facility. Or through inaction
and delay, we can face an uncertain judicial remedy which will almost
certainly be
[[Page S484]]
costly, and which is unlikely to actually move waste out of America's
backyards.
It is not morally right to shirk our responsibility to protect the
environment and the future of our children and grandchildren. We cannot
wait until 1998 to decide whether the Department of Energy will store
this nuclear waste. We have received letters from 23 State Governors
and attorneys general, including Arizona, Arkansas, Delaware, Florida,
Georgia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, New Mexico, North Carolina, Ohio, Oregon,
Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and
Wisconsin, urging the Congress to pass, and the President to sign, a
bill that provides for an interim storage site in Nevada. Congress must
speak now and provide the means to build one, safe and monitored
facility at the Nevada test site, a unique site so remote that the
Government used it to explode nuclear weapons for 50 years, or another
site designated by the President and Congress.
The time is now--the Nuclear Waste Policy Act of 1997 is the answer.
Mr. CRAIG. Mr. President, today we begin a new Congress and an urgent
environmental problem remains unresolved. Today I am reintroducing
legislation to address the problem that continues to vex us--that is,
how to address our Nation's high-level nuclear waste disposal. The
Nuclear Waste Policy Act of 1997 that is introduced today answers this
problem and is responsible, fair, environmentally friendly, and
supported by Members of both parties.
Today, high-level nuclear waste and highly radioactive used nuclear
fuel continues to accumulate at more than 80 sites in 41 States. Each
year, as more and more fuel accumulates and our ability to continue to
store this used fuel at each of these sites in a safe and responsible
way diminishes. The only responsible choice is to support legislation
that solves this problem by safely moving this used fuel to a safe,
monitored facility in the remote Nevada desert. This answer will lead
us to a safer future for all Americans.
To facilitate our consideration of such legislation, Senator
Murkowski and I along with 16 other cosponsors are introducing a bill
to amend the Nuclear Waste Policy Act of 1982. This legislation is
identical to S. 1936 that passed the Senate toward the end of the past
Congress. Unfortunately, that legislation was not acted upon by the
other body nor signed into law. It is my intent to assure that is not
the fate of this legislation. The Senate Energy and Natural Resources
Committee will hold a hearing on this bill on February 5 and will move
to a speedy markup. I encourage the Senate and House to act quickly and
to send it to the President for his signature.
This bill contains all of the important clarifications and changes
addressing the concerns that were raised prior to and during floor
debate in the 104th Congress. This is legislation that will allow a
solution for nuclear waste disposal. Let us move forward to enact it
into law. I encourage the administration to work with us to make that a
reality.
This bill provides a clear and simple choice. We can choose to have
one, remote, safe, and secure nuclear waste storage facility. Or,
through inaction and delay, we can perpetuate the status quo and have
80 such sites spread across the Nation. The courts have made clear the
Department of Energy must act to dispose of this material in 1998. It
is irresponsible to shirk our responsibility to protect the environment
and the future for our children and grandchildren. This Nation needs to
confront its nuclear waste problem now. I urge my colleagues to support
the Nuclear Waste Policy Act of 1997.
Mr. KEMPTHORNE. Mr. President, I rise in support of the Nuclear Waste
Policy Act of 1997 introduced today by my good friends Senator Craig
and Senator Murkowski, the chairman of the Senate Energy and Natural
Resource Committee. This important bill will make substantial,
necessary and meaningful progress in our Nation's effort to deal with
the problem of radioactive nuclear waste. The bill is similar to the
Nuclear Waste Policy Act of 1996 which passed the Senate by a 2-to-1
ratio last year.
The Nuclear Waste Policy Act of 1997, which I am proud to cosponsor,
will establish an interim storage facility for spent nuclear fuel and
high-level radioactive waste at the Nevada test site. The interim
storage site will address our near-term problem of safely storing spent
nuclear fuel and high-level waste while the characterization,
permitting and construction of the permanent repository at Yucca
Mountain proceeds.
My State of Idaho currently stores a wide variety of Department of
Energy, Navy and commercial reactor spent nuclear fuel at the Idaho
National Engineering Laboratory. This spent nuclear fuel is stored in
temporary facilities that are reaching the end of their design life.
This phenomenon is happening across the country as temporary storage
facilities are used beyond their design life because our Nation has not
developed a comprehensive policy of dealing with nuclear waste. Instead
of dealing with this difficult issue, for far too long our Government,
under Democratic and Republican leadership, has kicked the hard
decisions down the road. The Craig-Murkowski bill will tackle this
difficult problem and it deserves the support of the Congress and the
administration.
The Nuclear Waste Policy Act of 1997 directs the Environmental
Protection Agency's role to determine the appropriate radiation
protection standards for the interim storage facility. The language
directing establishment of an interim storage facility complies with
the National Environmental Protection Act which requires preparation of
an environmental impact statement before operation of the interim
storage facility can begin. The Craig-Murkowski bill also directs that
all shipments to the interim storage facility must comply with existing
transportation laws and standards.
The Nuclear Waste Policy Act offers justice to the rate payers and
electric utilities who have paid into the nuclear waste fund and gotten
little if any benefit from those fees. After collecting billions in
fees, the Craig-Murkowski bill will force the Federal Government to
provide the storage facility promised to those currently storing spent
nuclear fuel.
Mr. President, this is a very good bill which solves a vexing nation
problem. The Craig-Murkowski bill will make important progress in the
way the United States stores radioactive nuclear waste. The bill will
show the citizens of this country that this Congress will solve tough
problems in a fair and rational manner.
I urge my colleagues to support the Nuclear Waste Policy Act of 1997
and I want to thank Senators Craig and Murkowski for their tenacious
determination to solve this national problem.
Mr. ABRAHAM. Mr. President, today I join several of my colleagues in
cosponsoring the Nuclear Waste Policy Act of 1997. This bill, a replica
of the legislation that was passed by the Senate during the 104th
Congress, is vital to securing this Nation's commercial waste at a
single, safe facility.
I believe an agreement for the consolidation of this Nation's
commercial nuclear waste is long overdue. Today, old fuel is stored at
over 100 facilities around the country. In 1980, the Department of
Energy [DOE] recognized the danger of such a system and entered into an
agreement with much of the nuclear power industry to fund the research
and development of a central, permanent facility. DOE was to be
responsible for collecting and storing the fuel starting in 1988. Since
1980, the DOE has collected over $11 billion of the taxpayers' dollars
for this permanent facility. Last year, however, the DOE announced that
it will not be able to begin storing waste from commercial reactors
until at least the year 2010.
In my opinion, Michigan cannot wait that long. Michigan has four
nuclear plants in operation today. All four were designed with some
storage capacity, but none are capable of storing used fuel for an
extended period of time. Indeed, the Palisades plant in Southaven, MI,
has already run out of used fuel storage space. The plant now stores
its nuclear waste in steel casks which sit on a platform about 100
yards from Lake Michigan. This storage arrangement illustrates the need
for a new national storage policy.
Mr. President, Michigan needs a national storage facility for nuclear
waste. I am pleased to be a cosponsor
[[Page S485]]
of the Nuclear Waste Policy Act and hope that both the House and Senate
will move quickly to pass this legislation and present it to the
President.
______
By Mr. MOYNIHAN:
S. 105. A bill to repeal the habeas corpus requirement that a Federal
court defer to State court judgments and uphold a conviction regardless
of whether the Federal court believes that the State court erroneously
interpreted Constitutional law, except in cases where the Federal court
believes the State court acted in an unreasonable manner; to the
Committee on the Judiciary.
habeas corpus legislation
Mr. MOYNIHAN. Mr. President, I introduce this bill to repeal an
unprecedented provision--unprecedented until the 104th Congress--to
tamper with the constitutional protection of habeas corpus.
The provision reads:
(d) An application for writ of habeas corpus on behalf of a
person in custody pursuant to the judgment of State court
shall not be granted with respect to any claim that was
adjudicated on the merits in State court proceedings unless
the adjudication of the claim--
(1) resulted in a decision that was contrary to, or
involved an unreasonable application of, clearly established
Federal law, as determined by the Supreme Court of the United
States; or
(2) resulted in a decision that was based on an
unreasonable determination of the facts in light of the
evidence presented in the State court proceeding.
Last year we enacted a statute which holds that constitutional
protections do not exist unless they have been unreasonably violated,
an idea that would have confounded the framers. Thus, we introduced a
virus that will surely spread throughout our system of laws.
Article I, section 9, clause 2 of the Constitution stipulates, ``The
Privilege of the Writ of Habeas Corpus shall not be suspended, unless
when in Cases of Rebellion or Invasion the public Safety may require
it.''
We are mightily and properly concerned about the public safety, which
is why we enacted the counterterrorism bill. But we have not been
invaded, Mr. President, and the only rebellion at hand appears to be
against the Constitution itself. We are dealing here, sir, with a
fundamental provision of law, one of those essential civil liberties
which precede and are the basis of political liberties.
The writ of habeas corpus is often referred to as the ``Great Writ of
Liberty.'' William Blackstone (1723-80) called it ``the most celebrated
writ in English law, and the great and efficacious writ in all manner
of illegal imprisonment.''
* * * * *
I repeat what I have said previously here on the Senate floor: If I
had to choose between living in a country with habeas corpus but
without free elections, or a country with free elections but without
habeas corpus, I would choose habeas corpus every time. To say again,
this is one of the fundamental civil liberties on which every
democratic society of the world has built political liberties that have
come subsequently.
I make the point that the abuse of habeas corpus--appeals of capital
sentences--is hugely overstated. A 1995 study by the Department of
Justice's Bureau of Justice Statistics determined that habeas corpus
appeals by death row inmates constitute 1 percent of all Federal habeas
filings. Total habeas filings make up 4 percent of the caseload of
Federal district courts. And most Federal habeas petitions are disposed
of in less than 1 year. The serious delays occur in State courts, which
take an average of 5 years to dispose of habeas petitions. If there is
delay, the delay is with the State courts.
It is troubling that Congress has undertaken to tamper with the Great
Writ in a bill designed to respond to the tragic circumstances of the
Oklahoma City bombing last year. Habeas corpus has little to do with
terrorism. The Oklahoma City bombing was a Federal crime and will be
tried in Federal courts.
Nothing in our present circumstance requires the suspension of habeas
corpus, which was the practical effect of the provision in that bill.
To require a Federal court to defer to a State court's judgment unless
the State court's decision is ``unreasonably wrong'' effectively
precludes Federal review. I find this disorienting.
Anthony Lewis has written of the habeas provision in that bill: ``It
is a new and remarkable concept in law: that mere wrongness in a
constitutional decision is not to be noticed.'' We have agreed to this;
to what will we be agreeing next? I restate Mr. Lewis' observation, a
person of great experience, long a student of the courts, ``It is a new
and remarkable concept in law: that mere wrongness in a constitutional
decision is not to be noticed.'' Backward reels the mind.
On December 8, 1995, four former U.S. Attorneys General, two
Republicans and two Democrats, all persons with whom I have the honor
to be acquainted, Benjamin R. Civiletti, Jr., Edward H. Levi, Nicholas
Katzenbach, and Elliot Richardson--I served in administrations with Mr.
Levi, Mr. Katzenbach, Mr. Richardson; I have the deepest regard for
them--wrote President Clinton. I ask unanimous consent that the full
text be printed in the Record as follows:
December 8, 1995.
Hon. William J. Clinton,
The White House,
Washington, DC.
Dear Mr. President: The habeas corpus provisions in the
Senate terrorism bill, which the House will soon take up, are
unconstitutional. Though intended in large part to expedite
the death penalty review process, the litigation and
constitutional rulings will in fact delay and frustrate the
imposition of the death penalty. We strongly urge you to
communicate to the Congress your resolve, and your duty under
the constitution, to prevent the enactment of such
unconstitutional legislation and the consequent disruption of
so critical of part of our criminal punishment system.
The constitutional infirmities reside in three provisions
of the legislation: one requiring federal courts to defer to
erroneous state court rulings on federal constitutional
matters, one imposing time limits which could operate to
completely bar any federal habeas corpus review at all, and
one prevent the federal courts from hearing the evidence
necessary to decide a federal courts from hearing the
evidence necessary to decide a federal constitutional
question. They violate the Habeas Corpus Suspension Clause,
the judicial powers of Article III, and due process. None of
these provisions appeared in the bill that you and Senator
Biden worked out in the last Congress together with
representatives of prosecutors' organizations.
The deference requirement would bar any federal court from
granting habeas corpus relief where a state court has
misapplied the United States Constitution, unless the
constitutional error rose to a level of ``unreasonableness.''
The time-limits provisions set a single period of the filing
of both state and federal post-conviction petitions (six
months in a capital case and one year in other cases),
commencing with the date a state conviction become final on
direct review. Under these provisions, the entire period
could be consumed in the state process, through no fault of
the prisoner or counsel, thus creating an absolute bar to the
filing of federal habeas corpus petition. Indeed, the period
could be consumed before counsel had even been appointed in
the state process, so that the inmate would have no notice of
the time limit or the fatal consequences of consuming all of
it before filing a state petition.
Both of these provisions, by flatly barring federal habeas
corpus review under certain circumstances, violate the
Constitution's Suspension Clause, which provides: ``The
privilege of the Writ of Habeas Corpus shall not be
suspended, unless when in the case of rebellion or
invasion the public safety may require it'' (Art. I, Sec.
9, cl. 1). Any doubt as to whether this guarantee applies
to persons held in state as well as federal custody was
removed by the passage of the Fourteenth Amendment and by
the amendment's framers' frequent mention of habeas corpus
as one of the privileges and immunities so protected.
The preclusion of access to habeas corpus also violates Due
Process. A measure is subject to proscription under the due
process clause if it ``offends some principle of justice so
rooted in the traditions and conscience of our people as to
be ranked as fundamental,'' as viewed by ``historical
practice.'' Medina v. California, 112 S.Ct. 2572, 2577
(1992). Independent federal court review of the
constitutionality of state criminal judgments has existed
since the founding of the Nation, first by writ of error, and
since 1867 by writ of habeas corpus. Nothing else is more
deeply rooted in America's legal traditions and conscience.
There is no case in which ``a state court's incorrect legal
determination has ever been allowed to stand because it was
reasonable,'' Justice O'Connor found in Wright v. West, 112
S.Ct. 2482, 2497; ``We have always held that federal courts,
even on habeas, have an independent obligation to say what
the law is.'' Indeed, Alexander Hamilton argued, in The
Federalist No. 84, that the existence of just two
protections--habeas corpus and the prohibition against ex
post facto laws--obviated the need to add a Bill of Rights to
the Constitution.
The deference requirement may also violate the powers
granted to the judiciary
[[Page S486]]
under Article III. By stripping the federal courts of
authority to exercise independent judgment and forcing them
to defer to previous judgments made by state courts, the
provision runs afoul of the oldest constitutional mission of
the federal courts: ``the duty . . . to say what the law
is.'' Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).
Although Congress is free to alter the federal courts'
jurisdiction, it cannot order them how to interpret the
Constitution, or dictate any outcome on the merits. United
States v. Klein, 80 U.S. (13 Wall.) 128 (1871). In 1996, the
Supreme Court reiterated that Congress has no power to assign
``rubber stamp work'' to an Article III court. ``Congress may
be free to establish a . . . scheme that operates without
court participation,'' the Court said, ``but that is a matter
quite different from instructing a court automatically to
enter a judgment pursuant to a decision the court has not
authority to evaluate.'' Gutierrez de Martinez v. Lamagno,
115 S. Ct 2227, 2234.
Finally, in prohibiting evidentiary hearings where the
constitutional issue raised does not go to guilt or
innocence, the legislation again violates Due Process. A
violation of constitutional rights cannot be judged in a
vacuum. The determination of the facts assumes ``and
importance fully as great as the validity of the substantive
rule of law to be applied.'' Wingo v. Wedding, 418 U.S. 461,
474 (1974).
Prior to 1996, the last time habeas corpus legislation was
debated at length in constitutional terms was in 1968. A bill
substantially eliminating federal habeas corpus review for
state prisoners was defeated because, as Republican Senator
Hugh Scott put it at the end of debate, ``if Congress tampers
with the great writ, its action would have about as much
chance of being held constitutional as the celebrated
celluloid dog chasing the asbestos cat through hell.''
In more recent years, the habeas reform debate has been
viewed as a mere adjunct of the debate over the death
penalty. But when the Senate took up the terrorism bill this
year, Senator Moynihan sought to reconnect with the large
framework of constitutional liberties: ``If I had to live in
a country which had habeas corpus but not free elections,''
he said, ``I would take habeas corpus every time.'' Senator
Chafee noted that his uncle, a Harvard law scholar, has
called habeas corpus ``the most important human rights
provision in the Constitution.'' With the debate back on
constitutional grounds, Senator Biden's amendment to delete
the deference requirement nearly passed, with 46 votes.
We respectfully ask that you insist, first and foremost, on
the preservation of independent federal review, i.e., on the
rejection of any requirement that federal courts defer to
state court judgments on federal constitutional questions. We
also urge that separate time limits be set for filing federal
and state habeas corpus petitions--a modest change which need
not interfere with the setting of strict time limits--and
that they begin to run only upon the appointment of competent
counsel. And we urge that evidentiary hearings be permitted
wherever the factual record is deficient on an important
constitutional issue. Congress can either fix the
constitutional flaws now, or wait through several years of
litigation and confusion before being sent back to the
drawing board. Ultimately, it is the public's interest in the
prompt and fair disposition of criminal cases which
will suffer. The passage of an unconstitutional bill helps
no one.
We respectfully urge you, as both President and a former
professor of constitutional law, to call upon Congress to
remedy these flaws before sending the terrorism bill to your
desk. We request an opportunity to meet with you personally
to discuss this matter so vital to the future of the Republic
and the liberties we all hold dear.
Sincerely,
Benjamin R. Civiletti, Jr.,
Baltimore, MD.
Edward H. Levi,
Chicago, IL.
Nicholas deB. Katzenbach,
Princeton, NJ.
Elliot L. Richardson,
Washington, DC.
Let me read excerpts from the letter:
``The habeas corpus provisions in the Senate bill . . . are
unconstitutional. Though intended in large part to expedite
the death penalty review process, the litigation and
constitutional rulings will in fact delay and frustrate the
imposition of the death penalty . . .
The constitutional infirmities . . . violate the Habeas
Corpus Suspension Clause, the judicial powers of Article III,
and due process . . .
. . . A measure is subject to proscription under the due
process clause if it ``offends some principle of justice so
rooted in the traditions and conscience of our people as to
be ranked as fundamental,'' as viewed by ``historical
practice.''
That language is Medina versus California, a 1992 decision. To
continue,
Independent federal court review of the constitutionality
of state criminal judgments has existed since the founding of
the Nation, first by writ of error, and since 1867 by writ of
habeas corpus.
Nothing else is more deeply rooted in America's legal
traditions and conscience. There is no clause in which ``a
state court's incorrect legal determination has ever been
allowed to stand because it was reasonable.''
That is Justice O'Connor, in Wright versus West. She goes on, as the
attorneys general quote. ``We have always held that federal courts,
even on habeas, have an independent obligation to say what the law
is.''
If I may interpolate, she is repeating the famous injunction of
Justice Marshall in Marbury versus Madison.
The attorneys general go on to say,
Indeed, Alexander Hamilton argued, in The Federalist No.
84, that the existence of just two protections--habeas corpus
and the prohibition against ex post facto laws--obviated the
need to add a Bill of Rights to the Constitution.
The letter from the Attorneys General continues, but that is the gist
of it. I might point out that there was, originally, an objection to
ratification of the Constitution, with those objecting arguing that
there had to be a Bill of Rights added. Madison wisely added one during
the first session of the first Congress. But he and Hamilton and Jay,
as authors of The ``Federalist Papers,'' argued that with habeas corpus
and the prohibition against ex post facto laws in the Constitution,
there would be no need even for a Bill of Rights. We are glad that, in
the end, we do have one. But their case was surely strong, and it was
so felt by the framers.
To cite Justice O'Connor again: ``A state court's incorrect legal
determination has never been allowed to stand because it was
reasonable.''
Justice O'Connor went on: ``We have always held that Federal courts,
even on habeas, have an independent obligation to say what the law
is.''
Mr. President, we can fix this now. Or, as the Attorneys General
state, we can ``wait through several years of litigation and confusion
before being sent back to the drawing board.'' I fear that we will not
fix it now.
We Americans think of ourselves as a new nation. We are not. Of the
countries that existed in 1914, there are only eight which have not had
their form of government changed by violence since then. Only the
United Kingdom goes back to 1787 when the delegates who drafted our
Constitution established this Nation, which continues to exist. In
those other nations, sir, a compelling struggle took place, from the
middle of the 18th century until the middle of the 19th century, and
beyond into the 20th, and even to the end of the 20th in some
countries, to establish those basic civil liberties which are the
foundation of political liberties and, of those, none is so precious as
habeas corpus, the ``Great Writ.''
Here we are trivializing this treasure, putting in jeopardy a
tradition of protection of individual rights by Federal courts that
goes back to our earliest foundation. And the virus will spread. Why
are we in such a rush to amend our Constitution? Why do we tamper with
provisions as profound to our traditions and liberty as habeas corpus?
The Federal courts do not complain. It may be that because we have
enacted this, there will be some prisoners who are executed sooner than
they otherwise would have been. You may take satisfaction in that or
not, as you choose, but we have begun to weaken a tenet of justice at
the very base of our liberties. The virus will spread.
This is new. It is profoundly disturbing. It is terribly dangerous.
If I may have the presumption to join in the judgment of four Attorneys
Generals, Mr. Civiletti, Mr. Levi, Mr. Katzenbach, and Mr. Richardson--
and I repeat that I have served in administrations with three of them--
this matter is unconstitutional and should be repealed from law.
Fifteen years ago, June 6, 1982, to be precise, I gave the
commencement address at St. John University Law School in Brooklyn. I
spoke of the proliferation of court-curbing bills at that time. I
remarked:
* * * some people--indeed, a great many people--have
decided that they do not agree with the Supreme Court and
that they are not satisfied to Debate, Legislate, Litigate.
They have embarked upon an altogether new and I believe
quite dangerous course of action. A new triumvirate hierarchy
has emerged. Convene (meaning the calling of a constitutional
convention), Overrule (the passage of legislation designed to
overrule a particular Court ruling, when the Court's ruling
was based on an interpretation of the Constitution), and
Restrict (to restrict the jurisdiction of certain courts to
decide particular kinds of cases).
Perhaps the most pernicious of these is the attempt to
restrict courts' jurisdictions, for it is * * * profoundly at
odds with our Nation's customs and political philosophy.
[[Page S487]]
It is a commonplace that our democracy is characterized by
majority rule and minority rights. Our Constitution vests
majority rule in the Congress and the President while the
courts protect the rights of the minority.
While the legislature makes the laws, and the executive
enforces them, it is the courts that tell us what the laws
say and whether they conform to the Constitution.
This notion of judicial review has been part of our
heritage for nearly two hundred years. There is not a more
famous case in American jurisprudence than Marbury v. Madison
and few more famous dicta than Chief Justice Marshall's that
``It is emphatically the province and the duty of the
judicial department to say what the law is.''
But in order for the court to interpret the law, it must
decide cases. If it cannot hear certain cases, then it cannot
protect certain rights.
We need to deal resolutely with terrorism. And we have. But the guise
of combating terrorism, we have diminished the fundamental civil
liberties that Americans have enjoyed for two centuries; therefore the
terrorists will have won.
My bill will repeal this dreadful, unconstitutional provision now in
public law. I ask unanimous consent that the article entitled ``First
in Damage to Constitutional Liberties,'' by Nat Hentoff from the
Washington Post of November 16, 1996; and the article entitled
``Clinton's Sorriest Record'' from the New York Times of October 14,
1996; be printed in the Record at the conclusion of my remarks.
There being no objection, the articles were ordered to be printed in
the Record, as follows:
[From the Washington Post, Nov. 16, 1996]
First in Damage to Constitutional Liberties
(By Nat Hentoff)
There have been American presidents to whom the
Constitution has been a nuisance to be overruled by an means
necessary. In 1798, only seven years after the Bill of Rights
was ratified, John Adams triumphantly led Congress in the
passage of the Alien and Sedition Acts, which imprisoned a
number of journalists and others for bringing the president
or Congress into ``contempt or disrepute.'' So much for the
First Amendment.
During the Civil War, Abraham Lincoln actually suspended
the writ of habeas corpus. Alleged constitutional guarantees
of peaceful dissent were swept away during the First World
War--with the approval of Woodrow Wilson. For example, there
were more than 1,900 prosecutions for anti-war books,
newspaper articles, pamphlets and speeches. And Richard Nixon
seemed to regard the Bill of Rights as primarily a devilish
source of aid to his enemy.
No American president, however, has done so much damage to
constitutional liberties as Bill Clinton--often with the
consent of Republicans in Congress. But it has been Clinton
who had the power and the will to seriously weaken our
binding document in ways that were almost entirely ignored by
the electorate and the press during the campaign.
Unlike Lincoln, for example, Clinton did a lot more than
temporarily suspend habeas corpus. One of his bills that has
been enacted into law guts the rights that Thomas Jefferson
insisted be included in the Constitution. A state prisoner on
death row now has only a year to petition a federal court to
review the constitutionality of his trial or sentence. In
many previous cases of prisoners eventually freed after years
of waiting to be executed, proof of their innocence has been
discovered long after the present one year limit.
Moreover, the Clinton administration is--as the ACLU's
Laura Murphy recently told the National Law Journal--``the
most wire-tap-friendly administration in history.''
And Clinton ordered the Justice Department to appeal a
unanimous 3rd circuit Court of Appeals decision declaring
unconstitutional the Communications Decency Act censoring the
Internet, which he signed into law.
There is a chilling insouciance in Clinton's elbowing the
Constitution out of the way. He blithely, for instance, has
stripped the courts of their power to hear certain kinds of
cases. As Anthony Lewis points out in the New York Times,
Clinton has denied many people their day in court.
For one example, says Lewis. ``The new immigration law * *
* takes away the rights of thousands of aliens who may be
entitled to legalize their situation under a 1986 statute
giving amnesty to illegal aliens.'' Cases involving as many
as 300,000 people who may still qualify for amnesty have been
waiting to be decided. All have now been thrown out of court
by the new immigration law.
There have been other Clinton revisions of the
Constitution, but in sum--as David Boaz of the Cato Institute
has accurately put it--Clinton has shown ``a breathtaking
view of the power of the Federal government, a view directly
opposite the meaning of `civil libertarian.' ''
During the campaign there was no mention at all of this
breathtaking exercise of federal power over constitutional
liberties. None by former senator Bob Dole who has largely
been in agreement with this big government approach to
constitutional ``guarantees.'' Nor did the press ask the
candidates about the Constitution.
Laura Murphy concludes that ``both Clinton and Dole are
indicative of how far the American people have slipped away
from the notions embodied in the Bill of Rights.'' She
omitted the role of the press, which seems focused primarily
on that part of the First Amendment that protects the press.
Particularly revealing were the endorsements of Clinton by
the New York Times, The Washington Post and the New Republic,
among others. In none of them was the president's civil
liberties record probed. (The Post did mention the FBI files
at the White House.) Other ethical problems were cited, but
nothing was mentioned about habeas corpus, court-stripping,
lowering the content of the Internet to material suitable for
children and the Clinton administration's decided lack of
concern for privacy protections of the individual against
increasingly advanced government technology.
A revealing footnote to the electorate's ignorance of this
subverting of the Constitution is a statement by N. Don
Wycliff, editorial page editor of the Chicago Tribune. He
tells Newsweek that ``people are not engaged in the
[political] process because there are no compelling issues
driving them to participate. It would be different if we
didn't have peace and prosperity.''
What more could we possibly want?
____
[From the New York Times, Oct. 14, 1996]
Abroad at Home; Clinton's Sorriest Record
(By Anthony Lewis)
Bill Clinton has not been called to account in this
campaign for the worst aspect of his Presidency. That is his
appalling record on constitutional rights.
The Clinton years have seen, among other things, a series
of measures stripping the courts of their power to protect
individuals from official abuse--the power that has been the
key to American freedom. There has been nothing like it since
the Radical Republicans, after the Civil War, acted to keep
the courts from holding the occupation of the South to
constitutional standards.
The Republican Congress of the last two years initiated
some of the attacks on the courts. But President Clinton did
not resist them as other Presidents have. And he proposed
some of the measures trampling on constitutional protections.
Much of the worst has happened this year. President Clinton
sponsored a counterterrorism bill that became law with a
number of repressive features in it. One had nothing to do
with terrorism: a provision gutting the power of Federal
courts to examine state criminal convictions, on writs of
habeas corpus, to make sure there was no violation of
constitutional rights.
The Senate might well have moderated the habeas corpus
provision if the President had put up a fight. But he broke a
promise and gave way.
The counterterrorism law also allows the Government to
deport a legally admitted alien, on the ground that he is
suspected of a connection to terrorism, without letting him
see or challenge the evidence. And it goes back to the
McCarthy period by letting the Government designate
organizations as ``terrorist''--a designation that could have
included Nelson Mandela's African National Congress before
apartheid gave way to democracy in South Africa.
The immigration bill just passed by Congress has many
sections prohibiting review by the courts of decisions by the
Immigration and Naturalization Service or the Attorney
General. Some of those provisions have drastic retroactive
consequences.
For example, Congress in 1986 passed an amnesty bill that
allowed many undocumented aliens to legalize their presence
in this country. They had to file by a certain date, but a
large number said they failed to do so because improper
I.N.S. regulations discouraged them.
The Supreme Court held that those who could show they were
entitled to amnesty but were put off by the I.N.S. rules
could file late. Lawsuits involving thousands of people are
pending. But the new immigration law throws all those cases--
and individuals--out of court.
Another case, in the courts for years, stems from an
attempt to deport a group of Palestinians. Their lawyer sued
to block the deportation action; a Federal district judge,
Stephen V. Wilson, a Reagan appointee, found that it was an
unlawful selective proceeding against people for exercising
their constitutional right of free speech. The new
immigration law says the courts may not hear such cases.
The immigration law protects the I.N.S. from judicial
scrutiny in a broader way. Over the years the courts have
barred the service from deliberately discriminatory policies,
for example the practice of disallowing virtually all asylum
claims by people fleeing persecution in certain countries.
The law bars all lawsuits of that kind.
Those are just a few examples of recent incursions on due
process of law and other constitutional guarantees. A
compelling piece by John Heilemann in this month's issue of
Wired, the magazine on the social consequences of the
computer revolution, concludes that Mr. Clinton's record on
individual rights is ``breathtaking in its awfulness.'' He
may be, Mr. Heilemann says, ``the worst civil liberties
President since Richard Nixon.'' And even President Nixon did
not leave a legacy of court-stripping statutes.
[[Page S488]]
It is by no means clear that Bob Dole would do better. He
supported some of the worst legislation in the Senate, as the
Gingrich Republicans did in the House.
Why? The Soviet threat, which used to be the excuse for
shoving the Constitution aside, is gone. Even in the worst
days of the Red Scare we did not strip the courts of their
protective power. Why are we legislating in panic now? Why,
especially, is a lawyer President indifferent to
constitutional rights and their protection by the courts?
______
By Mrs. BOXER.
S. 106. A bill to require that employees who participate in cash or
deferred arrangements are free to determine whether to be invested in
employer real property and employer securities, and if not, to protect
such employees by applying the same prohibited transaction rules that
apply to traditional defined benefit pension plans, and for other
purposes; to the Committee on Finance.
S. 107. A bill to require the offer in every defined benefit plan of
a joint and \2/3\ survivor benefit annuity option and to require
comparative disclosure of all benefit options to both spouses; to the
Committee on Finance.
S. 108. A bill to require annual, detailed investment reports by
plans with qualified cash or deferred arrangements, and for other
purposes; to the Committee on Labor and Human Resources.
legislation to protect american pension funds
Mrs. BOXER. Mr. President, today I am introducing three bills
designed to protect Americans' pension funds.
i. the 401(k) pension plan protection act
The first bill, the ``401(k) Pension Plan Protection Act of 1997'',
would give employees who participate in a 401(k) plan the assurance
that their employer cannot force them to invest their employee
contributions in the company.
The 401(k) Pension Protection Act will increase employees' investment
freedom and protect employees against low yielding and undiversified
401(k) investments in their employer. It allows employees to protect
themselves against loss of jobs and pensions if their employer becomes
bankrupt.
Unfortunately, such losses have already occurred. A year ago, Color
Tile, -Inc., a nationwide retailer of floor and counter coverings,
filed bankruptcy. Color Tile had one pension plan, a 401(k) plan. The
401(k) allowed employees no choice of investments. All investment
decisions were made by Color Tile.
At the time of bankruptcy, 83 percent of the 401(k)'s investments
were in 44 Color Tile stores. Many of those stores were closed in the
bankruptcy. Those investments--and the employees retirement savings--
are now at risk of a large, possibly total loss.
In 1991, in my own State, another bankruptcy resulted in a
substantial loss to a 401(k) plan enrolling 10,000 employees. Carter
Hawley Hales stores went bankrupt with more than 50 percent of its
assets invested in Carter Hawley Hale stock. As a result of the
bankruptcy, the stock lost 92 percent of its value. Many employees lost
a pension and a job simultaneously.
The 401(k) Pension Protection Act is designed to prevent situations
such as Color Tile and Carter Hawley Hale from reoccurring. The act
would prevent a company from requiring that more than 10 percent of
employee contributions to a 401(k) plan, contributions known as salary
deferrals, be invested in the employer stock or employer real estate.
The act exempts a certain type of 401(k) plan from the 10 percent
limit--where employees are free to direct how their contributions are
invested and to move their investments in the 401(k) with reasonable
frequency. In such situations, the 10 percent limitation does not apply
and employees are free to assume the risk of undiversified investment
in their employer.
The 401(k) Pension Protection Act would protect 23 million employees
in 401(k) plans investing more than 675 million dollars in assets.
All 401(k) members need the 401(k) Pension Protection Act. Unlike
traditional pension plans, companies sponsoring 401(k)s do not
guarantee that investments will provide the promised pension. Instead,
401(k) participants bear all risk of undiversified investment in the
employer.
Participants in 401(k)s also need the protections of the act
because--unlike traditional pension plans--401(k)s are not insured
against bankruptcy of the plan sponsor by the Pension Benefit Guaranty
Corp., or PBGC.
ii. the pension benefits fairness act of 1997
The second bill that I offer today is the Pension Benefits Fairness
Act of 1997. The act would require that traditional pension plans offer
equal survivor retirement benefits to both spouses.
Current Federal law requires an unequal survivors retirement benefit
option. Unless they voluntarily offer a better benefit, traditional
pension plans are required to offer a benefit option that pays one
spouse double the amount paid to other spouse, when one spouse dies.
Many plans do not voluntarily offer an equal benefit.
Current law also requires that only one spouse be given a description
of the retirement benefit option or options offered by the plan. This
leaves one spouse in a marriage uninformed of a decision that affects
their income for the rest of their life. It is doubly important that
they understand the decision to accept a particular benefit because
they can never change their decision.
Under current law, the spouse who gets the required description is
also the spouse who gets a survivor benefit that is twice as large.
The preferred spouse is the spouse who participated in the retirement
plan. This means that the unequal treatment disproportionately impacts
women because women's jobs are less often covered by a pension plan.
Women need better pension survivor benefits because three out of four
marriages they outlive their husbands
The Pension Benefits Fairness Act would correct this problem by
requiring that pension plans treat spouses equally with regard to
benefits and disclosure of benefit options.
The act imposes no additional pension costs on plans, employers, or
participants. The act would increase the benefits paid to the many
surviving spouses while resulting in no material reduction in the
pension paid to a typical couple.
iii. the small 401(k) pension plan disclosure act of 1997
The third pension bill that I introduce today is the Small 401(k)
Pension Plan Disclosure Act of 1997.
Current Federal law requires that pension plans file an annual
investment report with the Department of Treasury and make the report
available if a participant asks for it. Participants in small 401(k)s
should not be required to ask where their pension contributions are
invested. Participants in small 401(k)s are often hesitant to request
the information for fear of being identified as questioning their
employer's handling of a 401(k). Participants in large plans, where
there is greater anonymity, are less hesitant.
Participants in 401(k)s should know where their plan is invested.
Unlike traditional, defined pension plan participants, 401(k)
participants have neither a plan sponsor's guarantee nor PBGC insurance
against poor investment return. Participants bear the risk themselves.
It is only fair that 401(k) participants be informed how their money
is invested.
The Small 401(k) Pension Plan Disclosure Act of 1997 eliminates the
need to ask. It requires that the Secretary of Labor issue regulations
requiring that small 401(k)s to provide each participant with an annual
investment report. The details of the report are left to the Secretary,
but certain details are suggested as a guide.
The act also encourages the Secretary to provide for the delivery of
reports through company e-mail. This should help minimize the cost of
providing reports.
The act exempts 401(k) accounts where participants direct their
investments because current law already requires that those
participants receive investment descriptions and reports.
Mr. President, these bills increase the retirement security of the
American work force, diversify 401(k) investments, require equal
benefits for husband and wife, and inform employees in small 401(k)
plans where their money is invested.
______
By Mr. INOUYE (for himself and Mr. Akaka):
S. 109. A bill to provide Federal housing assistance to Native
Hawaiians; to the Committee on Indian Affairs.
[[Page S489]]
the native hawaiian housing assistance act of 1997
Mr. INOUYE. Mr. President, I rise today to introduce the native
Hawaiian Housing Assistance Act of 1997--a measure which seeks to
provide housing assistance to those families most in need, both
nationally and in my home state of Hawaii--native Hawaiians.
Less than 2 years ago, in 1995, the U.S. Department of Housing and
Urban Development released a report entitled, ``Housing Problems and
Needs of Native Hawaiians.'' This report found, astoundingly, that
native Hawaiians experience the highest percentage of housing problems
in the Nation--49 percent--higher than even that of American Indians
and Alaska Natives residing on reservation--44 percent--and
substantially higher than that of all U.S. households--27 percent.
These findings, taken in conjunction with those of two other reports:
The final report of the National Commission on American Indian, Alaska
Native, and native Hawaiian Housing, ``Building the Future: a Blueprint
for Change'' (1992) and the State Department of Hawaiian home lands
report, ``Department of Hawaiian Homelands Beneficiary Needs Study''
(1995), document that:
Native Hawaiians have the worst housing conditions in the State of
Hawaii and are seriously overrepresented in the Stat's homeless
population, representing over 30 percent of the homeless population.
Among the native Hawaiian population, the needs of the native
Hawaiians eligible to reside on lands set aside under the Hawaiian
Homes Commission Act are the most severe. Ninety-five percent of the
current applicants, approximately 13,000 native Hawaiians, are in need
of housing, with one half of those applicant households facing
overcrowding and one third paying more than 30 percent of their income
for shelter; and under the Department of Housing and Urban Development
[HUD] guidelines, 70.8 percent of the Department of Hawaiian Home Lands
(DHHL) lessees and applicants fall below the HUD median family income,
with more than half having incomes below 30 percent.
Mr. President, I find these statistics deplorable and unconscionable.
They are the direct result of a pattern of purposeful neglect on the
part of our Federal Government.
At the time of the arrival of Captain Cook to Hawaii's shores in
1778, there was a thriving community of nearly 1 million indigenous
inhabitants. But over time, introduced diseases and the devastating
physical, cultural, social, and spiritual effects of Western contact
nearly decimated the native Hawaiian population. In 1826, less than 50
years later, the native Hawaiian population had decreased to an
estimated 142,650, and by 1919, this number had dropped to 22,600.
In recognition of this catastrophic decline, and of the role the
Federal Government played in facilitating such a decline, the Congress
enacted The Hawaiian Homes Commission Act [HHCA], which set aside
200,000 acres of CEDED public lands for homesteading by native
Hawaiians. As then Secretary of the Interior Franklin K. Lane was
quoted in the committee report to the HHCA as saying: ``One thing that
impressed me--was the fact that the natives of the islands who are our
wards, I should say, and for whom in a sense we are trustees, are
falling off rapidly in numbers, and many are in poverty.'' Congress
thus sought to return the Hawaiian people to the land, thereby
revitalizing a dying race.
And yet, despite what arguably were good intentions, the Congress
subsequently and systematically failed to appropriate sufficient funds
for the administration of the HHCA. Faced with no means of securing the
necessary funding which would enable the development of infrastructure
or housing, the administrators were forced to lease large tracts of the
homelands to non-Hawaiians for commercial and other purposes in order
to generate revenue to administer and operate the program. Hawaiians
were thereby denied the benefits of residing on those very lands set
aside for their survival as the indigenous inhabitants of Hawaii.
Over the years, I am sad to report, this Government has taken the
anomalous legal position that native Hawaiians residing on these home
lands must be excluded from access to existing Federal Housing and
Infrastructure Development programs because the expenditure of Federal
funds to benefit these lands was somehow deemed unconstitutional.
While the Clinton administration has reversed this position--arguing
before the Ninth Circuit Court of Appeals that the home lands were not
set aside exclusively for native Hawaiians--there are those who
nonetheless seem to want it both ways. They want to deny that any
Federal responsibility flows from the provisions of a Federal law, and
yet they want to bar native people from their rights of access to
existing Federal housing programs.
It is this reverse discrimination that I find repugnant and
unacceptable. It is a mentality that enables the Federal Government to
set aside lands for native Hawaiians, retain certain powers over the
administration of these lands, and then deny those native Hawaiians
residing on these lands access to programs made available to all
others, including Indians residing on reservations, on the basis that
the lands set aside by the United States only benefit native Hawaiians.
I am happy to report that, with the assistance of outgoing HUD
Secretary Cisneros, we have worked to identify and remove some barriers
which have prevented native Hawaiians residing on the home lands, from
securing access to existing federally-assisted housing programs. For
his understanding of and dedication toward these matters, I am most
grateful. However, I would be the first to admit that much more remains
to be done.
When the National Commission of American Indian, Alaska Native, and
Native Hawaiian Housing issued its report, after full consideration of
the deplorable housing conditions native Hawaiian families face, they
submitted the following recommendation: That Congress enact a ``Native
Hawaiian Housing and Infrastructure Assistance Program'' to alleviate
and address the severe housing needs of native Hawaiians by extending
to them the same Federal housing assistance available to American
Indians and Alaska Natives.
This, Mr. President, is exactly what this bill is designed to
accomplish. It amends the Native American Housing and Self-
Determination Act of 1996 by creating a separate title to establish a
parallel housing program for native Hawaiians. This program would not
benefit all native Hawaiians, but is limited in scope to those most in
need because this Government has consistently denied them access to
existing housing programs--those native Hawaiians eligible to reside on
the home lands.
This bill would provide funding, in the form of a block grant, to the
department of Hawaiian Home Lands, to carry out affordable housing
activities which are identical to those activities authorized under the
Native American Housing Assistance and Self-Determination Act. The bill
provides that, to the extent practicable, the Department shall employ
private nonprofit organizations experienced in the planning and
development of affordable housing for native Hawaiians. In addition,
the bill authorizes the Secretary to adopt modifications which are
deemed necessary in order to meet the unique needs of native Hawaiians.
Finally, an additional section of the bill creates a loan guarantee
program similar to that which exists for American Indians. Neither of
these programs would tap into existing tribal monies, but instead would
authorize a separate funding stream.
Mr. President, this is a bill whose foundation is a dual one--one
based on need, on statistics which show that native Hawaiians face the
highest incidence of housing needs in the nation, and that among the
native Hawaiian population, those native Hawaiians eligible to reside
on the home lands are the most in need, and one based on the special
historical relationship between the United States and the native
Hawaiian people.
While history has shown that the Congress has fallen far short of its
commitment to provide sufficient funding for the administration of the
Hawaiian Homes Commission Act, let history also reflect, that in this,
the 105th Congress, we sought to finally, balance the scales, by
creating housing opportunities for native Hawaiians similar to those
provided to other native Americans.
[[Page S490]]
Mr. President, I thank you for your consideration of this most
important measure and ask unanimous consent that the bill be printed in
the Record in its entirety. I urge my colleagues to act favorably and
expeditiously on this measure.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 109
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Native Hawaiian Housing
Assistance Act of 1997''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) The Federal Government has a responsibility to promote
the general welfare of the Nation by employing its resources
to remedy the unsafe and unsanitary housing conditions and
the acute shortage of decent, safe, and sanitary dwellings
for families of lower income and by developing effective
partnerships with governmental and private entities to
accomplish these objectives.
(2) Based upon the status of the Kingdom of Hawaii as an
internationally recognized and independent sovereign and the
unique historical and political relationship between the
United States and Native Hawaiians, the Native Hawaiian
people have a continuing right to local autonomy in
traditional and cultural affairs and an ongoing right of
self-determination and self-governance that has never been
extinguished.
(3) The authority of Congress under the Constitution of the
United States to legislate and address matters affecting the
rights of indigenous peoples of the United States includes
the authority to legislate in matters affecting Native
Hawaiians.
(4) In 1921, in recognition of the severe decline in the
Native Hawaiian population, Congress enacted the Hawaiian
Homes Commission Act, 1920, which set aside approximately
200,000 acres of the ceded public lands for homesteading by
Native Hawaiians, thereby affirming the special relationship
between the United States and the Native Hawaiians.
(5) In 1959, under the Act entitled ``An Act to provide for
the admission of the State of Hawaii into the Union'',
approved March 18, 1959 (73 Stat. 4), the United States
reaffirmed the special relationship between the United States
and the Native Hawaiian people--
(A) by transferring what the United States deemed to be a
trust responsibility for the administration of the Hawaiian
Home Lands to the State of Hawaii, but continuing Federal
superintendence by retaining the power to enforce the trust,
including the exclusive right of the United States to consent
to land exchanges and any amendments to the Hawaiian Homes
Commission Act, 1920, enacted by the legislature of the State
of Hawaii affecting the rights of beneficiaries under such
Act; and
(B) by ceding to the State of Hawaii title to the public
lands formerly held by the United States, mandating that such
lands be held ``in public trust'' for ``the betterment of the
conditions of Native Hawaiians, as defined in the Hawaiian
Homes Commission Act, 1920'', and continuing Federal
superintendence by retaining the exclusive legal
responsibility to enforce this public trust.
(6) In recognition of the special relationship that exists
between the United States and the Native Hawaiian people,
Congress has extended to Native Hawaiians the same rights and
privileges accorded to American Indians and Alaska Natives
under the Native American Programs Act of 1974, the American
Indian Religious Freedom Act, the National Museum of the
American Indian Act, the Native American Graves Protection
and Repatriation Act, the National Historic Preservation Act,
the Native American Languages Act, the American Indian,
Alaska Native and Native Hawaiian Culture and Arts
Development Act, the Job Training and Partnership Act, and
the Older Americans Act of 1965.
(7) The special relationship has been recognized and
reaffirmed by the United States in the area of housing--
(A) through the authorization of mortgage loans insured by
the Federal Housing Administration for the purchase,
construction, or refinancing of homes on Hawaiian Home Lands
under the National Housing Act;
(B) by mandating Native Hawaiian representation on the
National Commission on American Indian, Alaska Native, and
Native Hawaiian Housing;
(C) by the inclusion of Native Hawaiians in the Native
American Veterans' Home Loan Equity Act; and
(D) by enactment of the Hawaiian Home Lands Recovery Act,
which establishes a process that enables the Federal
Government to convey lands to the Department of Hawaiian Home
Lands equivalent in value to lands acquired by the Federal
Government.
(b) Purposes.--The purposes of this Act are as follows:
(1) To implement the recommendation of the National
Commission on American Indian, Alaska Native, and Native
Hawaiian Housing (in this Act referred to as the
``Commission'') that Congress establish a Native Hawaiian
Housing and Infrastructure Assistance Program to alleviate
and address the severe housing needs of Native Hawaiians by
extending to them the same Federal housing assistance
available to American Indians and Alaska Natives.
(2) To address the following needs of the Native Hawaiian
population, as documented in the Final Report of the
Commission, ``Building the Future: A Blueprint for Change''
(1992); the United States Department of Housing and Urban
Development report, ``Housing Problems and Needs of Native
Hawaiians (1995);'' and the State Department of Hawaiian Home
Lands report ``Department of Hawaiian Home Lands Beneficiary
Needs Study'' (1995):
(A) Native Hawaiians experience the highest percentage of
housing problems in the Nation: 49 percent, compared to 44
percent for American Indian and Alaska Native households in
tribal areas, and 27 percent for all United States
households, particularly in the area of overcrowding (27
percent versus 3 percent nationally) with 36 percent of
Hawaiian homelands households experiencing overcrowding.
(B) Native Hawaiians have the worst housing conditions in
the State of Hawaii and are seriously over represented in the
State's homeless population, representing over 30 percent.
(C) Among the Native Hawaiian population, the needs of the
native Hawaiians eligible for Hawaiian homelands are the most
severe. 95 percent of the current applicants, approximately
13,000 Native Hawaiians, are in need of housing, with one-
half of those applicant households facing overcrowding and
one-third paying more than 30 percent of their income for
shelter. Under Department of Housing and Urban Development
guidelines, 70.8 percent of Department of Hawaiian Homelands
lessees and applicants fall below the Department of Housing
and Urban Development median family income, with more than
half having incomes below 30 percent.
SEC. 3. HOUSING ASSISTANCE.
The Native American Housing Assistance and Self-
Determination Act of 1996 (Public Law 104-330) is amended by
adding at the end the following new title:
``TITLE VIII--HOUSING ASSISTANCE FOR NATIVE HAWAIIANS
``SEC. 801. DEFINITIONS.
``In this title--
``(1) the term `Department of Hawaiian Home Lands' means
the department of the State of Hawaii that is responsible for
the administration of the Hawaiian Homes Commission Act,
1920;
``(2) the term `Hawaiian Home Lands' means those lands set
aside by the United States for homesteading by Native
Hawaiians under the Hawaiian Homes Commission Act, 1920, and
any other lands acquired pursuant to that Act; and
``(3) the term `Native Hawaiian' has the same meaning as in
section 201 of the Hawaiian Homes Commission Act, 1920.
``SEC. 802. BLOCK GRANTS FOR AFFORDABLE HOUSING ACTIVITIES.
``(a) Authority.--For each fiscal year, the Secretary shall
(to the extent amounts are made available to carry out this
title) make grants under this section on behalf of Native
Hawaiian families to carry out affordable housing activities
in the State of Hawaii. Under such a grant, the Secretary
shall provide the grant amounts directly to the Department of
Hawaiian Home Lands. The Department of Hawaiian Home Lands
shall, to the maximum extent practicable, employ private
nonprofit organizations experienced in the planning and
development of affordable housing for Native Hawaiians, in
order to carry out such activities.
``(b) Applicability of Other Provisions.--
``(1) In general.--Subject to paragraph (2), titles I
through IV apply to assistance provided under this section in
the same manner as titles I through IV apply to assistance
provided on behalf of an Indian tribe under title I.
``(2) Exception.--The Secretary may by regulation provide
for such modifications to the applicability of titles I
through IV to assistance provided under this section as the
Secretary determines to be necessary to meet the unique
housing needs of Native Hawaiians.
``SEC. 803. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated such sums as may
be necessary to carry out this title for each of fiscal years
1997, 1998, 1999, 2000, and 2001.''.
SEC. 4. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.
Section 184 of the Housing and Community Development Act of
1992 (12 U.S.C. 1715z-13a) is amended--
(1) in subsection (k), by adding at the end the following
new paragraphs:
``(10) The term `Hawaiian Home Lands' means those lands set
aside by the United States for homesteading by Native
Hawaiians under the Hawaiian Homes Commission Act, 1920, and
any other lands acquired pursuant to that Act.
``(11) The term `Native Hawaiian' has the same meaning as
in section 201 of the Hawaiian Homes Commission Act, 1920.
``(12) The term `Native Hawaiian housing authority' means
any public body (or agency or instrumentality thereof)
established under the laws of the State of Hawaii, that is
authorized to engage in or assist in the development or
operation of low-income housing for Native Hawaiians, and
includes the Department of Hawaiian Home Lands and the Office
of Hawaiian Affairs.''; and
(2) by adding at the end the following new subsection:
``(l) Applicability to Native Hawaiian Housing.--
[[Page S491]]
``(1) In general.--Subject to paragraphs (2) and (3),
subsections (a) through (k) apply to Native Hawaiian
families, Native Hawaiian housing authorities, and private
nonprofit organizations experienced in the planning and
development of affordable housing for Native Hawaiians, in
the same manner as those subsections apply to Indian families
and to Indian housing authorities, respectively.
``(2) Exception.--The Secretary may by regulation provide
for such modifications to the applicability of subsections
(a) through (k) to Native Hawaiian families, Native Hawaiian
housing authorities, and private nonprofit organizations
experienced in the planning and development of affordable
housing for Native Hawaiians as the Secretary determines to
be necessary to meet the unique housing needs of Native
Hawaiians.
``(3) Limitation.--Any assistance provided under this
subsection, including any assistance provided to Native
Hawaiians not residing on the Hawaiian Home Lands, shall be
limited to the State of Hawaii.
``(4) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be necessary
to carry out this subsection.''.
______
By Mr. INOUYE (for himself and Mr. Akaka):
S. 110. A bill to amend the Native American Graves Protection and
Repatriation Act to provide for improved notification and consent, and
for other purposes; to the Committee on Indian Affairs.
THE NATIVE AMERICAN GRAVES PROTECTION AND REPATRIATION ACT AMENDMENT
ACT OF 1997
Mr. INOUYE. Mr. President, I rise today to introduce a bill to amend
the Native American Graves Protection and Repatriation Act to clarify
certain provisions of that act as they pertain to Indian tribes and
native Hawaiian organizations. This bill is similar to the bill I
introduced in the last session of the Congress--a bill which passed
this body by unanimous consent on September 13, 1996. Unfortunately,
the House of Representatives failed to act on the measure prior to the
adjournment of the 104th Congress.
In 1990, the Congress enacted the Native American Graves Protection
and Repatriation Act [NAGPRA] to address the growing concern among
Indian tribes, Alaska Native villages, and native Hawaiian
organizations regarding the proper disposition of thousands of Native
American human remains and sacred objects in the possession and control
of museums and Federal agencies.
NAGPRA requires museums and Federal agencies to compile summaries and
inventories of human remains, associated and unassociated funerary
objects, sacred objects, and cultural patrimony, to notify an Indian
tribe or native Hawaiian organization that have an ownership or
possessory interest in the remains, objects or patrimony, and, upon
request, to repatriate those remains or cultural items to the
appropriate Indian tribe or native Hawaiian organization.
NAGPRA further provides a process governing the treatment of human
remains or cultural items inadvertently discovered and intentionally
excavated from Federal or tribal lands.
In the years since the enactment of NAGPRA, native Hawaiians have
been at the forefront in the repatriation of ancestral remains and the
treatment of ancestral remains inadvertently discovered on Federal
lands.
Hundreds of native Hawaiian kupuna--ancestors--have been returned to
Hawaii--released from the confines of more than 25 museums in the
Untied States, Canada, Switzerland, and Austrialia--and returned to the
land of their birth.
Despite these accomplishments, native Hawaiian organizations have
experienced difficulty in ensuring the implementation of the act--
ironically, not abroad, but in Hawaii.
In written testimony submitted to the Committee on Indian Affairs by
Hui Malama I Na Kupuna O Hawaii Nei, a native Hawaiian organization
recognized under NAGRPA, for a December 9, 1995 oversight hearing on
the act, a number of concerns were raised--concerns which this bill
seeks to address, namely: The lack of written consent where native
American remains are excavated or removed from Federal lands for
purposes of study; following an inadvertent discovery of Native
American remains, the lack of assurances that the process for removal
complies with the requirements that are associated with an intentional
excavation; and the lack of required notification to native Hawaiian
organizations when inadvertent discoveries of Native American human
remains are made on Federal lands.
In addition to amendments which address these concerns, this bill
also incorporates two technical amendments requested by the
administration: a provision expanding the responsibility of the NAGPRA
Review Committee to include associated funerary objects in the
compilation of an inventory of culturally unidentifiable human remains;
and provisions providing the Secretary of The Interior with authority
to use fines collected to supplement the cost of enforcement-related
activities.
As one of the original sponsors of the act, it is my view that these
amendments are consistent with the original purpose, spirit, and intent
of NAGPRA, and are necessary to clarify the existing law.
It is my expectation that if adopted, these amendments will ensure
better cooperation by Federal agencies in the implementation of the act
in the State of Hawaii and the rest of the United States. For while
these amendments address concerns raised by the native Hawaiian people,
they will also serve to benefit Indian country.
The responsibility borne by those who choose, or who are called upon
to care for the remains of their ancestors is a heavy one. By acting
favorably on this measure, I hope that we can assist these individuals
and organizations as they continue in their efforts to bring their
ancestors home and provide them with proper treatment when they are
disturbed from sacred burial sites.
Mr. President, I thank you for this time today, and I urge my
colleagues to support this bill when it comes before the Senate for
consideration.
Mr. President, I ask unanimous consent that the test of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 110
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AMENDMENTS TO THE NATIVE AMERICAN GRAVES
PROTECTION AND REPATRIATION ACT.
(a) Written Consent Required if Native American Remains Are
Excavated or Removed for Purposes of Study.--Section 3(c) of
the Native American Graves Protection and Repatriation Act
(25 U.S.C. 3002(c)) is amended--
(1) in paragraph (3), by striking ``and'' at the end of the
paragraph;
(2) in paragraph (4), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(5) in the case of any intentional excavation or removal
of Native American human remains for purposes of study, such
remains are excavated or removed after written consent is
obtained from--
``(A) lineal descendants, if known or readily
ascertainable; or
``(B) each appropriate Indian tribe or Native Hawaiian
organization.
The requirement under paragraph (1) shall not be interpreted
as allowing or requiring, in the absence of the consent of
each appropriate Indian tribe or Native Hawaiian
organization, any recordation or analysis that is in addition
to any recordation or analysis that is otherwise allowed or
required under this Act.''.
(b) Requirements for Inadvertent Discoveries.--Section 3(d)
of the Native American Graves Protection and Repatriation Act
(25 U.S.C. 3002(d)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``with respect to
Federal lands'' and inserting ``with respect to those Federal
lands'';
(B) by inserting after the first sentence the following:
``In any case in which a Federal agency or instrumentality
receives notice of a discovery of Native American cultural
items on lands with respect to which the Federal agency or
instrumentality has management authority, the appropriate
official of the Federal agency or instrumentality shall
notify each appropriate Indian tribe or Native Hawaiian
organization. The notification required under the preceding
sentence shall be provided not later than 3 business days
after the date on which the Federal agency or instrumentality
receives notification of the discovery.''; and
(C) in the last sentence, by inserting ``, and, in the case
of Federal lands, the appropriate official of the Federal
agency or instrumentality with management authority over
those lands notified each appropriate Indian tribe or Native
Hawaiian organization by the date specified in this
paragraph,'' after ``that notification has been received,'';
and
(2) in paragraph (2), by adding at the end the following
new sentence: ``Any person or entity that disposes of, or
controls, a cultural item referred to in the preceding
sentence shall comply with the applicable requirements of
subsection (c).''.
(c) Review Committee.--Section 8(c)(5) of the Native
American Graves Protection and
[[Page S492]]
Repatriation Act (25 U.S.C. 3006(c)(5)) is amended--
(1) by inserting ``and associated funerary objects'' after
``culturally unidentifiable human remains''; and
(2) by striking ``for developing a process for disposition
of such remains'' and inserting ``for developing a process
for the disposition of the remains and associated funerary
objects''.
(c) Enforcement.--Section 9 of the Native American Graves
Protection and Repatriation Act (25 U.S.C. 3007) is amended
by adding at the end the following:
``(e) Enforcement.--
``(1) In general.--Subject to paragraph (2), the amounts
collected by the Secretary as penalties under this section
shall be used to supplement the amounts made available by
appropriations for conducting enforcement activities related
to this section.
``(2) Authority of Secretary.--In carrying out enforcement
activities related to this section, the Secretary may--
``(A) pay any person who furnishes information that leads
to the assessment of a civil penalty under this section
(other than an officer or employee of the Federal Government
or a State or local government (including a tribal
government) who furnishes or who renders service in the
performance of official duties) the lesser of--
``(i) half of the amount of the civil penalty; or
``(ii) $1,000; and
``(B) reduce the amount of a civil penalty that would
otherwise be assessed under this section if the violator
against whom the civil penalty is assessed agrees to pay to
the aggrieved parties involved an aggregate amount of
restitution not to exceed the amount of the reduction.''.
______
By Mr. INOUYE:
S. 111. A bill to amend the Immigration and Nationality Act to
facilitate the immigration to the United States of certain aliens born
in the Philippines or Japan who were fathered by United States
citizens; to the Committee on the Judiciary.
THE AMERASIAN IMMIGRATION ACT AMENDMENT ACT OF 1997
Mr. INOUYE. Mr. President, today, I rise to introduce legislation
which amends Public Law 97-359, the Amerasian Immigration Act, to
include Amerasian children from the Philippines and Japan as eligible
applicants. This legislation also expands the eligibility period for
the Philippines to November 24, 1992, the date of the last United
States military base closure and the date of enactment of the proposed
legislation for Japan.
Under the Amerasian Immigration Act (Public Law 97-359) children born
in Korea, Laos, Kampuchea, Thailand, and Vietnam after December 31,
1950, and before October 22, 1982, who were fathered by United States
citizens, are allowed to immigrate to the United States. The initial
legislation introduced in the 97th Congress included Amerasians born in
the Philippines and Japan with no time limits concerning their births.
The final version as enacted by the Congress included only those areas
where the U.S. had engaged in active military combat from the Korea War
onward. Consequently, Amerasians from the Philippines and Japan were
excluded from eligibility.
Although the Philippines and Japan were not considered war zones from
1950 to 1982, the extent and nature of U.S. military involvement in
both countries are not dissimilar to U.S. military involvement in other
Asian countries during the Korean and Vietnam conflicts. The role of
the Philippines and Japan as vital supply and stationing bases brought
tens of thousands of U.S. military personnel to these countries. As a
result, interracial relations in both countries were common, leading to
a significant number of Amerasian children being fathered by U.S.
citizens. There are now over 50,000 Amerasian children in the
Philippines. According to the Embassy of Japan, there are 6,000
Amerasian children in Japan born between 1987 and 1992.
Public Law 97-359 was passed in the hope of redressing the situation
of Amerasian children in Korea, Laos, Kampuchea, Thailand, and Vietnam
who, due to their illegitimate or mixed ethnic make-up, their lack of a
father or stable mother figure, or impoverished state, have little hope
of escaping their plight. It became the ethical and social obligation
of the United States to care for these children.
The stigmatization and ostracism felt by Amerasian children in those
countries covered by the Amerasian Immigration Act also is felt by
Amerasian children in the Philippines and Japan. These children of
American citizens deserve the same viable opportunities of employment,
education, and family life that is afforded their counterparts from
Korea, Laos, Kampuchea, Thailand, and Vietnam.
Mr. President, I ask unanimous consent that the text of my bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 111
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That
section 204(f)(2)(A) of the Immigration and Nationality Act
(8 U.S.C. 1154(f)(2)(A)) is amended--
(1) by inserting ``(I)'' after ``born''; and
(2) by inserting after ``subsection,'' the following:
``(II) in the Philippines after 1950 and before November 24,
1992, or (III) in Japan after 1950 and before the date of
enactment of this subclause,''.
______
By Mr. MOYNIHAN:
S. 112. A bill to amend title 18, United States Code, to regulate the
manufacture, importation, and sale of ammunition capable of piercing
police body armor; to the Committee on the Judiciary.
law enforcement officers protection act of 1997
Mr. MOYNIHAN. Mr. President, I am introducing legislation today to
amend Title 18 of the United States Code to strengthen the existing
prohibition on handgun ammunition capable of penetrating policy body
armor, commonly referred to as bullet-proof vests. This provision would
require the Secretary of the Treasury and the Attorney General to
develop a uniform ballistics test to determine with precision whether
ammunition is capable of penetrating police body armor. The bill also
prohibits the manufacture and sale of any handgun ammunition determined
by the Secretary of the Treasury and the Attorney General to have
armor-piercing capability.
I am encouraged that, on behalf of its 277,000 members, the Fraternal
Order of Police has decided to support this bill. In addition the Law
Enforcement Steering Committee, which represents eight of the largest
Associations of law enforcement officers, has also indicated that they
are in support of this bill.
I am also pleased that President Clinton has taken an avid interest
in this subject. In a statement similar to remarks he made many times
at campaign appearances around the country, President Clinton said to
an audience in Cincinnati, Ohio on September 16, 1996:
So that's my program for the future--do more to break the
gangs, ban those cop killer bullets, drug testing for
parolees, improve the opportunities for community-based
strategies that lower crime and give our kids something to
say yes to.
Mr. President, it has been fifteen years since I first introduced
legislation in the Senate to outlaw armor-piercing, or ``cop-killer,''
bullets. In 1982, Phil Caruso of the Patrolman's Benevolent Association
of New York City alerted me to the existence of a Teflon-coated bullet
capable of penetrating the soft body armor police officers were then
beginning to wear. Shortly thereafter, I introduced the Law Enforcement
Officers Protection Act of 1982 to prohibit the manufacture,
importation, and sale of such ammunition.
At that time, armor-piercing bullets--most notably the infamous
``Green Hornet''--were manufactured with a solid steel core. Unlike the
softer lead composition of most other ammunition, this hard steel core
prevented these rounds from deforming at the point of impact--thus
permitting the rounds to penetrate the 18 layers of Kevlar in a
standard-issue police vest or ``flak-jacket.'' These bullets could go
through a bullet-proof vest like a hot knife through butter. My
legislation simply banned any handgun ammunition made with a core of
steel or other hard metals.
Despite the strong support of the law enforcement community, it took
four years before this seemingly non-controversial legislation was
enacted into law. The National Rifle Association initially opposed it--
that is, until the NRA realized that a large number of its members were
themselves police officers who strongly supported banning these
insidious bullets. Only then did the NRA lend its grudging support. The
bill passed the Senate on March 6, 1986 by a vote of 97-1, and was
signed by President Reagan on August 8, 1986 (Public Law 99-408).
[[Page S493]]
That 1986 Act served us in good stead for 7 years. To the best of my
knowledge, not a single law enforcement officer was shot with an armor-
piercing bullet. Unfortunately, the ammunition manufacturers eventually
found a way around the 1986 law. By 1993, a new Swedish-made armor-
piercing round, the M39B, had appeared. This pernicious bullet evaded
the 1986 statute's prohibition because of its unique composition. Like
most common ammunition, it had a soft lead core, thus exempting it from
the 1986 law. But this core was surrounded by a heavy steel jacket,
solid enough to allow the bullet to penetrate body armor. Once again,
our nation's law enforcement officers were at risk. Immediately upon
learning of the existence of the new Swedish round, I introduced a bill
to ban it.
Another protracted series of negotiations ensued before we were able
to update the 1986 statute to cover the M39B. We did it with the
support of law enforcement organizations, and with technical assistance
from the Bureau of Alcohol, Tobacco and Firearms. In particular, James
O. Pasco, Jr., then the Assistant Director of Congressional Affairs at
BATF, worked closely with me and may staff to get it done. The bill
passed the Senate by unanimous consent on November 19, 1993 as an
amendment to the 1994 Crime Bill.
Despite these legislative successes, it was becoming evident that
continuing ``innovations'' in bullet design would result in new armor-
piercing rounds capable of evading the ban. It was at this time that
some of us began to explore in earnest the idea of developing a new
approach to banning these bullets based on their performance, rather
than their physical characteristics. Mind, this concept was not
entirely new; the idea had been discussed during our efforts in 1986,
but the NRA had been immovable on the subject. The NRA's leaders, and
their constituent ammunition manufacturers, felt that any such broad-
based ban based on a bullet ``performance standard'' would inevitably
lead to the outlawing of additional classes of ammunition. They viewed
it as a slippery slope, much as they have regarded the assault weapons
ban as a slippery slope. The NRA had agreed to the 1986 and 1993 laws
only because they were narrowly drawn to cover individual types of
bullets.
And so in 1993 I asked the ATF for the technical assistance necessary
to write into law an armor-piercing bullet ``performance standard.'' At
the time, however, the experts at the ATF informed us that this could
not be done. They argued that it was simply too difficult to control
for the many variables that contribute to a bullet's capability to
penetrate police body armor. We were told that it might be possible in
the future to develop a performance-based test for armor-piercing
capability, but at the time we had to be content with the existing
content-based approach.
Well. Two years passed and the Office of Law Enforcement Standards of
the National Institute of Standards and Technology wrote a report
describing the methodology for just such a armor-piercing bullet
performance test. The report concluded that a test to determine armor-
piercing capability could be developed within six months.
So we know it can be done, if only the agencies responsible for
enforcing the relevant laws have the will. The legislation I am
introducing requires the Secretary of the Treasury, in consultation
with the Attorney General, to establish performance standards for the
uniform testing of handgun ammunition. Such an objective standard will
ensure that no rounds capable of penetrating police body armor,
regardless of their composition, will ever be available to those who
would use them against our law enforcement officers.
I wish to assure the Senate that this measure would in no way
infringe upon the rights of legitimate hunters and sportsmen. It would
not affect legitimate sporting ammunition used in rifles. It would only
restrict the availability of armor-piercing rounds, for which no one
can seriously claim there is a genuine sporting use. These cop-killer
rounds have no legitimate uses, and they have no business being in the
arsenals of criminals. They are designed for one purpose: to kill
police officers.
The 1986 and 1993 cop-killer bullet laws I sponsored kept us one step
ahead of the designers of new armor-piercing rounds. When the
legislation I have introduced today is enacted--and I hope it will be
early in the 105th Congress--it will put them out of the cop-killer
bullet business permanently.
Mr. President, I ask unanimous consent that the letter of support
from the Fraternal Order of Police be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
January 16, 1997.
Hon. Daniel P. Moynihan,
U.S. Senate,
Washington, DC.
Dear Senator Moynihan: On behalf of the 277,000 members of
the Fraternal Order of Police, I am writing to advise you of
our support of legislation which you plan to introduce
banning ``cop-killer'' bullets.
Continuing innovations in the construction of ammunition
place the vest-wearing police officer in jeopardy. Your bill
requiring performance-based evaluations in order to restrict
the availability of armor-piercing bullets for hand-guns will
secure a greater measure of safety for all of America's law
enforcement officers. And though no bill or piece of
legislation can protect them fully from the dangers inherent
to police work, your bill will enhance the value of the body
armor, which, sometimes, is all that stands between life and
death.
The F.O.P. supports this effort to quantify and identify
``cop-killer'' bullets for handguns based on their ability to
penetrate body armor, to prevent them from being used against
law enforcement officers. If I can be of assistance in
working to pass this legislation, please do not hesitate to
contact me, or Executive Director Jim Pasco, at (202) 547-
8189.
Again, thank you for continued concern and support for the
safety and protection of America's law enforcement officers.
Sincerely,
Gilbert G. Gallegos,
National President.
______
By Mr. INOUYE:
S. 113. A bill to amend title VII of the Public Health Service Act to
establish a psychology post-doctoral fellowship program, and for other
purposes; to the Committee on Labor and Human Resources.
The Public Health Service Act Amendment Act of 1997
Mr. INOUYE. Mr. President, I am introducing legislation today to
amend Title VII of the Public Health Service Act to establish a
psychology post-doctoral program.
Psychologists have made a unique contribution in serving the Nation's
medically undeserved populations. Expertise in behavorial science is
useful in addressing many of our most distressing concerns such as
violence, addiction, mental illness, children's behavior disorders, and
family disruption. Establishment of a psychology post-doctoral program
could be most effective in finding solutions to these pressing societal
issues.
Similar programs supporting additional, specialized training in
traditionally undeserved settings or with specific undeserved
populations have been demonstrated to be successful in providing
services to those same undeserved populations during the years
following the training experience. That is, mental health professionals
who have participated in these specialized federally funded programs
have tended not only to meet their payback obligations, but have
continued to work in the public sector or with the undeserved
populations with whom they have been trained to work.
While the doctorate in psychology provides broad-based knowledge and
mastery in a wide variety of clinical skills, the specialized post-
doctoral fellowship programs provide particular diagnostic and
treatment skills required to effectively respond to these underserved
populations. For example, what looks like severe depression in an
elderly person might be a withdrawal related to hearing loss, or what
looks like poor academic motivation in a child recently relocated from
Southeast Asia might be reflective of a cultural value of reserve
rather than a disinterest in academic learning. Each Of these
situations requires very different interventions, of course, and
specialized assessment skills.
Domestic violence is not just a problem for the criminal justice
system, it is a significant public health problem. A single aspect of
the issue, domestic violence against women results in almost 100,000
days of hospitalization, 30,000 emergency room visits, and 40,000
visits to physicians each year. Rates of child and spouse abuse in
rural areas are particularly high as are the rates of
[[Page S494]]
alcohol abuse and depression in adolescents. A post-doctoral fellowship
program in the psychology of rural populations could be of special
benefit in addressing these problems.
Given the changing demographics of the Nation--the increasing life
span and numbers of the elderly, the rising percentage of minority
populations within the country, as well as an increased recognition on
the long-term sequel of violence and abuse--and given the demonstrated
success and effectiveness of these kinds of specialized training
programs, it is incumbent upon us to encourage participation in post-
doctoral fellowship programs that respond to the needs of the Nation's
underserved.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record as follows:
S. 113
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.
Part E of title VII of the Public Health Service Act (42
U.S.C. 294o) is amended by adding at the end thereof the the
following:
``SEC. 779. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.
``(a) In General.--The Secretary shall establish a
psychology post-doctoral fellowship program to make grants to
and enter into contracts with eligible entities to encourage
the provision of psychological training and services in
underserved treatment areas.
``(b) Eligible Entities.--
``(1) Individuals.--In order to receive a grant under this
section an individual shall submit an application to the
Secretary at such time, in such form, and containing such
information as the Secretary shall require, including a
certification that such individual--
``(A) has received a doctoral degree through a graduate
program in psychology provided by an accredited institution
at the time such grant is awarded;
``(B) will provide services in a medically underserved
population during the period of such grant;
``(C) will comply with the provisions of subsection (c);
and
``(D) will provide any other information or assurances as
the Secretary determines appropriate.
``(2) Institutions.--In order to receive a grant or
contract under this section, an institution shall submit an
application to the Secretary at such time, in such form, and
containing such information as the Secretary shall require,
including a certification that such institution--
``(A) is an entity, approved by the State, that provides
psychological services in medically underserved areas or to
medically underserved populations (including entities that
care for the mentally retarded, mental health institutions,
and prisons);
``(B) will use amounts provided to such institution under
this section to provide financial assistance in the form of
fellowships to qualified individuals who meet the
requirements of subparagraphs (A) through (C) of paragraph
(2);
``(C) will not use in excess of 10 percent of amounts
provided under this section to pay for the administrative
costs of any fellowship programs established with such funds;
and
``(D) will provide any other information or assurance as
the Secretary determines appropriate.
``(c) Continued Provision of Services.--Any individual who
receives a grant or fellowship under this section shall
certify to the Secretary that such individual will continue
to provide the type of services for which such grant or
fellowship is awarded for at least 1 year after the term of
the grant or fellowship has expired.
``(d) Regulations.--Not later than 180 days after the date
of enactment of this section, the Secretary shall promulgate
regulations necessary to carry out this section, including
regulations necessary to carry out this section, including
regulations that define the terms `medically underserved
areas' or `medically unserved populations'.
``(e) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section,
$5,000,000 for each of the fiscal years 1998 through 2000.''.
______
By Mr. INOUYE (for himself, Mr. Thomas, Mr. Cochran, and Mr.
Stevens):
S. 114. A bill to repeal the reduction in the deductible portion of
expenses for business meals and entertainment; to the Committee on
Finance.
Mr. INOUYE. Mr. President, I rise to introduce legislation to restore
the business meals and entertainment tax deduction to 80 percent. I am
joined by Senators Thomas, Cochran, and Stevens. Restoration of this
deduction is essential to the livelihood of the food service, travel
and tourism, and entertainment industries throughout the United States.
These industries are being economically harmed as a result of this
reduction. All are major industries which employ millions of people.
many of whom are already feeling the effects of the reduction.
The deduction for business meals and entertainment was reduced from
80 to 50 percent under the Omnibus budget Reconciliation Act of 1993,
and went into effect on January 1, 1994. Many companies, small and
large, have changed their policies and guidelines on travel and
entertainment expenses as a result of the tax reduction in the business
meals and entertainment expenses deduction. Businesses have also been
forced to curtail company reimbursement policies because of the
reduction in the business meals and entertainment expenses deduction.
In some cases, businesses have eliminated their expense accounts.
Consequently, restaurant establishments, which have replied heavily on
business lunch and dinner services, are being adversely affected by the
reduction in business meals. For example:
Jay's Restaurant in Dayton, Ohio, closed its lunch service on July
14, 1994, following a 15 percent decrease in lunch business. This
decision was based on 2,000 fewer lunch customers from January through
June 1994 as compared to the same period in 1993.
The Wall Street Restaurant in Des Moines, Iowa, an upscale restaurant
serving American and Continental cuisine, has seen its revenues decline
40 percent since the beginning of 1994. Owner Joey Fasano reduced his
staff from 50 to 35 employees.
The Boca in Middlesex County, New Jersey, averaged 40 to 60 lunches
per day prior to 1994. The restaurant now serves between 5 to 15
lunches per day. Owner Robert Campione reduced his staff from 18 to 14
employees.
The 37th Street Hideaway Restaurant in New York City did 150 lunches
a day prior to 1994. Owner Van Panopoulos now serves 40 lunches and his
dinner business has dropped 30 to 40 percent. Mr. Panopoulos reduced
his staff from 20 to 10 employees.
Bianco's in Denver, Colorado, closed its lunch service in April 1994
because of the decline in business. Owner Fred White reduced his staff
from 26 to 15 employees.
Edward's at Kanoloa in Hawaii has seen its revenues decline by 15
percent since 1994. Owner Edward Frady attributes the decline in his
business to the reduction in business meals and entertainment expense
deduction.
I sincerely hope that the business meals reduction to 50 percent does
not become a Luxury Tax Two, in which the Congress moves toward
restoration only after the damage has been done and huge job losses
have occurred. Accordingly, I urge my colleagues to join me in
cosponsoring this important legislation.
Mr. President, I ask unanimous consent that the bill text be printed
in the Record.
S. 114
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REPEAL OF REDUCTION IN BUSINESS MEALS AND
ENTERTAINMENT TAX DEDUCTION.
(a) In General.--Paragraph (1) of section 274(n) of the
Internal Revenue Code of 1986 (relating to only 50 percent of
meal and entertainment expenses allowed as deduction) is
amended by striking ``50 percent'' and inserting ``80
percent''.
(b) Conforming Amendment.--The heading for section 274(n)
is amended by striking ``50'' and inserting ``80''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December, 31,
1996.
______
By Mr. INOUYE:
S. 115. A bill to increase the role of the Secretary of
Transportation in administering section 901 of the Merchant Marine Act,
1936, and for other purposes; to the Committee on Commerce, Science,
and Transportation.
merchant marine legislation
Mr. INOUYE. Mr. President, the legislation I am introducing today
would centralize the authority in the Secretary of Transportation for
administering our cargo preference laws. The background of these laws,
the need for them, and the problems with, in my view, necessitate the
legislation, are succinctly stated in a Journal of Commerce article
dated November 18, 1988. While the printing of this article was several
years ago, the background it provides and the light it sheds on our
[[Page S495]]
present needs are still pertinent. I ask unanimous consent that the
text of the bill and the article be printed in the Record.
There being no objection, the items were ordered to be printed in the
Record, as follows:
S. 115
Be in enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TRANSPORTATION IN AMERICAN VESSELS OF GOVERNMENT
PERSONNEL AND CERTAIN CARGOES.
Section 901(b)(2) of the Merchant Marine Act, 1936 (46
U.S.C. App. 1241 (b)(2)), is amended to read as follows:
``(2)(A) The Secretary of Transportation shall have the
sole responsibility for determining and designating the
programs that are subject to the requirements of this
subsection. Each department or agency that has responsibility
for a program that is designated by the Secretary of
Transportation pursuant to the preceding sentence shall, for
the purposes of this subsection, administer such program
pursuant to regulations promulgated by such Secretary.
``(B) The Secretary of Transportation shall--
``(i) review the administration of the programs referred to
in subparagraph (A); and
``(ii) on an annual basis, submit a report to Congress
concerning the administration of such programs.''.
____
[From the Journal of Commerce, November 18, 1988]
Cargo Preference
What It Is: A series of statutes, going back to 1904,
intended to assure U.S.-flag ships a minimum share of cargoes
produced by U.S. government programs. It is the oldest U.S.
maritime promotional program and while subsidies and
financing aids have shrunk over the years, preference has
survived.
Background: The preference laws began by tracking this
country's extension of its military and naval power, starting
with the Spanish-American War. More recently, they have come
to reflect the expansion of government programs extending
U.S. economic power and interest abroad.
The Military Transportation Act of 1904 was the first of
the preference statutes and its requirement for U.S.-flag
vessel use, 100 percent, is the highest.
In 1934 Congress adopted Public Resolution 17 to require
that half of the exports financed by the Reconstruction
Finance Corp. were to move in U.S.-flag vessels. Later that
resolution was made to apply to financing of the Export-
Import Bank, established originally to facilitate trade with
the Soviet Union.
In the early postwar period, Congress acted each year to
apply the resolution's 50 percent U.S.-flag share to foreign
aid shipments. It permanently inserted the requirements into
the 1954 Agricultural Trade Development and Assistance Act,
better known as Food for Peace and PL-480.
Public Law 664 in 1961 made clear that preference should
benefit and protect all U.S.-flag vessels, not just liners,
and that all U.S. programs, including those where non-
military agencies procured equipment, materials or
commodities for themselves or foreign governments, had to use
U.S. flags to the extent of 50 percent.
Importance to Carriers: In the last year for which
statistics are available, calendar 1986, U.S.-flag carriers
hauled more than 33 million metric tons of ****preference****
****cargo****, somewhat more than the 28.5 million tons of
commercial shipments carried that year. As an industry, the
revenue amounted to about $502 million.
Necessity for Preference: Preference statutes are formally
predicated on the need for assured cargoes to encourage the
existence of a U.S.-flag merchant fleet to act as a military
auxiliary in times of national emergencies.
Past efforts to apply preference to commercial cargoes have
failed, reflecting U.S. governmental sensitivity to
objections by this country's trading partners as well as
stern opposition form U.S. exporters, importers and
agricultural interests. The availability of preference
cargoes has unquestionably kept some U.S. carriers in
business but critics argue that preference has encouraged
keeping obsolete vessels in operation long after they should
have been scrapped.
Extent of Program: The Defense Department, the Agriculture
Department and the Agency for International Development are
the agencies most heavily involved in utilizing shipping and
observing cargo preference. But there are at least 10 others
with the same cargo preference responsibilities although
smaller volumes. The Export-Import Bank in 1987 reported an
unusually high, 91 percent rate of U.S.-flag vessel use. It
brought participating carriers some $14.5 million in revenue.
Problems: The Maritime Administration is responsible for
monitoring other government agencies to try to make sure they
live up to preference requirements. In fiscal year 1987,
those agencies met the cargo share minimums for the most
part. Among the exceptions were cases in which the cargo
origins and destinations were such that U.S.-flag vessels
were simply not available.
Despite Reagan administration pledges to honor cargo
preference requirements, the Navy and the Agriculture
Department have had a number of preference fights with the
maritime industry.
One produced an agreement by which the carriers agreed to
forgo preference claims on new Agriculture Department-
supported export programs with commercial-like terms in
return for increasing to 75 percent their share of giveaway
relief food shipments.
In another such dispute, the Navy and the U.S. State
Department were forced to negotiate a cargo-sharing agreement
with Iceland for military shipments there. Iceland threatened
the future of U.S. bases in that country if the United States
didn't agree to a departure from 100 percent U.S.-flag
carriage of defense shipments.
There have been other, largely budget-driven attempts to
bypass preference, but carriers and their supporters in
Congress generally have managed to forestall them.
Comment: Budgetary austerity and the Defense Department's
strict insistence of competitive procurement have combined to
make for increasing carrier dissatisfaction, especially with
the Navy's Military Sealift Command.
Efforts already are under way to change the competitive
procurement system the command uses. Carriers hope generally,
to end the pressures they believe force rates downward to
depressed levels.
The presidentially appointed Commission on Merchant Marine
and Defense has recommended that all U.S.-flag preference
requirements programs be raised to 100 percent but the tight
budget and such interests as farmers and traders will work
against such a step. Agricultural interests have tried
unsuccessfully to have existing preference removed from
government programs in the belief that they inhibit U.S. farm
exports.
______
By Mr. INOUYE:
S. 116. A bill to restore the traditional day of observance of
Memorial Day; to the Committee on the Judiciary.
memorial day legislation
Mr. INOUYE. Mr. President, in our effort to accommodate many
Americans by making the last Monday in May, Memorial Day, we have lost
sight of the significance of this day to our nation. My bill would
restore Memorial Day to May 30 and authorize our flag to fly at half
mast on that day. In addition, this legislation would authorize the
President to issue a proclamation designating Memorial Day and Veterans
Day as days for prayer and ceremonies. This legislation would help
restore the recognition our veterans deserve for the sacrifices they
have made on behalf of our nation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 116
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. RESTORATION OF TRADITIONAL DAY OF OBSERVANCE OF
MEMORIAL DAY.
(a) In General.--Section 6103(a) of title 5, United States
Code, is amended in the item relating to Memorial Day by
striking out ``the last Monday in May.'' and inserting in
lieu thereof ``May 30.''.
(b) Display of Flag.--Section 2(d) of the joint resolution
entitled ``An Act to codify and emphasize existing rules and
customs pertaining to the display and use of the flag of the
United States of America'', approved June 22, 1942 (36 U.S.C.
174(d)), is amended by striking out ``the last Monday in
May;'' and inserting in lieu thereof ``May 30;''.
(c) Proclamation.--The President is authorized and
requested to issue a proclamation calling upon the people of
the United States to observe Memorial Day as a day for prayer
and ceremonies showing respect for American veterans of wars
and other military conflicts.
______
By Mr. Inouye:
S. 117. A bill to amend the Internal Revenue Code of 1986 to provide
for the tax treatment of residential ground rents, and for other
purposes; to the Committee on Finance.
residential ground rents legislation
Mr. Inouye. Mr. President, I rise today to speak on an issue of great
importance to Hawaii's leasehold homeowners. In fiscal year 1992, at my
request, the Congress appropriated $400,000 to study the feasibility of
reforming the Internal Revenue Code to address ground lease rent
payments and to determine what role, if any, the Federal Government
should play in encouraging lease to fee conversions. The nationwide
study was conducted by the Hawaii Real Estate and Research Center.
The legislation I am introducing today is based on the
recommendations of this study. The bill would: First, provide a
mortgage interest deduction for residential leasehold properties by
allowing the nonredeemable ground
[[Page S496]]
lease rents to be claimed as an interest deduction; and second, include
a tax credit for up to $5,000 for certain transaction costs on the
transfer of certain residential leasehold land for a 5-year period,
ending on December 31, 2001. Transaction costs include closing costs,
attorneys' fees, surveys and appraisals, and telephone, office, and
travel expenses.
In most private home ownership situations in this country, a
homeowner owns both the building and land. Under a leasehold
arrangement a homeowner owns the building--single-family home,
condominium, or cooperative apartment--on leased land. The research
conducted under the leasehold study shows that residential leaseholds
are not uncommon in other parts of the United States and elsewhere in
the world. Residential leaseholds exist in places such as Baltimore,
MD, Irvine, CA, native American lands in Palm Springs, CA, Fairhope,
AL, Pearl River Basin, MS, and New York, NY.
The study further indicates that there are few States that regulate
residential leaseholds. Of those that do, the most common requirement
applies only to condominium or time share units and is one requiring
adequate disclosure of the lease terms. For the most part, States are
unaware of any leasehold problems in their jurisdictions. However,
residential leaseholds have proven to be problematic for the State of
Hawaii.
The formation of Hawaii's land tenure system can be traced back to
1778 when British Capt. James Cook made his first contact with the
Hawaiian civilization. Leasing was the preferred system to maintain
control and retain a portfolio asset value. Residential leaseholds were
first developed on the Island of Oahu after World War II. Population
increases created a demand for housing and other types of real estate
development. Federal income tax policy encouraged the retention of land
to avoid payment of large capital gains taxes.
Hawaii's land tenure system is now anomalous to the rest of the
United States because of the concentration of land in the hands of
government, large charitable trusts, large agriculturally based
companies and owners of small parcels or urban properties. High land
prices and high renegotiated rents continue to create instability in
Hawaii's residential leasehold system. In 1967, the Hawaii State
Legislature enacted a Land Reform Act which did not become effective
until the U.S. Supreme Court issued its 1984 decision in Hawaii Housing
Authority v. Midkiff, 104 S. Ct. 231 (1984). The act and the Supreme
Court decision basically divided the market into a ``single-family home
market in which leaseholds were subject to mandatory conversion, and a
leasehold condominium market which did not come within the scope of the
law.''
Mandatory conversions on the single-family home market occurred from
1979 to 1982, and 1986 to 1990. As of 1992, there are approximately
4,600 single-family homes remaining in residential leaseholds. However,
resolution over condominium leasehold reform remains uncertain. In
1990, the Honolulu City Council enacted legislation that would cap
lease rent increases. The constitutionality of the law as challenged in
U.S. District Court, District of Hawaii. The court found the law
unconstitutional because the formula it used to arrive at permitted
lease rent was illogical.
In 1991, due to the Hawaii State Legislature's unwillingness to
address the leasehold problems, the Honolulu City Council again enacted
a mandatory leasehold conversion law for leasehold condominiums,
Ordinance 01-95. The constitutionality of this law is currently being
challenged in the Federal court. Another bill which linked lease rent
increases with the Consumer Price Index and the level of disposable
income available to condominium owners was also considered. This bill,
similar to the one enacted in 1990, was found to be unconstitutional.
The uncertainty in the residential leasehold market continues to
create economic and emotional distress for the leasehold residents of
Hawaii. Voluntary conversion has helped to ease the situation and
substantially reduce the stock of leasehold residential units in
Hawaii. Yet, voluntary conversion is not enough to resolve the
residential leasehold problems.
My legislation will help reduce the economic hardship due to the
uncertainty in Hawaii's residential leasehold system. The leasehold
study contains an analysis of the tax revenue effects of this
legislation by allowing individual tax deductions for residential
ground rent. The analysis suggests that there are potential revenues to
the Federal Government if this legislation is enacted into law.
Mr. President, I ask unanimous consent that the text of my bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 117
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MORTGAGE INTEREST DEDUCTION FOR QUALIFIED NON-
REDEEMABLE GROUND RENTS.
(a) In General.--Section 163(c) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(c) Ground Rents.--For purposes of this subtitle, any
annual or periodic rental under a redeemable ground rent
(excluding amounts in redemption thereof) or a qualified non-
redeemable ground rent shall be treated as interest on an
indebtedness secured by a mortgage.''
(b) Treatment of Qualified Non-Redeemable Ground Rents.--
(1) In general.--Subsections (a), (b), and (d) of section
1055 of the Internal Revenue Code of 1986 (relating to
redeemable ground rents) are amended by inserting ``or
qualified non-redeemable'' after ``redeemable'' each place it
appears.
(2) Definition.--Section 1055 of such Code is amended by
redesignating subsection (d) as subsection (e) and by
inserting after subsection (c) the following new subsection:
``(d) Qualified Non-Redeemable Ground Rent.--For purposes
of this subtitle, the term `qualified non-redeemable ground
rent' means a ground rent with respect to which--
``(1) there is a lease of land which is for a term in
excess of 15 years,
``(2) no portion of any payment is allocable to the use of
any property other than the land surface,
``(3) the lessor's interest in the land is primarily a
security interest to protect the rental payments to which the
lessor is entitled under the lease, and
``(4) the leased property must be used as the taxpayer's
principal residence (within the meaning of section 1034).''
(3) Conforming amendments.--
(A) The heading for section 1055 of such Code is amended by
striking ``redeemable''.
(B) The item relating to section 1055 in the table of
sections for part IV of subchapter O of chapter 1 of subtitle
A of such Code is amended by striking ``Redeemable ground''
and inserting ``Ground''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act,
with respect to taxable years ending after such date.
SEC. 2. CREDIT FOR TRANSACTION COSTS ON THE TRANSFER OF LAND
SUBJECT TO CERTAIN GROUND RENTS.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
foreign tax credit, etc.) is amended by inserting after
section 30A the following new section:
``SEC. 30B. CREDIT FOR TRANSACTION COSTS.
``(a) Allowance of Credit.--
``(1) In general.--At the election of the taxpayer, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the
transaction costs relating to any sale or exchange of land
subject to ground rents with respect to which immediately
after and for at least 1 year prior to such sale or
exchange--
``(A) the transferee is the lessee who owns a dwelling unit
on the land being transferred, and
``(B) the transferor is the lessor.
``(2) Credit allowed to both transferor and transferee.--
The credit allowed under paragraph (1) shall be allowed to
both the transferor and the transferee.
``(b) Limitations.--
``(1) Limitation per dwelling unit.--The amount of the
credit allowed to a taxpayer under subsection (a) for any
taxable year shall not exceed the lesser of--
``(A) $5,000 per dwelling unit, or
``(B) 10 percent of the sale price of the land.
``(2) Limitation based on taxable income.--The amount of
the credit allowed to a taxpayer under subsection (a) for any
taxable year shall not exceed the sum of--
``(A) 20 percent of the regular tax for the taxable year
reduced by the sum of the credits allowable under subpart A
and sections 27, 28, 29, 30, and 30A plus
``(B) the alternative minimum tax imposed by section 55.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Transaction costs.--
``(A) In General.--The term `transaction costs' means any
expenditure directly associated with a transaction, the
purpose of which is to convey to the lessee, by the lessor,
land subject to ground rents.
``(B) Specific expenditures.--Such term includes closing
costs, attorney fees, surveys
[[Page S497]]
and appraisals, and telephone, office, and travel expenses
incurred in negotiations with respect to such transaction.
``(C) Lost rents not included.--Such term does not include
lost rents due to the premature termination of an existing
lease.
``(2) Dwelling unit.--A dwelling unit shall include any
structure or portion of any structure which serves as the
principal residence (within the meaning of section 1034) for
the lessee.
``(3) Reduction in basis.--The basis of property acquired
in a transaction to which this section applies shall be
reduced by the amount of credit allowed under subsection (a).
``(4) Election.--This section shall apply to any taxpayer
for the taxable year only if such taxpayer elects to have
this section so apply.
``(d) Carryover of Credit.--
``(1) Carryover period.--If the credit allowed to the
taxpayer under subsection (a) for any taxable year exceeds
the amount of the limitation imposed by subsection (b)(2) for
such taxable year (hereafter in this subsection referred to
as the `unused credit year'), such excess shall be a
carryover to each of the 5 succeeding taxable years.
``(2) Amount carried to each year.--
``(A) Entire amount carried to first year.--The entire
amount of the unused credit for an unused credit year shall
be carried to the earliest of the 5 taxable years to which
(by reason of paragraph (1)) such credit may be carried.
``(B) Amount carried to other 4 years.--The amount of
unused credit for the unused credit year shall be carried to
each of the remaining 4 taxable years to the extent that such
unused credit may not be taken into account for a prior
taxable year because of the limitation imposed by subsection
(b)(2).
``(e) Termination.--This section shall not apply to any
transaction cost paid or incurred in taxable years beginning
after December 31, 2001.''
(b) Clerical Amendment.--The table of sections for such
subpart B is amended by inserting after the item relating to
section 30A the following new item:
``Sec. 30B. Credit for transaction costs on the transfer of land
subject to certain ground rents.''
(c) Effective Date.--The amendments made by this section
shall apply to expenditures paid or incurred in taxable years
beginning after December 31, 1996.
______
By Mr. INOUYE:
S. 118. A bill to provide for the completion of the naturalization
process for certain nationals of the Philippines; to the Committee on
the Judiciary.
Filipino Naturalization Legislation
Mr. INOUYE.
Mr. President, section 405 of the Immigration Act of 1990 was enacted
to make naturalization under section 329 of the Immigration and
Nationality Act available to those Filipino World War II veterans whose
military service during the liberation of the Philippines makes them
deserving of United States citizenship. The naturalization authority to
allow the veterans to be naturalized in the Philippines was first
granted under Section 113 of the fiscal year 1993 Departments of
Commerce, Justice, State, Judiciary and related agencies appropriations
bill.
The original intent of Congress in providing the Immigration and
Naturalization Service [INS] with the authority to naturalize
applicants in the Philippines was to relieve the unnecessary hardships
that section 405 applicants would encounter by having to travel to the
United States for an interview and naturalization ceremony, since many
are elderly and have no relatives in the United States. The initial
period for filing an application under this provision was from November
29, 1990 to November 30, 1992. Section 113 further extended the filing
period to February 3, 1995.
Unfortunately, the authority to naturalize applicants in the
Philippines has now expired. The legislation I am introducing today
would immediately restore, for a 5-year period, the authority for the
U.S. Embassy in Manila to complete the naturalization process of
approximately 12,000 remaining applications which were properly filed
under section 405 of the 1990 Act. The legislation does not extend the
application period. The legislation also makes clear that
naturalization is available only to those applicants who were found by
the Recovered Personnel Division of the U.S. Army and the Guerrilla
Affairs Division of the U.S. Army to deserve benefits from the U.S.
Government.
Mr. President, I ask unanimous consent that the bill text be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 118
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SEC. ____. COMPLETION OF THE NATURALIZATION PROCESS FOR
CERTAIN NATIONALS OF THE PHILIPPINES.
(a) In General.--Section 405 of the Immigration and
Nationality Act of 1990 (8 U.S.C. 1440 note) is amended--
(1) by striking subparagraph (B) of subsection (a)(1) and
inserting the following:
``(B) who--
``(i) is listed on the final roster prepared by the
Recovered Personnel Division of the United States Army of
those who served honorably in an active duty status within
the Philippine Army during the World War II occupation and
liberation of the Philippines,
``(ii) is listed on the final roster prepared by the
Guerrilla Affairs Division of the United States Army of those
who received recognition as having served honorably in an
active duty status within a recognized guerrilla unit during
the World War II occupation and liberation of the
Philippines, or
``(iii) served honorably in an active duty status within
the Philippine Scouts or within any other component of the
United States Armed Forces in the Far East (other than a
component described in clause (i) or (ii)) at any time during
the period beginning September 1, 1939, and ending December
31, 1946;'';
(2) by adding at the end of subsection (a) the following
new paragraph:
``(3)(A) For purposes of the second sentence of section
329(a) and section 329(b)(3) of the Immigration and
Nationality Act, the executive department under which a
person served shall be--
``(i) in the case of an applicant claiming to have served
in the Philippine Army, the United States Department of the
Army;
``(ii) in the case of an applicant claiming to have served
in a recognized guerrilla unit, the United States Department
of the Army or, in the event the Department of the Army has
no record of military service of such applicant, the General
Headquarters of the Armed Forces of the Philippines; or
``(iii) in the case of an applicant claiming to have served
in the Philippine Scouts or any other component of the United
States Armed Forces in the Far East (other than a component
described in clause (i) or (ii)) at any time during the
period beginning September 1, 1939, and ending December 31,
1946, the United States executive department (or successor
thereto) that exercised supervision over such component.
``(B) An executive department specified in subparagraph (A)
may not make a determination under the second sentence of
section 329(a) with respect to the service or separation from
service of a person described in paragraph (1) except
pursuant to a request from the Service.''; and
(3) by adding at the end the following new subsection:
``(d) Implementation.--(1) Notwithstanding any other
provision of law, for purposes of the naturalization of
natives of the Philippines under this section--
``(A) the processing of applications for naturalization,
filed in accordance with the provisions of this section,
including necessary interviews, shall be conducted in the
Philippines by employees of the Service designated pursuant
to section 335(b) of the Immigration and Nationality Act; and
``(B) oaths of allegiance for applications for
naturalization under this section shall be administered in
the Philippines by employees of the Service designated
pursuant to section 335(b) of that Act.
``(2) Notwithstanding paragraph (1), applications for
naturalization, including necessary interviews, may continue
to be processed, and oaths of allegiance may continue to be
taken in the United States.''.
(b) Repeal.--Section 113 of the Departments of Commerce,
Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 1993 (8 U.S.C. 1440 note), is repealed.
(c) Effective Date; Termination Date.--
(1) Application to pending applications.--The amendment
made by subsection (a) shall apply to applications filed
before February 3, 1995.
(2) Termination date.--The authority provided by the
amendment made by subsection (a) shall expire February 3,
2001.
______
By Mr. INOUYE:
S. 119. A bill to amend title VII of the Public Health Service Act to
ensure that social work students or social work schools are eligible
for support under the Health Careers Opportunity Program, the Minority
Centers of Excellence Program, and programs of grants for training
projects in geriatrics, and to establish a social work training
program; to the Committee on Labor and Human Resources.
PUBLIC HEALTH SERVICE ACT AMENDMENTS
Mr. INOUYE. Mr. President, on behalf of our Nation's clinical social
workers, I am introducing legislation to amend the Public Health
Service Act. This legislation will: First, establish a new social work
training program; second, ensure that social work students are eligible
for support under the Health Careers Opportunity Program and that
social work schools are eligible for support under the Minority Centers
for Excellence programs;
[[Page S498]]
Third, permit schools offering degrees in social work to obtain grants
for training projects in geriatrics; and fourth, ensure that social
work is recognized as a profession under the Public Health Maintenance
Organization [HMO] Act.
Despite the impressive range of services social workers provide to
the people of this Nation, particularly our elderly, disadvantaged, and
minority populations, few Federal programs exist to provide
opportunities for social work training in health and mental health
care. This legislation builds on the health professions education
legislation enacted by the 102d Congress enabling schools of social
work to apply for AIDS training funding and resources to establish
collaborative relationships with rural health care providers and
schools of medicine or osteopathic medicine. This bill provides funding
for traineeships and fellowships for individuals who plan to specialize
in, practice, or teach social work, or for operating approved social
work training programs; it assists disadvantaged students to earn
graduate degrees in social work with concentrations in health or mental
health; it provides new resources and opportunities in social work
training for minorities; and it encourages schools of social work to
expand programs in geriatrics. Finally, the recognition of social work
as a profession merely codifies current social work practice and
reflects the modifications made by the Medicare HMO legislation.
I believe it is important to ensure that the special expertise and
skills social workers possess continue to be available to the citizens
of this Nation. This legislation, by providing financial assistance to
schools of social work and social work students, recognizes the long
history and critical importance of the services provided by social work
professionals. In addition since social workers have provided quality
mental health services to our citizens for a long time and continue to
be at the forefront of establishing innovative programs to serve our
disadvantaged populations, I believe that it is time to provide them
with the proper recognition of their profession that they have clearly
earned and deserve.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congression Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 119
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SOCIAL WORK STUDENTS.
(a) Scholarships, Generally.--Section 737(a)(3) of the
Public Health Service Act (42 U.S.C. 293a(a)(3)) is amended
by striking ``offering graduate programs in clinical
psychology'' and inserting ``offering graduate programs in
clinical psychology, graduate programs in clinical social
work, or programs in social work''.
(b) Faculty Positions.--Section 738(a)(3) of the Public
Health Service Act (42 U.S.C. 293b(a)(3)) is amended by
striking ``offering graduate programs in clinical
psychology'' and inserting ``offering graduate programs in
clinical psychology, graduate programs in clinical social
work, or programs in social work''.
(c) Health Professions School.--Section 739(h)(1)(A) of the
Public Health Service Act (42 U.S.C. 293c(h)(1)(A)) is
amended by striking ``or a school of pharmacy'' and inserting
``a school of pharmacy, or a school offering graduate
programs in clinical social work, or programs in social
work''.
(d) Health Careers Opportunities Program.--Section
740(a)(1) of the Public Health Service Act (42 U.S.C.
293d(a)(1)) is amended by striking ``which offer graduate
programs in clinical psychology'' and inserting ``offering
graduate programs in clinical psychology or programs in
social work''.
SEC. 2. GERIATRICS TRAINING PROJECTS.
Section 777(b)(1) of the Public Health Service Act (42
U.S.C. 294o(b)(1)) is amended by inserting ``schools offering
degrees in social work,'' after ``teaching hospitals,''.
SEC. 3. SOCIAL WORK TRAINING PROGRAM.
Part E of title VII of the Public Health Service Act (42
U.S.C. 294n et seq.) is amended by adding at the end the
following:
``SEC. 779. SOCIAL WORK TRAINING PROGRAM.
``(a) Training Generally.--The Secretary may make grants
to, or enter into contracts with, any public or nonprofit
private hospital, school offering programs in social work, or
to or with a public or private nonprofit entity (which the
Secretary has determined is capable of carrying out such
grant or contract)--
``(1) to plan, develop, and operate, or participate in, an
approved social work training program (including an approved
residency or internship program) for students, interns,
residents, or practicing physicians;
``(2) to provide financial assistance (in the form of
traineeships and fellowships) to students, interns,
residents, practicing physicians, or other individuals, who
are in need thereof, who are participants in any such
program, and who plan to specialize or work in the practice
of social work;
``(3) to plan, develop, and operate a program for the
training of individuals who plan to teach in social work
training programs; and
``(4) to provide financial assistance (in the form of
traineeships and fellowships) to individuals who are
participants in any such program and who plan to teach in a
social work training program.
``(b) Academic Administrative Units.--
``(1) In general.--The Secretary may make grants to or
enter into contracts with schools offering programs in social
work to meet the costs of projects to establish, maintain, or
improve academic administrative units (which may be
departments, divisions, or other units) to provide clinical
instruction in social work.
``(2) Preference in making awards.--In making awards of
grants and contracts under paragraph (1), the Secretary shall
give preference to any qualified applicant for such an award
that agrees to expend the award for the purpose of--
``(A) establishing an academic administrative unit for
programs in social work; or
``(B) substantially expanding the programs of such a unit.
``(c) Duration of Award.--The period during which payments
are made to an entity from an award of a grant or contract
under subsection (a) may not exceed 5 years. The provision of
such payments shall be subject to annual approval by the
Secretary of the payments and subject to the availability of
appropriations for the fiscal year involved to make the
payments.
``(d) Funding.--
``(1) Authorization of appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated $10,000,000 for each of the fiscal years 1998
through 2000.
``(2) Allocation.--Of the amounts appropriated under
paragraph (1) for a fiscal year, the Secretary shall make
available not less than 20 percent for awards of grants and
contracts under subsection (b).''.
SEC. 4. CLINICAL SOCIAL WORKER SERVICES.
Section 1302 of the Public Health Service Act (42 U.S.C.
300e-1) is amended--
(1) in paragraphs (1) and (2), by inserting ``clinical
social worker,'' after ``psychologist,'' each place it
appears;
(2) in paragraph (4)(A), by striking ``and psychologists''
and inserting ``psychologists, and clinical social workers'';
and
(3) in paragraph (5), by inserting ``clinical social
work,'' after ``psychology,''.
______
By Mr. INOUYE:
S. 120. A bill to amend title VII of the Public Health Service Act to
make certain graduate programs in clinical psychology eligible to
participate in various health professions loan programs; to the
Committee on Labor and Human Resources.
public health service act amendments
Mr. INOUYE. Mr. President, I am introducing legislation today to
modify Title VII of the U.S. Public Health Service Act in order to
provide students enrolled in graduate psychology programs with the
opportunity to participate in various health professions loan programs.
Providing students enrolled in graduate psychology programs with
eligibility for financial assistance in the form of loans, loan
guarantees, and scholarships will facilitate a much needed infusion of
behavioral science expertise into our public health efforts. There is a
growing recognition of the valuable contribution that is being made by
our nation's psychologists toward solving some of our Nation's most
distressing problems such as domestic violence, addictions,
occupational stress, child abuse, and depression.
The participation of students of all kinds is vital to the success of
health care training. The Title VII programs play a significant role in
providing financial support for the recruitment of minorities, women,
and individuals from economically disadvantaged backgrounds. Minority
therapists, for example, have an advantage in the provision of critical
services to minority populations because they are more likely to
understand or, perhaps, share the cultural background of their clients
and are often able to communicate to them in their own language. Also
significant is the fact that, when compared with non-minority
graduates, ethnic minority graduates are less likely to work in private
practice and more likely to work in community or non-profit settings,
where ethnic minority and economically disadvantaged individuals are
more likely to seek care.
[[Page S499]]
It is important that a continued emphasis be placed on the needy
populations of our nation and that continued support be provided for
the training of individuals who are most likely to provide services in
underserved areas.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 120
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN
PROGRAMS.
(a) Loan Agreements.--Section 721 of the Public Health
Service Act (42 U.S.C. 292q) is amended--
(1) in subsection (a), by inserting ``, or any public or
nonprofit schools that offer graduate programs in clinical
psychology'' after ``veterinary medicine'';
(2) in subsection (b)(4), by striking ``or doctor of
veterinary medicine or an equivalent degree'' and inserting
``doctor of veterinary medicine or an equivalent degree, or a
graduate degree in clinical psychology''; and
(3) in subsection (c)(1), by inserting ``, or schools that
offer graduate programs in clinical psychology'' after
``veterinary medicine''.
(b) Loan Provisions.--Section 722 of the Public Health
Service Act (42 U.S.C. 292r) is amended--
(1) in subsection (b)(1), by striking ``or doctor of
veterinary medicine or an equivalent degree'' and inserting
``doctor of veterinary medicine or an equivalent degree, or a
graduate degree in clinical psychology''; and
(2) in subsection (k)--
(A) in the matter preceding paragraph (1), by striking ``or
podiatry'' and inserting ``podiatry, or clinical
psychology''; and
(B) in paragraph (4), by striking ``or podiatric medicine''
and inserting ``podiatric medicine, or clinical psychology''.
______
By Mr. MOYNIHAN (for himself, Mr. CHAFEE, Mr. KENNEDY, and Ms.
MOSELEY-BRAUN):
S. 121. A bill to amend the Internal Revenue Code of 1986 to provide
for 501(c)(3) bonds a tax treatment similar to governmental bonds, and
for other purposes; to the Committee on Finance.
the higher education bond parity act
S. 122. A bill to amend the Internal Revenue Code of 1986 to correct
the treatment of tax-exempt financing of professional sports
facilities; to the Committee on Finance.
the stop tax-exempt arena debt issuance act
Mr. MOYNIHAN. Mr. President, I rise today to introduce two tax bills
which I introduced together for the first time last summer. The two
bills are both significant in their own rights. Yet, when taken
together, they correct a serious misallocation of our limited resources
under present law: a tax subsidy that inures largely to the benefit of
wealthy sports franchise owners and their players would be replaced
with increased for higher education and research.
The first bill, the Higher Education Bond Parity Act of 1997, has
been introduced several times previously by this Senator, with several
of my distinguished colleagues as cosponsors. It would undo what ought
never have been done. It would remove the ``private activity'' label
from the tax-exempt bonds of private, nonprofits higher education
institutions and other organizations, and thereby eliminate the
arbitrary $150 million cap on the amount of tax-exempt bonds that such
as institution may have outstanding.
The Tax Reform Act of 1986 imposed the ``private activity'' label
(and a $150 million cap) on bonds issued on behalf on nonprofit
institutions, collectively known as section 501(c)(3) organizations.
This was a serious error. The cap has relegated private, higher
education institutions to a diminished, restricted status, relative to
their public counterparts.
Already, this has caused observable, harmful effects on many of our
Nation's leading colleges and universities. Thirty-four of them
presently are at or near the $150 million cap, and unlike their public
counterparts are precluded from using tax-exempt to finance classrooms,
libraries, research laboratories, and the like. A few years ago, as the
$150 million cap was bargaining to take effect, 19 of the universities
that ranked in the top 50 in research undertaking were private
institutions. Today, only 14 of those 19 private institutions remain in
the top 50, and all but one are foreclosed form tax-exempt financing as
a result of the $150 million per institution limit.
We must act soon to restore the access of private colleges and
universities to tax-exempt financing equal to that of their pubic
counterparts. Otherwise, the vitality of our private institutions in
higher education and research will be at risk. And we will lose a
distinguishing feature of American society of inestimable value--the
singular degree to which we maintain an independent sector--``private
universit[ies] in the public service,'' to paraphrase the motto of New
York University. This is no longer so in most of the democratic world;
it never was so in the rest. It is a treasure and a phenomenon that has
clearly produced excellence--indeed, the envy of the world--and it must
be sustained.
The practical effect of the $150 million cap is to deny tax-exempt
financing to large, private, research-oriented educational institutions
most in need of capital to carry out their research mission. This will
have a predictable impact over a generation: the distribution of major
research in this country will inevitably shift to public institutions.
If I may use California as an example, we could look up one day and
find Stanford to be still an institution of the greatest quality as an
undergraduate teaching facility--with a fine law school and excellent
liberal arts degree program--but with all the big science projects at
Berkeley, the State institution.
By removing the ``private activity'' label, this legislation will
restore the parity of treatment of private nonprofit institutions and
their public counterparts, and reinstate proper recognition in the tax
code of the essential public purposes served by such private
institutions.
The capital needs of private colleges and universities merit the
close attention of this body. The cost of these changes is modest,
given their importance. The staff of the Joint Committee on Taxation
has estimated the revenue loss previously at $308 million over 5 years.
The Senate has twice passed legislation to remove the ``private
activity'' label and the $150 million bond cap--in the Family Tax
Fairness, Economic Growth, and Health Care Access Act of 1992 (H.R.
4210) and the Revenue Act of 1992 (H.R. 11)--only to have both bills
vetoed for other reasons by President Bush. We should correct this
error before it is too late. Otherwise, we will soon look up and find
that we do not recognize the higher education sector.
Mr. President, the second tax bill I introduce today--the Stop Tax-
exempt Arena Debt Issuance Act (or STADIA for short)--was introduced by
this Senator for the first time last summer. Since that time, the bill
has attracted the close scrutiny of bond counsel and their clients and
has received much attention in the press almost all of which has been
favorable.
Mr. Keith Olbermann, anchor of ESPN's Sportscenter program, even
declared that the introduction of the bill was ``paramount among all
other sports stories'' last year. Mr. Olbermann's support for this
legislation is so emphatic that he compared its author to Dr. Jonas
Salk. Passage of the bill, Mr. Olbermann says, is ``the vaccine that *
* * could conceivably at least towards the cure, if not cure
immediately, almost all the ills of sports.''
Mr. Olbermann is far too generous to this Senator, but he is right
about the importance of this bill, both to sports fans and to
taxpayers. This bill closes a big loophole, a loophole that ultimately
injures State and local governments and other issuers of tax-exempt
bonds, that provides an unintended Federal subsidy (in fact,
contravenes Congressional intent), that underwrites bidding wars among
cities battling for professional sports franchises, and that
contributes to the enrichment of persons who need no Federal assistance
whatsoever.
A decade ago, I was much involved in the drafting of the Tax Reform
Act of 1986. A major objective of that legislation was to simplify the
Tax Code by eliminating a large number of loopholes that had come to be
viewed as unfair because they primarily benefited small groups of
taxpayers. One of the loopholes we sought to close in 1986 was one that
permitted builders of professional sports facilities to use tax-exempt
bonds. Mind, we had nothing
[[Page S500]]
against new stadium construction, but we made the judgment that scarce
Federal resources could surely be used in ways that would better serve
the public good. The increasing proliferation of tax-exempt bonds had
driven up interest costs for financing roads, schools, libraries, and
other governmental purposes, led to mounting revenue losses to the U.S.
Treasury, caused an inefficient allocation of capital, and allowed
wealthy taxpayers to shield a growing amount of their investment income
from income tax by purchasing tax-exempt bonds. Thus, we expressly
forbade use of ``private activity'' bonds for sports facilities,
intending to eliminate tax-exempt financing of these facilities
altogether.
Unfortunately, our effort in 1986 backfired. Team owners, with help
from clever tax counsel, soon recognized that the change could work to
their advantage. As columnist Neal R. Pierce wrote recently, team
owners ``were not checkmated for long. They were soon exhibiting the
gall to ask mayors to finance their stadiums with [governmental]
purpose bonds.'' Congress did not anticipate this. After all, by law,
governmental bonds used to build stadiums would be tax-exempt only if
no more than 10 percent of the debt service is derived from stadium
revenue sources. In other words, non-stadium governmental revenues
(i.e., tax revenues, lottery proceeds, and the like) must be used to
repay the bulk of the debt, freeing team owners to pocket stadium
revenues. Who would have thought that local officials, in order to keep
or get a team, would capitulate to team owners--granting concessionary
stadium leases and committing limited government revenues to repay
stadium debt, thereby hindering their own ability to provide schools,
roads and other public investments?
The result has been a stadium construction boom unlike anything we
have ever seen. In the last 6 years alone, over $4 billion has been
spent on building 30 professional sports stadiums. According to Prof.
Robert Baade, an economist at Lake Forest College in Illinois and a
stadium finance expert, that amount could ``completely refurbish the
physical plants of the nation's public elementary and secondary
schools.'' An additional $7 billion of stadiums are in the planning
stages, and no end is in sight.
What is driving the demand for new stadiums? Mainly, team owners'
bottom lines and rising player salaries. Although our existing stadiums
are generally quite serviceable, team owners can generate greater
income, increase their franchise values dramatically, and compete for
high-priced free agents with new tax-subsidized, single-purpose
stadiums equipped with luxury skyboxes, club seats and the like. Thus,
using their monopoly power, owners threaten to move, forcing bidding
wars among cities. End result: new, tax-subsidized stadiums with fancy
amenities and sweetheart lease deals.
To cite a case in point, Mr. Art Modell recently moved the Cleveland
Browns professional football team from Cleveland to Baltimore to become
the Ravens. Prior to relocating, Mr. Modell had said, ``I am not about
to rape the city [of Cleveland] as others in my league have done. You
will never hear me say `if I don't get this I'm moving.' You can go to
press on that one. I couldn't live with myself if I did that.''
Obviously, Mr. Modell changed his mind. And why? An extraordinary
stadium deal with the State of Maryland.
The State of Maryland (and the local sports authority) provided the
land on which the stadium is located, issued $87 million in tax-exempt
bonds (yielding interest savings of approximately $60 million over a 30
year period as compared to taxable bonds), and contributed $30 million
in cash and $64 million in state lottery revenues toward construction
of the stadium. Mr. Modell agreed to contribute $24 million toward the
project and, in return, receives rent-free use of the stadium (the
franchise pays only for the operating and maintenance costs), $65
million in sales of rights to purchase season tickets (so called
``personal seat licenses''), all revenues from selling the right to
name the stadium luxury suites, premium seats, in-park advertising, and
concessions, and 50 percent of all revenues from stadium events other
than Ravens' games (with the right to control the booking of those
events).
Financial World reports that the value of the Baltimore Ravens'
franchise increased from $165 million in 1992 (i.e., before the move
from Cleveland) to an estimated $250 million, after its first season in
the new stadium. It's little wonder that Mr. Modell recently stated:
``The pride and presence of a professional football team is far more
important than 30 libraries, and I say that with all due respect to the
learning process.''
Meanwhile, the City of Cleveland has agreed to construct a new, $225
million stadium to house an expansion football team. When Mr. Modell
decided to move his team to Baltimore, the NFL agreed to create a new
Cleveland football team with the same name: the Cleveland Browns. Most
cities are not as fortunate when a team leaves.
We are even reaching a point at which stadiums are being abandoned
before they have been used for 10 or 15 years. A recent article in
Barron's reports that this owner-perceived ``economic obsolescence''
has doomed even recently-built venues:
The eight-year-old Miami Arena is facing a future without
its two major tenants, the Florida Panthers hockey team and
the Miami Heat basketball franchise, because of inadequate
seating capacity and a paucity of luxury suites. The Panthers
have already cut a deal to move to a new facility that nearby
Broward County is building for them at a cost of around $200
million. Plans call for Dade County to build a new $210
million arena before the end of the decade, despite the fact
that the move will leave local taxpayers stuck with servicing
the debt on two Miami arenas rather than just one.
How do taxpayers benefit from all this? They don't. Tickets prices go
way up--and stay up--after a new stadium opens. So while fans are asked
to foot the bills through tax subsides, many no longer can afford the
price of admission. A study of Newsday recently found that tickets
prices rose by 32 percent in five new baseball stadiums, as compared to
a major league average of 8 percent. Not to mention the refreshments
and other concessions, which also cost more in the new venues.
According to Barron's the projects ``cater largely to well-heeled
fans, meaning the folks who can afford to pay for seats in glassed-in
luxury boxes. While the suit-and-cell-phone crowd get all the best
seats, the average taxpayer is consigned to `cheap seats' in nosebleed
land or, more often, for following his favorite team on television.''
Nor do these new stadiums provide much, if any, economic benefit to
their local communities. Professor Baade studied new stadiums in 30
metropolitan areas. He found no discernible positive impact on economic
development in 27 of the areas, and a negative impact in the other 3.
Any job growth that does result is extremely expensive. The
Congressional Research Service [CRS] reports that the new $177 million
football stadium for the Baltimore Ravens is expected to cost $127,000
per job created. By contrast, the cost per job generated by Maryland's
economic development program is just $6,250. Another recent study in
New York found that a proposed $1 billion stadium for the Yankees would
cost over $500,000 for every job created.
Finally, Federal taxpayers receive absolutely no economic benefit for
providing this subsidy. As CRS points out, ``Almost all stadium
spending is spending that would have been made on other activities
within the United States, which means that benefits to the nation as a
whole are near zero.'' After all, these teams will invariably locate
somewhere in the United States, it is just a matter of where. And
should the Federal taxpayers in the team's current home town be forced
to pay for the team's new stadium in the new city? The answer is
unmistakably no.
The STADIA bill would save about $50 million a year now spent to
subsidize professional sports stadiums. So I ask you once again this
year, should we subsidize the commercial pursuits of wealthy team
owners, encourage escalating player salaries, and underwrite bidding
wars among cities seeking (or fighting to keep) professional sports
teams, or, would our scarce resources be put to better use for public
needs, like higher education and research? To my mind, this is not a
difficult choice.
Mr. President, I ask unanimous consent that the two bills be printed
in the Record, along with explanatory statements. I also ask unanimous
consent that the following articles be printed
[[Page S501]]
in the Record following the bills and explanatory statements.
There being no objection, the items were ordered to be printed in the
Record, as follows:
S. 121
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Higher Education Bond Parity
Act''.
SEC. 2. TAX TREATMENT OF 501(c)(3) BONDS SIMILAR TO
GOVERNMENTAL BONDS.
(a) In General.--Section 150(a) of the Internal Revenue
Code of 1986 (relating to definitions and special rules) is
amended by striking paragraphs (2) and (4), by redesignating
paragraphs (5) and (6) as paragraphs (4) and (5),
respectively, and by inserting after paragraph (1) the
following:
``(2) Exempt person.--
``(A) In general.--The term `exempt person' means--
``(i) a governmental unit, or
``(ii) a 501(c)(3) organization, but only with respect to
its activities which do not constitute unrelated trades or
businesses as determined by applying section 513(a).
``(B) Governmental unit not to include federal
government.--The term `governmental unit' does not include
the United States or any agency or instrumentality thereof.
``(C) 501(c)(3) organization.--The term `501(c)(3)
organization' means any organization described in section
501(c)(3) and exempt from tax under section 501(a).''.
(b) Repeal of Qualified 501(c)(3) Bond Designation.--
Section 145 of the Internal Revenue Code of 1986 (relating to
qualified 501(c)(3) bonds) is repealed.
(c) Conforming Amendments.--
(1) Section 141(b)(3) of the Internal Revenue Code of 1986
is amended--
(A) in subparagraphs (A)(ii)(I) and (B)(ii), by striking
``government use'' and inserting ``exempt person use'';
(B) in subparagraph (B), by striking ``a government use''
and inserting ``an exempt person use'';
(C) in subparagraphs (A)(ii)(II) and (B), by striking
``related business use'' and inserting ``related private
business use'';
(D) in the heading of subparagraph (B), by striking
``related business use'' and inserting ``related private
business use''; and
(E) in the heading thereof, by striking ``government use''
and inserting ``exempt person use''.
(2) Section 141(b)(6)(A) of such Code is amended by
striking ``a governmental unit'' and inserting ``an exempt
person''.
(3) Section 141(b)(7) of such Code is amended--
(A) by striking ``government use'' and inserting ``exempt
person use''; and
(B) in the heading thereof, by striking ``Government use''
and inserting ``Exempt person use''.
(4) Section 141(b) of such Code is amended by striking
paragraph (9).
(5) Section 141(c)(1) of such Code is amended by striking
``governmental units'' and inserting ``exempt persons''.
(6) Section 141 of such Code is amended by redesignating
subsection (e) as subsection (f) and by inserting after
subsection (d) the following:
``(e) Certain Issues Used To Provide Residential Rental
Housing for Family Units.--
``(1) In general.--Except as provided in paragraph (2), for
purposes of this title, the term `private activity bond'
includes any bond issued as part of an issue if any portion
of the net proceeds of the issue are to be used (directly or
indirectly) by an exempt person described in section
150(a)(2)(A)(ii) to provide residential rental property for
family units. This paragraph shall not apply if the bond
would not be a private activity bond if the section 501(c)(3)
organization were not an exempt person.
``(2) Exception for bonds used to provide qualified
residential rental projects.--Paragraph (1) shall not apply
to any bond issued as part of an issue if the portion of such
issue which is to be used as described in paragraph (1) is to
be used to provide--
``(A) a residential rental property for family units if the
first use of such property is pursuant to such issue,
``(B) qualified residential rental projects (as defined in
section 142(d)), or
``(C) property which is to be substantially rehabilitated
in a rehabilitation beginning within the 2-year period ending
1 year after the date of the acquisition of such property.
``(3) Substantial rehabilitation.--
``(A) In general.--Except as provided in subparagraph (B),
rules similar to the rules of section 47(c)(1)(C) shall apply
in determining for purposes of paragraph (2)(C) whether
property is substantially rehabilitated.
``(B) Exception.--For purposes of subparagraph (A), clause
(ii) of section 47(c)(1)(C) shall not apply, but the
Secretary may extend the 24-month period in section
47(c)(1)(C)(i) where appropriate due to circumstances not
within the control of the owner.
``(4) Certain property treated as new property.--Solely for
purposes of determining under paragraph (2)(A) whether the
1st use of property is pursuant to tax-exempt financing--
``(A) In general.--If--
``(i) the 1st use of property is pursuant to taxable
financing,
``(ii) there was a reasonable expectation (at the time such
taxable financing was provided) that such financing would be
replaced by tax-exempt financing, and
``(iii) the taxable financing is in fact so replaced within
a reasonable period after the taxable financing was provided,
then the 1st use of such property shall be treated as being
pursuant to the tax-exempt financing.
``(B) Special rule where no operating state or local
program for tax-exempt financing.--If, at the time of the 1st
use of property, there was no operating State or local
program for tax-exempt financing of the property, the 1st use
of the property shall be treated as pursuant to the 1st tax-
exempt financing of the property.
``(C) Definitions.--For purposes of this paragraph--
``(i) Tax-exempt financing.--The term `tax-exempt
financing' means financing provided by tax-exempt bonds.
``(ii) Taxable financing.--The term `taxable financing'
means financing which is not tax-exempt financing.''.
(7) Section 141(f) of such Code, as redesignated by
paragraph (6), is amended--
(A) at the end of subparagraph (E), by adding ``or'';
(B) at the end of subparagraph (F), by striking ``, or''
and inserting a period; and
(C) by striking subparagraph (G).
(8) The last sentence of section 144(b)(1) of such Code is
amended by striking ``(determined'' and all that follows to
the period.
(9) Section 144(c)(2)(C)(ii) of such Code is amended by
striking ``a governmental unit'' and inserting ``an exempt
person''.
(10) Section 146(g) of such Code is amended--
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively; and
(C) by striking ``Paragraph (4)'' and inserting ``Paragraph
(3)''.
(11) The heading of section 146(k)(3) of such Code is
amended by striking ``governmental'' and inserting ``exempt
person''.
(12) The heading of section 146(m) of such Code is amended
by striking ``Government'' and inserting ``Exempt Person''.
(13) Section 147(b) of such Code is amended by striking
paragraph (4) and by redesignating paragraph (5) as paragraph
(4).
(14) Section 147(h) of such Code is amended to read as
follows:
``(h) Certain Rules Not To Apply to Mortgage Revenue Bonds
and Qualified Student Loan Bonds.--Subsections (a), (b), (c),
and (d) shall not apply to any qualified mortgage bond,
qualified veterans' mortgage bond, or qualified student loan
bond.''.
(15) Section 148(d)(3)(F) of such Code is amended--
(A) by striking ``or which is a qualified 501(c)(3) bond'';
and
(B) in the heading thereof, by striking ``governmental use
bonds and qualified 501(c)(3)'' and inserting ``exempt
person''.
(16) Section 148(f)(4)(B)(ii)(II) of such Code is amended
by striking ``(other than a qualified 501(c)(3) bond)''.
(17) Section 148(f)(4)(C)(iv) of such Code is amended--
(A) by striking ``a governmental unit or a 501(c)(3)
organization'' both places it appears and inserting ``an
exempt person'';
(B) by striking ``qualified 501(c)(3) bonds,''; and
(C) by striking the comma after ``private activity bonds''
the first place it appears.
(18) Section 148(f)(7)(A) of such Code is amended by
striking ``(other than a qualified 501(c)(3) bond)''.
(19) Section 149(d)(2) of such Code is amended--
(A) by striking ``(other than a qualified 501(c)(3)
bond)''; and
(B) in the heading thereof, by striking ``Certain private''
and inserting ``Private''.
(20) Section 149(e)(2) of such Code is amended--
(A) in the second sentence, by striking ``which is not a
private activity bond'' and inserting ``which is a bond
issued for an exempt person described in section
150(a)(2)(A)(i)''; and
(B) by adding at the end the following: ``Subparagraph (D)
shall not apply to any bond which is not a private activity
bond but which would be such a bond if the 501(c)(3)
organization using the proceeds thereof were not an exempt
person.''.
(21) The heading of section 150(b) of such Code is amended
by striking ``Tax-Exempt Private Activity Bonds'' and
inserting ``Certain Tax-Exempt Bonds''.
(22) Section 150(b)(3) of such Code is amended--
(A) in subparagraph (A), by inserting ``owned by a
501(c)(3) organization'' after ``any facility'';
(B) in subparagraph (A), by striking ``any private activity
bond which, when issued, purported to be a tax-exempt
qualified 501(c)(3) bond'' and inserting ``any bond which,
when issued, purported to be a tax-exempt bond, and which
would be a private activity bond if the 501(c)(3)
organization using the proceeds thereof were not an exempt
person''; and
(C) by striking the heading thereof and inserting ``Bonds
for exempt persons other than governmental units.--''.
(23) Section 150(b)(5) of such Code is amended--
(A) in subparagraph (A), by striking ``private activity'';
(B) in subparagraph (A), by inserting ``and which would be
a private activity bond if the 501(c)(3) organization using
the proceeds
[[Page S502]]
thereof were not an exempt person'' after ``tax-exempt
bond'';
(C) by striking subparagraph (B) and inserting the
following:
``(B) such facility is required to be owned by an exempt
person, and''; and
(D) in the heading thereof, by striking ``governmental
units or 501(c)(3) organizations'' and inserting ``exempt
persons''.
(24) Section 150 of such Code is amended by adding at the
end the following:
``(f) Certain Rules To Apply to Bonds for Exempt Persons
Other Than Governmental Units.--
``(1) In general.--Nothing in section 103(a) or any other
provision of law shall be construed to provide an exemption
from Federal income tax for interest on any bond which would
be a private activity bond if the 501(c)(3) organization
using the proceeds thereof were not an exempt person unless
such bond satisfies the requirements of subsections (b) and
(f) of section 147.
``(2) Special rule for pooled financing of 501(c)(3)
organization.--
``(A) In general.--At the election of the issuer, a bond
described in paragraph (1) shall be treated as meeting the
requirements of section 147(b) if such bond meets the
requirements of subparagraph (B).
``(B) Requirements.--A bond meets the requirements of this
subparagraph if--
``(i) 95 percent or more of the net proceeds of the issue
of which such bond is a part are to be used to make or
finance loans to 2 or more 501(c)(3) organizations or
governmental units for acquisition of property to be used by
such organizations,
``(ii) each loan described in clause (i) satisfies the
requirements of section 147(b) (determined by treating each
loan as a separate issue),
``(iii) before such bond is issued, a demand survey was
conducted which shows a demand for financing greater than an
amount equal to 120 percent of the lendable proceeds of such
issue, and
``(iv) 95 percent or more of the net proceeds of such issue
are to be loaned to 501(c)(3) organizations or governmental
units within 1 year of issuance and, to the extent there are
any unspent proceeds after such 1-year period, bonds issued
as part of such issue are to be redeemed as soon as possible
thereafter (and in no event later than 18 months after
issuance).
A bond shall not meet the requirements of this subparagraph
if the maturity date of any bond issued as part of such issue
is more than 30 years after the date on which the bond was
issued (or, in the case of a refunding or series of
refundings, the date on which the original bond was
issued).''.
(25) Section 1302 of the Tax Reform Act of 1986 is
repealed.
(26) Section 57(a)(5)(C) of such Code is amended by
striking clause (ii) and by redesignating clauses (iii) and
(iv) as clauses (ii) and (iii), respectively.
(27) Section 103(b)(3) of such Code is amended by inserting
``and section 150(f)'' after ``section 149''.
(28) Section 265(b)(3) of such Code is amended--
(A) in subparagraph (B), by striking clause (ii) and
inserting the following:
``(ii) Certain bonds not treated as private activity
bonds.--For purposes of clause (i)(II), there shall not be
treated as a private activity bond any obligation issued to
refund (or which is part of a series of obligations issued to
refund) an obligation issued before August 8, 1986, which was
not an industrial development bond (as defined in section
103(b)(2) as in effect on the day before the date of the
enactment of the Tax Reform Act of 1986) or a private loan
bond (as defined in section 103(o)(2)(A), as so in effect,
but without regard to any exemption from such definition
other than section 103(o)(2)(A)).''; and
(B) in subparagraph (C)(ii)(I), by striking ``(other than a
qualified 501(c)(3) bond, as defined in section 145)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to bonds
(including refunding bonds) issued with respect to capital
expenditures made on or after the date of the enactment of
this Act.
(2) Exception.--The amendments made by this section shall
not apply to bonds issued before January 1, 1997, for
purposes of applying section 148(f)(4)(D) of the Internal
Revenue Code of 1986.
____
Higher Education Bond Parity Act of 1997
present law
Interest on State and local governmental bonds generally is
excluded from income if the bonds are issued to finance
direct activities of these governments (sec. 103). Interest
on bonds issued by these governments to finance activities of
other persons, e.g., private activity bonds, is taxable
unless a specific exception is included in the Code. One such
exception is for private activity bonds issued to finance
activities of private, charitable organizations described in
Code section 501(c)(3) (``section 501(c)(3) organizations'')
when the activities do not constitute an unrelated trade
business (sec. 141(e)(1)(G)).
Classification of section 501(c)(3) organization bonds as private
activity bonds
Before enactment of the Tax Reform Act of 1986, States and
local governments and section 501(c)(3) organizations were
defined as ``exempt persons,'' under the Code bond
provisions. As exempt persons, section 501(c)(3)
organizations were not treated as `'private'' persons, and
their bonds were not ``industrial development bonds'' or
``private loan bonds'' (the predecessor categories to current
private activity bonds). Under present law, a bond is a
private activity bond if its proceeds are used in a manner
violating either (a) a private business test or (b) a private
loan test. The private business test is a conjunctive two-
pronged test. First, the test limits private business use of
governmental bonds to no more than 10 percent of the
proceeds.\1\ Second, no more than 10 percent of the debt
service on the bonds may be secured by or derived from
private business users of the proceeds. The private loan test
limits to the lesser of 5 percent or $5 million the amount of
governmental bond proceeds that may be used to finance loans
to persons other than governmental units.
---------------------------------------------------------------------------
Footnotes at end of article.
---------------------------------------------------------------------------
Special restrictions on tax-exemption for section 501(c)(3)
organization bonds
Present law treats section 501(c)(3) organizations as
private persons; thus, bonds for their use may only be issued
as private activity ``qualified 501(c)(3) bonds,'' subject to
the restrictions of Code section 145. The most significant of
these restrictions limits the amount of outstanding bonds
from which a section 501(c)(3) organization may benefit to
$150 million. In applying this ``$150 million limit,'' all
section 501(c)(3) organizations under common management or
control are treated as a single organization. The limit does
not apply to bonds for hospital facilities, defined to
include only acute care, primarily impatient, organizations.
A second restriction limits to no more than five percent the
amount of the net proceeds of a bond issue that may be used
to finance any activities (including all costs of issuing the
bonds) other than the exempt purposes of the section
501(c)(3) organization.
Legislation enacted in 1988 imposed low-income tenant
occupancy restrictions on existing residential rental
property that is acquired by section 501(c)(3)
organizations in tax-exempt-bond-financed transactions.
These restrictions required that a minimum number of the
housing units comprising the property be continuously
occupied by tenants having a family incomes of 50 percent
(60 percent in certain cases) of area median income for
periods of up to 15 years. These same low-income tenant
occupancy requirements apply to for-profit developers
receiving tax-exempt private activity bond financing.
Other restrictions
Several restrictions are imposed on private activity bonds
generally that do not apply to bonds used to finance State
and local government activities. Many of these restrictions
also apply to qualified 501(c)(3) bonds. No more than two
percent of the proceeds of a bond issue may be used to
finance the costs of issuing the bonds, and these monies are
not counted in determining whether the bonds satisfy the
requirement that at least 95 percent of the net proceeds of
each bond issue be used for the exempt activities qualifying
the bonds for tax-exemption.
The weighted average maturity of a bond issue may not
exceed 120 percent of the average economic life of the
property financed with the proceeds. A public hearing must be
held and an elected public official must approve the bonds
before they are issued (or the bonds must be approved by
voter referendum).
If property financed with private activity bonds is
converted to use not qualifying for tax-exempt financing,
certain loan interest penalties are imposed.
Both governmental and private activity bonds are subject to
numerous other Code restrictions, including the following:
1. The amount of arbitrage profits that may be earned on
tax-exempt bonds is strictly limited, and most such profits
must be rebated to the Federal Government;
2. Banks may not deduct interest they pay to the extent of
their investments in most tax-exempt bonds; and
3. Interest on private activity bonds, other than qualified
501(c)(3) bonds, is a preference item in calculating the
alternative minimum tax.
Reasons for Change
A distinguishing feature of American society is the
singular degree to which the United States maintains a
private, non-profit sector of private higher education,
health care, and other charitable institutions in the public
service. It is important to assist these private institutions
in their advancement of the public good. The restrictions
of present law place these section 501(c)(3) organizations
at a financial disadvantage relative to substantially
identical governmental institutions, and are particularly
inappropriate. For example, private, non-profit research
universities are subject to the $150 million limitation on
outstanding bonds, whereas State-sponsored universities
competing for the same research projects do not operate
under a comparable restriction. A public hospital
generally has unlimited access to tax-exempt bond
financing, while a private, non-profit hospital is subject
to a $150 million limitation on outstanding bonds to the
extent the bonds finance health care facilities that do
not qualify under the present-law definition of hospital.
These and other restrictions inhibit the ability of
America's private, non-profit institutions to modernize
their health care facilities and to build state-of-the-art
research facilities for the advancement of science,
medicine, and other educational endeavors.
[[Page S503]]
Inhibiting the access of private, non-profit research
institutions to sources of capital financing, in relation to
their public counterparts, distorts the distribution of major
research among the leading institutions, and over time will
lead to the decline of research undertakings by private, non-
profit universities. The tax-exempt bond rules should reduce
these distortions by treating more equally State and local
governments and those private organizations which are engaged
in similar actions advancing the public good.
explanation of provision
The bill amends the tax-exempt bond provisions of the Code
to conform generally the treatment of bonds for section
501(c)(3) organizations to that provided for bonds issued to
finance direct State or local government activities,
including construction of public hospitals and university
facilities. Certain restrictions, described below, that have
been imposed on qualified 501(c)(3) bonds (but not on
governmental bonds) since 1986, and that address specialized
policy concerns, are retained.
Repeal of private activity bond classification for bonds for section
501(c)(3) organizations
The concept of an ``exempt person'' that existed under the
Code bond provisions before 1986, is reenacted. An exempt
person is defined as (a) a State or local governmental unit
or (b) a section 501(c)(3) organization, when carrying out
its exempt activities under Code section 501(a). Thus, bonds
for section 501(c)(3) organizations are generally no longer
classified as private activity bonds. Financing for unrelated
business activities of such organizations continue to be
treated as a private activity for which tax-exempt financing
is not authorized.
As exempt persons, section 501(c)(3) organizations are
subject to the same limits as States and local governments on
using their bond proceeds to finance private business
activities or to make private loans. Thus, generally no more
than 10 percent of the bond proceeds\2\ can be used in a
business use of a person other than an exempt person if
the Code private payment test is satisfied, and no more
than 5 percent ($5 million if less) can be used to make
loans to such ``nonexempt'' persons.
Repeal of most additional special restrictions on section 501(c)(3)
organization bonds
Persent Code section 145, which establishes additional
restrictions on qualified 501(c)(3) bonds, is repealed, along
with the restriction on bond-financed costs of issuance for
section 501(c)(3) organization bonds (sec. 147(h)). This
eliminates the $150 million limit on non-hospital bonds for
section 501(c)(3) organizations.
Retention of certain specialized requirements for section 501(c)(3)
organization bonds
The bill retains certain specialized restrictions on bonds
for section 501(c)(3) organizations. First, the bill retains
the requirement that existing residential rental property
acquired by a section 501(c)(3) organization in a tax-exempt-
bond-financed transaction satisfy the same low-income tenant
requirements as similar housing financing for for-profit
developers. Second, the bill retains the present-law maturity
limitations applicable to bonds for section 501(c)(3)
organizations, and the public approval requirements
applicable generally to private activity bonds. Third, the
bill continues to apply the penalties on changes in use of
tax-exempt-bond-financed section 501(c)(3) organization
property to a use not qualified for such financing.
Finally, the bill makes no amendments, other than technical
conforming amendments, to the tax-exempt arbitrage
restrictions, the alternative minimum tax tax-exempt bond
preference, or the provisions generally disallowing interest
paid by banks on monies used to acquire or carry tax-exempt
bonds.
effective date
The provision is generally effective for bonds issued with
respect to capital expenditures made after the date of
enactment. The provision does not apply to bonds issued prior
to January 1, 1997 for the purposes of applying the rebate
requirements under Section 148(f)(4)(D).
footnotes
\1\ No more than 5 percent of bond proceeds may be used in a
private business use that is unrelated to the governmental
purpose of the bond issue. the 10-percent debt service test,
described below, likewise is reduced to 5 percent in the case
of such ``disproportionate'' private business use.
\2\ This limit would be reduced to 5 percent in the case of
disproportionate private use as under the present-law
governmental bond disproportionate private use limit.
____
S. 122
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Tax-Exempt Arena Debt
Issuance Act''.
SEC. 2. TREATMENT OF TAX-EXEMPT FINANCING OF PROFESSIONAL
SPORTS FACILITIES.
(a) In General.--Section 141 of the Internal Revenue Code
of 1986 (defining private activity bond and qualified bond)
is amended by redesignating subsection (e) as subsection (f)
and by inserting after subsection (d) the following new
subsection:
``(e) Certain Issues Used for Professional Sports
Facilities Treated as Private Activity Bonds.--
``(1) In general.--For purposes of this title, the term
`private activity bond' includes any bond issued as part of
an issue if the amount of the proceeds of the issue which are
to be used (directly or indirectly) to provide professional
sports facilities exceeds the lesser of--
``(A) 5 percent of such proceeds, or
``(B) $5,000,000.
``(2) Bond not treated as a qualified bond.--For purposes
of this title, any bond described in paragraph (1) shall not
be a qualified bond.
``(3) Professional sports facilities.--For purposes of this
subsection--
``(A) In general.--The term `professional sports
facilities' means real property or related improvements used
for professional sports exhibitions, games, or training,
regardless if the admission of the public or press is allowed
or paid.
``(B) Use for professional sports.--Any use of facilities
which generates a direct or indirect monetary benefit (other
than reimbursement for out-of pocket expenses) for a person
who uses such facilities for professional sports exhibitions,
games, or training shall be treated as a use described in
subparagraph (A).
``(4) Anti-abuse regulations.--The Secretary shall
prescribe such regulations as may be appropriate to carry out
the purposes of this subsection, including such regulations
as may be appropriate to prevent avoidance of such purposes
through related persons, use of related facilities or
multiuse complexes, or otherwise.''
(b) Effective Date.--
(1) In general.--Except as provided in paragraphs (2), (3),
and (5), the amendments made by this section shall apply to
bonds issued on or after the first date of committee action.
(2) Exception for construction, binding agreements, or
approved projects.--The amendments made by this section shall
not apply to bonds--
(A) the proceeds of which are used for--
(i) the construction or rehabilitation of a facility--
(I) if such construction or rehabilitation began before
June 14, 1996, and was completed on or after such date, or
(II) if a State or political subdivision thereof has
entered into a binding contract before June 14, 1996, that
requires the incurrence of significant expenditures for such
construction or rehabilitation, and some of such expenditures
are incurred on or after such date; or
(ii) the acquisition of a facility pursuant to a binding
contract entered into by a State or political subdivision
thereof before June 14, 1996, and
(B) which are the subject of an official action taken by
relevant government officials before June 14, 1996--
(i) approving the issuance of such bonds, or
(ii) approving the submission of the approval of such
issuance to a voter referendum.
(3) Exception for final bond resolutions.--The amendments
made by this section shall not apply to bonds the proceeds of
which are used for the construction or rehabilitation of a
facility if a State or political subdivision thereof has
completed all necessary governmental approvals for the
issuance of such bonds before June 14, 1996.
(4) Significant expenditures.--For purposes of paragraph
(2)(A)(i)(II), the term ``significant expenditures'' means
expenditures equal to or exceeding 10 percent of the
reasonably anticipated cost of the construction or
rehabilitation of the facility involved.
(5) Exception for certain current refundings.--
(A) In general.--The amendments made by this section shall
not apply to any bond the proceeds of which are used
exclusively to refund a qualified bond (or a bond which is a
part of a series of refundings of a qualified bond) if--
(i) the amount of the refunding bond does not exceed the
outstanding principal amount of the refunded bond,
(ii) the average maturity date of the issue of which the
refunding bond is a part is not later than the average
maturity date of the bonds to be refunded by such issue, and
(iii) the net proceeds of the refunding bond are used to
redeem the refunded bond not later than 90 days after the
date of the issuance of the refunding bond.
For purposes of clause (ii), average maturity shall be
determined in accordance with section 147(b)(2)(A) of the
Internal Revenue Code of 1986.
(B) Qualified bond.--For purposes of subparagraph (A), the
term ``qualified bond'' means any tax-exempt bond to finance
a professional sports facility (as defined in section
141(e)(3) of such Code, as added by subsection (a)) issued
before the first date of committee action.
The Stop Tax-Exempt Arena Debt Issuance Act
present law
Interest on State and local governmental bonds generally is
excluded from income if the bonds are issued to finance
direct activities of these governments (sec. 103). Interest
on bonds issued by these governments to finance activities of
other persons, e.g., private activity bonds, is taxable
unless the bonds satisfy certain requirements. Private
activity bonds must be within certain statewide volume
limitations, must not violate the arbitrage and other
applicable restrictions, and must finance activities within
one of the categories specified in the Code. The
[[Page S504]]
Tax Reform Act of 1986 repealed the private activity bond
category for sports facilities; therefore no private activity
bonds may be issued for this purpose.
Bonds issued by State and local governments are considered
to be government use bonds, unless the bonds are classified
as private activity bonds. Bonds are deemed to be private
activity bonds if both the (i) private business use test and
(ii) private security or payment test are met. The private
business use test is met if more than 10 percent of the bond
proceeds, including facilities financed with the bond
proceeds, is used in a nongovernmental trade or business. The
private security or payment test is met if more than 10
percent of the bond repayments is secured by privately used
property, or is derived from the payments of private business
users. Additionally, bonds are deemed to be private activity
bonds if more than five percent of the bond proceeds or $5
million are used to finance loans to persons other than
governmental units.
reasons for change
The use of tax-exempt financing for professional sports
facilities provides an indirect and inefficient federal tax
subsidy. Congress intended to eliminate this subsidy for
professional sports facilities in the Tax Reform Act of 1986,
by repealing the private activity bond category for sports
facilities. Congress did not intend to continue the subsidy
by allowing the use of tax-exempt bonds to finance the
identical underlying private business use through alternative
financing arrangements.
In addition, the use of tax-exempt bonds to finance
professional sports facilities is particularly inappropriate
where the facilities to be built are used to entice
professional sports franchises to relocate.
explanation of provision
The bill would provide that bonds issued to finance
professional sports facilities are private activity bonds,
and that such bonds are not qualified bonds. Therefore,
professional sports facilities will not qualify for tax-
exempt bond financing.
A professional sports facility is defined to include real
property and related improvements which are used for
professional sports exhibitions, games, or training, whether
or not admission of the public or press is allowed or paid.
In addition, a facility that is used for a purpose other than
professional sports will nevertheless be treated as being
used for professional sports if the facility generates a
direct or indirect monetary benefit (other than reimbursement
for out-of-pocket expenses) for a person who uses the
facility for professional sports. These benefits are intended
to include an interest in revenues from parking fees, food
and beverage sales, advertising and sports facility naming
rights, television rights, ticket sales, private suites and
club seats, and concessions.
Public use infrastructure improvements that connect to
larger public-use systems, such as highway access ramps and
sewer and water connections, are not intended to be subject
to the bill. Thus, bonds issued to finance such improvements
could still qualify for tax-exempt status., if such bonds
otherwise qualify for such status under applicable tax-exempt
bond rules. Improvements which generate a direct or indirect
monetary benefit for a person who uses the facility for
professional sports are meant to be covered by the bill. For
example, if a professional sports team owner receives
revenues from the use of a parking garage, the garage is not
eligible for tax-exempt financing under the bill.
The Secretary of the Treasury is authorized to issue anti-
abuse regulations to prevent transactions intended to
improperly divert the indirect Federal subsidy for
traditional governmental uses inherent in tax-exempt bonds
for the benefit of professional sports facilities or
professional sports teams. It is intended that no tax-exempt
bond proceeds may finance a ball park used for professional
sports exhibitions, even if the ball park is made a part of a
larger multi-use complex used 365 days a year for other
purposes. In addition, it is intended that reciprocal usage
of sports facilities by professional sports franchises that
divide their usage among several facilities in order to avoid
the 5% use test be aggregated for purposes of this provision.
No inference is intended regarding the rules under present
law regarding the issuance or holding of, or interest paid or
accrued on, any bonds issued prior to the effective date of
this bill to finance sports facilities.
Effective Date
The bill is effective with respect to bonds issued on or
after the first date of committee action.
The bill does not apply to bonds issued to finance a
professional sports facility if actual construction or
rehabilitation of the facility began prior to June 14, 1996
(or a State or political subdivision thereof had entered into
a binding contract prior to that date to construct,
rehabilitate or acquire the facility) and such bonds are the
subject of appropriate official action approving the bonds or
submitting approval to a voter referendum. In addition, the
bill does not apply to bonds issued to finance a professional
sports facility if a State or policical subdivision thereof
has completed all necessary governmental approvals for the
issuance of such bonds.
The bill does not apply to the issuance of certain current
refunding bonds, where the refunded bonds are qualified bonds
issued prior to the first date of committee action, the
average maturity and outstanding principal amount of the
refunding bonds do not exceed that of the refunded bonds, the
proceeds of the refunding bonds are used to redeem the
refunded bonds within 90 days, and the refunding bonds are
otherwise permissible under applicable provisions of the
Code.
[From Barron's, August 19, 1996]
Foul Play?
Team owners get sports palaces and fat concession deals.
Taxpayers get stuck with the tab.
(By Jonathan R. Laing)
Sports stadiums have come to play an almost religious role
in American culture, a fact noted by observers as varied as
famed architect Philip Johnson and best-selling author James
Michener. Like cathedrals of yore, today's towering sports
venues often dazzle the masses with their immense size and
evoke fervent emotions with their ritual events. And for some
fans, cheering along with a crowd of 60,000 people is about
as close to a religious experience as they'll ever get.
This facet of American life is worth contemplating, if for
no other reason than, in the 1990s alone, 30 professional
sports palaces have been built in the U.S., at a total cost
of over $4 billion. And the trend shows no signs of stopping.
Over the next five to seven years, according to Fitch
Investors Services, some 40 more major-league teams are
likely to get new homes. Total price tag: an added $7
billion.
The surge of building activity is mind-boggling on a number
of counts. To begin with, it is being financed mainly by
state and local governments in spite of the fact that budgets
are tight everywhere, leaving schools and social programs
facing deep cutbacks. Yet in referendum after referendum,
voters regularly approve large dollops of city and state
backing to projects that will cater largely to well-heeled
fans, meaning the folks who can afford to pay for seats in
glassed-in luxury boxes. While the suit-and-cell-phone crowd
get all the best seats for corporate entertaining, the
average taxpayer is consigned to ``cheap'' seats in nosebleed
land or, more often, to following his favorite team on cable
television.
But voters don't seem to mind. In Cincinnati last March
they decided to raise Hamilton County's sales tax to 6% from
5.5%, to help pay for a $540 million plan to eventually raze
the city's Riverfront Stadium and replace it with separate,
state-of-the-art edifices for the Bengals football squad and
the Reds baseball team.
And even in places where referenda have failed, local
politicians leap into the fray to rescue beleaguered
projects. Example: When a proposal to use proceeds from a
statewide lottery to fund a new ballpark for the Milwaukee
Brewers went down to defeat, the Wisconsin State Legislature
gave the venture new life by approving a hike in the sales
tax in the five-county area around Milwaukee to finance the
bulk of the proposed $250 million project. Likewise, two
defeats for stadium referenda in Seattle were insufficient to
keep the Washington State Legislature from meeting in
emergency session to approve a financial package clearing
the way for a new $300 million baseball stadium for the
Seattle Mariners, complete with a retractable roof.
Even privately financed facilities, of which there are a
handful, typically benefit from public subsidies in the form
of land donations and free infrastructure improvements. The
Carolina Panthers' new $170 million Ericsson Stadium in
Charlotte, for instance, received plenty of such goodies, as
will a proposed $250 million downtown baseball stadium for
San Francisco's Giants.
Perhaps more bizarre, many of the stadiums that have
already been demolished or are slated for abandonment are
relatively new and in good condition. The days may be
numbered, for example, for the multi-use ovals built in the
early 'Seventies such as Veterans Stadium in Philadelphia and
Three Rivers Stadium in Pittsburgh. Both of these facilities
will likely lose their baseball and football teams. Such
stadiums simply lack the skyboxes and other revenue-producing
``fan amenities'' demanded by today's team owners.
So-called ``economic obsolesence'' may also doom venues of
even newer vintage. The eight-year-old Miami Arena is facing
a future without its two major tenants, the Florida Panthers
hockey team and the Miami Heat basketball franchise, because
of inadequate seating capacity and a paucity of luxury
suites.
The Panthers have already cut a deal to move to a new
facility that nearby Broward County is building for them at a
cost of around $200 million. Plans call for Dade County to
build a new $210 million arena for the Heat before the end of
the decade, despite the fact that the move will leave local
taxpayers stuck with servicing the debt on two Miami arenas
rather than just one.
``The shelf life on sports facilities seems to be ever-
compressing as teams force local authorities and
municipalities to build them new venues so that every
conceivable source of revenue they can identify can be
engineered into the new structure,'' observes Robert Baade,
an economist at Lake Forest College in Illinois. ``The
situation of the Miami Arena and other modern facilities that
are being scrapped is crazy. For the more than $4 billion
that has so far been spent on new stadiums, we could
completely refurbish the physical plants of the nation's
public elementary and secondary schools.''
[[Page S505]]
The new stadiums befit the crass commercialism and endless
cross-marketing of the current business era. The games
themselves are almost submerged in a sea of collateral
activity, including food courts, sports bars, interactive
game rooms, private clubs and sports-merchandise stores.
Inside the arenas, there are intrusive Jumbotron video
systems and lavish corporate entertainment in skyboxes, which
run as high as $250,000 a year at Boston's Fleet Arena, where
the Celtics and Bruins now play.
No possible revenue source goes untapped. Corporations like
United Airlines, BancOne and Coors buy the rights to put
their names on stadiums for more than $1 million a year in
some instances. The sensory overload of advertising signage
is distracting, to say the least. No area is sacrosanct,
including the wall behind homeplate. Teams in the National
Basketball Association are now minting advertising revenues
by selling ads that silently scroll on computer-controlled
signboards at courtside.
The Portland Trail Blazers, owned by Microsoft billionaire
Paul Allen, have taken high-tech amenities to an as-yet-
unsurpassed level in their new Rose Garden arena. Some of its
club seats feature fiber-optic wiring allowing spectators to
play music, order food or punch up replays on their own video
screens. The arena also plans to experiment with online
kiosks that will hawk computer hardware and software.
Team owners argue that enhanced revenues are essential for
acquiring or retaining top athletes in the high-stakes world
of professional sports. But there is another factor at work.
Unlike fees paid by television networks and general-
admission revenues, a stadium's income from premium seats,
concessions, stadium advertising, parking and the like
generally doesn't have to be shared with other teams in
the league.
Yet both the NFL and NBA have attempted to institute some
controls on players' salaries by establishing league-wide
team salary caps. And scant linkage has been established
between the size of team payrolls and performance in baseball
and hockey. Otherwise, the New York Yankees of the past two
decades, with their bloated salary structure, might have
enjoyed the dominance of the Yankee dynasties of yore.
Even so, a veritable stadium arms race seems only to be
intensifying. Even teams in leagues with salary caps claim to
need additional stadium revenues because the teams with the
highest revenues keep driving up the averages upon which the
caps are based. ``This is certainly true in the NBA, where
top-grossing teams like the Bulls, the Knicks and the Lakers
are creating problems for the rest of the league,'' Jerry
Reinsdorf, controlling partner of the Chicago Bulls and White
Sox, explains. ``All I can say is that I'm glad I have two
new stadiums [the United Center and New Comiskey Park] with
strong in-park revenues.''
What's indisputable, though, is that new venues enrich team
owners by fattening the teams' bottom lines and franchise
values. It's no accident, for example, that four of the top
10 most valuable baseball franchises in Financial World
magazine's latest annual survey--the Baltimore Orioles,
Toronto blue Jays, Texas Rangers and Colorado Rockies--boast
new stadiums, which give them the financial heft to compete
with teams in larger advertising markets such as New York,
Chicago and Los Angeles. Likewise, new stadiums have helped
the Phoenix Suns, Detroit Pistons and Chicago Bulls push the
New York Knicks for the top spot among basketball franchises
on Financial World's list.
And in all of professional sports, no team comes close to
the Dallas Cowboys franchise, with its estimated value of
$272 million. Team owner Jerry Jones was lucky to inherit a
stadium already loaded with skyboxes in 1988 to which he
added some 80 suites. In addition, he has inked stadium
sponsorship agreements with the likes of Nike, PepsiCo.
American Express and AT&T. As a result, Financial World
estimates that the Cowboys earned revenues of nearly $40
million on their stadium, compared with a league average of
just $6.2 million. Such riches gave Jones the bucks to
exploit loopholes in the salary cap, enabling him to carry a
payroll some 50% larger than the NFL average.
In Jones' case, he financed his own stadium improvements.
But in the main, it's the taxpayer who ends up subsidizing
the stadiums that shower such wealth on the owners. And these
days, teams seem to hold all the cards in their negotiations
with local politicians. For the demand for professional
franchises from cities wanting the cachet of being ``big
league'' far exceeds the supply of teams, even with the big
leagues' steady expansion efforts. ``No city can take its
teams for granted or they will find another locale in which
to realize team value,'' explains Reinsdorf, who cynically
played of the state of Illinois against St. Petersburg, Fla,
to win a $150 million in tax-exempt funding to build the New
Comiskey Park in 1991.
Observers are still agog at the deal the former Los Angeles
Rams football team negotiated to move to St. Louis last year.
The city, state and St. Louis County incurred some $262
million in debt to provide the team with the 70,000-seat
Trans World Dome. Then the city sold instruments called
``personal seat licenses,'' requiring football-crazy fans to
pay as much as $4,500 just for the privilege of buying season
tickets for the stadium's best 45,000 seats. The $70 million
or so in proceeds from these licenses didn't go toward the
constructions costs of the new stadium, however, Instead, the
Rams were allowed to use the funds to defray some $20 million
in moving costs, build a $10 million practice facility and
clean up some debts in their old home in Anaheim.
And that's not all. The Rams were able to lock in an annual
rent over a 30-year lease period of just $250,000, the
fifth-lowest rent rate in the NFL. Yet the Rams will
receive 100% of the revenues from the stadium's 100 luxury
suites and 6,250 club seats. On top of that, the team got
the option to add 20 more luxury boxes and convert 4,500
more seats to club status, plus a guarantee that 85% of
all suites and club seats will be sold over the next 15
years. The team also gets all concession revenues
generated by the stadium, $4.5 million of the first $6
million received in stadium advertising and 90% of any ad
revenues over $6 million. The Rams also get to pocket the
$1.3 million a year that Trans World Airlines is paying
for the stadium naming rights. Lastly, St. Louis agreed to
build a store for the Rams to sell team merchandise.
The total package of the stadium construction costs, debt-
service expense and other goodies doled out by St. Louis will
end up costing area taxpayers more than $700 million,
according to a reckoning by a St. Louis public-interest
group. A consultant who represented the Rams was heard to
crow, ``This will be the best stadium deal ever in the NFL,
except for the next one.''
Truer words were never spoken, for the new Baltimore Ravens
(formerly the Cleveland Browns) won an extraordinary deal on
their $200 million stadium currently under construction in
the shadow of Oriole Park at Camden Yards. The new stadium
will be financed by state lottery proceeds and revenue bonds.
In addition to being able to keep the $65 million in personal
seat license fees, the Ravens will be charged no rent over
their 30-year lease other than a 10% tax on all tickets. The
team will be responsible only for covering operating and
maintenance expenses of the facility.
The Ravens will be able to keep all stadium revenues from
the luxury suites, premium seats, concessions and in-park
advertising, plus it will garner 50% from all revenues at the
stadium from non-football events. No wonder S&P described the
deal cooked up by Ravens owner Art Modell as ``Maryland
throws the bomb.''
Financial World estimates that after its first season in
the new stadium (1998), the Ravens' franchise value will
appreciate some 50%, to around $250 million, and could be
second only to the Dallas Cowboys'.
In the stadium game, spin, bargaining ploys and fancy
dancing are difficult to separate from concrete developments.
Proposed new stadium packages are leaked to the local press
only to go through myriad changes before ground is broken and
financing is in place.
George Steinbrenner wants out of the Bronx. One month he is
rumored to be looking at suburban New Jersey for his Yankees,
the next he's said to be considering a proposal by New York
City to build a facility on Manhattan's West Side that would
cost $1 billion. Not to be outdone, the Mets are said to be
angling for a new stadium next to Shea that would cost around
$450 million and, perhaps, include a theme park in the
complex.
Rick Horrow, a Miami-based stadium development consultant
to the NFL, ticks off the names of 12 football teams that
have unsettled stadium situations and are likely to move to
new facilities in the years ahead: the Minnesota Vikings,
Chicago Bears, Tampa Bay Buccaneers, San Francisco 49ers,
Seattle Seahawks, Denver Broncos, Arizona Cardinals,
Philadelphia Eagles, Pittsburgh Steelers, Washington
Redskins, Detroit Lions and New England Patriots. One
proposal calls for the Pats to move from Foxboro, Mass., to a
domed stadium in downtown Boston that would be part of a $750
million convention-center megaplex.
These NFL teams should be able to exert plenty of leverage
over their local politicians. According to Horrow, cities
such as Houston, Los Angeles, Memphis, Orlando, Sacramento,
Toronto and Mexico City all hunger for an NFL franchise.
Various suburban locations also beckon.
Likewise, such arenas as the L.A. Forum, Houston's Summit
Arena, Dallas's Reunion Arena, Charlotte Coliseum and
Indianapolis's Market Square Arena are all likely to lose
their NBA tenants despite the recent vintage of many of these
facilities. The Detroit Pistons' Palace at Auburn Hills, with
its rows of skyboxes encircling the arena, changed the
entire economics of indoor venues following its opening in
1988.
Some obstacles could block this torrent of prospective
stadium deals. Of greatest moment, perhaps, is a bill that
was introduced two months ago by Sen. Daniel Patrick Moynihan
(D.-N.Y.) that would outlaw tax-exempt bond financing for
professional sports facilities. He argues that such financing
in effect constitutes a subsidy by federal taxpayers that
largely enriches team owners and serves no legitimate public
purpose.
Even Moynihan concedes that the proposal has no chance of
passing in the current session of Congress. Nor are the
bill's prospects very bright next year. The U.S. Council of
Mayors and other lobbying organizations have already mounted
a jihad against the measure. And it doesn't hurt that
professional sports has the stature of organized religion
these days.
Nonetheless, the bill has temporarily cast a pall over
certain stadium plans that are being considered. The fear is
that the bill might someday pass in its current form.
Particularly vulnerable would be new football
[[Page S506]]
and baseball stadiums. They almost always require some tax-
exempt financing because of their high price tags--$200
million and up.
John Gillespie, a managing director of Bear Stearns's
sports facility banking team, estimates that at current
spreads, the cost of the typical stadium proposal would rise
by 15%-20% if public authorities were forced to switch from
the tax-exempt to the taxable public-debt market. Says
Gillespie: ``Clearly, a number of stadium deals wouldn't fly
under these circumstances because even on a tax-exempt basis
they were pushing the envelope on a feasibility basis. I
don't think the bill has a prayer of passing, but then, I'm
prejudiced.''
Ironically, past attempts by Congress to curb the use of
tax-exempt financing for sports stadiums have only
exacerbated the problem. The Tax Reform Act of 1986, for
example, declared that public financings of stadiums would
lose their tax-exemption if more than 10% of the revenues
earned by the facility were subsequently used to service the
construction debt.
Rather than quashing such activity, the stricture left
municipalities even more at the mercy of team owners. To
retain local franchises or attract new teams, public
officials were compelled to tap revenue streams other than
the stadium to back construction debt. Today's stadium bonds
are backed by general revenue sources as diverse as state
lotteries, sales taxes, hotel and motel occupancy imposts,
car-rental fees and alcohol and tobacco taxes.
The balance of power has shifted so dramatically in recent
years that public stadium authorities consider themselves
fortunate if pro sports teams pay enough rent to cover the
operating costs of the facility, let alone contribute
anything to debt service.
``The new structure is inequitable in that it forces broad
categories of people in a given area to finance a facility
that only benefits fans, team owners and athletes,'' asserted
Dennis Zimmerman, an economist at the Library of Congress's
Congressional Research Service, whose study on the subject of
tax-exempt stadium financing helped spur the Moynihan bill.
``Certainly federal taxpayers receive no benefits for
granting this subsidy.''
Cities try to make new stadiums more palatable to their
electorates by offering up ``economic impact'' studies
showing the gains in regional income and employment that the
project will produce. The financial benefits trumpeted in
such studies are so humongous that he multimillion-dollar
cost of the sport palaces seems almost trivial by comparison.
The University of Cincinnati Center for Economic Education
concluded last January, for example, that the $540 million
project to build a new football stadium and a new baseball
stadium in Cincinnati would generate more than $1.1 billion
in economic activity. In subsequent years, the study said the
Cincinnati area could count on $73 million annually in added
spending by local consumers, $4.4 million a year in taxes and
$28 million per year in local spending by out-of-town fans.
But such impact studies are often flawed. Stanford
University economist Roger Noll points out that the majority
of fans attending games come from within a 20-mile radius of
the venue. Any money they end up dropping at the
ballpark would likely have been spent on other modes of
local recreation or entertainment. Americans, after all,
spend virtually all their income anyway. This
``substitution effect'' means that stadiums may actually
represent very little, if any, net economic gain to local
businesses.
The studies also play games with the multiplier or ripple
effect of fan spending. They assume that all the munificence
earned by the players, owners and concessionaires is
repatriated to the local economy. Lake Forest College
economist Robert Baade argues that the money frequently
doesn't stay put and that this ``leakage'' can actually have
a negative impact. He has, in fact, developed econometric
models indicating that in some 36 instances new stadiums had
a nonexistent or even negative impact on local job and income
growth.
Few stadium projects have been as trumpeted as the Gateway
Development in Cleveland. The site encompasses two new
facilities, including the Indians' Jacobs Field, with its
retro charm, and the Cavaliers' sleek Gund Arena. The two new
venues draw sellout crowds totaling five million fans a year,
and they are credited with having sparked a revival in the
once-sagging fortunes of downtown Cleveland. But as the
Indians streak toward their second straight pennant, the
project's finances continue to deteriorate. The problem lies
in construction cost overruns incurred by both facilities and
the fact that Gateway Development Corp., the quasi-public
authority that owns both venues, isn't getting enough from
its leases with the Indians and Cavs to pay the debt service
on some $120 million in bonds that helped finance the Gund
project.
As a result, Cuyahoga County, which guaranteed the debt,
has had to ante up some $23 million to cover Gateway's
arrears, and will likely to be forced to lay out at least $70
million more over the next 16 years. At that point, Gateway
will have the opportunity to renegotiate the Indians' lease
and perhaps have a prayer of meeting its obligations.
Meantime, the city of Cleveland is taking a bath on some
$40 million in bonds it sold to build two parking garages for
the Gateway complex. The city is having to subsidize the debt
service on the bonds because of lower-than-projected parking
revenues.
``The facilities are beautiful, the teams are minting
money, and the county and city taxpayers are left holding the
bag,'' grouses Steve Letsky, Cuyahoga County's director of
accounting. ``We're paying a hell of a price for downtown
economic redevelopment.''
Even more gruesome was the bloodletting the Province of
Ontario took on Toronto's Skydome, a combination stadium,
hotel and entertainment complex that opened in 1989. Ontario
got stuck with the huge cost overruns, and by late 1991 the
province ended up taking a nearly $200 million loss when it
dumped its controlling interest in the project for $110
million.
Even with that writedown, the Skydome's financial future is
by no means secure. Attendance has waned from the halcyon
days of the early 'Nineties as the Blue Jays have sunk in the
standings. The all-important leases on the stadium's luxury
suites are due to expire in two years, and revenues could
take a tumble.
With deals like this going down, it's little wonder that
the halo effect of having a new stadium seems to be
diminishing. Brian McGough, a J.P. Morgan investment banker
involved in stadium deals, reports that a recent study shows
that new venues seem to spur attendance for just about three
years. Comiskey Park and the Ballpark at Arlington, Texas,
aren't packing in fans they way they did only a few years
ago, despite the fact that both stadiums have baseball teams
that are very much in contention for the pennant.
Resistance to the stadium-building boom does seem to be
mounting. Several politicians have been forced to walk the
plank recently for backing sales-tax increases to fund new
baseball stadiums. Among the banished were a Maricopa County
commissioner from Arizona's Sun City and a Wisconsin state
senator from Racine, one of the five counties that will
contribute tax revenues for the Milwaukee Brewers' new
stadium.
Nonetheless, new stadium projects seem to have a dynamic
that defies all considerations of economic prudence and
taxpayer unrest. For when all else fails, public officials
invariable justify their reflexive resort to the public purse
by prattling on about pro sports' positive impact on civic
pride and quality of life.
Perhaps new stadiums appeal to some deeply-rooted edifice
complex-the plaque on the wall of the venue conferring a
measure of immortality to the politicians who built it. Maybe
it's true that without a vibrant pro sports scene, major
corporation won't put their headquarters in certain cities.
Or possibility the local citizenry walk just a little taller
in burgs that are genuinely big-league. ``Psychic reward,''
as economists call it.
Whatever the case, the surge in popularity of pro sports is
a worldwide phenomenon. Social scientists advance in all
kinds of theories to explain the boom. Increasing job
specialization is deemed to have robbed modern man of
satisfaction in his workaday world, forcing him to turn to
sports for tangibility of results. Others commentators claim
that pro athletes have become proxies for acting out the
aggressions of increasingly alienated populations around the
globe.
Rand Araskog, chairman of ITT Corp., obviously believes in
a bright future for pro sports and franchise values. ITT
teamed up with Cablevision in 1994 to buy Madison Square
Garden, the New York Knicks and the Rangers from Viacom for
$1 billion. The operation's cash flow has burgeoned since.
According to Araskog and ITT President Robert Bowman, a
myriad of factors will propel the pro sports boom. More and
more media and entertainment companies are buying pro sport
franchises because they afford relatively cheap and
compellingly dramatic programming. ComCast and Walt Disney
are merely the most recent corporate entrants. Women are
increasingly hooked on pro sports as a result of federal laws
that require schools to spend equal amounts of men's and
women's sports.
As for international interest, the National Basketball
Association is just the first pro league in the U.S. to catch
the worldwide tidal wave. Others will follow. And finally,
technology, with its proliferation of sports delivery
mechanisms and its promise of eventually bringing the playing
field into the living room, will only enhance the appeal.
Bear Stearns's Gillespie goes so far as to predict that pro
sports franchises will double in value in the next five to
six years. One can only hope he's right. Maybe then team
owners will stop hitting up taxpayers for new stadiums and
pay the freight themselves.
Costly Building Boom
More than $4 billion has been spent on sports arenas, with
$7 billion more expected.
----------------------------------------------------------------------------------------------------------------
Approx
Facility Team total cost Opened Debt type
in millions
----------------------------------------------------------------------------------------------------------------
Skydome............................. Toronto Blue Jays...... $600 1989 P/P
[[Page S507]]
TWA Dome at America's Center........ St. Louis Rams......... 290 1995 Public
Molson Centre....................... Montreal Canadians..... 230 1996 Private
Coors Field......................... Colorado Rockies....... 215 1995 Public
Georgia Dome........................ Atlanta Falcons........ 214 1992 Public
CoreStates Center................... Philadelphia Flyers/ 210 1996 Private
76ers.
Orioles Park at Camden Yards........ Baltimore Orioles...... 210 1992 Public
Corel Center (Palladium............. Ottawa Senators........ 200 1996 P/P
Ballpark of Arlington............... Texas Rangers.......... 191 1994 P/P
Alamodome........................... San Antonio Spurs...... 186 1993 Public
GM Place............................ Vancouver Canucks/ 180 1995 Private
Grizzlies.
United Center....................... Chicago Blackhawks/ 180 1994 Private
Bulls.
Jacobs Field........................ Cleveland Indians...... 168 1994 P/P
San Jose Arena...................... San Jose Sharks........ 163 1993 P/P
Fleet Center........................ Boston Celtics/Bruins.. 160 1995 Private
Gund Arena.......................... Cleveland Cavaliers.... 155 1994 P/P
Comiskey Park....................... Chicago White Sox...... 150 1991 Public
Rose Garden......................... Portland Trail Blazers. 145 1995 P/P
Gator Bowl.......................... Jacksonville Jaguars... 136 1995 Public
Marine Midland Arena................ Buffalo Sabres......... 128 1996 P/P
Arrowhead Pond of Anaheim........... Anaheim Mighty Ducks... 120 1993 P/P
Ice Palace.......................... Tampa Bay Lightning.... 120 1996 P/P
Target Center....................... Minnesota Timberwolves. 104 1990 P/P
America West Arena.................. Phoenix Suns........... 101 1992 P/P
Orlando Arena....................... Orlando Magic/Solar 100 1989 P/P
Bears.
Kiel Center......................... St. Louis Blues........ 99 1994 Private
Bradley Center...................... Milwaukee Bucks........ 80 1988 Private
Ericsson Stadium.................... Carolina Panthers...... 70 1996 Private
Palace of Auburn Hills.............. Detroit Pistons........ 70 1988 Private
Charlotte Coliseum.................. Charlotte Hornets...... 58 1988 Public
Delta Center........................ Utah Jazz.............. 55 1991 Private
Miami Arena......................... Miami Heat/Florida 52 1988 P/P
Panthers.
Arco Arena.......................... Sacramento Kings....... 40 1988 Private
----------------------------------------------------------------------------------------------------------------
____
[From the New York Times, July 27, 1996]
Picking Up the Tab For Fields of Dreams
taxpayers build stadiums; owners cash in
(By Leslie Wayne)
Washington.--In Baltimore, the Ravens, formerly the
Cleveland Browns, are coming to a $200 million football
stadium to be built on their behalf. Nashville has lured the
Oilers from Houston with the promise of a sparkling new $389
million stadium. In New York, there is talk of a new ball-
park for the Yankees, while discussion continues about
replacing venerable Tiger Stadium in Detroit and Fenway Park
in Boston, both now celebrating their 84th anniversaries.
But even as multimillion-dollar sports places are being
proposed for assorted Bears, Bengals, Hawks, Vikings and
other professional teams, a lot of people in Washington would
like to clamp down on lucrative public subsidies that they
contend do much more to help already-wealthy professional
sports team owners than the communities that support the
teams.
Senator Daniel Patrick Moynihan, a New York Democrat, has
fired the opening shot by introducing legislation to end the
use of tax-free dollars to build sports stadiums. But,
retreating under a hail of lobbying fire, Mr. Moynihan admits
his measure has no chance of being enacted this year. Still,
that has not stopped him from vigorously arguing that Federal
tax dollars would be better devoted to public needs like
higher education than subsidizing the current stadium
building boom.
``Building new professional sports facilities is fine by
me,'' Mr. Moynihan said. ``Let the new stadiums be built.
But, please, do not ask the American taxpayer to pay for
them.''
With an estimated $6 billion of new sports stadiums and
arenas on the drawing boards, the mere introduction of a bill
that would prevent local governments from tapping the tax-
exempt municipal bond market for such projects is sending
shock waves through the world of sports finance. ``The
Moynihan bill has had an immediate, horrendous impact,'' said
Howard Richard, a lawyer at Katten Muchin & Zavis in Chicago.
``There's intense lobbying. No one believes this bill will
pass, but it is wreaking havoc with the market''.
The controversy over stadium financing dates back to the
1988 Tax Reform Act, which was though to have eliminated the
public subsidies by forcing team owners to finance stadiums
with taxable, rather than tax-free dollars.
That effort, however, backfired. With team owners precluded
from tapping the public bond markets and reluctant to use
more costly taxable debt, sports-starved cities stepped in to
build and own the stadiums themselves, using municipal bonds.
And since the 1986 tax act prevents stadium revenues from
being used to pay off any tax-free, stadium-related debt, a
bizarre situation has developed. The municipality is often
forced to pay with its own dollars for all of the borrowings,
but the team owner virtually alone gets the revenues from the
stadium. Under the tax code, only a small portion of the
stadium revenues and lease payments--less than 10 percent--
can be drawn on by municipalities to repay tax-free stadium
debt.
Some of the newest, and most stylish, stadiums rely
exclusively on public debt: Camden Yards and Ravens Stadium
in Baltimore and the new Comiskey Park in Chicago are just a
few of many. To pay off this debt, local governments have had
to raise taxes, tap lottery proceeds or use other public
revenues. Other stadiums, like the indoor America West Arena
in Phoenix, were built as public-private partnerships, with
some construction costs footed by the team owner; it all
depends on the bargain struck. In all, $3.9 billion in public
debt for stadiums has been issued since 1990.
Teams owners, to bring their franchise to town or to be
persuaded to stay put, are demanding not just new and bigger
stadiums, but more ways to make money from them: luxury
skyboxes that rent for $50,000 to $200,000 a year; ``personal
seat licenses,'' which are options bought by ticket holders
to insure season tickets in perpetuity; new tiers of ``club
seats'' that cost more than regular seats. And then there are
``pouring rights,'' which are paid by beverage companies to
peddle their beers and soda; more ``totem'' space to sell
advertising, and bigger car-parking concessions.
``We thought we shut down public financing to private
sports stadiums in 1986,'' said Senator Byron L. Dorgan, a
Democrat from North Dakota who is a supporter of the Moynihan
measure. ``Now a decade later, we see that the only remaining
healthy public housing is in sports stadiums for wealthy team
owners. We thought we closed a loophole and they found a way
through it.''
Brian McGough, who specializes in stadium financing for
J.P. Morgan & Company, explained the unintended consequences
of the legislation; ``Congress forced public officials back
into the arms of team owners. It was a sea change
difference.''
The effect of these changes has been to give team owners
more financial leverage in bargaining with local governments.
And experts say the new-found riches from stadium deals,
television contracts and other sources have been an important
factor in the escalating salaries in professional sports.
When some team owners have more cash in hand, they bid up
everyone's prices for top players--witness the $98 million,
seven-year contract for the basketball player Juwan Howard to
join the Miami Heat or the $121 million, seven-year contract
for Shaquille O'Neal to move to the Los Angeles Lakers.
``A lot of these financial benefits flow to the talent
because talent is key, especially in basketball,'' said Mr.
Richard, the Chicago lawyer. ``Look at the Chicago Bulls. You
are seeing a $25 million raise for Micheal Jordan and
millions for others. They say that this is creating the
necessity for a new stadium because they need the skybox
revenues to pay for the players. When you see all these
salaries and the new stadiums, what is the cause and what is
the effect?''
More troubling to critics is the evidence that the money
spent on sports stadiums provides few economic benefits to
the surrounding community. Indeed, several studies indicate
that communities could benefit more if these investments,
which cost taxpayers hundreds of millions of dollars a year,
were spent on other forms of economic development.
``The economic research on whether these stadiums provide
benefits for state and local taxpayers suggest that they do
not,'' said Dennis Zimmerman, author of a Congressional
Research Service report on stadium financing. ``There are a
lot more productive things that state and local governments
could have done with this money.''
Mr. Zimmerman, using data the State of Maryland offered in
making the case for building the Ravens' new stadium, found
that more jobs could be created by investing the same $177
million in the state's ``Sunny Day'' economic development
fund. He also concluded that in many cases the money local
governments saved by issuing tax-free municipal bonds to
build these stadiums ended up costing Federal taxpayers more
than the local benefit.
``It would be cheaper for the Federal Government to just
give a subsidy for these stadiums,'' Mr. Zimmerman said.
Robert Baade, an economist at Lake Forest College, is one
of the strongest critics of
[[Page S508]]
the present system. ``The distribution of income and benefits
is skewed: The owners and the players get the lion's share,''
Mr. Baade said, ``If I've raised taxes to finance a stadium,
I can't argue that every dollar of that stadium is a boon to
the economy.''
Opponents of Mr. Moynihan's measure argue that eliminating
tax-free dollars for sports stadiums would take decision-
making away from local officials and increase the costs to
municipalities by forcing them to borrow in the taxable
markets. Indeed, the only way some of these stadiums can be
built, they say, is with lower-cost public debt. Football
stadiums, in particular, could become endangered, since they
often cost as much as $200 million, yet may be used for only
eight to 10 games a year, making it hard to generate enough
revenues to repay the debts.
``A stadium is not conceptually different from a lot of
other public projects,'' said Micah Green, the Washington
lobbyist for the Public Securities Association, a trade group
representing the municipal bond industry. ``If cities and
states decide to raise taxes to pay for these stadiums, then
that's O.K. That makes it a governmental bond. The local
decision of the electorate is the best test.''
(Sometimes, however, local sentiment has to be swayed. The
Ravens Stadium proposal passed by only two votes amid
controversy in the Maryland Senate. Cincinnati voters
approved two new stadiums to replace Riverfront Stadium only
after a hard-fought campaign by downtown boosters. In
Nashville, opponents forced the city's first-ever bond
referendum before the new Oilers stadium won approval.)
Six local government organizations, including the United
States Conference of Mayors and the National League of
Cities, sent a letter to Mr. Moynihan arguing against his
proposal. ``It is simply not good public policy to constrain
local flexibility in deciding what projects to undertake on a
tax-exempt basis,'' the letter said.
Cathy Spain, the Washington lobbyist for the Government
Finance Officers Association, said her group opposes the
strict restrictions that preclude the use of stadium-related
revenues from repaying municipal debt. Ms. Spain said the
association's warnings to Congress about the problem went
unheeded when the tax act was changed in 1986. Now, she said,
her group would like to allow, say, 25 percent of stadium
revenues to be diverted to municipalities instead of team
owners.
Stadium financing experts say that regardless of the
economics, the lure of professional sports is so strong that
politicians and communities will still seek to attract and
keep the limited number of sports teams available.
And what about cities that just say no? They may be better
off in purely economic terms, but still left with an empty
feeling.
``St. Louis lost the football Cardinals to Phoenix because
they refused to build a new stadium,'' said James Gray,
assistant director at the National Sports Law Institute in
Milwaukee. ``Now they are paying triple to lure the Rams from
Los Angeles. Being part of a major league is something unique
in our society. Lots of people believe it's a worth-while
investment and will do anything to keep a team there.''
____
[From ESPNET Sports Zone, ESPN Studios]
Your Tax Dollars in Action--For Real
(By Keith Olbermann)
The biggest sports story of the week got about as little
publicity as possible.
Legislation has been introduced in the U.S. Senate that
would cripple so-called ``Franchise Free Agency,'' stop the
merry-go-round of teams blackmailing cities and cities
bribing teams with public funds, and restore a little sanity
to the ever decreasingly sane world of sports.
The ``Stop Tax-Exempt Arena Debt Issuance Act,'' sponsored
by Sen. Daniel Patrick Moynihan, D-N.Y., would make it
illegal for states, counties or cities to try to float tax-
free bonds to build new sports stadiums and arenas. It's what
we've been crying for here for months, and as pathetic as
most of our politicians are, I am ready to nominate Sen.
Moynihan for Deity.
A Congressional Research Service report recently concluded
that the most frequently-used justification for building a
new park for a ballclub, that the ancillary financial
benefits created by such a new facility more than make up for
the huge expense, is a falsehood. Just as Stanford economist
Roger Moll pointed out several months ago: if stadiums really
made money, the teams would build them themselves, wouldn't
they?
If passed, the measure would virtually stop the kind of
rapacious marriages of glory-hungry politicians and money-
hungry owners that greased the skids for the Cleveland Browns
move to Baltimore. The Brewers need a new stadium in
Milwaukee? Have a lovely time building it, Bud. Oh, you'll
move to Charlotte instead: Have a lovely time getting a
business loan to build Selig Stadium there. No more endless
threats from George Steinbrenner to move the Yankees to New
Jersey. No more repeat winners in Owner Blackmail like the
Seattle Mariners. No more publicly-funded white elephants
like ThunderDome in St. Petersburg or the Alamodome in San
Antonio.
Enactment of this law might go even further toward righting
the sports ship. If owners couldn't count on government to
pull their chestnuts out of the financial fire, they could
not possibly continue to permit salaries to spiral upward.
They could not possibly continue to jack ticket prices upward
as a prerequisite to not moving elsewhere (see ``Whalers,
Hartford''). Some of the less economically-skilled owners
might even sell out, and might find that the only
corporations willing to take the franchise off their hands
would be the same kind of community-based, almost not-for-
profit group that owns the Green Bay Packers--a team that if
owned by a Bill Bidwill or a Georgia Frontiere would have
moved out 20 years ago.
In short, this is genius--and, though I swore I'd never say
anything like this about any issue: let your congressman or
senator know how you feel. We'll keep you posted on the
progress of Sen. Moynihan's measure in this cyberspace.
______
By Mr. INOUYE:
S. 123. A bill to amend title 10, United States Code, to increase the
grade provided for the heads of the nurse corps of the Armed Forces; to
the Committee on Armed Services.
the u.s. military chief nurse corps amendment act of 1997
Mr. INOUYE. Mr. President, I rise today to introduce an amendment
that would change existing law regarding the designated position and
grade for the Chief Nurses of the United States Army, the United States
Navy, and the United States Air Force. Currently the Chief Nurses of
the three branches of the military are one-star level general officer
grades; this law would change the current grade to Major General in the
United States Army and Air Force and Rear Admiral (upper half) in the
United States Navy. Our military Chief Nurses have an awesome
responsibility--a degree of responsibility that is absolutely deserving
of this change in grade.
You might be surprised at how big their scope of duties actually is.
For example, the Chiefs are responsible for both peacetime and wartime
health care doctrine, standards and policy for all nursing personnel
within their respective branches. In fact, the Chief Nurses are
responsible for more than 80,000 Army, 5,200 Navy, and 26,000 Air Force
nursing personnel. This includes officer and enlisted nursing
specialties in the active, reserve and guard components of the
military. This level of responsibility certainly supports the need to
change the grade for the Chief Nurses which would insure that they have
a seat at the corporate table of policy and decision making.
There has been much discussion about the so-called glass ceilings
that unfairly impact the ability of women to achieve the same status as
their male counterparts. While I do not want to make this a gender-
discrimination issue, the reality is that military nurses hit two glass
ceilings: one as a nurse in a physician-dominated health care system
and one as a woman in a male-dominated military system. The simple fact
is that organizations are best served when the leadership is composed
of a mix of specialty and gender groups--of equal rank--who bring their
unique talents to the corporate table. For military nurses, the two-
star level of general officer Chief Nurse will insure that nurses
indeed get to the corporate executive table.
I strongly believe that it is very important, and past time, that we
recognize the extensive scope and level of responsibility the military
Chief Nurses have and make sure that future military health care
organizations will continue to benefit from their expertise and unique
contributions.
Mr. President, I request unanimous consent that the text of this bill
be printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 123
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. INCREASED GRADE FOR HEADS OF NURSE CORPS.
(a) Army.--Section 3069(b) of title 10, United States Code,
is amended by striking out ``brigadier general'' in the
second sentence and inserting in lieu thereof ``major
general''.
(b) Navy.--The first sentence of section 5150(c) of such
title is amended--
(1) by inserting ``rear admiral (upper half) in the case of
an officer in the Nurse Corps or'' after ``for promotion to
the grade of''; and
(2) by inserting ``in the case of an officer in the Medical
Service Corps'' after ``rear admiral (lower half)''.
(c) Air Force.--Section 8069(b) of such title is amended by
striking out ``brigadier general'' in the second sentence and
inserting in lieu thereof ``major general''.
[[Page S509]]
______
By Mr. Gramm (for himself, Mr. Mack and Mrs. Hutchinson):
S. 124. A bill to invest in the future of the United States by
doubling the amount authorized for basic science and medical research;
to the Committee on Labor and Human Resources.
THE NATIONAL RESEARCH INVESTMENT ACT OF 1997
Mr. GRAMM. Mr. President, in 1965, 5.7 percent of the federal budget
was spent on non-defense research and development. Thirty-two years
later, that figure has dropped by two-thirds to 1.9 percent. In no year
since 1970 has the United States spent as large a percentage of its GDP
on non-defense research and development as Japan or Germany.
Unfortunately, recent signs point to this situation becoming worse
rather than better. From 1992 through 1995, for the first time in 25
years, real federal spending on research declined for 4 straight years.
If we don't restore the high priority once afforded science and
technology in the federal budget and increase federal investment in
research, it will be impossible to maintain the United States' position
as the technological leader of the world.
As a nation, we have an interest in the research funding decisions of
the private sector. Investing in basic science and medical research can
provide much needed help to all our technology companies without giving
any single company a special advantage over its competitors. Our goal
should be to raise all the boats in the harbor, not just the ones
belonging to the politically well-connected.
The United States simply does not spend enough on basic research.
This bill would double the amount spent by the federal government on
non-defense research over ten years in a dozen agencies, programs, and
activities, from $32.5 billion in FY 1997 to $65 billion in FY 2007,
making sure that within that amount the funding for the National
Institutes of Health would double from $12.75 billion to $25.5 billion.
At the same time, in order to be sure the increase in funding is spent
wisely, the bill gives priority to investments in basic science and
medical research in order to develop new scientific knowledge which
will be available in the public domain. The legislation does not allow
funds to be used for the commercialization of technologies, and
allocates funds using a peer review system. Expanding the nations's
commitment to basic research in science and medicine is a critically
important investment in the future of our Nation.
______
By Mr. Moynihan (for himself and Mr. D'Amato):
S. 125. A bill to provide that the Federal medical assistance
percentage for any State or territory shall not be less than 60
percent; to the Committee on Finance.
Federal Medical Assistance Legislation
Mr. Moynihan. Mr. President, I rise today to introduce a bill,
cosponsored by Senator D'Amoto, to revise the formula for determining
the Federal Medical Assistance Percentage.
Medicaid services and associated administrative costs are financed
jointly by the Federal government and the States. The formula for the
Federal share of a State's payments for services, known as the Federal
Medical Assistance Percentage [FMAP], was established when Medicaid was
created as part of the Social Security Amendments of 1965. The Federal
share of administrative costs is 50 percent for all States, though
higher rates are applicable for specific items.
The FMAP is an exotic creature, derived from the Hill-Burton Hospital
Survey and Construction Act of 1946, specifically designed to provide a
higher Federal matching rate for states with lower per capita income.
Rather than comparing per capita income directly, the HILL-BURTON
formula is designed to exaggerate the differences between States' per
capita income. A Senate colleague once described it to me as the
South's revenge for the war between the States.
The Federal government's share depends upon the square of the ratio
of state per capita income to national per capita income. Per capita
income is only a proxy but not the only proxy for measuring the States'
relative fiscal capacity. In March 1982, the Advisory Commission on
Intergovernmental Relations stated that,
* * * the use of a single index, resident per capita income,
to measure fiscal capacity, seriously misrepresents the
actual ability of many governments to raise revenue. Because
states tax a wide range of economic activities other than the
income of their residents, the per capita income measure
fails to account for sources of revenue to which income is
only related in part. This misrepresentation results in the
systematic over and understatement of the ability of many
states to raise revenue. In addition, the recent evidence
suggests that per capita income has deteriorated as a measure
of capacity.
Sqaring the ratio of state per capita income to national per capita
income exaggerates the differences between States with regard to this
incomplete proxy. Suppose my income is $1 and your income $2. The
difference we have to make up is $1. If we compare squares, the
difference we have to make up is $3.
I proposed a change to the HILL-BURTON formula in June of 1977--at a
commencement address at Kingsborough Community College in Brooklyn, New
York--to compare square roots. Going back to our example, if we were to
compare square roots, the difference would only be 59 cents--better
than $3. Nonetheless, the idea has not caught on.
Current law stipulates that no State may have an FMAP lower than 50
percent or higher than 83 percent. In Fiscal Year 1997, 11 States and
the District of Columbia receive the minimum 50 percent FMAP while
Mississippi receives the highest FMAP of 77.22 percent. States are
responsible for the nonfederal share of Medicaid costs. Meaning that a
State with a FMAP of 50 percent puts up 50 percent of the money and the
Federal government puts up 50 percent of the money. A State with a FMAP
of 80 percent puts up 20 percent of the funds with a Federal match of
80 percent. This inequity has existed for over 50 years. It is time for
change.
The bill I introduce today would change the minimum FMAP from 50
percent to 60 percent. A modest proposal. As I mentioned before, there
are 11 States and the District of Columbia which receive 50 percent. An
additional 14 States have an FMAP between 50 and 60 percent. All other
States get more.
The Finance Committee passed this measure as part of its Budget
Reconciliation Recommendations in 1995 but it never became law.
This legislation gives high cost States such as New York the
flexibility to realize savings without cost to the Federal government.
It does not propose to change the amount of Federal funds such States
receive. With an FMAP of 50 percent, a State receiving $1000 in Federal
funds would be required to match it with $1000. With a 60 percent FMAP,
the same State would still receive $1000 in Federal funds but would
only be required to put up $667, a one-third reduction in the amount of
state money required.
Allocation formulas are designed to target Federal funds to States
according to need. The FMAP does not. The savings realized by a 60
percent minimum would provide some relief for States with low matching
rates and would make the FMAP a bit less regressive. Adjusted for the
cost-of-living, New York has the fifth highest poverty rate in the
nation. Yet it has an FMAP of 50 percent. Arkansas has the 24th highest
poverty rate, yet has an FMAP of 73.29. Our current formula is a
regressive one that needs repair.
I urge my colleagues to support this measure.
______
By Mr. INOUYE:
S. 126. A bill to amend title VII of the Public Health Service Act to
revise and extend certain programs relating to the education of
individuals as health professionals, and for other purposes; to the
Committee on Labor and Human Resources.
physical therapy and occupation therapy education act of 1997
Mr. INOUYE. Mr. President, today, I am introducing The Physical
Therapy and Occupational Therapy Education Act of 1997. This
legislation will assist in educating physical therapy and occupational
therapy practitioners to meet the growing demand for the valuable
services they provide in our communities.
In its most recent report, the Department of Labor's Bureau of Labor
Statistics projected that the demand for services provided by physical
therapy practitioners will increase dramatically over the next decade.
According
[[Page S510]]
to the Bureau, between 1994 and 2005 the increase in demand will create
a need for 81,000 additional physical therapists, an 80 percent
increase over 1994 figures. Demand for physical therapist assistants is
expected to grow at an even faster rate, experiencing an 83 percent
increase over the same time period.
The Bureau also predicts increasing demand for practitioners in the
field of occupational therapy. Between 1994 and 2005 the increase in
demand will create a need for 39,000 occupational therapists, a 72
percent increase over 1994 figures. Demand for occupational therapist
assistants is projected to experience an 82 percent increase over the
same time period.
Several factors contribute to the present need for Federal support in
this area. The rapid aging of our nation's population, the demands of
the AIDS crisis, increasing emphasis on health promotion and disease
prevention, and the growth of home health care have out paced our
ability to educate an adequate number of physical therapy and
occupational therapy practitioners. In addition, technological advances
are allowing injured and disabled individuals to survive conditions
that in the past would have proven fatal.
America's inability to educate an adequate number of physical
therapists and occupational therapists has led to an increased reliance
on foreign-educated, non-immigrant temporary workers (H-1B visa
holders). The U.S. Commission on Immigration Reform has identified the
physical therapy and occupational therapy fields as having among the
highest number of H-1B visa holders in the U.S., second only to
computer specialists.
According to the Immigration and Naturalization Service (INS), we
know that 1,389 H-1B visa holders sought employment as physical
therapists in 1994. This number represents 5.9 percent of the 23,500
arrivals for which the INS can verify their known occupation. An
additional 82,399 holders of H-1B visas were reported to have entered
the U.S. in 1994 for which the INS does not have occupation data. If we
assume that the same percentage of H-1B visa holders are seeking
employment in physical therapy as in the known-occupation pool, we can
calculate that an additional 4,861 foreign-educated physical therapists
were also seeking employment (5.9 percent of 82,399 aliens). Thus, the
total number of foreign-educated physical therapists seeking employment
in the U.S. during 1994 was approximately 6,250. In comparison, U.S.
programs of physical therapy graduated a total of 5,846 physical
therapists from 141 institutions nationwide in the same year.
While the INS does not categorize occupational therapy as a separate
profession when tracking H-1B visa entrants, the National Board for
Certification in Occupational Therapy documents that the percentage of
newly certified occupational therapists who are foreign graduates has
risen from 3 percent in 1985 to more than 20 percent in 1995.
The legislation I introduce today would provide necessary assistance
to physical therapy and occupational therapy programs throughout the
country to meet the health care demands of the 21st century. In
awarding grants, preference would be given to those applicants that
seek to educate and train practitioners at clinical sites in either
rural or urban medically underserved communities.
In addition to a shortage of practitioners, the present shortage of
physical therapy and occupational therapy faculty impedes the expansion
of established programs. The critical shortage of doctoral-prepared
physical therapists and occupational therapists has resulted in an
almost nonexistent pool of potential faculty. Presently, there exist
117 faculty vacancies among the 131 accredited, professional-level
physical therapy programs in the U.S. Similarly, during the '93-'94
academic year there existed 51 faculty vacancies among the 85
accredited, professional-level occupational therapy programs. The
legislation I introduce today would assist in the development of a pool
of qualified faculty by giving preference to those grant applicants
seeking to develop and expand post-professional programs for the
advanced training of physical therapists and occupational therapists.
The investment we make through passage of The Physical Therapy and
Occupational Therapy Education Act of 1997 will help reduce America's
dependence on foreign labor and help create high-skilled, high-wage
employment opportunities for American citizens. I look forward to
working with my colleagues in the Congress to enact this important
legislation.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 126
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Physical Therapy and
Occupational Therapy Education Act of 1997''.
SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.
Subpart II of part D of title VII of the Public Health
Service Act (42 U.S.C. 294d et seq.) is amended by adding at
the end the following:
``SEC. 768. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.
``(a) In General.--The Secretary may make grants to, and
enter into contracts with, programs of physical therapy and
occupational therapy for the purpose of planning and
implementing projects to recruit and retain faculty and
students, develop curriculum, support the distribution of
physical therapy and occupational therapy practitioners in
underserved areas, or support the continuing development of
these professions.
``(b) Preference in Making Grants.--In making grants under
subsection (a), the Secretary shall give preference to
qualified applicants that seek to educate physical therapists
or occupational therapists in rural or urban medically
underserved communities, or to expand post-professional
programs for the advanced education of physical therapy or
occupational therapy practitioners.
``(c) Peer Review.--Each peer review group under section
798(a) that is reviewing proposals for grants or contracts
under subsection (a) shall include not fewer than 2 physical
therapists or occupational therapists.
``(d) Report to Congress.--
``(1) In general.--The Secretary shall prepare a report
that--
``(A) summarizes the applications submitted to the
Secretary for grants or contracts under subsection (a);
``(B) specifies the identity of entities receiving the
grants or contracts; and
``(C) evaluates the effectiveness of the program based upon
the objectives established by the entities receiving the
grants or contracts.
``(2) Date certain for submission.--Not later than February
1, 2001, the Secretary shall submit the report prepared under
paragraph (1) to the Committee on Commerce and the Committee
on Appropriations of the House of Representatives, the
Committee on Labor and Human Resources and the Committee on
Appropriations of the Senate.
``(e) Authorization of Appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated $3,000,000 for each of the fiscal years 1997
through 2000.''.
______
Mr. MOYNIHAN (for himself, Mr. Roth, Mr. Chafee, Mr. Baucus, Mr.
Bingaman, Mrs. Boxer, Mr. Bryan, Mr. Craig, Mr. D'Amato, Mr.
Ford, Mr. Glenn, Mr. Grassley, Mr. Hatch, Mr. Kennedy, Mr.
Kerry, Mr. Kyl, Mr. Leahy, Mr. Lieberman, Mr. McConnell, Ms.
Moseley-Braun, Mrs. Murray, Mr. Robb, Mr. Rockefeller, Mr.
Shelby, Mr. Torricelli, and Mr. Wyden):
S. 127. A bill to amend the Internal Revenue Code of 1986 to make
permanent the exclusion for employer-provided educational assistance
programs, and for other purposes; to the Committee on Finance.
the employee educational assistance act
Mr. MOYNIHAN. Mr. President, I rise today to introduce legislation
that will make permanent the tax exclusion for employer-provided
educational assistance under section 127 of the Internal Revenue Code.
This bill, which is cosponsored by the distinguished chairman of the
Committee on Finance, Senator Roth, and by Senators Baucus, Boxer,
Bryan, Chafee, Craig, D'Amato, Ford, Glenn, Grassley, Hatch, Kennedy,
Kerry, Kyl, Leahy, Lieberman, McConnell, Moseley-Braun, Murray, Robb,
Rockefeller, Sarbanes, Shelby, Torricelli, Wyden, and Bingaman ensures
that employees may receive up to $5,250 annually in tuition
reimbursements or similar educational benefits for both undergraduate
and graduate education from their employers on a tax-free basis.
[[Page S511]]
Section 127 is one of the most successful education programs that the
Federal Government has ever undertaken. A million persons benefit from
this provision every year. And they benefit in the most auspicious of
circumstances. An employer recognizes that the worker is capable of
doing work at higher levels and skills and says, ``Will you go to
school and get a degree so we can put you in a higher position than you
have now--and with better compensation?'' Unlike so many of our job
training programs that have depended on the hope that in the after-math
of the training there will be a job, here you have a situation where
the worker already has a job and the employer agrees that the worker
should enlarge his or her situation in a manner that is beneficial to
all concerned.
This is a program that works. Yet, outside the organizations
involved, not many people know of this program. It administers itself.
It has no bureaucracy--there is no bureau in the Department of
Education for employer-provided educational assistance, no titles, no
confirmations, no assistant secretaries. There is nothing except
individual contracts, employee and employer, with a great value-added.
Since its inception in 1978, section 127 has enabled millions of
workers to advance their education and improve their job skills without
incurring additional taxes and a reduction in take-home pay. Without
section 127, workers will find that the additional taxes or reduction
in take-home pay impose a significant, even prohibitive, financial
obstacle to further education. For example, an unmarried clerical
worker pursuing a college diploma who has income of $21,000 in 1997 and
who receives tuition reimbursement for two semesters of night courses--
worth approximately $4,000--would owe additional Federal income and
payroll taxes of $866 on this educational assistance. If the worker has
children and was receiving the earned income tax credit, the worker
would owe additional taxes--including loss of the EITC benefits--of up
to $1,708.
Section 127 makes an important contribution to simplicity in the tax
law. Absent section 127, a worker receiving educational benefits from
an employer is taxed on the value of the education received, unless the
education is directly related to the worker's current job. Permanent
reinstatement of section 127 will allow workers to receive employer-
provided educational assistance on a tax-free basis, without the need
to consult a tax advisor to determine whether the education is directly
related to their current job.
A well-trained and educated work force is a key to our Nation's
competitiveness in the global economy of the 21st century. Pressures
from international competition and technological change require
constant adjustment by our work force. Education and retraining will be
necessary to maintain and strengthen American industry's competitive
position. Section 127 has an important, perhaps vital, role to play in
this regard. It permits employees to adapt and retrain without
incurring additional tax liabilities and a reduction in take-home pay.
By removing the tax burden from workers seeking education and
retraining, section 127 helps to maintain American workers as the most
productive in the industrialized and developing world.
Section 127 has also helped to improve the quality of America's
public education system, at a fraction of the cost of direct-aid
programs. A survey by the National Education Association a few years
ago found that almost half of all American public school systems
provide tuition assistance to teachers seeking advanced training and
degrees. This has enabled thousands of public school teachers to obtain
advanced degrees, augmenting the quality of instruction in our schools.
Our most recent extension of section 127 last year excluded expenses
of pursuing graduate level education for courses beginning after June
30, 1996. This was a serious mistake. Historically, one quarter of the
individuals who have used section 127 went to graduate schools. Ask
major employer about their training systems, and they will say nothing
is more helpful than being able to send a promising young person, or
middle management person, to a graduate school to learn a new field
that has developed since that person had his education.
When we eliminate graduate level education from section 127, we
impose a tax increase on many citizens who work and go to graduate
school at the same time. But not all of them. Only the ones whose
education does not directly relate to their current jobs. For these
unlucky persons, we have erected a barrier to their upward mobility.
Who are these people? The engineer seeking a masters degree in geology
to enter the field of environmental science. The bank teller seeking an
MBA in finance or an MPA in accounting. The production line worker
seeking an MBA in management.
Simple equity among taxpayers demands that section 127 be made
permanent. Contrast each of the above examples with the following: The
environmental geologist seeking a masters in geology, the bank
accountant seeking an MPA, and the management trainee seeking an MBA
each qualify for tax-free education. There is no justification for this
difference in tax treatment.
Thus, section 127 removes a tax bias against lesser-skilled workers.
The tax bias arises because lesser-skilled workers have narrower job
descriptions, and a correspondingly greater difficulty proving that
educational expenses directly relate to their current jobs. Less-
skilled workers are in greater need of remedial and basic education.
And they are the ones least able to afford the imposition of tax on
their educational benefits.
It is important to note that employer-provided educational assistance
is not an extravagant benefit for highly paid executives. It largely
benefits low- and moderate-income employees seeking access to higher
education and further job training. A study published by the National
Association of Independent Colleges and Universities in December, 1995
found that 85 percent of section 127 recipients in the 1992-93 academic
year earned less than $50,000, with the average recipient earning less
than $33,000. An earlier Coopers & Lybrand study indicated that over 70
percent of recipients of section 127 benefits in 1986 were earning less
than $30,000, and that participation rates decline as salary levels
increase.
I hope that Congress will recognize the importance of this provision,
and enact it permanently. Our on-again, off-again approach to section
127 creates great practical difficulties for the intended
beneficiaries. Workers cannot plan sensibly for their educational
goals, not knowing the extent to which accepting educational assistance
may reduce their take-home pay. As for employers, the fits and starts
of the legislative history of section 127 have been a serious
administrative nuisance: there have been 8 retroactive extensions of
this provision since 1978. If section 127 is in force, then there is no
need to withhold taxes on educational benefits provided; if not, the
job-relatedness of the educational assistance must be ascertained, a
value assigned, and withholding adjusted accordingly. Uncertainty about
the program's continuance magnifies this burden, and discourages
employers from providing educational benefits.
For example, section 127 expired for a time after 1994. During 1995,
employers did not know whether to withhold taxes or curtail their
educational assistance programs. Workers did not know whether they
would face large tax bills, and possible penalties and interest, and
thus faced considerable risk in planning for their education. Some of
my constituents who called my office reported that they were taking
fewer courses--or no courses--due to this uncertainty. And when we
failed to extend the provision by the end of 1995, employers had to
guess as to how to report their worker's incomes on the W-2 tax
statements, and employees had to guess whether to pay tax on the
benefits they received. In the Small Business Job Protection Act of
1996 enacted last August, we finally extended the provision
retroactively to the beginning of 1995. As a result, we had to instruct
the IRS to expeditiously issue guidance to employers and workers on how
to obtain refunds.
The provision expires after June 30, 1997. Will we subject our
constituents, once again, to similar confusion? The legislation I
introduce today would restore certainty to section 127 by extending it
retroactively--from July 1, 1996--for graduate level education, and
maintaining it on a permanent basis for all education.
[[Page S512]]
Thomas Jefferson, as ever, was right to observe that American liberty
depends on an educated electorate. In 1816, the year in which the
Senate Committee on Finance was founded, Jefferson warned ``If a nation
expects to be ignorant and free, in a state of civilization, it expects
what never was and never will be.''
Previous efforts to extend this provision have enjoyed broad and
bipartisan support. Encouraging workers to further their education and
to improve their job skills is an important national priority. It is
crucial for preserving our competitive position in the global economy.
Permitting employees to receive educational assistance on a tax-free
basis, without incurring significant cuts in take-home pay, is a
demonstrated, cost-effective means for achieving these objectives. This
is a wonderful piece of unobtrusive social policy.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 127
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Employee Educational
Assistance Act''.
SEC. 2. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE PROGRAMS.
(a) Permanent Extension.--Section 127 of the Internal
Revenue Code of 1986 (relating to exclusion for educational
assistance programs) is amended by striking subsection (d)
and by redesignating subsection (e) as subsection (d).
(b) Repeal of Limitation on Graduate Education.--The last
sentence of section 127(c)(1) of such Code is amended by
striking ``, and such term also does not include any payment
for, or the provision of any benefits with respect to, any
graduate level course of a kind normally taken by an
individual pursuing a program leading to a law, business,
medical, or other advanced academic or professional degree''.
(c) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to taxable years beginning after December 31, 1996.
(2) Graduate education.--The amendment made by subsection
(b) shall apply with respect to expenses relating to courses
beginning after June 30, 1996.
(3) Expedited procedures.--The Secretary of the Treasury
shall establish expedited procedures for the refund of any
overpayment of taxes imposed by the Internal Revenue Code of
1986 which is attributable to amounts excluded from gross
income during 1996 or 1997 under section 127 of such Code,
including procedures waiving the requirement that an employer
obtain an employee's signature where the employer
demonstrates to the satisfaction of the Secretary that any
refund collected by the employer on behalf of the employee
will be paid to the employee.
______
By Mr. INOUYE:
S. 128. A bill to amend the Public Health Service Act to provide
health care practitioners in rural areas with training in preventive
health care, including both physical and mental care, and for other
purposes; to the Committee on Labor and Human Resources.
Health Care Training Act of 1997
Mr. INOUYE. Mr. President, I rise today to introduce the Rural
Preventive Health Care Training Act of 1997, a bill that responds to
the dire situation our rural communities face in obtaining quality
health care and disease prevention programs.
Almost one fourth of Americans live in rural areas and thus
frequently lack access to adequate physical and mental health care. For
example, approximately 1,700 rural communities in virtually every state
of the union suffer critical shortages of health care providers. As
many as 21 million of the 34 million people living in underserved rural
areas are without access to a primary care provider. In areas where
providers exist, there are numerous limits to access, such as geography
and distance, lack of transportation, and lack of knowledge about
available resources. Additionally, due to the diversity of rural
populations, ranging from native Americans to migrant farm workers,
language and cultural obstacles are often a factor.
Compound these problems with slim financial resources and many of
America's rural communities go without vital health care, especially
preventive care. Children fail to receive immunizations and routine
checkups. Preventable illnesses and injuries occur needlessly and lead
to expensive hospitalizations. Early symptoms of emotional problems and
substance abuse go undetected and often develop into full blown
disorders.
An Institute of Medicine (IOM) report from their two-year study
entitled, ``Reducing Risks for Mental Disorders: Frontiers for
Preventive Intervention Research'' highlights the benefits of
preventive care for all health problems. Rural health care providers
face a lack of training opportunities. Training in prevention is
crucial in order to meet the demand for care in underserved areas.
Beyond the scope of simple prevention training, interdisciplinary
preventive training in rural health is important because of a growing
array of evidence that links mental disorders to physical ailments. For
example, it has been estimated that from fifty to seventy percent of
visits to physicians for medical symptoms are due in part or whole to
psychosocial problems. By encouraging interdisciplinary training, rural
communities can integrate the behavioral, biological, and psychological
sciences to form the most effective preventive care possible.
The problems with quality, access, and understanding of health care
in rural areas all suggest that promoting interdisciplinary training of
psychologists, nurses, and social workers is essential. The need
becomes clearer when considering that many of the behavior-related
problems afflicting rural communities are amenable to proven risk
reduction strategies that are best provided by trained mental health
care professionals.
Interdisciplinary team prevention training will facilitate both
health and mental health clinics sharing single service sites and
routine consultation between groups. Social workers, psychologists,
clinical psychiatric nurse specialists, and paraprofessionals play an
important role in extending rural mental health services to those in
need. Linkage of these services can provide better utilization of
existing mental health care personnel, increase awareness and
understanding of mental health services, and contribute to the overall
health of rural communities.
The Rural Preventive Health Care Training Act of 1997, targeted
specifically toward rural communities, would implement the risk-
reduction model described in the IOM study. This model is based on the
identification of risk factors for a certain disorder and the
implementation of specific preventive strategies to target groups with
those risk factors. The IOM Committee aptly demonstrates that methods
of risk reduction have proven highly successful in many health-related
areas, such as cardiovascular disease, smoking reduction, and the
numerous childhood diseases and conditions that are preventable by
early prenatal care for pregnant women.
The cost of human suffering caused by poor health is immeasurable,
but the huge financial burden placed on communities, families, and
individuals is evident. By implementing preventive measures, the
potential for savings in psychological and financial realms is
enormous. This savings is the goal of the Rural Preventive Health Care
Training Act of 1997.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 128
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Preventive Health Care
Training Act of 1997''.
SEC. 2. PREVENTIVE HEALTH CARE TRAINING.
Section 778 of the Public Health Service Act (42 U.S.C.
294p) is amended--
(1) in subsection (b)(3)(C), by striking ``this section''
and inserting ``subsection (a)'';
(2) by redesignating subsections (e) and (f) as subsections
(f) and (g), respectively;
(3) by inserting after subsection (d) the following new
subsection:
``(e) Preventive Health Care Training.--
``(1) In general.--The Secretary may make grants to, and
enter into contracts with, eligible applicants to enable such
applicants to provide preventive health care training, in
accordance with paragraph (3), to health care practitioners
practicing in rural areas. Such training shall, to the extent
practicable, include training in health care to prevent both
physical and mental disorders before the initial occurrence
of such disorders. In carrying out this paragraph, the
Secretary shall encourage, but may not require, the use of
[[Page S513]]
interdisciplinary training project applications.
``(2) Limitation.--To be eligible to receive training using
assistance provided under paragraph (1), a health care
practitioner shall be determined by the eligible applicant
involved to be practicing, or desiring to practice, in a
rural area.
``(3) Use of assistance.--Amounts received under a grant
made or contract entered into under this subsection shall be
used--
``(A) to provide student stipends to individuals attending
rural community colleges or other institutions that service
predominantly rural communities, for the purpose of enabling
the individuals to receive preventive health care training;
``(B) to increase staff support at rural community colleges
or other institutions that service predominantly rural
communities to facilitate the provision of preventive health
care training;
``(C) to provide training in appropriate research and
program evaluation skills in rural communities;
``(D) to create and implement innovative programs and
curricula with a specific prevention component; and
``(E) for other purposes as the Secretary determines to be
appropriate.
``(4) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection,
$5,000,000 for each of fiscal years 1998 through 2000.''; and
(4) in subsection (g) (as so redesignated), by inserting
``except subsection (e),'' after ``section,''.
______
By Mr. INOUYE:
S. 129. A bill to amend title 10, United States Code, to authorize
certain disabled former prisoners of war to use Department of Defense
commissary and exchange stores; to the Committee on Armed Services.
former prisoners of war legislation
Mr. INOUYE. Mr. President, today I am introducing legislation to
enable those former prisoners of war who have been separated honorably
from their respective services and who have been rated to have a 30
percent service-connected disability to have the use of both the
military commissary and post exchange privileges. While I realize that
it is impossible to adequately compensate one who has endured long
periods of incarceration at the hands of our Nation's enemies, I do
feel that this gesture is both meaningful and important to those
concerned. It also serves as a reminder that our Nation has not
forgotten their sacrifices.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 129
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN
DISABLED FORMER PRISONERS OF WAR.
(a) In General.--Chapter 54 of title 10, United States
Code, is amended by inserting after section 1064 the
following new section:
``Sec. 1064a. Use of commissary stores by certain disabled
former prisoners of war
``(a) In General.--Under regulations prescribed by the
Secretary of Defense, former prisoners of war described in
subsection (b) may use commissary and exchange stores.
``(b) Covered Individuals.--Subsection (a) applies to any
former prisoner of war who--
``(1) is separated from active duty in the armed forces
under honorable conditions; and
``(2) has a service-connected disability rated by the
Secretary of Veterans Affairs at 30 percent or more.
``(c) Definitions.--In this section:
``(1) The term `former prisoner of war' has the meaning
given the term in section 101(32) of title 38.
``(2) The term `service-connected' has the meaning given
the term in section 101(16) of title 38.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by inserting after the
item relating to section 1064 the following new item:
``1064a. Use of commissary stores by certain disabled former prisoners
of war.''.
______
By Mr. INOUYE:
S. 130. A bill to amend the Internal Revenue Code of 1986 to provide
a credit for the purchase of child restraint systems used in motor
vehicles; to the Committee on Finance.
child restraint system amendments act of 1997
Mr. INOUYE. Mr. President, today I am introducing legislation to
provide for a federal income tax credit for those families who purchase
a child restraint system for their automobiles.
Accidents and injuries continue to cause almost half of the deaths of
children between the ages of one and four, more than half of the deaths
of children between five and fifteen, and continue to be the leading
cause of death among children and young adults.
It is my understanding that although the Department of Transportation
has made injury prevention among children a top priority, a significant
number of parents either do not have adequate child restraint systems
or do not have them properly installed.
It is imperative that we create this opportunity to provide America's
parents with a financially accessible alternative to the insufficient
level of child safety measures currently available for use in
automobiles.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 130
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CREDIT FOR PURCHASE OF CHILD RESTRAINT SYSTEMS.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by adding at the
end the following:
``SEC. 25A. PURCHASE OF CHILD RESTRAINT SYSTEM.
``(a) General Rule.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the costs
incurred by the taxpayer during such taxable year in
purchasing a qualified child restraint system for any child
of the taxpayer.
``(b) Definitions.--For purposes of this section--
``(1) Qualified child restraint system.--The term
`qualified child restraint system' means any child restraint
system which meets the requirements of section 571.213 of
title 49 of the Code of Federal Regulations.
``(2) Child.--The term `child' has the meaning given the
term in section 151(c)(3).''.
(b) Conforming Amendment.--The table of sections for
subpart A of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 25 the following:
``Sec. 25A. Purchase of child restraint system.''.
(c) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 1996.
______
By Mr. Moynihan (for himself, Mr. Lieberman, and Mr. Jeffords):
S. 131. A bill to amend chapter 5 of title 13, United States Code, to
require that any data relating to the incidence of poverty produced or
published by the Secretary of Commerce for subnational areas is
corrected for differences in the cost of living in those areas; to the
Committee on Governmental Affairs.
The Poverty Data Correction Act of 1997
Mr. MOYNIHAN. Mr. President, I rise today to introduce the Poverty
Data Correction Act of 1997, a bill to require that any data relating
to the incidence of poverty in subnational areas be corrected for the
differences in the cost of living in those areas. This legislation,
cosponsored by Senators Lieberman and Jeffords, would correct a
longstanding inequity and would provide us with more accurate
information on the number of Americans living in poverty.
Mr. President, residents of New York and Connecticut earn more than
do the residents of Mississippi or Alabama. But they also must spend
more. The 1990 Census of Population and Housing, for instance,
determined that homeowner costs with a mortgage averaged $1,096 per
month in Connecticut, $894 in New York State--not city, $555 in
Alabama, and $511 in Mississippi. The national average was $737.
Yet, we have a national poverty threshold adjusted only by family
size and composition, not by where the family lives. A family of four
just above the poverty threshold in New York City is demonstrably worse
off than a family of four just below the threshold in, say, rural
Arkansas. And yet the family in New York might be ineligible for aid,
and will not count in the poverty population tallies used to allocate
funds while the Arkansas family will receive aid, and will be counted.
An August 7, 1994 New York Times editorial endorsing a version of
this bill introduced in the 104th Congress sums it up nicely:
The cost of food, rent and other consumer goods can be
twice as high in Manhattan as
[[Page S514]]
in Little Rock, Ark. Yet the income cutoff for poverty
programs is the same in both places, $14,769 for a family of
four. That produces the ridiculous and unfair result that a
Manhattan family earning $15,000 does not qualify for Federal
nutrition or education programs while an Arkansas family
earning $14,500--the equivalent of $29,000 in Manhattan--
does.
* * * Federal poverty levels are supposed to identify
families that cannot buy minimally decent food, clothes and
shelter. To act as if living costs do not matter, or as if
financially strapped states will pick up where Washington
leaves off, amounts to a vicious attack on the poor who
happen to live in high-cost states.
Professor Herman B. ``Dutch'' Leonard and Senior Research Associate
Monica Friar of the Taubman Center for State and local government at
Harvard have devised an index of poverty statistics that reflects the
differences in the cost of living between States. If we look at the
``Friar-Leonard State Cost-of-Living index,'' as it has come to be
known, we find that New York has a cost-adjusted poverty rate of 20.4
percent, the fifth highest in the Nation. Florida has the 12th highest
adjusted poverty rate; Arkansas drops from 14th to 24th. New York
fifth; Arkansas 24th. Georgia as the 25th highest. It is no longer the
case that the incidence of poverty is highest in the Mississippi Delta
or Appalachia. The fifth highest poverty rate is in New York. We seem
not to have grasped this.
In 1995, a National Academy of Sciences (NAS) panel of experts
released a study on redefining poverty. Our poverty index dates back to
the work of Social Security Administration economist Mollie Orshansky
who, in the early 1960s, hit upon the idea of a nutritional standard,
not unlike the ``pennyloaf'' of bread of the 18th century British poor
laws. Our poverty standard would be three times the cost of the
Department of Agriculture-defined minimally adequate ``food basket.''
During consideration of the Family Support Act of 1988, I included a
provision mandating the National Academy of Sciences to determine if
our poverty measure is outdated and how it might be improved. The
study, edited by Constance F. Citro and Robert T. Michael, is entitled
Measuring Poverty: A New Approach. A Congressional Research Service
review of the report states:
The NAS panel * * * makes several recommendations which, if
fully adopted, could dramatically alter the way poverty in
the U.S. is measured, how federal funds are allotted to the
States, and how eligibility for many Federal programs is
determined. The recommended poverty measure would be based on
more items in the family budget, would take major noncash
benefits and taxes into account, and would be adjusted for
regional differences in living costs.
* * * Under the current measure the share of the poor
population living in each region was: Northeast: 16.9
percent; Midwest: 21.7 percent; South: 40.0 percent; and
West: 21.4 percent. Under the proposed new measure, the
estimated share in each region would be: Northeast: 18.9
percent; Midwest: 20.0 percent; South 36.4 percent; and West:
24.5 percent.
Mr. President, our current poverty data are inaccurate. And these
substandard data are used in allocation formulas used to distribute
millions of Federal dollars each year. As a result, States with high
costs of living--States like New York, Connecticut, Vermont, Hawaii,
and California, just to name a few--are not getting their fair share of
Federal dollars because differences in the cost of living are ignored.
And the poor of these high cost States are penalized because they
happen to live there. It is time to correct this inequity.
I ask unanimous consent that the New York Times editorial be inserted
into the Record.
There being no objection, the item was ordered to be printed in the
Record, as follows:
[From the New York Times, Aug. 7, 1994]
Poverty Is Unfairly Defined
The cost of food, rent and other consumer goods can be
twice as high in Manhattan as in Little Rock, Ark. Yet the
income cutoff for poverty programs is the same in both
places, $14,764 for a family of four. That produces the
ridiculous and unfair result that a Manhattan family earning
$15,000 does not qualify for Federal nutrition or education
programs while an Arkansas family earning $14,500--the
equivalent of $29,000 in Manhattan--does.
The Federal definition of poverty is blind to the real
costs paid by people struggling to purchase the necessities
of life. That is why Senator Joseph Lieberman, Democrat of
Connecticut, and Representative Dean Gallo, Republican of New
Jersey, have proposed bills that would adjust poverty levels
for state differences in the cost of living. That way poor
families in Los Angeles and Philadelphia will get their fair
share of the $20 billion or more that Congress spends on
need-based programs. Senator Daniel Patrick Moynihan of New
York, an expert on poverty, says that adjusting poverty
levels for living costs will produce poverty rates in New
York nearly as high as those in the Deep South.
The only argument against the bills is that high-income
states like New York and California can afford to pay more to
help their poor than can low-income states like Mississippi
and South Carolina. But the poor in New York are not just the
responsibility of taxpayers in New York; helping the poor is
every American's duty, best carried out by Federal payments
that take account of differences in the cost of living. Of
course, wealthy states like New York will pay a
disproportionate share of the taxes that support such
payments.
The argument for letting rich states take care of ``their''
own poor fails for another reason: they will shirk. If state
governments try to finance generous welfare, they trigger in-
migration of the poor and out-migration of wealthy taxpayers.
Therefore they underfinance welfare; over the past two
decades, states welfare benefits have dwindled.
Federal poverty levels are supposed to identify families
that cannot buy minimally decent food, clothes and shelter.
To act as if living costs do not matter, or as if financially
strapped states will pick up where Washington leaves off,
amounts to a vicious attack on the poor who happen to live in
high-cost states.
______
By Mr. MOYNIHAN:
S. 132. A bill to prohibit the use of certain ammunition, and for
other purposes. A bill to prohibit the use of certain ammunition, and
for other purposes; to the Committee on the Judiciary.
S. 133. A bill to amend the Internal Revenue Code of 1986 to increase
the tax on handgun ammunition, to impose the special occupational tax
and registration requirements on importers and manufacturers of handgun
ammunition, and for other purposes; to the Committee on Finance.
legislation to control destructive ammunition
Mr. MOYNIHAN. Mr. President, I introduce two measures to help fight
the epidemic of bullet-related violence in America: the Real Cost of
Destructive Ammunition Act and the Destructive Ammunition Prohibition
Act of 1997. The purpose of these bills is to prevent from reaching the
marketplace some of the most deadly rounds of ammunition ever produced.
Some of my colleagues may remember the Black Talon. It is a hollow-
tipped bullet, singular among handgun ammunition in its capacity for
destruction. Upon impact with human tissue, the bullet produces razor-
sharp radial petals that produce a devastating wound. It is the very
same bullet that a crazed gunman fired at unsuspecting passengers on a
Long Island Railroad train in December 1993, Killing the husband of now
Congresswoman Carolyn McCarthy and injuring her son. That same month,
it was also used in the shooting of Officer Jason E. White of the
District of Columbia Metropolitan Police Department, just 15 blocks
from the Capitol.
I first learned of the Black Talon in a letter I received from Dr.
E.J. Gallagher, director of Emergency Medicine at Albert Einstein
College of Medicine at the Municipal Hospital Trauma Center in the
Bronx. Dr. Gallagher wrote that he has never seen a more lethal
projectile. On November 3, 1993, I introduced a bill to tax the Black
Talon at 10,000 percent. Nineteen days later, Olin Corp., the
manufacturer of the Black Talon, announced that it would withdraw sale
of the bullet to the general public. Unfortunately, the 103d Congress
came to a close without the bill having won passage.
As a result, there is nothing in law to prevent the reintroduction of
this pernicious bullet, nor is there any existing impediment to the
sale of similar rounds that might be produced by another manufacturer.
So today I reintroduce the bill to tax the Black Talon as well as a
bill to prohibit the sale of the Black Talon to the public. Both bills
would apply to any bullet with the same physical characteristics as the
Black Talon. These bullets have no place in the armory of criminals.
It has been estimated that the cost of hospital services for treating
bullet-related injuries is $1 billion per year, with the total cost to
the economy of such injuries approximately $14 billion.
[[Page S515]]
We can ill afford further increases in this number, but this would
surely be the result if bullets with the destructive capacity of the
Black Talon are allowed onto the streets.
Mr. President, despite the fact that the national crime rate has
decreased in recent months, the number of deaths and injuries caused by
bullet wounds is still at an unconscionable level. It is time we took
meaningful steps to put an end to the massacres that occur daily as a
result of gunshots. How better a beginning than to go after the most
insidious culprits of this violence? I urge my colleagues to support
these measures and to prevent these bullets from appearing on the
market.
______
By Mr. MOYNIHAN:
S. 134. A bill to amend title 18, United States Code, with respect to
the licensing of ammunition manufacturers, and for other purposes; to
the Committee on the Judiciary.
THE HANDGUN AMMUNITION CONTROL ACT OF 1997
Mr. MOYNIHAN. Mr. President, I rise today to introduce a measure to
improve our information about the regulation and criminal use of
ammunition and to prevent the irresponsible production of ammunition.
This bill has three components. First, it would require importers and
manufacturers of ammunition to keep records and submit an annual report
to the Bureau of Alcohol, Tobacco and Firearms [BATF] on the
disposition of ammunition, including the amount, caliber and type of
ammunition imported or manufactured. Second, it would require the
Secretary of the Treasury, in consultation with the National Academy of
Sciences, to conduct a study of ammunition use and make recommendations
on the efficacy of reducing crime by restricting access to ammunition.
Finally, it would amend title 18 of the United States Code to raise the
application fee for a license to manufacture certain calibers of
ammunition.
While there are enough handguns in circulation to last well into the
22d century, there is perhaps only a 4-year supply of ammunition. But
how much of what kind of ammunition? Where does it come from? Where
does it go? There are currently no reporting requirements for
manufacturers or importers of ammunition; earlier reporting
requirements were repealed in 1986. The Federal Bureau of
Investigation's annual Uniform Crime Reports, based on information
provided by local law enforcement agencies, does not record the
caliber, type, or quantity of ammunition used in crime. In short, our
data base is woefully inadequate.
I supported the Brady law, which requires a waiting period before the
purchase of a handgun, and the recent ban on semi-automatic weapons.
But while the debate over gun control continues, I offer another
alternative: Ammunition control. After all, as I have said before, guns
do not kill people; bullets do.
Ammunition control is not a new idea. In 1982 Phil Caruso of the New
York City Patrolmen's Benevolent Association asked me do something
about armor-piercing bullets. Jacketed in tungsten or other materials,
these rounds could penetrate four police flak jackets and five Los
Angeles County telephone books. They are of no sporting value. I
introduced legislation, the Law Enforcement Officers Protection Act, to
ban the cop-killer bullets in the 97th, 98th, and 99th Congresses. It
enjoyed the overwhelming support of law enforcement groups and,
ultimately, tacit support from the National Rifle Association. It was
finally signed into law by President Reagan on August 28, 1986.
The crime bill enacted in 1994 contained may amendment to broaden the
1986 ban to cover new thick steel-jacketed armor-piercing rounds.
Out cities are becoming more ware of the benefits to be gained from
ammunition control. The District of Columbia and some other cities
prohibit a person from possessing ammunition without a valid license
for a firearm of the same caliber or gauge as the ammunition. Beginning
in 1990, the city of Los Angeles banned the sale of all ammunition 1
week prior to Independence Day and New Year's Day in an effort to
reduce injuries and deaths caused by the firing of guns into the air.
And in September 1994, the city of Chicago became the first in America
to ban the sale of all handgun ammunition.
Such efforts are laudable. But they are isolated attempts to cure
what is in truth a national disease. We need to do more, but to do so,
we need information to guide policymaking. This bill would fulfill that
need by requiring annual reports to BATF by manufacturers and importers
and by directing a study by the National Academy of Sciences. We also
need to encourage manufacturers of ammunition to be more responsible.
By substantially increasing application fees for licenses to
manufacturer .25 caliber, .32 caliber, and 9-mm ammunition, this bill
would discourage the reckless production of unsafe ammunition or
ammunition which causes excesses damage.
I urge my colleagues to support this measure.
______
By Mr. MOYNIHAN:
S. 135. A bill to provide for the collection and dissemination of
information on injuries, death, and family dissolution due to bullet-
related violence, to require the keeping of records with respect to
dispositions of ammunition and to increase taxes on certain bullets; to
the Committee on Finance.
the violent crime control act of 1997
Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill that
comprehensively seeks to control the epidemic proportions of violence
in America. This legislation, the Violent Crime Control Act of 1997,
combines most of the provisions of two of the other crime-related bills
I am introducing today as well.
By including two different crime-related provisions, my bill attacks
the crime epidemic on more than just one front. If we are truly serious
about confronting our Nation's crime problem, we must learn more about
the nature of the epidemic of bullet-related violence and ways to
control it. To do this, we must require records to be keep on the
disposition of ammunition.
In October 1992, the Senate Finance Committee received testimony that
public health and safety experts have, independently, concluded that
there is an epidemic of bullet-related violence. The figures are
staggering.
In 1995, bullets were in the murders of 23,673 people in the United
States. By focusing on bullets, and not guns, we recognize that much
like nuclear waste, guns remain active for centuries. With minimum
care, they do not deteriorate. However, bullets are consumed. Estimates
suggest we have only a 4-years supply of them.
Not only am I proposing that we tax bullets used disproportionately
in crimes, 9 millimeter, .25 and .32 caliber bullets, I also believe we
must set up a Bullet Death and Injury Control Program within the
Centers for Disease Control's National Center for Injury Prevention and
Control. This Center will enhance our knowledge of the distribution and
status of bullet-related death and injury and subsequently make
recommendations about the extent and nature of bullet-related violence.
So that the Center would have substantive information to study and
analyze, this bill also requires importers and manufacturers of
ammunition to keep records and submit an annual report to the Bureau of
Alcohol, Tobacco, and Firearms [BATF] on the disposition of ammunition.
Currently, importers and manufacturers of ammunition are not required
to do so.
Clearly, it will take intense effort on all of our parts to reduce
violent crime in America. We must confront this epidemic from several
different range, recognizing that there is no simple solution.
______
By Mr. MOYNIHAN:
S. 136. A bill to amend chapter 44 of title 18, United States Code,
to prohibit the manufacture, transfer, or importation of .25 caliber
and .32 caliber and 9 millimeter ammunition; to the Committee on the
Judiciary.
violent crime reduction act
S. 137. A bill to tax 9 millimeter, .25 caliber, and .32 caliber
bullets; to the Committee on Finance.
real cost of handgun ammunition act of 1997
Mr. MOYNIHAN. Mr. President, I introduce two bills: the Violent Crime
Reduction Act of 1997 and the Real Cost of Handgun Ammunition Act of
1997. Their purposes are to ban or heavily tax .25 caliber, .32
caliber, and 9 mm ammunition. These calibers of bullets are used
disproportionately in crime. They are not sporting or hunting rounds,
but instead are the bullets of
[[Page S516]]
choice for drug dealers and violent felons. Every year they contribute
overwhelmingly to the pervasive loss of life caused by bullet wounds.
Today marks the fourth time in as many Congresses that I have
introduced legislation to ban or tax these pernicious bullets. As the
terrible gunshot death toll in the United States continues unabated, so
too does the need for these bills, which, by keeping these bullets out
of the hands of criminals, would save a significant number of lives.
The number of Americans killed or wounded each year by bullets
demonstrates their true cost to American society. Just look at the
data:
In 1995, 13,673 people--68.2 percent of all people murdered--were
murdered by gunshot. In addition, others lost their lives to bullets by
shooting themselves, either purposefully or accidentally. And although
no national statistics are kept on bullet-related injuries, studies
suggest they occur two to five times more frequently than do deaths.
The lifetime risk of death from homicide in U.S. males is 1 in 164,
about the same as the risk of death in battle faced by U.S. servicemen
in the Vietnam war. For black males, the lifetime risk of death from
homicide is 1 in 28, twice the risk of death in battle faced by Marines
in Vietnam.
As noted by Susan Baker and her colleagues in the book ``Epidemiology
and Health Policy,'' edited by Sol Levine and Abraham Lilienfeld:
There is a correlation between rates of private ownership
of guns and gun-related death rates; guns cause two-thirds of
family homicides; and small easily concealed weapons comprise
the majority of guns used for homicides, suicides and
unintentional death.
Baker states that:
* * * these facts of the epidemiology of firearm-related
deaths and injuries have important implications. Combined
with their lethality, the widespread availability of easily
concealed handguns for impetuous use by people who are angry,
drunk, or frightened appears to be a major determinant of the
high firearm death rate in the United States. Each
contributing factor has implications for prevention.
Unfortunately, issues related to gun control have evoked
such strong sentiments that epidemiologic data are rarely
employed to good advantage.
Strongly held views on both sides of the gun control issue have made
the subject difficult for epidemiologists. I would suggest that a good
deal of energy is wasted in this never-ending debate, for gun control
as we know it misses the point. We ought to focus on the bullets and
not the guns.
I would remind the Senate of our experience in controlling epidemics.
Although the science of epidemiology traces its roots to antiquity--
Hippocrates stressed the importance of considering environmental
influences on human diseases--the first modern epidemiological study
was conducted by James Lind in 1747. His efforts led to the eventual
control of scurvy. It wasn't until 1795 that the British Navy accepted
his analysis and required limes in shipboard diets. Most solutions are
not perfect. Disease is rarely eliminated. But might epidemiology be
applied in the case of bullets to reduce suffering? I believe so.
In 1854 John Snow and William Farr collected data that clearly showed
cholera was caused by contaminated drinking water. Snow removed the
handle of the Broad Street pump in London to prevent people from
drawing water from this contaminated water source and the disease
stopped in that population. His observations led to a legislative
mandate that all London water companies filter their water by 1857.
Cholera epidemics subsided. Now treatment of sewage prevents cholera
from entering our rivers and lakes, and the disinfection of drinking
water makes water distribution systems uninhabitable for cholera
vibrio, identified by Robert Koch as the causative agent 26 years after
Snow's study.
In 1900, Walter Reed identified mosquitos as the carriers of yellow
fever. Subsequent mosquito control efforts by another U.S. Army doctor,
William Gorgas, enabled the United States to complete the Panama Canal.
The French failed because their workers were too sick from yellow fever
to work. Now that it is known that yellow fever is caused by a virus,
vaccines are used to eliminate the spread of the disease.
These pioneering epidemiology success stories showed the world that
epidemics require an interaction between three things: the host--the
person who becomes sick or, in the case of bullets, the shooting
victim); the agent--the cause of sickness, or the bullet); and the
environment--the setting in which the sickness occurs or, in the case
of bullets, violent behavior. Interrupt this epidemiological triad and
you reduce or eliminate disease and injury.
How might this approach applies to the control of bullet-
related injury and death? Again, we are contemplating something
different from gun control. There is a precedent here. In the middle of
this century it was recognized that epidemiology could be applied to
automobile death and injury. From a governmental perspective, this
hypothesis was first adopted in 1959, late in the administration of
Gov. Averell Harriman of New York State. In the 1960 Presidential
campaign, I drafted a statement on the subject which was released by
Senator John F. Kennedy as part of a general response to enquiries from
the American Automobile Association. Then Senator Kennedy stated:
Traffic accidents constitute one of the greatest, perhaps
the greatest of the nation's public health problems. They
waste as much as 2 percent of our gross national product
every year and bring endless suffering. The new highways will
do much to control the rise of the traffic toll, but by
themselves they will not reduce it. A great deal more
investigation and research is needed. Some of this has
already begun in connection with the highway program. It
should be extended until highway safety research takes its
place as an equal of the many similar programs of health
research which the federal government supports.
Experience in the 1950's and early 1960's prior to passage of the
Motor Vehicle Safety Act, showed that traffic safety enforcement
campaigns designed to change human behavior did not improve traffic
safety. In fact, the death and injury toll mounted. I was Assistant
Secretary of Labor in the mid-1960's when Congress was developing the
Motor Vehicle Safety Act, and I was called to testify.
It was clear to me and others that motor vehicle injuries and deaths
could not be limited by regulating driver behavior. Nonetheless, we had
an epidemic on our hands and we needed to do something about it. My
friend William Haddon, the first Administrator of the National Highway
Traffic Safety Administration, recognized that automobile fatalities
were caused not by the initial collision, when the automobile strikes
some object, but by a second collision, in which energy from the first
collision is transferred to the interior of the car, causing the driver
and occupants to strike the steering wheel, dashboard, or other
structures in the passenger compartment. The second collision is the
agent of injury to the hosts--the car's occupants.
Efforts to make automobiles crashworthy follow examples used to
control infectious disease epidemics. Reduce or eliminate the agent of
injury. Seatbelts, padded dashboards, and airbags are all specifically
designed to reduce, if not eliminate, injury caused by the agent of
automobile injuries, energy transfer to the human body during the
second collision. In fact, we've done nothing revolutionary. All of the
technology used to date to make cars crashworthy, including airbags,
was developed prior to 1970.
Experience shows the approach worked. Of course, it could have worked
better, but it worked. Had we been able to totally eliminate the
agent--the second collision--the cure would have been complete.
Nonetheless, merely by focusing on simple, achievable remedies, we
reduced the traffic death and injury epidemic by 30 percent. Motor
vehicle deaths declined in absolute terms by 13 percent from 1980 to
1990, despite significant increases in the number of drivers, vehicles,
and miles driven. Driver behavior is changing, too. National seatbelt
usage is up dramatically, 60 percent now compared to 14 percent in
1984. These efforts have resulted in some 15,000 lives saved and
100,000 injuries avoided each year.
We can apply that experience to the epidemic of murder and injury
from bullets. The environment in which these deaths and injuries occur
is complex. Many factors likely contribute to the rise in bullet-
related injury. Here is an important similarity with the situation we
faced 25 years ago regarding automobile safety. We found we could not
easily alter the behavior of millions of drivers, but we could--
easily--
[[Page S517]]
change the behavior of three or four automobile manufacturers.
Likewise, we simply cannot do much to change the environment--violent
behavior--in which gun-related injury occurs, nor do we know how. We
can, however, do something about the agent causing the injury: bullets.
Ban them. At least the rounds used disproportionately to cause death
and injury; that is, the .25 caliber, .32 caliber, and 9 millimeter
bullets. These three rounds account for the ammunition used in about 13
percent of licensed guns in New York City, yet they are involved in
one-third of all homicides. They are not, as I have said, useful for
sport or hunting. They are used for violence. If we fail to confront
the fact that these rounds are used disproportionately in crimes,
innocent people will continue to die.
I have called on Congress during the past several sessions to ban or
heavily tax these bullets. This would not be the first time that
Congress has banned a particular round of ammunition. In 1986, it
passed legislation written by the Senator from New York banning the so-
called ``cop-killer'' bullet. This round, jacketed with tungsten
alloys, steel, brass, or any number of other metals, had been
demonstrated to penetrate no fewer than four police flak jackets and an
additional five Los Angeles County phonebooks at one time. In 1982, the
New York Police Benevolent Association came to me and asked me to do
something about the ready availability of these bullets. The result was
the Law Enforcement Officers Protection Act, which we introduced in
1982, 1983, and for the last time during the 99th Congress. In the end,
with the tacit support of the National Rifle Association, the measure
passed the Congress and was signed by the President as Public Law 99-
408 on August 28, 1986. In the 1994 crime bill, we enacted my amendment
to broaden the ban to include new thick steel-jacketed armor-piercing
rounds.
There are some 220 million firearms in circulation in the United
States today. They are, in essence, simple machines, and with minimal
care, remain working for centuries. However, estimates suggest that we
have only a 4-year supply of bullets. Some 2 billion cartridges are
used each year. At any given time there are some 7.5 billion rounds in
factory, commercial, or household inventory.
In all cases, with the exception of pistol whipping, gun-related
injuries are caused not by the gun, but by the agents involved in the
second collision: the bullets. Eliminating the most dangerous rounds
would not end the problem of handgun killings. But it would reduce it.
A 30-percent reduction in bullet-related deaths, for instance, would
save over 10,000 lives each year and prevent up to 50,000 wounds.
Water treatment efforts to reduce typhoid fever in the United States
took about 60 years. Slow sand filters were installed in certain cities
in the 1880's, and water chlorination treatment began in the 1910's.
The death rate from typhoid in Albany, NY, prior to 1889, when the
municipal water supply was treated by sand filtration, was about 100
fatalities per 100,000 people each year. The rate dropped to about 25
typhoid deaths per year after 1889, and dropped again to about 10
typhoid deaths per year after 1915, when chlorination was introduced.
By 1950, the death rate from typhoid fever had dropped to zero. It will
likely take longer than 60 years to eliminate bullet-related death and
injury, but we need to start with achievable measures to break the
deadly interactions between people, bullets, and violent behavior.
The bills I introduce today would begin the process. They would begin
to control the problem by banning or taxing those rounds used
disproportionately in crime--the .25-caliber, .32-caliber, and 9-
millimeter rounds. The bills recognize the epidemic nature of the
problem, building on findings contained in the June 10, 1992 issue of
the Journal of the American Medical Association which was devoted
entirely to the subject of violence, principally violence associated
with firearms.
Mr. President, it is time to confront the epidemic of bullet-related
violence. I urge my colleagues to support these bills.
______
By Mr. DASCHLE (for himself, Mr. Hollings, Mr. Kennedy, Ms.
Mikulski, Mr. Levin, Ms. Moseley-Braun, Mrs. Boxer, Mrs.
Feinstein, Mr. Inouye, Mrs. Murray, Mr. Johnson, Mr. Bryan, Mr.
Sarbanes, Mr. Ford, and Mr. Lautenberg):
S. 143. A bill to amend the Public Health Service Act and Employee
Retirement Income Security Act of 1974 to require that group and
individual health insurance coverage and group health plans provide
coverage for a minimum hospital stay for mastectomies and lymph node
dissections performed for the treatment of breast cancer; to the
Committee on Labor and Human Resources.
the breast cancer patient protection act of 1997
Mr. DASCHLE. Mr. President, today Senator Hollings and I are
introducing the Breast Cancer Patient Protection Act of 1997. I want to
thank Senators Kennedy, Milulski, Moseley-Braun, Boxer, Feinstein,
Levin, Inouye, Murray, Johnson, Bryan, Sarbanes, Ford and Landrieu, for
joining us as original cosponsors. We welcome the support of all of our
colleagues, on both sides of the aisle, for this important legislation.
Our bill is a companion to H.R. 135, which was introduced in the House
of Representatives by Representatives DeLauro, Dingell, and Roukema on
January 7, 1997.
I bring this bill to the Senate both to put an end to the relatively
new practice of forcing women to have mastectomies on an outpatient
basis and to begin a discussion on how to develop and maintain policies
that protect patients and ensure continued access to affordable high
quality medical care.
Every 3 minutes another woman is diagnosed with breast cancer. This
year alone, more than 180,000 women will find out they have breast
cancer. This disease strikes at the core of American families, taking
our mothers, wives, sisters, and daughters on an often terrifying tour
of our health care system.
The Breast Cancer Patient Protection Act seeks to make the journey
less worrisome by requiring insurance companies to provide at least a
minimum amount of inpatient hospital care for patients undergoing
mastectomies or lymph node dissections for the treatment of breast
cancer. The language is modeled after last year's carefully drafted and
unanimously supported compromise agreement that established a similar
policy to end the practice of drive-through deliveries.
The bill was designed in part to counter a consulting firm's
recommendation to its insurance company clients that both mastectomies
and lymph node dissections be performed on an outpatients basis. As a
result, some surgeons have been forced to send patients home still
groggy from anesthesia and with drainage tubes in place. Yet, with few
exceptions, hospitalization following major breast cancer surgery is
necessary not only to control pain and manage postoperative care, but
also to provide a supportive environment for women who have undergone
an undeniably traumatic and challenging surgery.
Under this targeted legislation, women would be guaranteed at least
48 hours of impatient care following a mastectomy, and a minimum of 24
hours following lymph node dissection for the treatment of breast
cancer. patients and their physicians--not insurance companies--could
jointly decide whether it is appropriate for the patient to leave the
hospital earlier. These timeframes, which were designed in consultation
with surgeons who specialize in this area, reflect the minimum amount
of inpatient care thought to be necessary following these procedures.
It is our hope that insurers would choose to make an investment in the
future health of their enrollees by allowing coverage for as long as
the provider determines to be medically appropriate to ensure a proper
recovery.
I would also like to call to your attention Senator Kennedy's
forthcoming bill that will require insurance companies who cover
mastectomies to also cover reconstruction surgery. Too often, women and
their physicians are faced with having to justify to the insurance
carrier the clear need for reconstruction surgery following amputation
of a diseased breast. This is wrong. Women who have undergone difficult
and disfiguring surgery for
[[Page S518]]
breast cancer should not have to undergo additional hardship while
simply seeking to made physically whole again. Senator Kennedy's bill,
which I will cosponsor, will address this important issue.
While these bills respond to ill-conceived policies that we believe
have dangerous implications for women with breast cancer, let them
serve as reminders of our broken health care system. Addressing health
insurance problems relating to quality of care and patient protection
issues on a piecemeal basis may be our only way to accomplish
meaningful reforms in this increasingly important area.
With one in eight women likely to develop breast cancer, it is
increasingly likely that all of our families will be in some way
affected by this devastating disease. Let us take this small step to
ensure the experience is not aggravated by unnecessarily difficult
encounters with the companies that have agreed under contract to stand
by us not only in health but also in sickness.
This bill is strongly supported by the National Breast Cancer
Coalition, the National Alliance of Breast Cancer Organizations, the
American College of Surgeons, the American Society of Plastic and
Reconstructive Surgeons, the Y-Me National Breast Cancer Organization,
the American Cancer Society, Families USA, and the Women's Legal
Defense Fund.
Together, I am hopeful that we can put critical health care decisions
back in the hands of breast cancer patients and their physicians.
Mr. President, I ask that the full text of the Breast Cancer Patient
Protection Act be inserted following may remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 143
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Breast Cancer Patient
Protection Act of 1997''.
SEC. 2. COVERAGE OF MINIMUM HOSPITAL STAY FOR CERTAIN BREAST
CANCER TREATMENT.
(a) Group Health Plans.--
(1) Public health service act amendments.--
(A) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act, as amended by section 703(a) of
Public Law 104-204, is amended by adding at the end the
following new section:
``SEC. 2706. STANDARDS RELATING TO BENEFITS FOR CERTAIN
BREAST CANCER TREATMENT.
``(a) Requirements for Minimum Hospital Stay Following
Mastectomy or Lymph Node Dissection.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
may not--
``(A) except as provided in paragraph (2)--
``(i) restrict benefits for any hospital length of stay in
connection with a mastectomy for the treatment of breast
cancer to less than 48 hours, or
``(ii) restrict benefits for any hospital length of stay in
connection with a lymph node dissection for the treatment of
breast cancer to less than 24 hours, or
``(B) require that a provider obtain authorization from the
plan or the issuer for prescribing any length of stay
required under subparagraph (A) (without regard to paragraph
(2)).
``(2) Exception.--Paragraph (1)(A) shall not apply in
connection with any group health plan or health insurance
issuer in any case in which the decision to discharge the
woman involved prior to the expiration of the minimum length
of stay otherwise required under paragraph (1)(A) is made by
an attending provider in consultation with the woman.
``(b) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to a woman eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide monetary payments or rebates to women to
encourage such women to accept less than the minimum
protections available under this section;
``(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because such provider
provided care to an individual participant or beneficiary in
accordance with this section;
``(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; or
``(5) subject to subsection (c)(3), restrict benefits for
any portion of a period within a hospital length of stay
required under subsection (a) in a manner which is less
favorable than the benefits provided for any preceding
portion of such stay.
``(c) Rules of Construction.--
``(1) Nothing in this section shall be construed to require
a woman who is a participant or beneficiary--
``(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
``(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
``(2) This section shall not apply with respect to any
group health plan, or any group health insurance coverage
offered by a health insurance issuer, which does not provide
benefits for hospital lengths of stay in connection with a
mastectomy or lymph node dissection for the treatment of
breast cancer.
``(3) Nothing in this section shall be construed as
preventing a group health plan or issuer from imposing
deductibles, coinsurance, or other cost-sharing in relation
to benefits for hospital lengths of stay in connection with a
mastectomy or lymph node dissection for the treatment of
breast cancer under the plan (or under health insurance
coverage offered in connection with a group health plan),
except that such coinsurance or other cost-sharing for any
portion of a period within a hospital length of stay required
under subsection (a) may not be greater than such coinsurance
or cost-sharing for any preceding portion of such stay.
``(d) Notice.--A group health plan under this part shall
comply with the notice requirement under section 713(d) of
the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this section as if such
section applied to such plan.
``(e) Level and Type of Reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(f) Preemption; Exception for Health Insurance Coverage
in Certain States.--
``(1) In general.--The requirements of this section shall
not apply with respect to health insurance coverage if there
is a State law (as defined in section 2723(d)(1)) for a State
that regulates such coverage that is described in any of the
following subparagraphs:
``(A) Such State law requires such coverage to provide for
at least a 48-hour hospital length of stay following a
mastectomy performed for treatment of breast cancer and at
least a 24-hour hospital length of stay following a lymph
node dissection for treatment of breast cancer.
``(B) Such State law requires, in connection with such
coverage for surgical treatment of breast cancer, that the
hospital length of stay for such care is left to the decision
of (or required to be made by) the attending provider in
consultation with the woman involved.
``(2) Construction.--Section 2723(a)(1) shall not be
construed as superseding a State law described in paragraph
(1).''.
(B) Conforming amendment.--Section 2723(c) of such Act (42
U.S.C. 300gg-23(c)), as amended by section 604(b)(2) of
Public Law 104-204, is amended by striking ``section 2704''
and inserting ``sections 2704 and 2706''.
(2) ERISA amendments.--
(A) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974, as
amended by section 702(a) of Public Law 104-204, is amended
by adding at the end the following new section:
``SEC. 713. STANDARDS RELATING TO BENEFITS FOR CERTAIN BREAST
CANCER TREATMENT.
``(a) Requirements for Minimum Hospital Stay Following
Mastectomy or Lymph Node Dissection.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
may not--
``(A) except as provided in paragraph (2)--
``(i) restrict benefits for any hospital length of stay in
connection with a mastectomy for the treatment of breast
cancer to less than 48 hours, or
``(ii) restrict benefits for any hospital length of stay in
connection with a lymph node dissection for the treatment of
breast cancer to less than 24 hours, or
``(B) require that a provider obtain authorization from the
plan or the issuer for prescribing any length of stay
required under subparagraph (A) (without regard to paragraph
(2)).
``(2) Exception.--Paragraph (1)(A) shall not apply in
connection with any group health plan or health insurance
issuer in any case in which the decision to discharge the
woman involved prior to the expiration of the minimum length
of stay otherwise required under paragraph (1)(A) is made by
an attending provider in consultation with the woman.
``(b) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to a woman eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide monetary payments or rebates to women to
encourage such women to accept less than the minimum
protections available under this section;
[[Page S519]]
``(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because such provider
provided care to an individual participant or beneficiary in
accordance with this section;
``(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; or
``(5) subject to subsection (c)(3), restrict benefits for
any portion of a period within a hospital length of stay
required under subsection (a) in a manner which is less
favorable than the benefits provided for any preceding
portion of such stay.
``(c) Rules of Construction.--
``(1) Nothing in this section shall be construed to require
a woman who is a participant or beneficiary--
``(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
``(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
``(2) This section shall not apply with respect to any
group health plan, or any group health insurance coverage
offered by a health insurance issuer, which does not provide
benefits for hospital lengths of stay in connection with a
mastectomy or lymph node dissection for the treatment of
breast cancer.
``(3) Nothing in this section shall be construed as
preventing a group health plan or issuer from imposing
deductibles, coinsurance, or other cost-sharing in relation
to benefits for hospital lengths of stay in connection with a
mastectomy or lymph node dissection for the treatment of
breast cancer under the plan (or under health insurance
coverage offered in connection with a group health plan),
except that such coinsurance or other cost-sharing for any
portion of a period within a hospital length of stay required
under subsection (a) may not be greater than such coinsurance
or cost-sharing for any preceding portion of such stay.
``(d) Notice under Group Health Plan.--The imposition of
the requirements of this section shall be treated as a
material modification in the terms of the plan described in
section 102(a)(1), for purposes of assuring notice of such
requirements under the plan; except that the summary
description required to be provided under the last sentence
of section 104(b)(1) with respect to such modification shall
be provided by not later than 60 days after the first day of
the first plan year in which such requirements apply.
``(e) Level and Type of Reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(f) Preemption; Exception for Health Insurance Coverage
in Certain States.--
``(1) In general.--The requirements of this section shall
not apply with respect to health insurance coverage if there
is a State law (as defined in section 731(d)(1)) for a State
that regulates such coverage that is described in any of the
following subparagraphs:
``(A) Such State law requires such coverage to provide for
at least a 48-hour hospital length of stay following a
mastectomy performed for treatment of breast cancer and at
least a 24-hour hospital length of stay following a lymph
node dissection for treatment of breast cancer.
``(B) Such State law requires, in connection with such
coverage for surgical treatment of breast cancer, that the
hospital length of stay for such care is left to the decision
of (or required to be made by) the attending provider in
consultation with the woman involved.
``(2) Construction.--Section 731(a)(1) shall not be
construed as superseding a State law described in paragraph
(1).''.
(B) Conforming amendments.--
(i) Section 731(c) of such Act (29 U.S.C. 1191(c)), as
amended by section 603(b)(1) of Public Law 104-204, is
amended by striking ``section 711'' and inserting ``sections
711 and 713''.
(ii) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as
amended by section 603(b)(2) of Public Law 104-204, is
amended by striking ``section 711'' and inserting ``sections
711 and 713''.
(iii) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 712
the following new item:
``Sec. 713. Standards relating to benefits for certain breast cancer
treatment.''.
(b) Individual Health Insurance.--
(1) In general.--Part B of title XXVII of the Public Health
Service Act, as amended by section 605(a) of Public Law 104-
204, is amended by inserting after section 2751 the following
new section:
``SEC. 2752. STANDARDS RELATING TO BENEFITS FOR CERTAIN
BREAST CANCER TREATMENT.
``(a) In General.--The provisions of section 2706 (other
than subsection (d)) shall apply to health insurance coverage
offered by a health insurance issuer in the individual market
in the same manner as it applies to health insurance coverage
offered by a health insurance issuer in connection with a
group health plan in the small or large group market.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 713(d)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements referred to in subsection (a) as
if such section applied to such issuer and such issuer were a
group health plan.
``(c) Preemption; Exception for Health Insurance Coverage
in Certain States.--
``(1) In general.--The requirements of this section shall
not apply with respect to health insurance coverage if there
is a State law (as defined in section 2723(d)(1)) for a State
that regulates such coverage that is described in any of the
following subparagraphs:
``(A) Such State law requires such coverage to provide for
at least a 48-hour hospital length of stay following a
mastectomy performed for treatment of breast cancer and at
least a 24-hour hospital length of stay following a lymph
node dissection for treatment of breast cancer.
``(B) Such State law requires, in connection with such
coverage for surgical treatment of breast cancer, that the
hospital length of stay for such care is left to the decision
of (or required to be made by) the attending provider in
consultation with the woman involved.
``(2) Construction.--Section 2762(a) shall not be construed
as superseding a State law described in paragraph (1).''.
(2) Conforming amendment.--Section 2762(b)(2) of such Act
(42 U.S.C. 300gg-62(b)(2)), as added by section 605(b)(3)(B)
of Public Law 104-204, is amended by striking ``section
2751'' and inserting ``sections 2751 and 2752''.
(c) Effective Dates.--
(1) Group market.--The amendments made by subsection (a)
shall apply with respect to group health plans for plan years
beginning on or after January 1, 1998.
(2) Individual market.--The amendment made by subsection
(b) shall apply with respect to health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on or after such date.
Ms. MOSELEY-BRAUN. Mr. President, I am pleased to join the list of
cosponsors of the Breast Cancer Patient Protection Act of 1997. I think
this act is vitally important to prevent health providers from cutting
costs at the expense of women's health.
Breast cancer is the most common cancer among women. This year alone
approximately 184,300 women will be diagnosed with breast cancer while
another 44,300 women will die of the disease. Breast cancer is a
disease that will affect one in every eight women. With statistics like
these, it is possible that every family in America will feel the
effects of this disease.
This act would ensure that health insurers which already provide for
the treatment of breast cancer cover a minimum hospital stay of 48
hours for patients undergoing mastectomies and 24 hours for those
undergoing lymph node removal if she and her doctor choose. I am
cosponsoring this bill to ensure that breast cancer surgery is not
relegated to routine outpatient surgery.
The average hospital stay of a breast cancer patient has dwindled
from 4-6 to 2-3 days and currently some patients are sent home a few
hours after their operation. Both the American College of Surgeons and
the American Medical Association believe that most patients require
hospital stays that are longer than the current trends. In addition,
accepted practice has shown that breast cancer surgery patients require
at least 48 hours in the hospital after a mastectomy and 24 hours'
hospital stay after a lymph node removal.
The important aspect of this matter is that women are being sent home
after breast cancer surgery before they are neither physically nor
emotionally ready to be released from the hospital. The reason for
sending these women home has nothing to do with medical standards of
care and everything to do with the bottom line. I support the Breast
Cancer Patient Protection Act because it will allow the decisions on
how long to stay in the hospital to be determined by the patient and
her doctor. If it is determined that the patient is not in need of a
48-hour stay, the doctor may release the patient from hospital care.
The crucial distinction between this scenario and what is currently
being practiced is that insurers will not be able to force someone out
on a purely arbitrary basis. Decisions will be made based on the needs
of the patient rather than the fiscal concerns of the insurer.
This legislation enjoys the support of the National Breast Cancer
Coalition, the National Association of Breast Care Organizations, the
Y-me National Breast Cancer Organization, the Families USA foundation,
the Women's
[[Page S520]]
Legal Defense Fund, and the American Society of Plastic and
Reconstructive Surgeons.
I have given careful consideration to the issues involved and believe
that this act will ensure that American women receive the health care
treatment and coverage that they are entitled to. I strongly encourage
all of my colleagues to endorse this effort.
Mr. FORD. Mr. President, I rise in support of the Breast Cancer
Protection Act introduced earlier today by my friend the Democratic
Leader, Senator Tom Daschle. I am pleased to be an original cosponsor
of this important legislation to provide women with breast cancer the
best care and health coverage available.
I come here not as an authority on this subject, but as one of the
many Americans who have been touched by this disease. My own daughter
is a breast cancer survivor, as is a former staff member.
Unfortunately, another member of my staff for 18 years, Martha Moloney,
was not so lucky. After a long battle with breast cancer, she died in
November 1995.
It is for these women, and the thousands of others affected by this
disease, that I lend my support to this effort to ensure all women with
breast cancer are treated with dignity and respect. Rather than being
rushed out the door hours after a breast cancer surgery, women deserve
to consult with their physician to determine the appropriate hospital
stay. That is why I am supporting the Breast Cancer Protection Act to
provide a minimum hospital stay of 48 hours for mastectomies and 24
hours for lymph node removals.
Over the past 10 years, the length of hospitalization for patients
undergoing breast cancer surgery has decreased significantly. Today,
hospitalization time for patients undergoing mastectomies has dwindled
to a mere 2-3 days, down from 4-6 days, 10 years ago.
Under pressure to cut costs, surgeons have been instructed by managed
care companies to perform lymph node dissections and even mastectomies
as outpatient surgery. I have heard stories about companies that
require patients to be sent home a few hours after their surgery, even
though they may be in severe pain, groggy from anesthesia, and have
surgical tubes still in place. Some companies have even denied women
hospitalization on the day of their surgery. These situations place
doctors in the difficult position of having to choose between
delivering the quality care their patients deserve and a penalty for
failing to follow an insurer's guidelines.
Mr. President, women with breast cancer suffer not only from physical
pain but also emotional and psychological trauma. They should not have
to worry whether their physician is struggling to comply with an
arbitrary length of stay guideline or their own best health interests.
The Breast Cancer Protection Act will help ease their anxiety by
ensuring that crucial health decisions are left in the hands of doctors
and patients, not accountants.
I am pleased to support this important effort to provide women with
breast cancer the thorough health care coverage they deserve.
Mr. Johnson. Mr. President, I am proud and grateful to be here today
as a co-sponsor of The Beast Cancer Patient Protection Act of 1997. I
am proud because this bill is the right thing to do--it's a common
sense measure that protects women undergoing breast cancer treatments.
And I am grateful because, as the husband of a woman who has suffered
from breast cancer, I know that every step makes a difference in
preserving and protecting the quality of life for those afflicted with
this disease.
As health care costs spiral out of control, more and more decisions
are being made based on the bottom-line rather than on the needs of the
patient. A twenty-four hour stay is not always long enough for a mother
and newborn child. And a twenty-four hour stay is often not long enough
for a woman who has undergone surgical treatment for breast cancer.
I know this not just from literature or fact sheets or discussions
with health care professionals. I know that twenty-four hours isn't
long enough for everyone because I helped my wife home from the
hospital after her cancer surgery. With tubes running everywhere, we
brought her into our home twenty-two hours after her surgery. Many
families aren't equipped to give the care needed. And many women aren't
well enough to give themselves the care needed. An additional twenty-
four hours in the hospital can decrease the risk of infection, allow
women to rest more comfortably, and ensure that any crucial health care
decision is being made in the best possible environment.
My wife and I are not alone. Nearly one out of every eight women will
develop breast cancer. Approximately, 185,000 women will be diagnosed
with the disease this year. Sadly, more than 44,000 women will also die
from this disease in the next 365 days. The numbers of those afflicted
with this disease must decrease, but the options must increase.
These are our grandmothers, our mothers, our daughters, our sisters,
our wives. They deserve the best that we can give.
This bill does not do it all, but, as we look for a cure and other
innovative treatments, it is part of a package to ease the pain of this
invasive disease. I will do all that I can to make sure this bill
becomes law.
Mr. HOLLINGS. Mr. President, first I want to thank my colleague,
Senator Daschle, for introducing this legislation in the Senate. Also,
I must thank Congresswoman Rosa DeLauro for taking the lead in the
House in protecting mastectomy patients from new Health Management
Organization [HMO] payment guidelines. Today, one in eight American
women develop breast cancer, and they and their families will thank her
when the bipartisan members of this Congress act to ensure that medical
decisions for mastectomy patients are made by the doctors and patients
involved in the case, rather than by HMO's or insurers.
When I notified one constituent that I would help introduce
legislation to guarantee women at least 48 hours of hospital coverage
for mastectomies and 24 hours for lymph node removals, he asked ``what
have we come to when we need legislation like this?'' What have we come
to, indeed.
Most Senators are not doctors, but common sense dictates that
mastectomy is not generally an outpatient procedure. Not only the pain,
but also the need to tend drainage tubes and the psychological shock
usually require at least two days of medical care and adjustment, and
often more. Unfortunately, managed care payment rules have led to cases
where women are forced out of the hospital on the same day as their
mastectomies, before spending a night in the hospital.
These extreme cases are part of a nationwide reduction in hospital
stays for women with breast cancer. Outpatient mastectomies have risen
from less than two percent of mastectomies 5 years ago to nearly 8
percent now. Mastectomy patients overall now spend only half of the
time in the hospital that they would have ten years ago--2-3 days
rather than 4-6. Medical experts know that sometimes a shorter stay is
appropriate or even requested by a patient who wants to get home and
has access to adequate follow-up care. But we obviously need to take
note of increased pressure to send women home early. Medical and
personal considerations between the patient and attending physician,
and not HMO financial rules, should be the determining factor.
I am still collecting data in my home State of South Carolina, which
is among the States least affected so far by HMO's. With our more
personalized medicine, we have not seen the same-day discharges without
an overnight stay. But South Carolina has a relatively high number of
mastectomies and it appears that many South Carolina women stay 21
hours, or 23 hours in the hospital after their surgery. Again,
something is wrong when patients tell me that they felt like the stay
was too short, the newfound pain was still there, and the medical
practitioners speak in terms of 21 or 23 hours. Obviously, this is
someone's attempt to call a procedure ``outpatient'' by not covering 24
hours in the hospital, and it represents a more subtle affect of
insurance payment rules on medicine which this Congress should
consider.
Mr. President, I will also join my colleagues, Senator D'Amato and
Senator Snowe, in introducing slightly broader legislation. I am
heartened that so many Senators of both parties are anxious to pass
legislation in this area and
[[Page S521]]
I commend their bipartisanship. I invite all of my colleagues to join
these efforts to make sure in this Congress that doctors and breast
cancer patients, rather than insurers, determine the best length of
stay in the hospital for each mastectomy case.
Mr. KENNEDY. Mr. President, I join Senator Daschle in introducing
legislation to ban the abusive practice of drive-by" mastectomies. This
legislation will respond to the concerns of women throughout the
country who fear that, in dealing with the cruel disease of breast
cancer, their health plan's bottom line will take precedence over their
health needs. This legislation will require health insurers to provide
coverage for a minimum hospital stay for mastectomies and lymph node
dissections performed for the treatment of breast cancer. The
legislation allows outpatient surgery when the patient and the doctor
decide that a hospital stay is not necessary, but it prohibits a health
plan from forcing patients to go home on the same day that they have
these major surgical procedures.
The Daschle bill is a companion to bipartisan legislation (H.R.135)
introduced by Representative Rosa DeLauro in the House of
Representatives. It will ban an abusive practice that even the health
plans themselves have recognized should not be tolerated.
This legislation is of major importance to millions of women. Breast
cancer is the most common solid tissue cancer among women. In 1996,
approximately 184,000 new cases of invasive breast cancer were
diagnosed. It is now the leading cause of death in women between the
ages of 40 and 55.
This legislation is supported by the National Breast Cancer Coalition
the National Association of Breast Care Organizations, the Y-me
National Breast Cancer Organization, the Families USA Foundation, the
Women's Legal Defense Fund, and the American Society of Plastic and
Reconstructive Surgeons. It prohibits plans from requiring hospital
stays shorter than 48 hours for patients after mastectomy and 24 hours
after lymph node dissection.
Decisions about the need for hospital care after such surgery should
be made by a woman and her doctor. The social, medical, geographic and
health issues unique to each person must be considered in deciding the
required amount of in-hospital care. In certain circumstances and with
proper support, it may be possible for some women to undergo these
procedures with a shorter hospital stay, or even on occasion as an
outpatient. Each circumstance is unique.
This bill preserves every woman's ability to avail herself of needed
services without fear of penalty or prejudice. It does not require a
stay in the hospital for any fixed period of time. Rather, it
guarantees that hospital care will be provided when it is needed.
Last year, Congress voted overwhelmingly to ban the practice of
health plans forcing excessively short stays after delivery of a baby.
This legislation is a further needed step to protect consumers against
a particularly abusive practice, and I look forward to its early
bipartisan approval by Congress.
______
By Mr. MOYNIHAN (for himself and Mr. Kerrey):
S. 144. A bill to establish the Commission to Study the Federal
Statistical System, and for other purposes; to the Committee on
Governmental Affairs.
federal statistical system legislation
Mr. MOYNIHAN. Mr. President, I rise today to reintroduce, along with
Senator Kerrey of Nebraska, legislation to establish a commission to
study the Federal Statistical System.
Statistics are part of our constitutional arrangement, which provides
for a decennial census that, among other purposes, is the basis for
apportionment of membership in the House of Representatives. I quote
from Article I, Section I:
* * * enumeration shall be made within three Years after
the first meeting of the Congress of the United States, and
within every subsequent Term of ten Years, in such Manner as
they shall by Law direct.
But, while the Constitution directed that there be a census, there
was, initially, no Census Bureau. The earliest censuses were conducted
by U.S. marshals. Later on, statistical bureaus in State governments
collected the data, with a Superintendent of the Census overseeing from
Washington. It was not until 1902 that a permanent Bureau of the Census
was created by the Congress, housed initially in the Interior
Department. In 1903 the Bureau was transferred to the newly established
Department of Commerce and Labor.
The Statistics of Income Division of the Internal Revenue Service,
which was originally an independent body, began collecting data in
1866. It too was transferred to the new Department of Commerce and
Labor in 1903, but then was put in the Treasury Department in 1913
following ratification of the 16th amendment, which gave Congress the
power to impose an income tax.
A Bureau of Labor, created in 1884, was also initially in the
Interior Department. The first Commissioner, appointed in 1885, was
Colonel Carroll D. Wright, a distinguished Civil War veteran of the New
Hampshire Volunteers. A self-trained social scientist, Colonel Wright
pioneered techniques for collecting and analyzing survey data on
income, prices, and wages. He had previously served as chief of the
Massachusetts Bureau of Statistics, a post he held for 15 years, and in
that capacity had supervised the 1880 Federal census in Massachusetts.
In 1888, the Bureau of Labor became an independent agency. In 1903 it
was once again made a Bureau, joining other statistical agencies in the
Department of Commerce and Labor. When a new Department of Labor was
formed in 1913, giving labor an independent voice--as labor was
``removed'' from the Department of Commerce and Labor--what we now know
as the Bureau of Labor Statistics was transferred to it.
And so it went. Statistical agencies sprung up as needed. And they
moved back and forth as new executive departments were formed. Today,
some 89 different organizations in the Federal Government comprise
parts of our national statistical infrastructure. Eleven of these
organizations have as their primary function the generation of data.
These 11 organizations are:
------------------------------------------------------------------------
Date
Agency Department Established
------------------------------------------------------------------------
National Agricultural Statistical Agriculture........... 1863
Service.
Statistics of Income Division, IRS. Treasury.............. 1866
Economic Research Service.......... Agriculture........... 1867
National Center for Education Education............. 1867
Statistics.
Bureau of Labor Statistics......... Labor................. 1884
Bureau of the Census............... Commerce.............. 1902
Bureau of Economic Analysis........ Commerce.............. 1912
National Center for Health Health and Human 1912
Statistics. Services.
Bureau of Justice Statistics....... Justice............... 1968
Energy Information Administration.. Energy................ 1974
Bureau of Transportation Statistics Transportation........ 1991
------------------------------------------------------------------------
need for legislation
President Kennedy once said:
Democracy is a difficult kind of government. It requires
the highest qualities of self-discipline, restraint, a
willingness to make commitments and sacrifices for the
general interest, and also it requires knowledge.
That knowledge often comes from accurate statistics. You cannot begin
to solve a problem until you can measure it.
This legislation would require the new commission to conduct a
comprehensive examination of our current statistical system and focus
particularly on the agencies that produce data as their primary
product--agencies such as the Bureau of Economic Analysis [BEA] and the
Bureau of Labor Statistics [BLS].
In September 1996, prior to the first introduction of this bill, I
received a letter from nine former chairmen of the Council of Economic
Advisers [CEA] endorsing this legislation. Excluding the two most
recent chairs, who were still serving in the Clinton administration,
the signatories include virtually every living chair of the CEA. While
acknowledging that the United States ``possesses a first-class
statistical system,'' these former chairmen remind us that ``problems
periodically arise under the current system of widely scattered
responsibilities.'' They conclude as follows:
Without at all prejudging the appropriate measures to deal
with these difficult problems, we believe that a
thoroughgoing review by a highly qualified and bipartisan
Commission as provided in your Bill has great promise of
showing the way to major improvements.
The letter is signed by: Michael J. Boskin, Martin Feldstein, Alan
Greenspan, Paul W. McCracken, Raymond J.
[[Page S522]]
Saulnier, Charles L. Schultze, Beryl W. Sprinkel, Herbert Stein, and
Murray Weidenbaum.
I ask unanimous consent that the full text of this letter be printed
in the Record following my statement.
It happens that this Senator's association with the statistical
system in the executive branch began over three decades ago. I was
Assistant Secretary of Labor for Policy and Planning in the
administration of President John F. Kennedy. This was a new position in
which I was nominally responsible for, inter alia, the Bureau of Labor
Statistics. I say nominally out of respect for the independence of that
venerable institution, which as I noted earlier long predated the
Department of Labor itself. The then-Commissioner of the BLS, Ewan
Clague, could not have been more friendly and supportive. And so were
the statisticians, who undertook to teach me to the extent I was
teachable. They even shared professional confidences. And so it was
that I came to have some familiarity with the field.
For example, we had just received a report on price indexes from a
committee led by George J. Stigler, who later won a Nobel prize in
economics.
The Committee stressed the importance of accurate and timely
statistics, noting that:
The periodic revision of price indexes, and the almost
continuous alterations in details of their calculation, are
essential if the indexes are to serve their primary function
of measuring the average movements of prices.
And while the recently released Final Report of the Advisory
Commission To Study The Consumer Index (The Boskin Commission) focused
primarily on the extent to which changes in the CPI overstate
inflation, the Boskin Commission also addressed issues related to the
effectiveness of Federal statistical programs and recommended that:
Congress should enact the legislation necessary for the
Department of Commerce and Labor to share information in the
interest of improving accuracy and timeliness of economic
statistics and to reduce the resources consumed in their
development and production.
Our Government officials are not oblivious to the growing need for
reform. In fact, Under Secretary of Commerce for Economic Affairs
Everett M. Ehrlich has been most forthcoming on this point. In a
November 24, 1996 New York Times article, Under Secretary Ehrlich
states:
Our statistical system is failing to keep track with a
rapidly changing economy. The data we provide give us a good
picture of where we are in the business cycle but risk
misrepresenting such long-term phenomena as inflation,
productivity growth and the economy's changing composition.
To address this problem, Under Secretary Ehrlich has proposed a 3-
year program to improve the Department of Commerce's measurement of
statistics.
There is, of course, a long history of attempts to reform our
Nation's statistical infrastructure. Between 1903 and 1990, 16
different committees, commissions, and study groups have convened to
assess our statistical infrastructure, but in most cases little or no
action has been taken on their recommendations. The result of this
inaction has been an ever-expanding statistical system. It continues to
grow in order to meet new data needs, but with little or no regard for
the overall objectives of the system. Janet L. Norwood, former
Commissioner of the BLS, writes in her book Organizing to Count:
The U.S. system has neither the advantages that come from
centralization nor the efficiency that comes from strong
coordination in decentralization. As presently organized,
therefore, the country's statistical system will be hard
pressed to meet the demands of a technologically advanced,
increasingly internationalized world in which the demand for
objective data of high quality is steadily rising.
In this era of government downsizing and budget cutting it is
unlikely that Congress will appropriate more funds for statistical
agencies. It is clear that to preserve and improve the statistical
system we must consider reforming it, yet we must not attempt to reform
the system until we have heard from experts in the field. It is also
clear there is a need for a comprehensive review of the Federal
statistical infrastructure. For if the public loses confidence in our
statistics, they are likely to lose confidence in our policies as well.
DESCRIPTION OF LEGISLATION
The legislation established the Commission to Study the Federal
Statistical System. The Commission would consist of 13 members: 5
appointed by the President with no more than 3 from the same political
party, 4 appointed by the President pro tempore of the Senate with no
more than 2 from the same political party, and 4 appointed by the
Speaker of the House with no more than 2 from the same political party.
A chairman would be selected by the President from the appointed
members. The members must have expertise in statistical policy with a
background in disciplines such as actuarial science, demography,
economics, finance, and management.
The Commission will conduct a comprehensive study of all matters
relating to the Federal statistical infrastructure, including: and
examination of multipurpose statistical agencies such as the Bureau of
Labor Statistics [BLS]; a review and evaluation of the mission and
organizational structure of statistical agencies, including activities
that should be expanded or eliminated and the advantages and
disadvantages of a centralized statistical agency; an examination of
the methodology involved in producing data and the accuracy of the data
itself; a review of interagency coordination and standardization of
collection procedures; a review of information technology and an
assessment of how data is disseminated to the public; an identification
and examination of issues regarding individual privacy in the context
of statistical data; a comparison of our system with the systems of
other nations; and recommendations for a strategy to maintain a modern
and efficient statistical infrastructure.
All of these objectives will be addressed in an interim report due no
later than June 1, 1998, with a final report due January 15, 1999.
The Commission is expected to spend $10 million: $2.5 million in
1997, $5 million in 1998, and $2.5 million in 1999. The Commission will
cease to exist 90 days after the final report is submitted.
This legislation is only a first step, but an essential one. The
Commission will provide Congress with a blueprint for reform. It will
be up to us to finally take action after nearly a century of
inattention to this very important issue.
Mr. President, I ask unanimous consent that the text of the
legislation be printed in the Record immediately after my statement.
There being no objection, the items were ordered to be printed in the
Record, as follows:
S. 144
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Commission to Study the
Federal Statistical System Act of 1997''.
SEC. 2. FINDINGS.
The Congress, recognizing the importance of statistical
information in the development and administration of policies
for the private and public sector, finds that--
(1) accurate Federal statistics are required to develop,
implement, and evaluate government policies and laws;
(2) Federal spending consistent with legislative intent
requires accurate and appropriate statistical information;
(3) business and individual economic decisions are
influenced by Federal statistics and contracts are often
based on such statistics;
(4) statistical information on the manufacturing and
agricultural sectors is more complete than statistical
information regarding the service sector which employs more
than half the Nation's workforce;
(5) experts in the private and public sector have long-
standing concerns about the accuracy and adequacy of numerous
Federal statistics, including the Consumer Price Index, gross
domestic product, trade data, wage data, and the poverty
rate;
(6) Federal statistical data should be accurate,
consistent, continuous, and be designed to best serve
explicitly stated purposes;
(7) the Federal statistical infrastructure should be
modernized to accommodate the increasingly complex and ever
changing American economy;
(8) Federal statistical agencies should utilize all
practical technologies to disseminate statistics to the
public;
(9) the Federal statistical infrastructure should maintain
the privacy of individuals; and
(10) the Federal statistical system should be designed to
limit redundancy of activities while achieving the maximum
practical level of knowledge, expertise, and data.
SEC. 3. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a commission to be
known as the Commission to Study the Federal Statistical
System (hereafter in this Act referred to as the
``Commission'').
[[Page S523]]
(b) Membership.--
(1) Composition.--The Commission shall be composed of 13
members of whom--
(A) 5 shall be appointed by the President;
(B) 4 shall be appointed by the President pro tempore of
the Senate, in consultation with the Majority Leader and
Minority Leader of the Senate; and
(C) 4 shall be appointed by the Speaker of the House of
Representatives, in consultation with the Majority Leader and
Minority Leader of the House of Representatives.
(2) Political party limitation.--(A) Of the 5 members of
the Commission appointed under paragraph (1)(A), no more than
3 members may be members of the same political party.
(B) Of the 4 members of the Commission appointed under
subparagraphs (B) and (C) of paragraph (1), respectively, no
more than 2 members may be members of the same political
party.
(3) Consultation before appointments.--In making
appointments under paragraph (1), the President, the
President pro tempore of the Senate, and the Speaker of the
House of Representatives shall consult with the National
Academy of Sciences and appropriate professional
organizations, such as the American Economic Association and
the American Statistical Association.
(4) Qualifications.--An individual appointed to serve on
the Commission--
(A) shall have expertise in statistical policy and a
background in such disciplines as actuarial science,
demography, economics, finance, and management;
(B) may not be a Federal officer or employee; and
(C) should be an academician, a statistics user in the
private sector, a corporate manager with experience related
to information technology, or a former government official
with experience related to--
(i) the Bureau of Labor Statistics of the Department of
Labor; or
(ii) the Bureau of Economic Analysis or the Bureau of the
Census of the Department of Commerce.
(5) Date.--The appointments of the members of the
Commission shall be made no later than 150 days after the
date of the enactment of this Act.
(c) Period of Appointment; Vacancies.--Members shall be
appointed for the life of the Commission. Any vacancy in the
Commission shall not affect its powers, but shall be filled
in the same manner as the original appointment.
(d) Initial Meeting.--No later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold its first meeting.
(e) Meetings.--The Commission shall meet at the call of the
Chairman.
(f) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(g) Chairman.--The President shall designate a Chairman of
the Commission from among the members.
SEC. 4. FUNCTIONS OF THE COMMISSION.
(a) Study.--
(1) In general.--The Commission shall conduct a
comprehensive study of all matters relating to the Federal
statistical infrastructure, including longitudinal surveys
conducted by private agencies and partially funded by the
Federal Government, for the purpose of identifying
opportunities to improve the quality of statistics in the
United States.
(2) Study and recommendations.--The matters studied by and
recommendations of the Commission shall include--
(A) an evaluation of the accuracy and appropriateness of
key statistical indicators and recommendations on ways to
improve such accuracy and appropriateness so that the
indicators better serve the major purposes for which they
were intended;
(B) an examination of multipurpose statistical agencies
that collect and analyze data of broad interest across
department and functional areas, such as the Bureau of
Economic Analysis and the Bureau of the Census of the
Commerce Department, and the Bureau of Labor Statistics of
the Labor Department, for the purpose of understanding the
interrelationship and flow of data among agencies;
(C) a review and evaluation of the collection of data for
purposes of administering such programs as Old-Age, Survivors
and Disability Insurance and Unemployment Insurance under the
Social Security Act;
(D) a review and evaluation of the mission and organization
of various statistical agencies, including--
(i) recommendations with respect to statistical activities
that should be expanded or eliminated;
(ii) the order of priority such activities should be
carried out;
(iii) a review of the advantages and disadvantages of a
centralized statistical agency or a partial consolidation of
the agencies for the Federal Government; and
(iv) an assessment of which agencies could be consolidated
into such an agency;
(E) an examination of the methodology involved in producing
official data and recommendations for technical changes to
improve statistics;
(F) a review of interagency coordination of statistical
data and recommendations of methods to standardize collection
procedures and surveys, as appropriate, and presentation of
data throughout the Federal system;
(G) a review of information technology and recommendations
of appropriate methods for disseminating statistical data,
with special emphasis on resources, such as the Internet,
that allow the public to obtain and report information in a
timely and cost-effective manner;
(H) an identification and examination of issues regarding
individual privacy in the context of statistical data;
(I) a comparison of the United States statistical system to
statistical systems of other nations for the purposes of
identifying best practices and developing a system of
maintaining best practices over time;
(J) a consideration of the coordination of statistical data
with other nations and international agencies, such as the
Organization for Economic Cooperation and Development; and
(K) a recommendation of a strategy for maintaining a modern
and efficient Federal statistical infrastructure to produce
meaningful information as the United States society and
economy change.
(b) Report.--
(1) Interim report.--No later than June 1, 1998, the
Commission shall submit an interim report on the study
conducted under subsection (a) to the President and to the
Congress.
(2) Final report.--No later than January 15, 1999, the
Commission shall submit a final report to the President and
the Congress which shall contain a detailed statement of the
findings and conclusions of the Commission, and
recommendations for such legislation and administrative
actions as the Commission considers appropriate.
SEC. 5. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers advisable
to carry out the purposes of this Act.
(b) Information From Federal Agencies.--The Commission may
secure directly from any Federal department or agency such
information as the Commission considers necessary to carry
out the provisions of this Act. Upon request of the Chairman
of the Commission, the head of such department or agency
shall furnish such information to the Commission.
(c) Postal Services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(d) Gifts.--The Commission may accept, use, and dispose of
gifts or donations of services or property.
SEC. 6. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--
(1) In general.--Subject to paragraph (2), each member of
the Commission shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay prescribed
for level IV of the Executive Schedule under section 5315 of
title 5, United States Code, for each day (including travel
time) during which such member is engaged in the performance
of the duties of the Commission.
(2) Chairman.--The Chairman shall be compensated at a rate
equal to the daily equivalent of the annual rate of basic pay
prescribed for level III of the Executive Schedule under
section 5315 of title 5, United States Code, for each day
(including travel time) during which such member is engaged
in the performance of the duties of the Commission.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
Such travel may include travel outside the United States.
(c) Staff.--
(1) In general.--Subject to paragraph (2), the Commission
shall, without regard to the provisions of title 5, United
States Code, relating to the competitive service, appoint an
executive director who shall be paid at a rate equivalent to
a rate established for the Senior Executive Service under
section 5382 of title 5, United States Code. The Commission
shall appoint such additional personnel as the Commission
determines to be necessary to provide support for the
Commission, and may compensate such additional personnel
without regard to the provisions of title 5, United States
Code, relating to the competitive service.
(2) Limitation.--The total number of employees of the
Commission (including the executive director) may not exceed
30.
(d) Detail of Government Employees.--Any Federal Government
employee may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
(e) Procurement of Temporary and Intermittent Services.--
The Chairman of the Commission may procure temporary and
intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals which do not
exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under
section 5316 of such title.
SEC. 7. TERMINATION OF THE COMMISSION.
The Commission shall terminate 90 days after the date on
which the Commission submits the final report of the
Commission.
[[Page S524]]
SEC. 8. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $2,500,000 for
fiscal year 1997, $5,000,000 for fiscal year 1998, and
$2,500,000 for fiscal year 1999 to the Commission to carry
out the purposes of this Act.
____
September 23, 1996.
Hon. Daniel P. Moynihan,
Hon. J. Robert Kerrey,
U.S. Senate,
Washington, DC.
Dear Senators Moynihan and Kerrey: All of us are former
Chairmen of the Council of Economic Advisers. We write to
support the basic objectives and approach of your Bill to
establish the Commission to Study the Federal Statistical
System.
The United States possesses a first-class statistical
system. All of us have in the past relied heavily upon the
availability of reasonably accurate and timely federal
statistics on the national economy. Similarly, our
professional training leads us to recognize how important a
good system of statistical information is for the efficient
operations of our complex private economy. But we are also
painfully aware that important problems of bureaucratic
organization and methodology need to be examined and dealt
with if the federal statistical system is to continue to meet
essential public and private needs.
All of us have particular reason to remember the problems
which periodically arise under the current system of widely
scattered responsibilities. Instead of reflecting a balance
among the relative priorities of one statistical collection
effort against others, statistical priorities are set in a
system within which individual Cabinet Secretaries recommend
budgetary tradeoffs between their own substantive programs
and the statistical operations which their departments,
sometimes by historical accident, are responsible for
collecting. Moreover, long range planning of improvements in
the federal statistical system to meet the changing nature
and needs of the economy is hard to organize in the present
framework. The Office of Management and Budget and the
Council of Economic Advisers put a lot of effort into trying
to coordinate the system, often with success, but often
swimming upstream against the system.
We are also aware, as of course are you, of a number of
longstanding substantive and methodological difficulties with
which the current system is grappling. These include the
increasing importance in the national economy of the service
sector, whose output and productivity are especially hard to
measure, and the pervasive effect both on measures of
national output and income and on the federal budget of the
accuracy (or inaccuracy) with which our measures of prices
capture changes in the quality of the goods and services we
buy.
Without at all prejudging the appropriate measures to deal
with these difficult problems, we believe that a
thoroughgoing review by a highly qualified and bipartisan
Commission as provided in your Bill has great promise of
showing the way to major improvements.
Sincerely,
Professor Michael J. Boskin, Stanford University; Dr.
Martin Feldstein, National Bureau of Economic Research;
Alan Greenspan; Professor Paul W. McCracken, University
of Michigan; Raymond J. Saulnier; Charles L. Schultze,
The Brookings Institution; Beryl W. Sprinkel; Herbert
Stein, American Enterprise Institute; Professor Murray
Weidenbaum, Center for the Study of American Business.
______
By Mr. MOYNIHAN:
S. 145. A bill to repeal the prohibition against government
restrictions on communications between government agencies and the INS;
to the Committee on the Judiciary.
GOVERNMENT AGENCIES LEGISLATION
Mr. MOYNIHAN. Mr. President, I rise today to introduce legislation to
repeal section 434 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, and subsections (a) and (b) of section 642
of the Illegal Immigration Reform and Immigrant Responsibility Act of
1996. Section 434 of the first act provides that:
Notwithstanding any other provision of Federal, State, or
local law, no State or local government entity may be
prohibited, or in any way restricted, from sending to or
receiving from the Immigration and Naturalization Service
(INS) information regarding the immigration status, lawful or
unlawful, of an alien in the United States.
This provision, along with portions of section 642 of the
aforementioned illegal immigration law, conflicts with an executive
order, issued by the mayor of New York in 1985, prohibiting city
employees from reporting suspected illegal aliens to the Immigration
and Naturalization Service unless the alien has been charged with a
crime. The executive order, which is similar to local laws in other
States and cities, was intended to ensure that fear of deportation does
not deter illegal aliens from seeking emergency medical attention,
reporting crimes, and so forth.
On September 8, 1995, during Senate consideration of H.R. 4, the Work
Opportunity Act of 1995, Senators Santorum and Nickles offered this
provision as an amendment. The amendment was adopted by a vote of 91 to
6. The Senators who voted ``no'' were: Akaka, Campbell, Inouye,
Moseley-Braun, Moynihan, and Simon.
Four of these six--Senators Akaka, Moseley-Braun, Simon, and the
Senator from New York--were also among the 11 Democrats who voted
against H.R. 4 when it passed the Senate 11 days later on September 19,
1995. The provision remained in H.R. 3734, the welfare bill recently
signed by President Clinton.
Mayor Rudolph W. Giuliani of New York City filed suit last year to
challenge section 434 of the new welfare law and section 642 of the
illegal immigration law in U.S. District Court and I introduced a
similar bill at the time. The mayor's lawsuit deserves to succeed for
the same reason this legislation deserves to pass: the provisions at
issue are onerous and represent bad public policy.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 145
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REPEAL OF THE PROHIBITION AGAINST GOVERNMENT
RESTRICTIONS ON COMMUNICATIONS BETWEEN
GOVERNMENT AGENCIES AND THE INS.
(a) Welfare.--Section 434 of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (Public Law
104-193, 110 Stat. 2275) is repealed.
(b) Immigration.--Section 642 of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996 (Public Law
104-208, 110 Stat 3009-1834) is amended--
(1) by striking subsections (a) and (b); and
(2) in subsection (c), by striking ``(c) Obligation to
Respond to Inquiries.--''.
______
By Mr. FRIST (for Mr. Rockefeller (for himself and Mr. Frist)):
S. 146. A bill to permit medicare beneficiaries to enroll with
qualified provider-sponsored organizations under title XVIII of the
Social Security Act, and for other purposes; to the Committee on
Finance.
the provider-sponsored organization act of 1997
Mr. ROCKEFELLER. Mr. President. I am extremely pleased to be
introducing legislation with my colleague from Tennessee, Senator
Frist, that will give Medicare beneficiaries the opportunity to receive
their health care services from a locally-based, provider-owned and
operated, health care plan.
In my own State of West Virginia, the health care landscape is
changing rapidly. Managed care is becoming more prominent, and, with
it, a concern that profits are being put ahead of a patient's health
care needs. My constituents want to be sure that their doctor is making
his or her own medical decisions on patient care and treatment. They do
not want to be told that their care is being directed by anonymous
insurance officials in another State available only through a 1-800
phone number.
Under current law, Medicare beneficiaries have a choice of receiving
their health care services under traditional Medicare fee-for-service
or from a Health Maintenance Organization (HMO). Our legislation would
allow seniors to choose another option and would make sure that patient
care and treatment decisions remain in the hands of health care
providers. This is accomplished by allowing provider-sponsored
organizations [PSOs] to directly provide benefits to Medicare
beneficiaries without the insurance middleman. Our bill would mean that
insurance administrative and overhead costs would be reduced, freeing
funds which are better spent on patient care costs.
Our legislation is necessary because insurance regulations in most
States do not take into account the unique characteristics of a PSO.
Only 4 States have adopted licensure requirements aimed at encouraging
the development of provider sponsored organizations. Our bill carves
out a time-limited Federal role of 4 years for direct federal Medicare
certification as a qualified PSO. During those 4 years, a PSO could
[[Page S525]]
apply directly to the Medicare Program to be designated as a qualified
PSO that would be paid on a capitated prospective basis and could serve
Medicare beneficiaries. Beginning on January 1, 2002, State licensure
would replace the Federal certification process as long as a State's
standards for PSOs were sufficiently similar to Federal PSO standards.
PSOs could continue to apply for a Federal waiver after the initial 4
years if a State failed to act on a PSO's application within a
reasonable time period or if a State continued to apply unfair or
unreasonable criteria for PSOs to enter the market.
Mr. President, our bill is actually quite similar to legislation
enacted in the early 70s directed at promoting and fostering the growth
of HMOs. According to a recent issue briefing prepared by the
Congressional Research Service on the HMO debate in the 1970s, ``state
solvency requirements were seen as excessive and unappreciative of the
unique resources available to a HMO . . . the outcome of the debate was
the Health Maintenance Organization Act . . . which enabled HMOs
meeting Federal requirements to be exempt from specific State laws.''
In many States, the State HMO requirements that evolved were designed
to address issues presented by large, insurer-owned and operated HMOs,
not smaller community-based provider organizations.
Our bill does not in any way weaken quality assurance or solvency
standards for PSOs that choose to contract directly with the Medicare
program. Our legislation is very specific on the solvency and quality
standards that must be met in order for a PSO to be federally
qualified. Overall, I believe, our standards are even more detailed and
explicit than current Medicare law relating to quality and solvency for
HMOs.
Our bill retains all of the consumer protections in current law that
apply to health plans that serve Medicare beneficiaries. Beneficiaries
would continue to be protected from incurring any financial liability
if a health care plan became insolvent. In addition, rules on open
enrollment and arranging for continuing Medigap coverage--without any
pre-existing condition limitations--would apply as they do under
current Medicare law. Our legislation would also require Medicare to
contract with local agencies for ongoing monitoring of PSO performance
and beneficiary access to services.
Specifically on solvency, our legislation builds on fiscal soundness
and solvency standards that were developed by the National Association
of Insurance Commissioners [NAIC]. Our bill slightly modifies the HMO
Model Act to take into account how affiliation arrangements are
structured within PSOs. It also recognizes a variety of alternative
means, that many States already use, of meeting the solvency standards.
In this way, our approach goes beyond earlier PSO legislative proposals
which merely required the Secretary to develop specific solvency
standards. I believe this approach will address concerns raised by some
that complete secretarial discretion on fiscal soundness and solvency
would somehow result in weakened solvency standards.
In 1972, a proxy measure for quality was enacted by Congress which
required health plans to meet an arbitrary standard of plan enrollment.
Under the so-called ``50-50 rule,'' a health plan's Medicare and
Medicaid enrolles cannot exceed 50 percent of its total enrollment. The
underlying premise of the 50-50 rule is that if a plan has a
significant enrollment of private or commercial enrolles its quality
will be higher than a health plan strictly serving Medicaid or Medicare
beneficiaries. This is an issue that is especially important in rural
States like West Virginia. Many rural provider networks--which this
bill seeks to encourage--would be unable to meet a 50-50 enrollment
quota because a disproportionate share of the elderly reside in rural
areas.
Also, since adoption of the 50-50 rule, there have been significant
advances made in measuring and assuring quality care. While still far
from perfect, I believe that we have gained sufficient knowledge to
adopt an approach that relies on specific quality standards, rather
than a rough proxy based on a plan's enrollment mix. Quality assurance
will continue to be a work in progress, but our bill begins to lay the
groundwork for explicitly setting and measuring the quality of health
care received by Medicare beneficiaries. Under our bill, the 50-50 rule
would be waived for any health plan that contracts with the Medicare
Program if the plan meets the enhanced quality requirements in our bill
and also has experience in providing managed or coordinated care. PSOs
would go further by adhering to additional standards governing
utilization review to reduce intrusions into the doctor patient
relationship, as well as how physicians participate in PSO networks.
Mr. President, last year Congress debated a variety of ways to
improve quality and to put an end to medical decision-making driven by
a desire to earn hefty profits for a company's stockholders. Our bill
gives health care providers the opportunity to get back in the driver's
seat. In addition, by cutting out the insurance company middleman, more
money could be spent on providing patient care instead of on processing
claims and realizing profits.
I look forward to discussing this issue and pursuing the goal of this
new bill later this year with my colleagues in the Finance Committee as
we look at a variety of ways to improve and strengthen the Medicare
program.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 146
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Provider-
Sponsored Organization Act of 1997''.
(b) References to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is
expressed in terms of an amendment to or repeal of a section
or other provision, the reference shall be considered to be
made to that section or other provision of the Social
Security Act.
SEC. 2. QUALIFIED PROVIDER-SPONSORED ORGANIZATIONS AS
MEDICARE HEALTH PLAN OPTION.
Section 1876(b) (42 U.S.C. 1395mm(b)) is amended to read as
follows:
``(b)(1) For purposes of this section, the term `eligible
organization' means a public or private entity (which may be
a health maintenance organization, a competitive medical
plan, or a qualified provider-sponsored organization) that--
``(A) is organized and licensed under State law to offer
prepaid health services or health benefits coverage in each
State in which the entity seeks to enroll individuals who are
entitled to benefits under this title; and
``(B) is described in paragraph (2), (3), or (4).
``(2) An entity is described in this paragraph if the
entity is a qualified health maintenance organization (as
defined in section 1310(d) of the Public Health Service Act).
``(3)(A) An entity is described in this paragraph if the
entity--
``(i) provides to enrolled members health care services
that include at least--
``(I) physicians' services performed by physicians (as
defined in section 1861(r)(1));
``(II) inpatient hospital services;
``(III) laboratory, X-ray, emergency, and preventive
services; and
``(IV) out-of-area coverage;
``(ii) is compensated (except for deductibles, coinsurance,
and copayments) for the provision of health care services to
enrolled members by a payment which is paid on a periodic
basis without regard to the date the health care services are
provided and which is fixed without regard to the frequency,
extent, or kind of health care service actually provided to a
member;
``(iii) provides physicians' services primarily--
``(I) directly through physicians who are either employees
or partners of such organization; or
``(II) through contracts with individual physicians or 1 or
more groups of physicians (organized on a group practice or
individual practice basis);
``(iv) except as provided in subsection (i), assumes full
financial risk on a prospective basis for the provision of
health care services listed in clause (i), except that such
entity may--
``(I) obtain insurance or make other arrangements for the
cost of providing to any enrolled member health care services
listed in clause (i), the aggregate value of which exceeds
$5,000 in any year;
``(II) obtain insurance or make other arrangements for the
cost of health care services listed in clause (i) provided to
its enrolled members other than through the entity because
medical necessity required their provision before they could
be secured through the entity;
``(III) obtain insurance or make other arrangements for not
more than 90 percent of the amount by which its costs for any
of its
[[Page S526]]
fiscal years exceed 115 percent of its income for such fiscal
year; and
``(IV) make arrangements with physicians or other health
professionals, health care institutions, or any combination
of such individuals or institutions to assume all or part of
the financial risk on a prospective basis for the provision
of basic health services by the physicians or other health
professionals or through the institutions; and
``(v) has made adequate provision against the risk of
insolvency, which provision is satisfactory to the Secretary.
``(B) Subparagraph (A)(i)(II) shall not apply to an entity
that has contracted with a single State agency administering
a State plan approved under title XIX for the provision of
services (other than inpatient hospital services) to
individuals eligible for such services under such State plan
on a prepaid risk basis prior to 1970.
``(4) An entity is described in this paragraph if the
entity is a qualified provider-sponsored organization (as
defined in subsection (l)(1)(A)).''.
SEC. 3. PARTIAL RISK ARRANGEMENTS.
Section 1876 (42 U.S.C. 1395mm) is amended--
(1) by redesignating subsections (i) and (j) as subsections
(j) and (k), respectively; and
(2) by inserting after subsection (h) the following:
``(i) The Secretary may enter into a partial risk contract
with an eligible organization under which--
``(1) notwithstanding subsection (b)(3)(A)(iv), the
organization and the program established under this title
share the financial risk associated with the services the
organization provides to individuals entitled to benefits
under part A and enrolled under part B or enrolled under part
B only;
``(2) notwithstanding subsections (a)(1) and (h)(2),
payment is based on--
``(A) a blend of--
``(i) the payments that would otherwise be made to such
organization under a risk-sharing contract under subsection
(g); and
``(ii) the payments that would be made to such organization
under a reasonable cost reimbursement contract under
subsection (h); or
``(B) any other methodology agreed upon by the Secretary
and the organization; and
``(3) adjustments, if appropriate, are made to payments to
the organization under this section to reflect any risk
assumed by such program.''.
SEC. 4. STANDARDS AND REQUIREMENTS FOR QUALIFIED PROVIDER-
SPONSORED ORGANIZATIONS.
Section 1876 (42 U.S.C. 1395mm), as amended by section 3 of
this Act, is amended by adding at the end the following:
``(l)(1)(A) For purposes of this section, the term
`qualified provider-sponsored organization' means a provider-
sponsored organization that--
``(i) provides a substantial proportion (as defined by the
Secretary, in accordance with subparagraph (C) and the
regulations established under section 1889) of the health
care items and services under the contract under this section
directly through the provider or through an affiliated group
of providers that comprise the organization; and
``(ii) is certified under section 1890 as meeting the
regulations established under section 1889, which, except as
provided in the succeeding paragraphs of this subsection,
shall be based on the requirements that apply to an
organization described in subsection (b)(3) with a risk
contract under subsection (g).
``(B) For purposes of this section, the term `provider-
sponsored organization' means a public or private entity that
is a provider or a group of affiliated providers organized to
deliver a spectrum of health care services (including basic
hospital and physicians' services) under contract to
purchasers of such services.
``(C) In defining a `substantial proportion' for purposes
of subparagraph (A)(i), the Secretary--
``(i) shall take into account the need for such an
organization to assume responsibility for providing--
``(I) significantly more than the majority of the items and
services under the contract under this section through its
own affiliated providers; and
``(II) most of the remainder of the items and services
under the contract through providers with which the
organization has an agreement to provide such items and
services,
in order to assure financial stability and to address the
practical considerations involved in integrating the delivery
of a wide range of service providers;
``(ii) shall take into account the need for such an
organization to provide a limited proportion of the items and
services under the contract through providers that are
neither affiliated with nor have an agreement with the
organization; and
``(iii) may allow for variation in the definition of
substantial proportion among such organizations based on
relevant differences among the organizations, such as their
location in an urban or rural area.
``(D) For purposes of this paragraph, a provider is
`affiliated' with another provider if, through contract,
ownership, or otherwise--
``(i) one provider, directly or indirectly, controls, is
controlled by, or is under the control of the other;
``(ii) each provider is a participant in a lawful
combination under which each provider shares, directly or
indirectly, substantial financial risk in connection with
their operations;
``(iii) both providers are part of a controlled group of
corporations under section 1563 of the Internal Revenue Code
of 1986; or
``(iv) both providers are part of an affiliated service
group under section 414 of such Code.
``(E) For purposes of subparagraph (D), control is presumed
to exist if one party, directly or indirectly, owns,
controls, or holds the power to vote, or proxies for, not
less than 51 percent of the voting rights or governance
rights of another.
``(2)(A) Subject to subparagraph (B), subsection (b)(1)(A)
(relating to State licensure) shall not apply to a qualified
provider-sponsored organization.
``(B) Beginning on January 1, 2002, subsection (b)(1)(A)
shall only apply (and subparagraph (A) of this paragraph
shall no longer apply) to a qualified provider-sponsored
organization in a State if--
``(i) the financial solvency and capital adequacy standards
for licensure of the organization under the laws of the State
are identical to the regulations established under section
1889; and
``(ii) the standards for licensure of the organization
under the laws of the State (other than the standards
referred to in clause (i)) are substantially equivalent to
the standards established by regulations under section 1889.
``(C)(i) A provider-sponsored organization, to which
subsection (b)(1)(A) applies by reason of subparagraph (B),
that seeks to operate in a State under a full risk contract
under subsection (g) or a partial risk contract under
subsection (i) may apply for a waiver of the requirement of
subsection (b)(1)(A) for that organization operating in that
State.
``(ii) The Secretary shall act on such a waiver application
within 60 days after the date it is filed and shall grant a
waiver for an organization with respect to a State if the
Secretary determines that--
``(I) the State did not act upon a licensure application
within 90 days after the date it was filed; or
``(II)(aa) the State denied a licensure application; and
``(bb) the State's licensing standards or review process
are determined by the Secretary to impose unreasonable
barriers to market entry, including through the imposition of
any requirements, procedures, or other standards on such
organization that are not generally applicable to any other
entities engaged in substantially similar activities.
``(iii) In the case of a waiver granted under this
paragraph for an organization--
``(I) the waiver shall be effective for a 24-month period,
except that it may be renewed based on a subsequent
application filed during the last 6 months of such period;
``(II) if the State failed to meet the requirement of
clause (ii)(I)--
``(aa) any application for a renewal may be made on the
basis described in clause (ii)(I) only if the State does not
act on a pending licensure application during the 24-month
period specified in subclause (I);
``(bb) any application for renewal (other than one made on
the basis described in clause (ii)(I)) may be made only on
the basis described in clause (ii)(II); and
``(cc) the waiver shall cease to be effective on approval
of the licensure application by the State during such 24-
month period; and
``(III) any provisions of State law that relate to the
licensing of the organization and prohibit the organization
from providing coverage pursuant to a contract under this
title shall be superseded during the period for which such
waiver is effective.
``(D) Nothing in this paragraph shall be construed as--
``(i) limiting the number of times such a waiver may be
renewed under subparagraph (C)(iii)(I); or
``(ii) affecting the operation of section 514 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1144).
``(3) The requirement of subsection (b)(3)(A)(i) (relating
to benefit package for commercial enrollees) shall not apply
to a qualified provider-sponsored organization.
``(4) The requirement of subsection (b)(3)(A)(iii)
(relating to delivery of physicians' services) shall apply to
a qualified provider-sponsored organization, except that the
Secretary shall by regulation specify alternative delivery
models or arrangements that may be used by such organizations
in lieu of the models or arrangements specified in such
subsection.
``(5) The requirement of subsection (b)(3)(A)(iv) (relating
to risk assumption) shall apply to a qualified provider-
sponsored organization, except that any such organization
with a full risk contract under subsection (g) may (with the
approval of the Secretary) obtain insurance or make other
arrangements for covering costs in excess of those permitted
to be covered by such insurance and any arrangements under
subsection (b)(3)(A)(iv)(III).
``(6)(A) A qualified provider-sponsored organization shall
be treated as meeting the requirement of subsection
(b)(3)(A)(v) (relating to adequate provision against risk of
insolvency) if the organization is fiscally sound.
``(B) A qualified provider-sponsored organization shall be
treated as fiscally sound for purposes of subparagraph (A) if
the organization--
``(i) has a net worth that is not less than the required
net worth (as defined in subparagraph (C)); and
[[Page S527]]
``(ii) has established adequate claims reserves (as defined
in subparagraph (D)).
``(C) For purposes of subparagraph (B)(i), the term
`required net worth' means--
``(i) in the case of an organization with a full risk
contract under subsection (g), a net worth (determined in
accordance with statutory accounting principles for insurance
companies and health maintenance organizations), not less
than the greatest of--
``(I) $1,500,000 at the time of application and $1,000,000
thereafter,
``(II) the sum of--
``(aa) 8 percent of the cost of health services that are
not provided directly by the organization or its affiliated
providers to enrollees; and
``(bb) 4 percent of the estimated annual costs of health
services provided directly by the organization or its
affiliated providers to enrollees; or
``(III) 3 months of uncovered expenditures; and
``(ii) in the case of an organization with a partial risk
contract under subsection (i), an amount determined in
accordance with clause (i), except that in applying subclause
(II) of such clause, the Secretary shall substitute for the
percentages specified in such subclause such lower
percentages as are appropriate to reflect the risk-sharing
arrangements under the contract.
``(D) For purposes of subparagraph (B)(ii), the term
`adequate claims reserves' means, with respect to an
organization, reserves for claims that are--
``(i) incurred but not reported; or
``(ii) reported but unpaid,
that are determined in accordance with statutory accounting
principles for insurance companies and health maintenance
organizations and with professional standards of actuarial
practice and are certified by an independent actuary as
adequate in light of the operations and contracts of the
organization.
``(E) In applying statutory accounting principles for
purposes of determining the net worth of an organization
under subparagraph (B)(i), the Secretary shall--
``(i) treat as `admitted assets'--
``(I) land, buildings, and equipment of the organization
used for the direct provision of health care services;
``(II) any receivables from governmental programs due for
more than 90 days; and
``(III) any other assets designated by the Secretary; and
``(ii) recognize, as a contribution to surplus, amounts
received under subordinated debt (meeting such requirements
as the Secretary may specify).
``(F) The Secretary shall recognize ways of complying with
the requirement of subparagraph (A) other than by means of
subparagraph (B), including (alone or in combination)--
``(i) letters of credit from a bank;
``(ii) financial guarantees from financially strong parties
including affiliates;
``(iii) unrestricted fund balances;
``(iv) diversity of lines of business and presence of
nonrisk related revenue;
``(v) certification of fiscal soundness by an independent
actuary;
``(vi) reinsurance ceded to, or stop loss insurance
purchased through, a recognized commercial insurance company;
and
``(vii) any other methods that the Secretary determines are
acceptable for such purpose.
``(7)(A) A qualified provider-sponsored organization shall
not be treated as meeting the requirements of subsection
(c)(6) (relating to an ongoing quality assurance program)
unless the quality assurance program of the organization
meets the requirements of subparagraphs (B) and (C).
``(B) A quality assurance program meets the requirements of
this subparagraph if the program--
``(i) stresses health outcomes;
``(ii) provides opportunities for input by physicians and
other health care professionals;
``(iii) monitors and evaluates high volume and high risk
services and the care of acute and chronic conditions;
``(iv) evaluates the continuity and coordination of care
that enrollees receive;
``(v) establishes mechanisms to detect both
underutilization and overutilization of services;
``(vi) after identifying areas for improvement, establishes
or alters practice parameters;
``(vii) takes action to improve quality and assess the
effectiveness of such action through systematic followup;
``(viii) makes available information on quality and
outcomes measures to facilitate beneficiary comparison and
choice of health coverage options (in such form and on such
quality and outcomes measures as the Secretary determines to
be appropriate); and
``(ix) is evaluated on an ongoing basis as to its
effectiveness.
``(C) If a qualified provider-sponsored organization
utilizes case-by-case utilization review, the organization
shall--
``(i) base such review on written protocols developed on
the basis of current standards of medical practice; and
``(ii) implement a plan under which--
``(I) such review is coordinated with the quality assurance
program of the organization; and
``(II) a transition is made from relying predominantly on
case-by-case review to review focusing on patterns of care.
``(D) A qualified provider-sponsored organization shall be
treated as meeting the requirements of subparagraphs (A) and
(B) and the requirements of subsection (c)(6) if the
organization is accredited (and periodically reaccredited) by
a private organization under a process that the Secretary has
determined assures that the organization meets standards that
are no less stringent than the standards established under
section 1889 to carry out this paragraph and subsection
(c).''.
SEC. 5. EXEMPTION FROM CERTAIN ENROLLMENT REQUIREMENTS FOR
ELIGIBLE ORGANIZATIONS MEETING ENHANCED QUALITY
ASSURANCE REQUIREMENTS.
(a) In General.--Section 1876 of the Social Security Act
(42 U.S.C. 1395mm), as amended by section 4 of this Act, is
amended by adding at the end the following:
``(m)(1) An eligible organization shall be deemed to meet
the requirements of subsection (f) (relating to enrollment
composition) if the organization demonstrates that it--
``(A) is capable of providing coordinated care in
accordance with the quality assurance standards established
under subsections (c)(6) and (l)(7)(B); and
``(B) has experience, under a past or present arrangement,
providing coordinated care to individuals (other than
individuals who are entitled to benefits under this title)
who are enrollees, participants, or beneficiaries of a health
plan or a State plan approved under title XIX.
``(2) An eligible organization shall be treated as meeting
the quality assurance standards referred to in paragraph
(1)(A) if the organization is accredited (and periodically
reaccredited) by a private organization under a process that
the Secretary has determined assures that the organization
meets standards that are no less stringent than the
requirements of that subparagraph.
``(3) For purposes of paragraph (1), the term `health plan'
means--
``(A) any contract of insurance, including any hospital or
medical service policy or certificate, hospital or medical
service plan contract, or health maintenance organization
contract, that is provided by a carrier; and
``(B) an employee welfare benefit plan insofar as the plan
provides health benefits and is funded in a manner other than
through the purchase of one or more policies or contracts
described in subparagraph (A).
``(4) For purposes of paragraph (3), the term `carrier'
means a licensed insurance company, a hospital or medical
service corporation (including an existing Blue Cross or Blue
Shield organization), or any other entity licensed or
certified by a State to provide health insurance or health
benefits.''.
(b) Size Requirement for Eligible Organizations.--Section
1876(g)(1) (42 U.S.C. 1395mm(g)(1)) is amended--
(1) by striking ``5000'' and inserting ``1500''; and
(2) by striking ``fewer'' and inserting ``500 or more''.
(c) Conforming Amendment.--Section 1876(f)(1) (42 U.S.C.
1395mm(f)(1)) is amended by striking ``Each eligible'' and
inserting ``Except as provided in subsection (m), each
eligible''.
SEC. 6. ADJUSTED COMMUNITY RATE FOR A QUALIFIED PROVIDER-
SPONSORED ORGANIZATION.
Section 1876(g) (42 U.S.C. 1395mm(g)) is amended by adding
at the end the following:
``(7) In the case of a qualified provider-sponsored
organization, the adjusted community rate under subsection
(e)(3) and paragraph (2) may be computed (in a manner
specified by the Secretary) using data in the general
commercial marketplace or (during a transition period) based
on the costs incurred by the organization in providing such a
product.''.
SEC. 7. PROCEDURES RELATING TO PARTICIPATION OF A PHYSICIAN
IN A QUALIFIED PROVIDER-SPONSORED ORGANIZATION.
Section 1876 (42 U.S.C. 1395mm), as amended by section 5 of
this Act, is amended by adding at the end the following:
``(n) A qualified provider-sponsored organization shall not
be treated as meeting the requirements of this section unless
the organization--
``(1) establishes reasonable procedures, as determined by
the Secretary, relating to the participation (under an
agreement between a physician or group of physicians and the
organization) of physicians under contracts under this
section, including procedures to provide--
``(A) notice of the rules regarding participation;
``(B) written notice of a participation decision that is
adverse to a physician; and
``(C) a process within the organization for appealing an
adverse decision, including the presentation of information
and views of the physician regarding such decision; and
``(2) consults with physicians who have entered into
participation agreements with the organization regarding the
organization's medical policy, quality, and medical
management procedures.
Paragraph (1)(C) shall not be construed to require a live
evidentiary hearing, a verbatim record, or representation of
the appealing party by legal counsel.''.
SEC. 8. ESTABLISHMENT OF REGULATIONS; CERTIFICATION
PROCEDURES.
Part C of title XVIII (42 U.S.C. 1395x et seq.) is amended
by inserting after section 1888 (42 U.S.C. 1395yy) the
following:
``ESTABLISHMENT OF REGULATIONS FOR QUALIFIED PROVIDER-SPONSORED
ORGANIZATIONS
``Sec. 1889. (a) Interim Regulations.--
[[Page S528]]
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Secretary shall promulgate
regulations to implement the requirements for qualified
provider-sponsored organizations under section 1876). Such
regulations shall be issued on an interim basis, but shall
become effective upon publication and shall remain in effect
until the end of December 31, 2001.
``(2) Consultation.--In developing regulations under this
subsection, the Secretary shall consult with the National
Association of Insurance Commissioners, the American Academy
of Actuaries, State health departments, associations
representing provider-sponsored organizations, quality
experts (including private accreditation organizations), and
medicare beneficiaries.
``(3) Contracts with state agencies.--The Secretary shall
enter into contracts with appropriate State agencies to
monitor performance and beneficiary access to services
provided under this title during the period in which interim
regulations are in effect under this subsection.
``(b) Permanent Regulations.--
``(1) In general.--Not later than July 1, 2001, the
Secretary shall issue permanent regulations to implement the
requirements for qualified provider-sponsored organizations
under section 1876.
``(2) Consultation.--In developing regulations under this
subsection, the Secretary shall consult with the
organizations and individuals listed in subsection (a)(2).
``(3) Effective date.--The permanent regulations developed
under this subsection shall be effective on and after January
1, 2002.
``CERTIFICATION OF PROVIDER-SPONSORED ORGANIZATIONS
``Sec. 1890. (a) In General.--
``(1) Process for certification.--The Secretary shall
establish a process for the certification of provider-
sponsored organizations as qualified provider-sponsored
organizations under section 1876. Such process shall provide
that an application for certification shall be approved or
denied not later than 90 days after receipt of a complete
application.
``(2) Fees.--The Secretary may impose user fees on entities
seeking certification under this subsection in such amounts
as the Secretary deems sufficient to pay the costs to the
Secretary resulting from the certification process.
``(b) Decertification.--If a qualified provider-sponsored
organization is decertified under this section, the
organization shall notify each enrollee with the organization
under section 1876 of such decertification.''.
SEC. 9. DEMONSTRATION OF COORDINATED ACUTE AND LONG-TERM CARE
BENEFITS; QUALIFIED PROVIDER-SPONSORED
ORGANIZATIONS UNDER MEDICAID PROGRAMS.
(a) Demonstration of Coordinated Acute and Long-Term Care
Benefits.--The Secretary of Health and Human Services shall
provide, in not less than 10 States, for demonstration
projects that permit State medicaid programs under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.) to be
treated as eligible organizations under section 1876 of that
Act (42 U.S.C. 1395mm) for the purpose of demonstrating the
delivery of primary, acute, and long-term care through an
integrated delivery network that emphasizes noninstitutional
care to individuals who are--
(1) eligible to enroll with an organization under such
section; and
(2) eligible to receive medical assistance under a State
program approved under title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.).
(b) Provider-Sponsored Organizations Under Medicaid
Programs.--Section 1903(m)(1)(A) (42 U.S.C. 1396b(m)(1)(A))
is amended, in the matter preceding clause (i), by inserting
``(which may be a provider-sponsored organization, as defined
in section 1876(l)(1)(B))'' after ``public or private
organization''.
(c) Conforming Amendments.--
(1) Section 1866(a)(1)(O) is amended by striking
``1876(i)(2)(A)'' and inserting ``1876(j)(2)(A)''.
(2) Section 1877(e)(3)(B)(i)(II) is amended by striking
``1876(i)(8)(A)(ii)'' and inserting ``1876(j)(8)(A)(ii)''.
SEC. 10. REPORT ON MEDICARE CONTRACTS INVOLVING PARTIAL RISK.
(a) Report.--Not later than 4 years after the date of
enactment of this Act, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall submit a report to the Committee on Ways and Means and
the Committee on Commerce of the House of Representatives and
the Committee on Finance of the Senate.
(b) Contents of Report.--The report described in subsection
(a) shall include--
(1) the number and type of partial-risk contracts entered
into by the Secretary under section 1876(i) of the Social
Security Act (42 U.S.C. 1395mm(i));
(2) the type of eligible organizations operating such
contracts;
(3) the impact such contracts have had on increasing
beneficiary access and choice under the medicare program
under title XVIII of that Act (42 U.S.C. 1395 et seq.); and
(4) a recommendation as to whether the Secretary should
continue to enter into partial-risk contracts under section
1876(i) of that Act (42 U.S.C. 1395mm(i)).
SEC. 11. EFFECTIVE DATES; INTERIM FINAL REGULATIONS.
(a) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), this
Act and the amendments made by this Act shall take effect on
the date of enactment of this Act.
(2) Eligible organization amendments.--The amendments made
by sections 2 through 8 shall take effect on the date of
enactment of this Act and shall apply to contract years
beginning on or after January 1, 1998.
(b) Use of Interim Final Regulations.--In order to carry
out the amendments made by this Act in a timely manner for
eligible organizations under section 1876 of the Social
Security Act (42 U.S.C. 1395mm), excluding organizations
described in subsection (b)(4) of that section, the Secretary
of Health and Human Services may promulgate regulations that
take effect on an interim basis, after notice and opportunity
for public comment.
Mr. FRIST. Mr. President, earlier today the President of the United
States announced that in his budget, which will be released on February
6, that he would aim to achieve approximately $138 billion in savings
in the Medicare program. He described this as a first gesture, which I
think should be applauded because the President clearly recognized the
importance of saving Medicare and strengthening it for future
generations.
The real issue is what policy lies behind that number of $138 billion
in savings. And to make it a legitimate first step, a first step that
really does start the debate in Medicare, we need to make sure that
there is policy which does things like expand choice for senior
citizens, give them the same options that most other people today have.
The structural reform I think should include looking at some of the
payment methodology, another element that relates to this choice in the
structural reform. We have to accomplish this structural reform if we
are going to truly strengthen the Medicare program and not just play
with numbers.
Again, we will be looking at a lot of numbers over the next several
weeks. I, as a physician, will keep coming back to the importance of
having true structural reform built into the program, both part A and
part B, in the overall Medicare program so that we truly will
strengthen the system and make sure it is there for not only the 38
million Americans today, senior citizens and individuals with
disabilities, but is there 5 years from now, 10 years from now, 15, 20
years from now on into the future.
I say all that to preface my reason for rising today, and that is to
introduce a bill, the Provider Sponsored Organization Act of 1997, to
be introduced along with my distinguished colleague from West Virginia,
Mr. Rockefeller. This bill, I believe, offers one of those very
important structural components which does expand choice for our senior
citizens, which when injected into the Medicare system today will do
something very important, and that is inject quality into the
considerations of options and choices among Medicare recipients. I will
explain this shortly.
Provider sponsored organizations, or PSOs, are integrated health care
delivery systems that are sponsored by local health care providers,
physicians in hospitals at the local level. Their purpose is to deliver
a full spectrum of health services. Very specifically, this bill
establishes the Federal solvency requirements, the licensing
requirements and those quality standards that PSOs, provider sponsored
organizations, must meet in order to come to the table and participate
in the Medicare Program.
It was more than 20 years ago that Congress really stepped up to the
plate and, I think, quite innovatively provided Federal guidance for
the entry of a brand-new phenomenon, and that was of HMOs, health
maintenance organizations. HMOs were established with the primary
purpose of coordinating health care delivery in such a way that there
could be competition and in some way control those skyrocketing costs
that previously had been associated with the fee-for-service programs.
What it did, it allowed a combining of the financing delivery system to
the health care delivery system.
Today Senator Rockefeller and I are proposing to level the playing
field once again with our bill to allow PSOs, for the first time, to
have access to the Medicare market. Our bill sets the national rules by
which these locally-based networks of providers may compete head to
head with the traditional managed care organizations. All of that is
done with the hope that the providers, the physicians, the hospitals,
[[Page S529]]
the frontline people who are taking care of patients, will be able to
more actively participate in coordinating the overall health care for
Medicare beneficiaries. We trust that free and fair competition will
give Medicare beneficiaries more choices and ultimately improve the
cost, and as I will discuss shortly, the quality of the services they
receive.
All of us know that today's health care market in its broadest sense
is in the midst of dynamic change. The cost of care does continue to
rise rapidly. There are a growing number of Americans all across this
country who are shifting from a traditional fee-for-service model to a
managed-care model. Today's paper, the Washington Post, released new
figures that show that 75 percent, three-quarters of all working
Americans today, receive their health insurance benefits through some
type of managed care. Unfortunately, I think, in many ways, the
accompanying perception with this shift of managed care, although it is
not always fair, has been that managed care companies focus almost
entirely on cutting costs, and then only after costs are cut is the
quality issue discussed.
In addition, physicians who have to clear practice decisions through
managed care organizations, and I can recall before coming to the U.S.
Senate 3 years ago picking up the telephone and calling a bureaucrat or
someone sitting 200, 300 and 400 miles away, to ask if I could
discharge my patient, or if my patient met criteria for discharge,
whether the hematic or blood count was appropriate, this intrusion is
really resented by physicians, that health care delivery which really
is in this country a pact, a relationship between a doctor and a
patient.
The mother-may-I mentality that has emerged has frustrated both
parties and providers and led them to question who is in charge. Is it
the physician, working with the patient, taking care, who knows that
patient, who has been trained to take care of that patient, or is it a
bureaucrat or somebody hundreds of miles away?
On the other side of the coin, it is very clear that managed care has
been very successful in forcing an out-of-date delivery system to be
more accountable. This has had very important benefits for patients.
That leads me to think of how outcomes, data and results are studied
very carefully by most managed care organizations, driving us into the
whole realm of quality assessment. That has been a huge contribution of
managed care, as well as HMOs. Much of that would not have occurred
without HMOs or managed care.
Amidst all this change is a great deal of uncertainty. We have senior
citizens who are scared to death to change anything, and that was
reinforced in the recent campaigns where huge advertising campaigns
were put on television, ``Don't change anything.'' Today, purchasers,
consumers and providers are really forcing attention back to that issue
of quality. As a physician, I find that very encouraging.
People will still tell you today though, as you travel across
Tennessee or our respective States, that their fear of managed care
stems a great deal from the fact that they feel their physician is no
longer in charge of their case, that somebody who is watching just the
dollars and cents or some bureaucrat is now in charge of their care.
Now, this has generated, and it really starts at a grassroots level,
has generated a lot of proposals in the last several months, both at
the State level and at the Federal level. That includes the ban on the
gag rule clauses and various length-of-stay proposals after various
procedures that are done in the hospital.
America's largest health care payer today is the Federal Medicare
Program. It has had difficulty, interestingly enough, in attracting
seniors to managed care. The figure that I just mentioned, three-
quarters of all people today being in managed care, contrasts with
those senior citizens, all of whom are in Medicare. Only 11 percent,
only 11 percent compared to 75 percent of Medicare beneficiaries are
signed up to participate. It is very clear that our senior citizens
have a great fear today of being herded into the traditional managed
care plans where they have a fear they will not include the physician
they choose or the hospital that they might choose.
The outmoded blank check mentality, on the other hand, of fee-for-
service system is not sustainable over time. It can be one of the
choices, but it cannot be and will not be the only choice. Given that
Medicare's own trustees have reported that the program is going to be
bankrupt in 4 to 5 years, Medicare clearly has to find a way to have
its growth slowed.
Medicare beneficiaries who fear managed care may well feel much more
secure knowing that they have the choice of a health care plan that is
actually run by providers--doctors working with hospitals, and not just
a business, not just a traditional insurance company.
PSOs will help push the market to elevate the level of quality at all
levels of plans of negotiation and delivery because of the direct
involvement of physicians with hospitals, of the people who are
actually delivering that care in every step of the process. Quality,
all of a sudden, becomes the primary goal. Once at the negotiating
table, you bring physicians into the room.
Many see all of this as an ``us-versus-them scenario.'' In fact,
neither group acts alone when funds are limited, whether care is paid
for by a Government program, an employer, an insurer, an individual.
Medicare providers and plan administrators simply must work together to
increase the value of health care dollars.
Before coming to the U.S. Senate, as one who used to negotiate, as a
transplant surgeon and running a large transplant center I negotiated
with managed care plans. Based on that negotiation, all too often
quality was not the issue, really, at the table. People would come in
and say, ``I need a discount of 10 percent, of 15 percent or 20
percent.'' What was missing at that table was someone--a group of
providers, physicians with hospitals, working together--who would ask
those questions about quality. Why do they ask the questions about
quality? Because they are on the frontline. At the table we will bring
physicians who are delivering that care to individuals.
That to me is one of the most exciting things about this bill. It
injects quality back into the marketplace. Is there any evidence today
that senior citizens will respond to this alternative? This year the
Health Care Financing Administration established the demonstration
project called Medicare Choices.
This pilot project is examining ways of expanding the choice of
health care plan options available to Medicare beneficiaries. Included
in this demonstration are a number of PSO's. Senator Mack recently
shared with me his experience in Florida with this new demonstration
project during its first 3 weeks of enrollment. A participating PSO in
Orlando received 5,500 phone calls from interested beneficiaries in the
first 5 days. They have already processed enrollment for 400 Medicare
beneficiaries. They started out holding 13 informational seminars each
week and had 600 attendees. They are now conducting 15 seminars a week
with 700 attendees. In addition, the PSO staffs have been making home
visits to those beneficiaries who are unable to come to the seminars,
and as a result of those home visits, they are enrolling seven to nine
individuals a day. The Orlando PSO has already enrolled another 400
beneficiaries just for February. So, yes, I think our senior citizens
will respond to this new option, this new option that expands choice,
when we bring physicians and hospitals through a PSO entity to the
table.
Clearly, we can make managed care options more attractive to
America's seniors by allowing PSO's to participate in the Medicare
program. What are the other advantages that provider-sponsored
organizations offer? These groups offer many advantages.
First, ``one-stop shopping'' for a coordinated package of health care
services really saves time and the expense of negotiating with
individual provider contracts.
Second, because it is the providers who are coordinating care,
clinical decisions and utilization reviews are conducted by the
providers themselves and not by a faceless third party charged with
conducting these reviews.
Third, incentives to control costs are borne by the only group that
can truly deliver systematic quality improvement and cost efficiency
over the long run. Why? Because it is the providers who are monitoring
that quality. It is
[[Page S530]]
the physicians and hospitals who are actually providing that care and,
thus, they are in a position to best monitor that quality.
Finally, PSO's simply tend to have much lower startup and
administrative costs, making it easier for them to enter the market in
those key areas that we need to look at, and that is the rural areas.
These rural areas have a real risk of being underserved without this
new entity, a PSO.
What are the advantages of the PSO's--provider-sponsored
organizations--for the country as a whole? The managed care industry
has been able to change our paradigms about health care tremendously
over the last 10 years. Health care is becoming less costly and more
efficient. But now we have to come back to quality and inject quality
back into the system and the effectiveness of that health care
delivery. By bringing providers, the people delivering that care every
day, to the table for the first time in Medicare, PSO's will create
that opportunity.
The PSO's are really in the health care business day in and day out.
Remember, it is a group of physicians who, every day, are taking care
of patients who we are bringing to the table for the first time. PSO's
are in the health care business, not in the insurance business, and
they are currently excluded from fair participation in the market by a
system ill-suited to their needs. Let me give a couple of examples.
Providers navigating the complex State licensure process for the
first time are really at a significant disadvantage compared to the
very large insurance companies and the large managed care plans. In a
competitive marketplace, the timing of entry is critical.
Even though PSO's do not take on the same level of insurance risk as
other players, PSO's are now required to submit the same State-defined
solvency tests and net worth requirements as HMO's. Since the law now
only allows Medicare to contract with organizations that are licensed
by the States as HMO's, many PSO's are forced to perform administrative
contortions in order to serve Medicare patients--contortions that make
them look like insurance companies, even though, in reality, they are
not.
How does the Provider Sponsored Organization Act develop solutions to
the problem?
First, it recognizes the potential for PSO's to serve beneficiaries
by enabling them to contract directly with Medicare, thus expanding the
range of choices available to each Medicare beneficiary.
Second, it will provide Federal leadership to the States in
fashioning a more nationally consistent, streamlined PSO approval
process.
However, with access must come accountability. This bill will also
require PSO's to meet strict standards that ensure that they are able
to take on the financial risks associated with delivering health care
services for a set fee, but these are tailored to their primary role as
providers, as physicians and hospitals; it will require collective
accountability, where quality and cost are both measured by overall
practice patterns across the entire PSO, not by case-by-case
utilization review; finally, it will set a standard for quality
assurance, a standard that will set the pace for the rest of the
industry.
This legislation--I need to be very clear about this--does not, in
any way, eclipse other health care plans. Rather, it complements, adds
to the existing menu of health care services. Qualified provider-
sponsored organizations will challenge all health care organizations
participating with Medicare to meet the goal of an integrated health
system, a system which truly provides an environment with lower costs,
better care, higher quality, and preserved relationships between
caregivers and their patients.
Mr. President, I send the bill to the desk and ask that it be
referred to the appropriate committee.
The PRESIDING OFFICER. The bill will be appropriately referred.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FRIST. I ask unanimous consent that a letter of endorsement from
a wide variety of hospital associations be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
January 21, 1997.
Hon. Bill Frist,
U.S. Senate,
Washington, DC.
Dear Senator Frist: We endorse enthusiastically ``The
Provider Sponsored Organization Act of 1997'' which you are
introducing in the Senate today. This legislation provides an
important new health care choice for Medicare beneficiaries,
the Provider Sponsored Organization (PSO) option.
Medicare beneficiaries deserve a greater variety of high
quality health care options from which they can choose--and
PSOs provide an outstanding additional choice for them.
Medicare PSOs will hold down health care costs by directly
managing both the use of services and the cost of providing
those services. These PSOs will offer affordable, high-
quality and coordinated care and be sponsored by
organizations that are concerned about the health of the
entire community. Because the PSO focused on the Community,
its medical management policies are locally focused rather
than nationally driven. And, in a PSO plan, a consumer is
more likely to maintain stable relationships with his or her
personal physician and community hospital, whereas other
health plans may change their rosters of participating
providers from year to year.
Your legislation recognizes that Medicare PSOs will not be
in the insurance business, but will focus on what has been
their primary business for years, the delivery of high
quality care. The bill requires, however, high solvency
standards for those participating in the program and
organizational arrangements that assure the plans are
integrated, fully operational, and responsive to the needs of
the Medicare beneficiaries that they will serve. Also,
Medicare PSOs will reduce administrative expenses in
comparison to many of the options offered to Medicare
beneficiaries today by stream-ling the organization of
administrative functions between the provider and the
Medicare program.
In short, Medicare beneficiaries need and deserve
additional health care choices built from the base of their
local community of hospitals and doctors. And they should be
assured the uniformity of plan standards that only federal
regulation can bring.
We look forward to working with you to seek enactment of
this important legislation in the first session of the 105th
Congress.
Sincerely,
American Hospital Association; Association of American
Medial Colleges; Catholic Health Association;
Federation of American Health Systems; InterHealth;
National Association of Childrens' Hospitals; National
Association of Public Hospitals; Premier, Inc.;
Voluntary Hospitals of America.
______
By Mr. DASCHLE (for himself, Mr. Chafee, Mr. Kennedy, Mr.
Johnson, and Mr. Reid):
S. 147. A bill to amend title XIX of the Social Security Act to
provide for coverage of alcoholism and drug dependency residential
treatment services for pregnant women and certain family members under
the Medicaid program, and for other purposes; to the Committee on
Finance.
The Medicaid Substance Abuse Treatment Act
______
By Mr. DASCHLE (for himself, Mr. Chafee, Mr. Bingaman, Mr.
Inouye, Mrs. Murray, Mr. Johnson, Mr. Campbell and Mr. Reid):
S. 148. A bill to amend the Public Health Service Act to provide a
comprehensive program for the prevention of Fetal Alcohol Syndrome; to
the Committee on Labor and Human Resources.
The Comprehensive Fetal Alcohol Syndrome Prevention Act
Mr. DASCHLE. Mr. President, today I am introducing two bipartisan
bills to help prevent the tragic occurrence of alcohol-related birth
defects, including both fetal alcohol syndrome [FAS] and fetal alcohol
effects [FAE]. I speak on behalf of all cosponsors when I say we are
hopeful we can move these two simple, but important, pieces of
legislation this year.
FAS and FAE are devastating, complex birth defects. Many people fail
to realize that FAS is the leading cause of mental retardation. Too
many women remain uninformed about the real dangers of alcohol
consumption during pregnancy. And, unfortunately, misconceptions about
the impact of alcohol intake during pregnancy are not limited to the
general public. Even some health care providers are unaware of the
danger of drinking during pregnancy, and for many years it was widely
held that moderate alcohol consumption during pregnancy was beneficial.
I am happy to report that several medical schools have begun teaching
their students about FAS and FAE, and I remain hopeful that medical
professionals will continue to learn more
[[Page S531]]
about how to appropriately diagnose and counsel women who are pregnant
or are considering pregnancy.
Recent estimates indicate that up to 12,000 children are born each
year in the United States with FAS. Thousands more are born with FAE.
It is estimated that the incidence of FAS may be as high as one per 100
in some Native American communities.
The costs associated with caring for individuals with FAS are
staggering. The Centers for Disease Control and Prevention estimates
that the lifetime cost of treating an individual with FAS is almost
$1.4 million. The total cost in terms of health care and social
services to treat all Americans with FAS was estimated to be $2.7
billion in 1995. This is an extraordinary and unnecessary expense,
especially when one considers that all alcohol-related birth defects
are 100 percent preventable.
The first step toward illuminating this devastating disease is
raising the public's consciousness about FAS/FAE. Although great
strides have been made in this regard, much more work remains to be
done. The Comprehensive Fetal Alcohol Syndrome Prevention Act attempts
to fill in the gaps in our current FAS/FAE prevention system. It
contains four major components, representing the provisions of the
original legislation that have not yet been enacted. These provisions
include the initiation of a coordinated education and public awareness
campaign; increased support for basic and applied epidemiologic
research into the causes, treatment and prevention of FAS/FAE;
widespread dissemination of FAS/FAE diagnostic criteria; and the
establishment of an interagency task force to coordinate the wide range
of Federal efforts in combating FAS/FAE.
A prevention strategy cannot succeed in the absence of increased
access to comprehensive treatment programs for pregnant addicted women.
Many pregnant substance abusers are denied treatment because facilities
refuse to accept them, or the women cannot accept treatment because
they lack adequate child care for their existing children while they
receive treatment. In fact, many treatment programs specifically
exclude pregnant women or women with children. To make matters worse,
while Medicaid covers some services associated with substance abuse,
like outpatient treatment and detoxification, it rails to cover non-
hospital based residential treatment, which is considered by most
health care professionals to be the most effective method of overcoming
addiction.
The Medicaid Substance Abuse Treatment Act would permit coverage of
residential alcohol and drug treatment for pregnant women and certain
family members under the Medicaid program, thereby assuring a stable
source of funding for States that wish to establish these programs. The
bill has three primary objectives. First, it would facilitate the
participation of pregnant women who are substance abusers in alcohol
and drug treatment programs. Second, by increasing the availability of
comprehensive and effective treatment programs for pregnant women and,
thus, improving a woman's chances of bearing healthy children, it would
help combat the serious and ever-growing problem of drug-impaired
infants and children, many of whom are born with FAS and FAE. Third, it
would address the unique situation of pregnant addicted Native American
and Alaska Native women in Indian Health Service areas.
Mr. President, the cost of prevention is substantially less than the
downstream costs in money and human capital of caring of children and
adults who have been impaired due to prenatal exposure to alcohol and
drugs. These prevention and treatment services are an investment that
yields substantial long-term dividends--both on a societal level, as
costs and efforts associated with taking care of children born with
alcohol-related birth defects decline, and on an individual level, as
mothers plagued by alcohol and drug addiction are given the means to
heal themselves and give their unborn children a healthier start in
life.
FAS and FAE represent a national tragedy that reaches across economic
and social boundaries. With researchers from Columbia University
reporting that at least one of every five pregnant women uses alcohol
and/or other drugs during pregnancy, the demand for a comprehensive and
determined response to this devastating problem is clear. I welcome the
support of my colleagues on these important bills.
Mr. President, I ask unanimous consent that the text of the bills be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 147
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicaid Substance Abuse
Treatment Act of 1997''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) a woman's ability to bear healthy children is
threatened by the consequences of alcoholism and drug
addiction and particularly by the use of alcohol and drugs
during pregnancy;
(2) hundreds of thousands of infants each year are born
drug-exposed, approximately 12,000 infants are born each year
with fetal alcohol syndrome, and thousands more are born each
year with fetal alcohol effects, a less severe version of
fetal alcohol syndrome;
(3) drug use during pregnancy can result in low
birthweight, physical deformities, mental retardation,
learning disabilities, and heightened nervousness and
irritability in newborns;
(4) fetal alcohol syndrome is the leading identifiable
cause of mental retardation in the United States and the only
cause that is 100 percent preventable;
(5) drug-impaired individuals pose extraordinary societal
costs in terms of medical, educational, foster care,
residential, and support services over the lifetimes of such
individuals;
(6) women, in general, are underrepresented in drug and
alcohol treatment programs;
(7) due to fears among service providers concerning the
risks pregnancies pose, pregnant women face more obstacles to
substance abuse treatment than do other addicts and many
substance abuse treatment programs, in fact, exclude pregnant
women or women with children;
(8) residential alcohol and drug treatment is an important
prevention strategy to prevent low birthweight, transmission
of AIDS, and chronic physical, mental, and emotional
disabilities associated with prenatal exposure to alcohol and
other drugs;
(9) effective substance abuse treatment must address the
special needs of pregnant women who are alcohol or drug
dependent, including substance-abusing women who may often
face such problems as domestic violence, incest and other
sexual abuse, poor housing, poverty, unemployment, lack of
education and job skills, lack of access to health care,
emotional problems, chemical dependency in their family
backgrounds, single parenthood, and the need to ensure child
care for existing children while undergoing substance abuse
treatment;
(10) nonhospital residential treatment is an important
component of comprehensive and effective substance abuse
treatment for pregnant addicted women, many of whom need
long-term, intensive habilitation outside of their
communities to recover from their addiction and take care of
themselves and their families; and
(11) a gap exists under the medicaid program for the
financing of comprehensive residential care in the existing
continuum of covered alcoholism and drug abuse treatment
services for pregnant medicaid beneficiaries.
(b) Purposes.--The purposes of this Act are--
(1) to increase the ability of pregnant women who are
substance abusers to participate in alcohol and drug
treatment;
(2) to ensure the availability of comprehensive and
effective treatment programs for pregnant women, thus
promoting a woman's ability to bear healthy children;
(3) to ensure that nonhospital residential treatment is
available to those low-income pregnant addicted women who
need long-term, intensive habilitation to recover from their
addiction;
(4) to create a new optional medicaid residential treatment
service for alcoholism and drug dependency treatment; and
(5) to define the core services that must be provided by
treatment providers to ensure that needed services will be
available and appropriate.
SEC. 3. MEDICAID COVERAGE OF ALCOHOLISM AND DRUG DEPENDENCY
RESIDENTIAL TREATMENT SERVICES FOR PREGNANT
WOMEN, CARETAKER PARENTS, AND THEIR CHILDREN.
(a) Coverage of Alcoholism and Drug Dependency Residential
Treatment Services.--
(1) Optional coverage.--Section 1905 of the Social Security
Act (42 U.S.C. 1396d) is amended--
(A) in subsection (a)--
(i) in paragraph (24), by striking ``and'' at the end;
(ii) by redesignating paragraph (25) as paragraph (26); and
(iii) by inserting after paragraph (24) the following new
paragraph:
``(25) alcoholism and drug dependency residential treatment
services (to the extent allowed and as defined in section
1931); and''; and
(B) in the sentence following paragraph (26), as so
redesignated--
[[Page S532]]
(i) in subparagraph (A), by striking ``or'' at the end;
(ii) in subparagraph (B), by striking the period and
inserting ``; or''; and
(iii) by inserting after subdivision (B) the following:
``(C) any such payments with respect to alcoholism and drug
dependency residential treatment services under paragraph
(25) for individuals not described in section 1932(d).''.
(2) Alcoholism and drug dependency residential treatment
services defined.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(A) by redesignating section 1932 as section 1933; and
(B) by inserting after section 1931, the following:
``ALCOHOLISM AND DRUG DEPENDENCY RESIDENTIAL TREATMENT SERVICES
``Sec. 1932. (a) Alcoholism and Drug Dependency Residential
Treatment Services.--The term `alcoholism and drug dependency
residential treatment services' means all the required
services described in subsection (b) which are provided--
``(1) in a coordinated manner by a residential treatment
facility that meets the requirements of subsection (c) either
directly or through arrangements with--
``(A) public and nonprofit private entities;
``(B) licensed practitioners or federally qualified health
centers with respect to medical services; or
``(C) the Indian Health Service or a tribal or Indian
organization that has entered into a contract with the
Secretary under section 102 of the Indian Self-Determination
Act (25 U.S.C. 450f) or section 502 of the Indian Health Care
Improvement Act (25 U.S.C. 1652) with respect to such
services provided to women eligible to receive services in
Indian Health Facilities; and
``(2) pursuant to a written individualized treatment plan
prepared for each individual, which plan--
``(A) states specific objectives necessary to meet the
individual's needs;
``(B) describes the services to be provided to the
individual to achieve those objectives;
``(C) is established in consultation with the individual;
``(D) is periodically reviewed and (as appropriate) revised
by the staff of the facility in consultation with the
individual;
``(E) reflects the preferences of the individual; and
``(F) is established in a manner which promotes the active
involvement of the individual in the development of the plan
and its objectives.
``(b) Required Services Defined.--
``(1) In general.--The required services described in this
subsection are as follows:
``(A) Counseling, addiction education, and treatment
provided on an individual, group, and family basis and
provided pursuant to individualized treatment plans,
including the opportunity for involvement in Alcoholics
Anonymous and Narcotics Anonymous.
``(B) Parenting skills training.
``(C) Education concerning prevention of HIV infection.
``(D) Assessment of each individual's need for domestic
violence counseling and sexual abuse counseling and provision
of such counseling where needed.
``(E) Room and board in a structured environment with on-
site supervision 24 hours-a-day.
``(F) Therapeutic child care or counseling for children of
individuals in treatment.
``(G) Assisting parents in obtaining access to--
``(i) developmental services (to the extent available) for
their preschool children;
``(ii) public education for their school-age children,
including assistance in enrolling them in school; and
``(iii) public education for parents who have not completed
high school.
``(H) Facilitating access to prenatal and postpartum health
care for women, to pediatric health care for infants and
children, and to other health and social services where
appropriate and to the extent available, including services
under title V, services and nutritional supplements provided
under the special supplemental food program for women,
infants, and children (WIC) under section 17 of the Child
Nutrition Act of 1966, services provided by federally
qualified health centers, outpatient pediatric services,
well-baby care, and early and periodic screening, diagnostic,
and treatment services (as defined in section 1905(r)).
``(I) Ensuring supervision of children during times their
mother is in therapy or engaged in other necessary health or
rehabilitative activities, including facilitating access to
child care services under title IV and title XX.
``(J) Planning for and counseling to assist reentry into
society, including appropriate outpatient treatment and
counseling after discharge (which may be provided by the same
program, if available and appropriate) to assist in
preventing relapses, assistance in obtaining suitable
affordable housing and employment upon discharge, and
referrals to appropriate educational, vocational, and other
employment-related programs (to the extent available).
``(K) Continuing specialized training for staff in the
special needs of residents and their children, designed to
enable such staff to stay abreast of the latest and most
effective treatment techniques.
``(2) Requirement for certain services.--Services under
subparagraphs (A), (B), (C), and (D), of paragraph (1) shall
be provided in a cultural context that is appropriate to the
individuals and in a manner that ensures that the individuals
can communicate effectively, either directly or through
interpreters, with persons providing services.
``(3) Limitations on coverage.--
``(A) In general.--Subject to subparagraph (B), services
described in paragraph (1) shall be covered in the amount,
duration, and scope therapeutically required for each
eligible individual in need of such services.
``(B) Restrictions on limiting coverage.--A State plan
shall not limit coverage of alcoholism and drug dependency
residential treatment services for any period of less than 12
months per individual, except in those instances where a
finding is made that such services are no longer
therapeutically necessary for an individual.
``(c) Facility Requirements.--The requirements of this
subsection with respect to a facility are as follows:
``(1) The agency designated by the chief executive officer
of the State to administer the State's alcohol and drug abuse
prevention and treatment activities and programs has
certified to the single State agency under section 1902(a)(5)
that the facility--
``(A) is able to provide all the services described in
subsection (b) either directly or through arrangements with--
``(i) public and nonprofit private entities;
``(ii) licensed practitioners or federally qualified health
centers with respect to medical services; or
``(iii) the Indian Health Service or with a tribal or
Indian organization that has entered into a contract with the
Secretary under section 102 of the Indian Self-Determination
Act (25 U.S.C. 450f) or section 502 of the Indian Health Care
Improvement Act (25 U.S.C. 1652) with respect to such
services provided to women eligible to receive services in
Indian Health Facilities; and
``(B) except for Indian Health Facilities, meets all
applicable State licensure or certification requirements for
a facility of that type.
``(2)(A) The facility or a distinct part of the facility
provides room and board, except that--
``(i) subject to subparagraph (B), the facility shall have
no more than 40 beds; and
``(ii) subject to subparagraph (C), the facility shall not
be licensed as a hospital.
``(B) The single State agency may waive the bed limit under
subparagraph (A)(i) for one or more facilities subject to
review by the Secretary. Waivers, where granted, must be made
pursuant to standards and procedures set out in the State
plan and must require the facility seeking a waiver to
demonstrate that--
``(i) the facility will be able to maintain a therapeutic,
family-like environment;
``(ii) the facility can provide quality care in the
delivery of each of the services identified in subsection
(b);
``(iii) the size of the facility will be appropriate to the
surrounding community; and
``(iv) the development of smaller facilities is not
feasible in that geographic area.
``(C) The Secretary may waive the requirement under
subparagraph (A)(ii) that a facility not be a hospital, if
the Secretary finds that such facility is located in an
Indian Health Service area and that such facility is the only
or one of the only facilities available in such area to
provide services under this section.
``(3) With respect to a facility providing the services
described in subsection (b) to an individual eligible to
receive services in Indian Health Facilities, such a facility
demonstrates (as required by the Secretary) an ability to
meet the special needs of Indian and Native Alaskan women.
``(d) Eligible Individuals.--
``(1) In general.--A State plan shall limit coverage of
alcoholism and drug dependency residential treatment services
under section 1905(a)(24) to the following individuals
otherwise eligible for medical assistance under this title:
``(A) Women during pregnancy, and until the end of the 12th
month following the termination of the pregnancy.
``(B) Children of a woman described in subparagraph (A).
``(C) At the option of a State, a caretaker parent or
parents and children of such a parent.
``(2) Initial assessment of eligible individuals.--An
initial assessment of eligible individuals specified in
paragraph (1) seeking alcoholism and drug dependency
residential treatment services shall be performed by the
agency designated by the chief executive officer of the State
to administer the State's alcohol and drug abuse treatment
activities (or its designee). Such assessment shall determine
whether such individuals are in need of alcoholism or drug
dependency treatment services and, if so, the treatment
setting (such as inpatient hospital, nonhospital residential,
or outpatient) that is most appropriate in meeting such
individual's health and therapeutic needs and the needs of
such individual's dependent children, if any.
``(e) Overall Cap on Medical Assistance and Allocation of
Beds.--
``(1) Total amount of services as medical assistance.--
``(A) In general.--The total amount of services provided
under this section as medical assistance for which payment
may be made available under section 1903 shall be limited to
the total number of beds allowed to be allocated for such
services in any given year as specified under subparagraph
(B).
[[Page S533]]
``(B) Total number of beds.--The total number of beds
allowed to be allocated under this subparagraph (subject to
paragraph (2)(C)) for the furnishing of services under this
section and for which Federal medical assistance may be made
available under section 1903 is for calendar year--
``(i) 1998, 1,080 beds;
``(ii) 1998, 2,000 beds;
``(iii) 2000, 3,500 beds;
``(iv) 2001, 5,000 beds;
``(v) 2002, 6,000 beds; and
``(vi) 2003 and for calendar years thereafter, a number of
beds determined appropriate by the Secretary.
``(2) Allocation of beds.--
``(A) Initial allocation formula.--For each calendar year,
a State exercising the option to provide the services
described in this section shall be allocated from the total
number of beds available under paragraph (1)(B)--
``(i) in calendar years 1998 and 1999, 20 beds;
``(ii) in calendar years 2000, 2001, and 2002, 40 beds; and
``(iii) in calendar year 2003 and for each calendar year
thereafter, a number of beds determined based on a formula
(as provided by the Secretary) distributing beds to States on
the basis of the relative percentage of women of childbearing
age in a State.
``(B) Reallocation of beds.--The Secretary shall provide
that in allocating the number of beds made available to a
State for the furnishing of services under this section that,
to the extent not all States are exercising the option of
providing services under this section and there are beds
available that have not been allocated in a year as provided
in paragraph (1)(B), that such beds shall be reallocated
among States which are furnishing services under this section
based on a formula (as provided by the Secretary)
distributing beds to States on the basis of the relative
percentage of women of childbearing age in a State.
``(C) Indian health service areas.--In addition to the beds
allowed to be allocated under paragraph (1)(B) there shall be
an additional 20 beds allocated in any calendar year to
States for each Indian Health Service area within the State
to be utilized by Indian Health Facilities within such an
area and, to the extent such beds are not utilized by a
State, the beds shall be reapportioned to Indian Health
Service areas in other States.''.
(3) Maintenance of state financial effort and 100 percent
federal matching for services for indian and native alaskan
women in indian health services areas.--Section 1903 of the
Social Security Act (42 U.S.C. 1396b) is amended by adding at
the end the following new subsections:
``(x) No payment shall be made to a State under this
section in a State fiscal year for alcoholism and drug
dependency residential treatment services (described in
section 1932) unless the State provides assurances
satisfactory to the Secretary that the State is maintaining
State expenditures for such services at a level that is not
less than the average annual level maintained by the State
for such services for the 2-year period preceding such fiscal
year.
``(y) Notwithstanding the preceding provisions of this
section, the Federal medical assistance percentage for
purposes of payment under this section for services described
in section 1932 provided to individuals residing on or
receiving services in an Indian Health Service area shall be
100 percent.''.
(b) Payment on a Cost-Related Basis.--Section 1902(a)(13)
of the Social Security Act (42 U.S.C. 1396a(a)(13)) is
amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by adding ``and'' at the end of subparagraph (F); and
(3) by adding at the end the following new subparagraph:
``(G) for payment for alcoholism and drug dependency
residential treatment services which the State finds, and
makes assurances satisfactory to the Secretary, are
reasonable and adequate to meet the costs which must be
incurred by efficiently and economically operated facilities
in order to provide all the services listed in section
1932(b) in conformity with applicable Federal and State laws,
regulations, and quality and safety standards and to assure
that individuals eligible for such services have reasonable
access to such services;''.
(c) Conforming Amendments.--
(1) Clarification of optional coverage for specified
individuals.--Section 1902(a)(10) of the Social Security Act
(42 U.S.C. 1396a(a)(10)) is amended, in the matter following
subparagraph (F)--
(A) by striking ``; and (XIII)'' and inserting ``,
(XIII)''; and
(B) by inserting before the semicolon at the end the
following: ``, and (XIII) the making available of alcoholism
and drug dependency residential treatment services to
individuals described in section 1932(d) shall not, by reason
of this paragraph, require the making of such services
available to other individuals''.
(2) Continuation of eligibility for alcoholism and drug
dependency treatment for pregnant women for 12 months
following end of pregnancy.--Section 1902 of the Social
Security Act (42 U.S.C. 1396a) is amended in subsection
(e)(5) by striking ``under the plan,'' and all through the
period at the end and inserting ``under the plan--
``(A) as though she were pregnant, for all pregnancy-
related and postpartum medical assistance under the plan,
through the end of the month in which the 60-day period
(beginning on the last day of her pregnancy) ends; and
``(B) for alcoholism and drug dependency residential
treatment services under section 1932 through the end of the
1-year period beginning on the last day of her pregnancy.''.
(3) Redesignations.--Section 1902 of the Social Security
Act (42 U.S.C. 1396a) is further amended in subsection
(a)(10)(C)(iv), by striking ``(24)'' and inserting ``(25)''.
(d) Annual Education and Training in Indian Health Service
Areas.--The Secretary of Health and Human Services in
cooperation with the Indian Health Service shall conduct on
at least an annual basis training and education in each of
the 12 Indian Health Service areas for tribes, Indian
organizations, residential treatment providers, and State
health care workers regarding the availability and nature of
residential treatment services available in such areas under
the provisions of this Act.
(e) Effective Date; Transition.--(1) The amendments made by
this section apply to alcoholism and drug dependency
residential treatment services furnished on or after January
1, 1998, without regard to whether or not final regulations
to carry out such amendments have been promulgated by such
date.
(2) The Secretary of Health and Human Services shall not
take any compliance, disallowance, penalty, or other
regulatory action against a State under title XIX of the
Social Security Act with regard to alcoholism and drug
dependency residential treatment services (as defined in
section 1932(a) of such Act) made available under such title
on or after January 1, 1998, before the date the Secretary
issues final regulations to carry out the amendments made by
this section, if the services are provided under its plan in
good faith compliance with such amendments.
S. 148
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Comprehensive Fetal Alcohol
Syndrome Prevention Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) Fetal Alcohol Syndrome is the leading known cause of
mental retardation, and it is 100 percent preventable;
(2) each year, up to 12,000 infants are born in the United
States with Fetal Alcohol Syndrome, suffering irreversible
physical and mental damage;
(3) thousands more infants are born each year with Fetal
Alcohol Effects, which are lesser, though still serious,
alcohol-related birth defects;
(4) children of women who use alcohol while pregnant have a
significantly higher infant mortality rate (13.3 per 1000)
than children of those women who do not use alcohol (8.6 per
1000);
(5) Fetal Alcohol Syndrome and Fetal Alcohol Effects are
national problems which can impact any child, family, or
community, but their threat to American Indians and Alaska
Natives is especially alarming;
(6) in some American Indian communities, where alcohol
dependency rates reach 50 percent and above, the chances of a
newborn suffering Fetal Alcohol Syndrome or Fetal Alcohol
Effects are up to 30 times greater than national averages;
(7) in addition to the immeasurable toll on children and
their families, Fetal Alcohol Syndrome and Fetal Alcohol
Effects pose extraordinary financial costs to the Nation,
including the costs of health care, education, foster care,
job training, and general support services for affected
individuals;
(8) the total cost to the economy of Fetal Alcohol Syndrome
was approximately $2,500,000,000 in 1995, and over a
lifetime, health care costs for one Fetal Alcohol Syndrome
child are estimated to be at least $1,400,000;
(9) researchers have determined that the possibility of
giving birth to a baby with Fetal Alcohol Syndrome or Fetal
Alcohol Effects increases in proportion to the amount and
frequency of alcohol consumed by a pregnant woman, and that
stopping alcohol consumption at any point in the pregnancy
reduces the emotional, physical, and mental consequences of
alcohol exposure to the baby; and
(10) though approximately 1 out of every 5 pregnant women
drink alcohol during their pregnancy, we know of no safe dose
of alcohol during pregnancy, or of any safe time to drink
during pregnancy, thus, it is in the best interest of the
Nation for the Federal Government to take an active role in
encouraging all women to abstain from alcohol consumption
during pregnancy.
SEC. 3. PURPOSE.
It is the purpose of this Act to establish, within the
Department of Health and Human Services, a comprehensive
program to help prevent Fetal Alcohol Syndrome and Fetal
Alcohol Effects nationwide. Such program shall--
(1) coordinate, support, and conduct basic and applied
epidemiologic research concerning Fetal Alcohol Syndrome and
Fetal Alcohol Effects;
(2) coordinate, support, and conduct national, State, and
community-based public awareness, prevention, and education
programs on Fetal Alcohol Syndrome and Fetal Alcohol Effects;
and
[[Page S534]]
(3) foster coordination among all Federal agencies that
conduct or support Fetal Alcohol Syndrome and Fetal Alcohol
Effects research, programs, and surveillance and otherwise
meet the general needs of populations actually or potentially
impacted by Fetal Alcohol Syndrome and Fetal Alcohol Effects.
SEC. 4. ESTABLISHMENT OF PROGRAM.
Title III of the Public Health Service Act (42 U.S.C. 241
et seq.) is amended by adding at the end the following:
``PART O--FETAL ALCOHOL SYNDROME PREVENTION PROGRAM
``SEC. 399G. ESTABLISHMENT OF FETAL ALCOHOL SYNDROME
PREVENTION PROGRAM.
``(a) Fetal Alcohol Syndrome Prevention Program.--The
Secretary shall establish a comprehensive Fetal Alcohol
Syndrome and Fetal Alcohol Effects prevention program that
shall include--
``(1) an education and public awareness program to--
``(A) support, conduct, and evaluate the effectiveness of--
``(i) training programs concerning the prevention,
diagnosis, and treatment of Fetal Alcohol Syndrome and Fetal
Alcohol Effects;
``(ii) prevention and education programs, including school
health education and school-based clinic programs for school-
age children, concerning Fetal Alcohol Syndrome and Fetal
Alcohol Effects; and
``(iii) public and community awareness programs concerning
Fetal Alcohol Syndrome and Fetal Alcohol Effects;
``(B) provide technical and consultative assistance to
States, Indian tribal governments, local governments,
scientific and academic institutions, and nonprofit
organizations concerning the programs referred to in
subparagraph (A); and
``(C) award grants to, and enter into cooperative
agreements and contracts with, States, Indian tribal
governments, local governments, scientific and academic
institutions, and nonprofit organizations for the purpose
of--
``(i) evaluating the effectiveness, with particular
emphasis on the cultural competency and age-appropriateness,
of programs referred to in subparagraph (A);
``(ii) providing training in the prevention, diagnosis, and
treatment of Fetal Alcohol Syndrome and Fetal Alcohol
Effects;
``(iii) educating school-age children, including pregnant
and high-risk youth, concerning Fetal Alcohol Syndrome and
Fetal Alcohol Effects, with priority given to programs that
are part of a sequential, comprehensive school health
education program; and
``(iv) increasing public and community awareness concerning
Fetal Alcohol Syndrome and Fetal Alcohol Effects through
culturally competent projects, programs, and campaigns, and
improving the understanding of the general public and
targeted groups concerning the most effective intervention
methods to prevent fetal exposure to alcohol;
``(2) an applied epidemiologic research and prevention
program to--
``(A) support and conduct research on the causes,
mechanisms, diagnostic methods, treatment, and prevention of
Fetal Alcohol Syndrome and Fetal Alcohol Effects;
``(B) provide technical and consultative assistance and
training to States, Tribal governments, local governments,
scientific and academic institutions, and nonprofit
organizations engaged in the conduct of--
``(i) Fetal Alcohol Syndrome prevention and early
intervention programs; and
``(ii) research relating to the causes, mechanisms,
diagnosis methods, treatment, and prevention of Fetal Alcohol
Syndrome and Fetal Alcohol Effects; and
``(C) award grants to, and enter into cooperative
agreements and contracts with, States, Indian tribal
governments, local governments, scientific and academic
institutions, and nonprofit organizations for the purpose
of--
``(i) conducting innovative demonstration and evaluation
projects designed to determine effective strategies,
including community-based prevention programs and
multicultural education campaigns, for preventing and
intervening in fetal exposure to alcohol;
``(ii) improving and coordinating the surveillance and
ongoing assessment methods implemented by such entities and
the Federal Government with respect to Fetal Alcohol Syndrome
and Fetal Alcohol Effects;
``(iii) developing and evaluating effective age-appropriate
and culturally competent prevention programs for children,
adolescents, and adults identified as being at-risk of
becoming chemically dependent on alcohol and associated with
or developing Fetal Alcohol Syndrome and Fetal Alcohol
Effects; and
``(iv) facilitating coordination and collaboration among
Federal, State, local government, Indian tribal, and
community-based Fetal Alcohol Syndrome prevention programs;
``(3) a basic research program to support and conduct basic
research on services and effective prevention treatments and
interventions for pregnant alcohol-dependent women and
individuals with Fetal Alcohol Syndrome and Fetal Alcohol
Effects;
``(4) a procedure for disseminating the Fetal Alcohol
Syndrome and Fetal Alcohol Effects diagnostic criteria
developed pursuant to section 705 of the ADAMHA
Reorganization Act (42 U.S.C. 485n note) to health care
providers, educators, social workers, child welfare workers,
and other individuals; and
``(5) the establishment, in accordance with subsection (b),
of an interagency task force on Fetal Alcohol Syndrome and
Fetal Alcohol Effects to foster coordination among all
Federal agencies that conduct or support Fetal Alcohol
Syndrome and Fetal Alcohol Effects research, programs, and
surveillance, and otherwise meet the general needs of
populations actually or potentially impacted by Fetal Alcohol
Syndrome and Fetal Alcohol Effects.
``(b) Interagency Task Force.--
``(1) Membership.--The Task Force established pursuant to
paragraph (5) of subsection (a) shall--
``(A) be chaired by the Secretary or a designee of the
Secretary, and staffed by the Administration; and
``(B) include representatives from all relevant agencies
and offices within the Department of Health and Human
Services, the Department of Agriculture, the Department of
Education, the Department of Defense, the Department of the
Interior, the Department of Justice, the Department of
Veterans Affairs, the Bureau of Alcohol, Tobacco and
Firearms, the Federal Trade Commission, and any other
relevant Federal agency.
``(2) Functions.--The Task Force shall--
``(A) coordinate all Federal programs and research
concerning Fetal Alcohol Syndrome and Fetal Alcohol Effects,
including programs that--
``(i) target individuals, families, and populations
identified as being at risk of acquiring Fetal Alcohol
Syndrome and Fetal Alcohol Effects; and
``(ii) provide health, education, treatment, and social
services to infants, children, and adults with Fetal Alcohol
Syndrome and Fetal Alcohol Effects;
``(B) coordinate its efforts with existing Department of
Health and Human Services task forces on substance abuse
prevention and maternal and child health; and
``(C) report on a biennial basis to the Secretary and
relevant committees of Congress on the current and planned
activities of the participating agencies.
``(c) Scientific Research and Training.--The Director of
the National Institute on Alcohol Abuse and Alcoholism, with
the cooperation of members of the interagency task force
established under subsection (b), shall establish a
collaborative program to provide for the conduct and support
of research, training, and dissemination of information to
researchers, clinicians, health professionals and the public,
with respect to the cause, prevention, diagnosis, and
treatment of Fetal Alcohol Syndrome and the related condition
know as Fetal Alcohol Effects.
``SEC. 399H. ELIGIBILITY.
``To be eligible to receive a grant, or enter into a
cooperative agreement or contract under this part, an entity
shall--
``(1) be a State, Indian tribal government, local
government, scientific or academic institution, or nonprofit
organization; and
``(2) prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as
the Secretary may prescribe, including a description of the
activities that the entity intends to carry out using amounts
received under this part.
``SEC. 399I. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this
part, such sums as are necessary for each of the fiscal years
1997 through 2001.''.
______
Mr. DASCHLE. Mr. President, today I am reintroducing two bipartisan
bills to help prevent the tragic occurrence of alcohol-related birth
defects, including both fetal alcohol syndrome [FAS] and fetal alcohol
effects [FAE]. I speak on behalf of all cosponsors when I say we are
hopeful we can move these two simple, but important pieces of
legislation this year.
Recent estimates indicate that up to 12,000 children are born each
year in the United States with FAS. Thousands more are born with FAE.
It is estimated that the incidence of FAS may be as high as one per 100
in some Native American communities.
FAS and FAE are devastating, complex birth defects. Many people fail
to realize that FAS is the leading cause of mental retardation. Too
many women remain uninformed about the real dangers of alcohol
consumption during pregnancy. In fact, at least one recently published
popular pregnancy book actually recommends a drink or two to relax
later in pregnancy. And, unfortunately, misconceptions about the impact
of alcohol intake during pregnancy are not limited to the general
public. For many years it was widely, though mistakenly, believed in
the medical community that moderate alcohol consumption during
pregnancy was beneficial. These misperceptions are not only
frightening, but life threatening. Children born to women who drink
alcohol during pregnancy have a 50 percent higher infant mortality rate
than the children of women who abstain. Fortunately, several medical
and nursing schools have begun offering a course specifically on FAS
and
[[Page S535]]
FAE. I remain hopeful that medical professionals will continue to learn
more about how to appropriately counsel women who are pregnant or are
considering pregnancy and how to recognize and diagnose children who
may be suffering from FAS or FAE.
The costs associated with caring for the individual with FAS and FAE
are staggering. The Centers for Disease Control and Prevention
estimates that the lifetime cost of treating an individual with FAS is
almost $1.4 million. The total costs in terms of health care and social
services to treat all Americans with FAS was estimated to be $2.7
billion 1995. This is an extraordinary and unnecessary expense,
especially when one considers that all alcohol-related birth defects
are 100% preventable.
The first step eliminating this devastating disease is raising the
public's consciousness about FAS/FAE. Although great strides have been
made in this regard, much more work remains to be done. The
Comprehensive Fetal Alcohol Syndrome Prevention Act attempts to fill in
the gaps in our current FAS/FAE prevention system. In contains four
major components, representing the provisions of the original
legislation that have not yet been enacted. These provisions include
the initiation of a coordinated education and public awareness
campaign; increased support for basic and applied epidemiologic
research into the causes, treatment and prevention of FAS/FAE;
widespread dissemination of FAS/FAE diagnostic criteria; and the
establishment of an inter-agency task force to coordinate the wide
range of federal efforts in combating FAS/FAE.
A prevention strategy cannot succeed in the absence of increases
access to comprehensive treatment programs for pregnant addicted women.
Many pregnant substance abusers are denied treatment because facilities
specifically exclude them, or they cannot find or afford adequate child
care for their existing children while they receive residential
treatment. To make matters worse, while Medicaid covers some services
associated with substance abuse, like outpatient treatment and
detoxification, it fails to cover non-hospital based residential
treatment, which is considered by most health care professionals to be
the most effective method of overcoming addiction.
The Medicaid Substance Abuse Treatment Act would create an optional
Medicaid benefit that would permit coverage of non-hospital based
residential alcohol and drug treatment for Medicaid-eligible pregnant
women and their children. This would assure a stable source of funding
for states that wish to establish these programs. The bill has three
primary objectives. First, it would facilitate the participation of
pregnant women who are substance abusers in alcohol and drug treatment
programs. Second, by increasing the availability of comprehensive and
effective treatment programs for pregnant women and, thus, improving a
woman's ability to bear health children, it would help combat the
serious and ever-growing problem of drug-impaired infants and children,
many of whom are also born with FAS or FAE. Third, it would address the
unique situation of pregnant, addicted Native American and Alaska
Native women in Indian Health Service areas.
Mr. President, the cost of prevention is substantially less than the
downstream costs in money and human capital of caring for children and
adults who have been impaired due to prenatal exposure to alcohol and
drugs. These prevention and treatment services are an investment that
yields substantial long-term dividends--both on a societal level, as
costs and efforts associated with taking care of children born with
alcohol-related birth defects decline and on a individual level, as
mothers plagued by alcohol and drug addiction are given the means to
heal themselves and give their unborn children a healthier start in
life.
FAS and FAE represent a national tragedy that reaches across economic
and social boundaries. With researchers from Columbia University
reporting that at least one of every five pregnant women uses alcohol
and/or other drugs during pregnancy, the demand for a comprehensive and
determined response to this devastating problem is clear. I welcome the
support of my colleagues on these important bills.
______
By Mr. MOYNIHAN (for himself and Mr. Grassley):
S. 149. A bill to amend the National Narcotics Leadership Act of 1988
to establish qualification standards for individuals nominated to be
the Deputy Director of Demand Reduction in the Office of National Drug
Control Policy; to the Committee on Labor and Human Resources.
national drug control policy legislation
Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill,
cosponsored by Senator Charles E. Grassley, to amend the Anti-Drug
Abuse Act of 1988 to establish qualification standards for individuals
nominated for the position of Deputy Director of Demand Reduction in
the Office of National Drug Control Policy.
On May 17, 1988, then-Senate Majority Leader Robert S. Byrd
established a working group on substance abuse which I was to co-chair
with Senator Sam Nunn of Georgia. Interdiction and crackdown were then
all the rage. My role on the working group was to assert that, other
than to raise the price of drugs somewhat, interdiction was not going
to have the slightest effect on supply. We saw the failure of supply
side measures during Prohibition and in the French Connection model of
cutting off production abroad. Accordingly, any comprehensive
legislation should place at least equal emphasis on demand.
The Anti-Drug Abuse Act of 1988, which became law on November 18 of
that year, did just that. Section 2012 sets out the purposes of the
law. They include: To increase to the greatest extent possible the
availability and quality of treatment services so that treatment on
request may be provided to all individuals desiring to rid themselves
of their substance abuse problem.
The legislation established an Office of National Drug Control Policy
in the executive office of the President. It was headed by a so-called
czar and included a deputy director of supply reduction and a deputy
director for demand reduction. The Deputy Director for Demand would
seek a clinical device, a pharmacological block, similar to methadone
treatment for heroin. The Deputy Director would know the chemistry of
the subject enough to promote some treatment beyond the sort of
psychiatric treatment currently available.
President Bush made extraordinary, fine appointments. He appointed
Dr. William Bennett as the head of the office. As the Deputy Director
for Demand Reduction he appointed Dr. Herbert Kleber, a physician at
the Yale Medical School, a research scientist, and exactly the person
you would want for this.
Then, after a while, Bennett left, and Kleber also left. Kleber has
gone to Columbia College of Physicians and Surgeons and is working at
the New York Psychiatric Institute in this field.
Nobody succeeded him in a scientific role. There have been a number
of persons in the job. I am sure they are good persons, but they are
nothing like what we had in mind in the legislation.
The bill I introduce today would require that the Deputy Director of
Demand Reduction have a scientific background and be a leader in the
field of substance abuse prevention or treatment. This is no more than
what the 1988 Act intended. We enacted a good statute which has been
trivialized. If we are serious about getting hold of the drug dealer
epidemic in this country, we must have an individual eminent in the
field of substance abuse prevention leading the charge on demand
reduction.
Mr. GRASSLEY. Mr. President, Senator Moynihan and I are introducing
Legislation today to spell out more specifically the requirements for
the office of Deputy Director for Demand Reduction at the Office of
National Drug Control Policy. I know it is Senator Moynihan's view, and
mine, that this office requires an incumbent of the highest
qualifications in the demand reduction area. This is especially true at
this time. We have seen 4 years of rising teenage drug use in this
country. We have seen initiatives that move us perilously close to
legalizing a dangerous drug. We have seen the cynical exploitation of
the public's trust in order to do this. In response, we need credible,
visible leadership of the highest caliber in the Nation's chief demand
reduction office. These qualifications were what Congress had in mind
[[Page S536]]
when we created the Drug Czar's office and the position of Deputy
Director for Demand Reduction. Today, we are introducing legislation
that will spell out more clearly this intent.
Last year, Congress increased funding to restore the Drug Czar's
office to effective staffing levels. This year we will be reviewing the
reauthorization of the office. Congress remains deeply interested in
ONDCP and I and others will be working to ensure that it is meeting the
expectations that we have in it.
As we work during this Congress to ensure a drug-free future for our
children, we must have an individual in charge of our national demand
reduction efforts who can command the respect of parents, doctors,
treatment and prevention specialist, and the public. I am pleased to
join Senator Moynihan in this effort. Our legislation will ensure that
we will see candidates for this important post who command universal
respect. I welcome the support of our colleagues. I look forward to
having someone of outstanding capabilities with whom we can work and in
whom the public can have confidence.
______
By Mr. MOYNIHAN (for himself, Mr. D'Amato, and Mr. Dodd):
S. 150. A bill to amend section 552 of title 5, United States Code,
(commonly referred to as the Freedom of Information Act), to provide
for disclosure of information relating to individuals who committed
Nazi war crimes, and for other purposes; to the Committee on the
Judiciary.
The War Crimes Disclosure Act
Mr. MOYNIHAN. Mr. President, today I am joined by Senators D'Amato
and Dodd in introducing the War Crime Disclosure Act. This legislation
is a companion to a measure introduced in the House, sponsored by
Representative Maloney.
The measure is a simple one. It requires the disclosure of
information under the Freedom of Information Act regarding individuals
who participated in Nazi war crimes.
Ideally, such documents would be made available to the public without
further legislation and without having to go through the slow process
involved in getting information through the Freedom of Information Act
[FOIA]. Unfortunately, this is not the case. Researchers seeking
information on Nazi war criminals are denied access to relevant
materials in the possession of the U.S. Government, even when the
disclosure of these documents no longer poses a threat to national
security--if indeed such disclosure ever did.
With the passing of time it becomes ever more important to document
Nazi war crimes, lest the enormity of those crimes be lost to history.
The greater access which this legislation provides will add clarity of
this important effort. I applaud those researchers who continue to
pursue this important work.
I would also like to call to the attention of my colleagues the
excellent work of the Office of Special Investigations of the
Department of Justice. This office has a monumental task and I would
not wish to add to that burden or divert its officials from their
primary goal of pursuing Nazi war criminals. To that end, I would note
that this legislation does not apply to the Office of Special
Investigations, as it is not identified in paragraph (1)(B) of the bill
as a ``specified agency.'' I would also add that there is a provision
in the bill which specifically prohibits the disclosure of information
which would compromise the work of the Office of Special
Investigations.
I would like to thank Representative Maloney for her original work on
this subject in the House of Representatives. I would also thank
Senators D'Amato and Dodd for joining me in this effort here in the
Senate.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, June 25, 1996]
Ms. Maloney and Mr. Waldheim
(By A.M. Rosenthal)
For a full half-century, with determination and skill, and
with the help of the law, U.S. intelligence agencies have
kept secret the record of how they used Nazis for so many
years after World War II, what the agencies got from these
services--and what they gave as payback.
Despite the secrecy blockade, we do know how one
cooperative former Wehrmacht officer and war crimes suspect
was treated. We know the U.S. got him the Secretary
Generalship of the U.N. as reward and base.
For more than two years, Congress has had legislation
before it to allow the public access to information about
U.S.-Nazi intelligence relations--a bill introduced by
Representative Carolyn B. Maloney, a Manhattan Democrat, and
now winding through the legislative process.
If Congress passes her War Crimes Disclosure Act, H.R.
1281, questions critical to history and the conduct of
foreign affairs can be answered and the power of government
to withhold them reduced. The case of Kurt Waldheim is the
most interesting example--the most interesting we know of at
the moment.
Did the U.S. know when it backed him for Secretary General
that he had been put on the A list of war-crime suspects,
adopted in London in 1948, for his work as a Wehrmacht
intelligence officer in the Balkans, when tens of thousands
of Yugoslavs, Greeks, Italians, Jew and non-Jew, were being
deported to death?
If not, isn't that real strange, since the U.S.
representative on the War Crimes Commission voted to list
him. A report was sent to the State Department. Didn't State
give the C.I.A. a copy--a peek?
And when he was running for Secretary General why did State
Department biographies omit any reference to his military
service--just as he forgot to mention it in his
autobiographies?
If all that information was lost by teams of stupid clerks,
once the Waldheim name came up for the job why did not the
U.S. do the obvious thing--check with Nazi and war-crime
records in London and Berlin to see if his name by any chance
was among those dearly wanted?
Didn't the British know? They voted for the listing too.
And the Russians--Yugoslavia moved to list him when it was a
Soviet satellite. Belgrade never told Moscow?
How did Mr. Waldheim repay the U.S. for its enduring
fondness to him? Twice it pushed him successfully for the
job. The third time it was among few countries that backed
him again but lost. Nobody can say the U.S. was not loyal to
the end.
Did he also serve the Russians and British? One at a time?
Or was he a big-power groupie, serving all?
One thing is not secret any longer, thanks to Prof. Robert
Herzstein of the University of South Carolina history
department. He has managed through years of perseverance to
pry some information loose. He found that while Mr. Waldheim
worked for the Austrian bureaucracy, the U.S. Embassy in
Vienna year after year sent in blurby reports about his
assistance to American foreign policy--friendly, outstanding,
cooperative, receptive to American thinking. All the while,
this cuddly fellow was on the A list, which was in the locked
files or absent with official leave.
On May 24, 1994, I reported on Professor Herzstein's
findings and the need for opening files of war-crime
suspects. Representative Maloney quickly set to work on her
bill to open those files to Freedom of Information requests--
providing safeguards for personal privacy, on-going
investigations and national security if ever pertinent.
Her first bill expired in the legislative machinery and in
1995 she tried again. She got her hearing recently thanks to
the chairman of her subcommittee of the Government Reform
Committee--Stephen Horn, the California Republican.
If the leaders of Congress will it, the Maloney bill can be
passed this year. I nominate my New York Senators to
introduce it in the Senate. It will be a squeeze to get it
passed before the end of the year, so kindly ask your
representatives and senators to start squeezing.
If not, the laborious legislative procedure will have to be
repeated next session. Questions about the Waldheim
connection will go unanswered, and also about other cases
that may be in the files or strangely misplaced, which will
also be of interest.
______
By Mr. MOYNIHAN:
S. 151. A bill for the relief of Dr. Yuri F. Orlov of Ithaca, New
York; to the Committee on Governmental Affairs.
soviet dissident legislation
Mr. MOYNIHAN. Mr. President, today I rise to introduce a bill to
recognize the immeasurable debt which we owe to a leading Soviet
dissident. Dr. Yuri F. Orlov, a founding member of the Soviet chapter
of Amnesty International and founder of the Moscow Helsinki Watch Group
(the first nation-wide organization in Soviet history to question
government actions), who now lives in Ithaca, New York, is threatened
by poverty. Yuri Orlov could not be stopped by the sinister forces of
the Soviet Union and, no doubt, he will not be stopped by poverty. But
I rise today in hopes that it will not come to that.
Dr. Orlov's career as a dissident began while he was working at the
famous Institute for Theoretical and Experimental Physics in Moscow. At
the Institute in 1956 he made a pro-democracy speech which cost him his
position and forced him to leave Moscow.
[[Page S537]]
He was able to return in 1972, whereupon he began his most outspoken
criticism of the Soviet regime.
On September 13, 1973, in response to a government orchestrated-
public smear campaign against Audrei Sakharov, Orlov sent ``Thirteen
Questions to Brezhnev,'' a letter which advocated freedom of the press
and reform of the Soviet economy. One month later, he became a founding
member of the Soviet chapter of Amnesty International. His criticism of
the Soviet Union left him unemployed and under constant KGB
surveillance, but he would not be silenced.
In May, 1976 Dr. Orlov founded the Moscow Helsinki Watch Group to
pressure the Soviet Union to honor the human rights obligations it had
accepted under the Helsinki Accords signed in 1975. His leadership of
the Helsinki Watch Group led to his arrest and, eventually, to a show
trial in 1978. He was condemned to seven years in a labor camp and five
years in exile.
After having served his prison sentence, and while still in exile,
Dr. Orlov was able to immigrate to the United States in 1986 in an
exchange arranged by the Reagan Administration. A captured Soviet spy
was returned in exchange for the release of Dr. Orlov and a writer for
U.S. News & World Report who had been arrested in Moscow, Nicholas
Daniloff.
Since then, Dr. Orlov has served as a senior scientist at Cornell
University in the Newman Laboratory of Nuclear Studies. Now that he is
72 years old, he is turning his thoughts to retirement. Unfortunately,
since he has only been in the United States for 10 years, his
retirement income from the Cornell pension plus Social Security will be
insufficient: only a fraction of what Cornell faculty of comparable
distinction now get at retirement.
His scientific colleagues, Nobel physicist Dr. Hans A. Bethe, Kurt
Gottfried of Cornell, and Sidney Drell of Stanford, have made concerted
efforts to raise support for Dr. Orlov's retirement, but they are in
further need.
To this end, I have agreed to assist these notable scientists in
their endeavor to secure a more appropriate recompense for this heroic
dissident. That is the purpose that brings me here to the Senate floor
today, on the first day of the 105th Congress, to introduce a bill on
Dr. Orlov's behalf. While I acknowledge the daunting prospects that
face private relief bills these days, I offer the bill at least as a
step toward bringing the kind of attention to Dr. Orlov's situation
which he deserves.
To understand Dr. Orlov's contributions to ending the Cold War, I
would draw my colleagues attention to his autobiography, Dangerous
Thoughts: Memoirs of a Russian Life. It captures the fear extant in
Soviet society and the courage of men like Orlov, Sakharov, Sharansky,
Solzhenitsyn, and others who defied the Soviet regime. Dr. Orlov, who
spent 7 years in a labor camp and two years in Siberian exile, never
ceased protesting against oppression. Despite deteriorating health and
the harsh conditions of the camp, Dr. Orlov smuggled out messages in
support of basic rights and nuclear arms control. His bravery and that
of his dissident colleagues played no small role in the dissolution of
the Soviet Union. I am sure many would agree that we owe them a
tremendous debt. This then is a call to all those who agree with that
proposition. Dr. Orlov is now in need; please join our endeavor.
______
By Mr. MOYNIHAN (for himself and Mr. D'Amato):
S. 152. A bill to provide for the relief and payment of an equitable
claim to the estate of Dr. Beatrice Braude of New York, New York; to
the Committee on the Judiciary.
PRIVATE RELIEF LEGISLATION
Mr. MOYNIHAN. Mr. President, I rise today to introduce a bill,
cosponsored by Senator D'Amato, to provide for the relief and payment
of an equitable claim to the estate of Dr. Beatrice Braude.
Mr. President, this is a measure of justice which brings back
memories of an old and awful time. Dr. Braude, a linguist fluent in
several languages, was dismissed from her position at the United States
Information Agency (USIA) in 1953 as a result of accusations of
disloyalty to the United States. The accusations were old; two years
earlier, the State Department's Loyalty Security Board had investigated
and unanimously voted to dismiss them. The Board sent a letter to Dr.
Braude stating ``there is no reasonable doubt as to your loyalty to the
United States Government or as to your security risk to the Department
of State.''
Dr. Braude was terminated one day after being praised for her work
and informed that she probably would be promoted. USIA officials told
her that the termination was due to budgetary constraints. Congress had
funded the USIA at a level 27 percent below the President's request.
The Supplemental Appropriation Act of 1954 (Public Law 83-207)
authorized a reduction in force commensurate to the budget cut. Fair
enough. As Dr. Braude remarked years later, ``I never felt that I had a
lien on a government job.'' But what Dr. Braude did not know is that
she was selected for termination because of the old--and answered--
charges against her. And because she did not know the real reason for
her dismissal, she was denied certain procedural rights (the right to
request a hearing, for instance).
The true reason for her dismissal was kept hidden from her. When she
was unable, over the next several years, to secure employment anywhere
else within the Federal Government--even in a typing pool despite a
perfect score on the typing test--she became convinced that she had
been blacklisted. She spent the next 30 years fighting to regain
employment and restore her reputation. Though she succeeded in 1982 (at
the age of 69) in securing a position in the CIA as a language
instructor, she still had not been able to clear her name by the time
of her death in 1988. The irony of the charges against Dr. Braude is
that she was an anti-communist, having witnessed first-hand communist-
sponsored terrorism in Europe while she was an assistant cultural
affairs officer in Paris and, for a brief period, an exchange officer
in Bonn during the late 1940s and early 1950s.
Mr. President, I would like to review the charges against Dr. Braude
because they are illustrative of that dark era and instructive to us
even today. There were a total of four. First, she was briefly a member
of the Washington Book Shop at Farragut Square that the Attorney
General later labeled subversive. Second, she had been in contact with
Mary Jane Keeney, a Communist Party activist employed at the United
Nations. Third, she had been a member of the State Department unit of
the Communist-dominated Federal Workers' Union. Fourth, she was an
acquaintance of Judith Coplon.
With regard to the first charge, Dr. Braude had indeed joined the
Book Shop shortly after her arrival in Washington in 1943. She was
eager to meet congenial new people and a friend recommended the Book
Shop, which hosted music recitals in the evenings. I must express some
sensitivity here: my F.B.I. records report that I was observed several
times at a ``leftist musical review'' in suburban Hampstead while I was
attending the London School of Economics on a Fulbright Fellowship.
Dr. Braude was aware of the undercurrent of sympathy with the Russian
cause at the Book Shop, but her membership paralleled a time of close
U.S.-Soviet collaboration. She drifted away from the Book Shop in 1944
because of her distaste for the internal politics of other active
members. Her membership at the Book Shop was only discovered when her
name appeared on a list of delinquent dues. It appears that her most
sinister crime while a member of the book shop was her failure to
return a book on time.
Dr. Braude met Mary Jane Keeney on behalf of a third woman who
actively aided Nazi victims after the war and was anxious to send
clothing to another woman in occupied Germany. Dr. Braude knew nothing
of Keeney's political orientation and characterized the meeting as a
transitory experience.
With regard to the third charge, Dr. Braude, in response to an
interrogatory from the State Department's Loyalty Security Board,
argued that she belonged to an anti-Communist faction of the State
Department unit of the Federal Workers' Union.
Remember that the Loyalty Security Baird invested these charges and
exonerated her.
[[Page S538]]
The fourth charge, which Dr. Braude certainly did not--or could not--
deny, was her friendship with Judith Coplon. Braude met Coplon in the
summer of 1945 when both women attended a class Herber Marcuse taught
at American University. They saw each other infrequently thereafter. In
May 1948, Coplon wrote to Braude, then stationed in Paris and living in
a hotel on the Left Bank, to announce that she would be visiting
shortly and needed a place to stay. Dr. Braude arranged for Coplon to
stay at the hotel. Coplon stayed for 6 weeks, during which time Dr.
Braude found her behavior very trying. The two parted on unfriendly
terms. The friendship they had prior to parting was purely social.
Mr. President, Judith Coplon was a spy. She worked in the Justice
Department's Foreign Agents Registration Division, an office integral
to the FBI's counter-intelligence efforts. She was arrested early in
1949 while handing over notes on counterintelligence operations to
Soviet citizen Valentine Gubitchev, a United Nations employee. Coplon
was tried and convicted--there was no doubt of her guilt--but the
conviction was overturned on a technicality. Gubitchev was also
convicted but was allowed to return to the U.S.S.R. because of his
quasi-diplomatic status.
My involvement in Dr. Braude's case dates back to early 1979, when
Dr. Braude came to me and my colleague at the time, Senator Javits, and
asked us to introduce private relief legislation on her behalf. In
1974, after filing a Freedom of Information Act request and finally
learning the true reason for her dismissal, she filed suit in the Court
of Claims to clear her name and seek reinstatement and monetary damages
for the time she was prevented from working for the Federal Government.
The Court, however, dismissed her case on the grounds that the statute
of limitations had expired. On March 5, 1979, Senator Javits and I
together introduced a bill, S. 546, to waive the statute of limitations
on Dr. Braude's case against the U.S. Government and to allow the Court
of Claims to render judgment on her claim. The bill passed the Senate
on January 30, 1980. Unfortunately, the House failed to take action on
the bill before the 96th Congress adjourned.
In 1988, and again in 1990, 1991, and 1993, Senator D'Amato and I re-
introduced similar legislation on Dr. Braude's behalf. Our attempts met
with repeated failure. Until at last, on September 21, 1993, we secured
passage of Senate Resolution 102, which referred S. 840, the bill we
introduced for the relief of the estate of Dr. Braude, to the Court of
Claims for consideration as a congressional reference action. The
measure compelled the Court to determine the facts underlying Dr.
Braude's claim and to report back to Congress on its findings.
The Court held a hearing on the case in November of 1995 and on March
7 of last year Judge Roger B. Andewelt of the Court of Federal Claims
issued his verdict that the USIA had wrongfully dismissed Dr. Braude
and intentionally concealed the reason for her termination. He
concluded that such actions constituted an equitable claim for which
compensation is due. Forty-three years after her dismissal from the
USIA and 8 years after her death, the Court found in favor of the
estate of Dr. Braude.
Senator D'Amato and I wish to express our profound admiration for
Judge Andewelt's decision in which he absolved Dr. Beatrice Braude of
the surreptitious charges of disloyalty with which she was never
actually confronted. The Court declared that Dr. Braude ``cared about
others deeply and was loyal to her friends, family and country.''
We are equally grateful to Christopher N. Sipes and William
Livingston, Jr. of Covington & Burling, two of the many lawyers who
have handled Dr. Braude's case on a pro bono basis over the years. Mr.
Sipes quite properly remarked that the decision represents an important
page in the annals of U.S. history: ``The Court of the United States
has said it recognizes that this conduct is out of bounds. It tells the
government it must acknowledge its wrongs and pay for them.''
Justice Department attorneys have reached a settlement with lawyers
representing the estate of Dr. Beatrice Braude concerning monetary
damages equitably due for the wrongful dismissal of Dr. Braude from her
Federal job in 1953 and subsequent blacklisting. The estate will
receive $200,000 in damages. Family members have announced that the
funds--which Congress must now appropriate--will be donated to Hunter
College, the institution from which Dr. Braude received her bachelor's
degree.
Now that the parties to the Braude case have reached an agreement on
the monetary damages equitably due to Dr. Braude's estate, Senator
D'Amato and I are offering legislation to release the $200,000 to her
estate. I hope that we will have the unqualified and unanimous support
of our colleagues.
What happened to Dr. Braude was a personal tragedy. But it was also
part of a national tragedy, too. This Nation lost, prematurely and
unnecessarily, the exceptional services of a gifted and dedicated
public servant. Stanley I. Kutler, a professor of constitutional
history at the University of Wisconsin, estimates that Dr. Braude was
one of about 1,500 Federal employees who were dismissed as security
risks between 1953 and 1956. Another 6,000 resigned under the pressure
of security and loyalty inquiries, according to Professor Kutler, who
testified as an expert witness on Dr. Braude's behalf. It was, as I
said earlier, an awful time. We had settled ``as on a darkling plain,
Swept with confused alarm of struggle and flight, Where ignorant armies
clash by night.'' It must not happen again.
______
Mr. MOYNIHAN (for himself and Mr. Ashcroft):
S. 153. A bill to amend the Age Discrimination in Employment Act of
1967 to allow institutions of higher education to offer faculty members
who are serving under an arrangement providing for unlimited tenure,
benefits on voluntary retirement that are reduced or eliminated on the
basis of age, and for other purposes; to the Committee on Labor and
Human Resources.
the faculty retirement incentive act
Mr. MOYNIHAN. Mr. President, today I rise to introduce the Faculty
Retirement Incentive Act. This bill will amend the Age Discrimination
in Employment Act of 1967 (ADEA) to allow the use of age-based
incentives for the voluntary retirement of tenured faculty at colleges
and universities. I am pleased that Senator Ashcroft is an original
cosponsor of this legislation.
Since the late 1950s, there has been a vast expansion in the number
of individuals pursuing careers in academia. Now, an unusually large
cohort of tenured faculty make it difficult for universities to hire
more recent graduates. As a practical matter, it is extremely difficult
or costly or both for institutions to bring on new tenured faculty
except where tenure positions open up as a result of retirement. In
order for academic institutions to remain effective centers of teaching
and scholarship they must have a balance of old and new faculty. This
balance, however, is threatened by continuing uncertainties created by
recent legislation.
I support the ADEA, but when it was amended in 1986 to extend the
protections of the act to individuals age 70 and over, I expressed
concern that the application of this change to the unique situation of
tenured faculty members at colleges and universities would affect
teaching and scholarship at these institutions. While it did include an
exemption from the provisions for the bill for tenured faculty, the
exemption only lasted seven years. Therefore, I was pleased when that
bill included a request for the National Academy of Sciences (NAS) to
appoint a commission to study the impact of removing the mandatory
retirement age for faculty members at colleges and universities.
When the National Research Council released this study, Ending
Mandatory Retirement for Tenured Faculty: The Consequences for Higher
Education, on behalf of NAS in 1991, the report concluded that
diminished faculty turnover--particularly at research universities--
could increase costs and limit institutional flexibility in responding
to changing academic needs, particularly with regard to necessary hires
in new and existing disciplines. In concluding that there was ``no
strong basis for continuing the exemption for tenured faculty,'' the
NAS report presumed that the Federal government would allow ``Practical
steps'' such as age-based early-retirement incentives
[[Page S539]]
to mitigate the impact of an uncapped retirement age for tenured
faculty. Specifically, the NAS report stated: ``The committee
recommends that Congress, the Internal Revenue Service, and the Equal
Employment Opportunity Commission permit colleges and universities to
offer faculty voluntary-retirement incentive programs that are not
classified as an employee benefit, include an upper age limit for
participants and limit participation on the basis of institutional
needs.''
These practical steps, however, were not taken although the exemption
was allowed to run out. Instead, passage of the Older Workers Benefit
Protection Act of 1990 (OWBPA) further confused the issue. OWBPA made
early-retirement incentives permissible in the context of defined-
benefit retirement plans but did not address the status of such
incentives in the context of defined-contribution retirement plans.
Defined-contribution retirement plans are most popular with tenured
faculty due to their pension portability. The OWBPA did not preclude
defined-contribution retirement plans, but by not addressing the issue
at all, it added to the ambiguity surrounding the matter. Functionally,
early-retirement incentives operate in the same manner for both types
of plans. There is continued uncertainty, however, whether early-
retirement incentives with an upper-age limit that are offered to
tenured faculty conflict with the purpose of ADEA of prohibiting
arbitrary age discrimination.
I am troubled by the continued uncertainty created by these bills,
and I hope that the Faculty Retirement Incentive Act will provide a
``safe harbor'' for colleges and universities by clarifying that the
early retirement incentives are permitted by the ADEA. Universities
must ensure that older faculty members retire at an appropriate age,
not simply to ``make room'' for younger faculty, but to maintain a
contemporary, innovative, and creative atmosphere at our nation's
colleges and universities.
______
By Mr. MOYNIHAN (for himself and Mr. D'Amato):
S. 154. A bill to improve Orchard Beach, New York; to the Committee
on Environment and Public Works.
THE ORCHARD BEACH, NEW YORK IMPROVEMENT ACT OF 1997
Mr. MOYNIHAN. Mr. President, I rise today to introduce a most
important piece of legislation for the State of New York, and to ask my
Senate colleagues for their support. This bill directs the Secretary of
the Army to repair a section of waterfront parkland in the Bronx, New
York, known as Orchard Beach. My colleague in New York City, Bronx
Borough President Fernando Ferrer, has worked hard for many years to
get this beach--so beloved by the citizens of the Bronx--restored to
its former glory.
Orchard Beach is a splendid natural sanctuary and recreational spot
within the Bronx, which is one of New York City's most urbanized areas.
Orchard Beach provides a welcome respite from urban living and is
particularly valued by low-income families with children who cannot
afford summer homes or trips to the tonier beach resorts on Long Island
or the Jersey shore. Over two million people visit Orchard Beach
annually. For many of New York's working families, it offers the only
affordable and convenient place for their children to play in the sea
and sand.
In addition, the beach and surrounding wetlands and salt marshes
provide a vital habitat for many marine creatures, including crabs,
lobsters, striped bass and winter flounder, as well as numerous species
of overwintering waterfowl.
But today, the beach is in urgent need of repair--there is widespread
erosion due to repeated storm damage, threatening both the recreational
utility of the beach and the stability of the animal and ocean life
habitats. It seems only appropriate that we come to the rescue of this
treasure now before irreversible damage is done.
In the Water Resources Development Acts of 1992 and 1996, a total of
$5.6 million was authorized to study and then conduct an Orchard Beach
shoreline protection project to address storm damage prevention,
recreation, and environmental restoration. The bill I introduce today
would help to ensure that this important project for New York goes
forward.
______
By Mr. MOYNIHAN (for himself and Mr. D'Amato):
S. 155. A bill to redesignate General Grant National Memorial as
Grant's Tomb National Monument, and for other purposes; to the
Committee on Energy and Natural Resources.
Mr. MOYNIHAN. Mr. President, I rise to introduce, along with my
friend and colleagues, Senator D'Amato, a bill to designate President
Grant's tomb a national monument. This April 27 will be the centennial
of the dedication of the tomb. I can think of no better observance than
to pass this designation and the other provisions in this bill that
would protect and preserve the tomb and make it more attractive to
visitors.
The Nation owes President Grant a great debt for his efforts during
the Civil War alone. He proved to be the capable general President
Lincoln lacked in the early years of that conflict. Grant provided the
leadership, strategy, determination, and courage to do what was
necessary to win the war. He should also be remembered for his efforts
to include Blacks in the Union Army and later for his relentless
opposition to the Ku Klux Klan. Many Southerners appreciated his
generous terms with General Lee, which included allowing Lee's men to
keep their horses for the spring plowing. Grant went on to become the
eighteenth President and to serve two terms.
In 1881 the former President moved to New York City, and four years
later to Mount McGregor near Saratoga. He died in 1885. In the next few
years, 90,000 people contributed to a fundraising effort that brought
in $600,000. This was enough to build structure on Riverside Drive in
Manhattan modeled on the tombs of the Emperor Hadrian in Rome, Napoleon
in Paris, and King Mausolis in Turkey. Inside are two eight-and-a-half
ton sarcophagi made of Wisconsin red granite and a great mural
depicting Lee's surrender to Grant at Appomattox.
The tomb became a leading attraction for New York residents and for
tourists. However, the neighborhood around the tomb has changed in
recent years and visitorship is down. Vandalism is an ongoing concern.
This bill takes several steps that are past due to protect and preserve
the tomb.
The bill would make Grant's Tomb a National Monument and require the
Secretary of the Interior to ``administer, repair, restore, preserve,
maintain, and promote'' the tomb in accordance with the law applicable
to all National Monuments. It requires the Secretary to build a
visitors center. It also calls for a study over two years to plan
interpretive programs, restoration, and security and maintenance.
This bill addresses the needs at Grant's Tomb. It can again become a
leading attraction in New York. More important, the bill does what is
right for the memory of our eighteenth President.
______
By Mr. DASCHLE (for himself and Mr. Johnson):
S. 156. A bill to provide certain benefits of the Pick-Sloan Missouri
River Basin program to the Lower Brule Sioux Tribe, and for other
purposes; to the Committee on Energy and Natural Resources.
the lower brule sioux tribe infrastructure development trust fund act
of 1997
Mr. DASCHLE. Mr. President, I am pleased to introduce the Lower Brule
Sioux Tribe Infrastructure Development Trust Fund of 1997. This
legislation is the companion bill to the Crow Creek Sioux Tribe
Infrastructure Development Trust Fund Act of 1996, which was signed by
President Clinton on October 1, 1996.
When the Senate considered the Crow Creek Sioux bill last fall, I
told my colleagues it is important to enact legislation to address
similar claims by the Lower Brule Sioux and Cheyenne River Sioux
tribes. The introduction of this legislation is intended to start that
process for the Lower Brule Sioux Tribe. I intend to introduce similar
legislation for the Cheyenne River Sioux Tribe later in this session.
The need for this legislation is great. In 1944, Congress passed the
Flood Control Act, authorizing the Pick-Sloan Plan to build five dams
on the Missouri River. Four of the Pick-Sloan dams are located in South
Dakota. While the
[[Page S540]]
Pick-Sloan Project has been instrumental in providing the region with
irrigation, hydropower and flood control capabilities, its construction
took a serious toll on many Native American tribes, who were forced to
cede land to the project and suffer the turmoil associated with
relocating entire communities.
Like many of the tribes along the Missouri River, the Lower Brule
Sioux Tribe shouldered a disproportionate amount of the cost to
implement the Pick-Sloan project. Three decades ago, the Big Bend and
Fort Randall dams flooded more than 22,000 acres of the Lower Brule
Sioux land. Over 70 percent of the tribe's residents were forced to
settle elsewhere. The tribe suffered the loss of fertile and productive
land along the river that provided many of the tribe's basic staples,
including wood for fuel and construction, edible plants, and wildlife
habitat that supported the game on which the tribe relied for food.
This land, which once played such an important role in the day-to-day
lives of the tribal members, now lies underneath the Missouri River
reservoirs. The tribe was never adequately compensated for this
extraordinary loss.
It was not until 1992 that Congress formally acknowledged the federal
government's failure to provide the tribes with adequate compensation.
The passage of the Three Affiliated Tribes and Standing Rock Sioux
Tribe Equitable Compensation Act, which I cosponsored, established a
recovery fund to compensate these tribes. This fund is financed
entirely from Pick-Sloan power revenues, and payments to the fund are
structured in such a way that they will not result in rate increases to
power customers. This is appropriate and fair. As with any well-run
business, the revenues from the project should be used to pay its
costs.
With the legislation that I am introducing today, we have an
opportunity to finally compensate the Lower Brule Sioux Tribe for the
sacrifices it has had to bear since being relocated forcibly decades
ago. We have an opportunity to mitigate the effects of dislocating the
tribal communities and inundating the natural resources that the tribe
depended upon for its survival. This legislation will help the Lower
Brule Sioux Tribe build new facilities and improve existing
infrastructure. Hopefully, by doing so, it will improve the lives of
tribal residents in a meaningful and lasting way and promote greater
economic self-sufficiency.
Under this legislation, a fund similar to the Crow Creek Sioux
Infrastructure Development Trust Fund will be established for the Lower
Brule Sioux Tribe. The trust fund will be capitalized from hydropower
revenues until the fund accumulates $39.3 million--a figure well
documented by Dr. Michael Lawson in his study of the history of this
issue entitled An Analysis of the Impact of Pick-Sloan Dam Projects on
the Lower Brule Sioux Tribe. The tribe will be able to use the interest
generated from the fund to finance its own economic development
priorities according to a plan prepared in conjunction with the Bureau
of Indian Affairs and the Indian Health Service.
Mr. President, in conclusion I want to emphasize the broad support
this legislation enjoys in South Dakota. Senator Tim Johnson is a
cosponsor and Governor Bill Janklow has endorsed this bill.
Establishing this fund for the Lower Brule Sioux Tribe benefits the
entire state of South Dakota, as well as the tribal members. It will
spur greater economic activity within the state and help the Lower
Brule Sioux Tribe establish the infrastructure necessary to participate
more fully in the region's economy.
It is my hope that my colleagues will join with me in supporting this
legislation.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 156
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lower Brule Sioux Tribe
Infrastructure Development Trust Fund Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) under the Act of December 22, 1994, commonly known as
the ``Flood Control Act of 1994'' (58 Stat. 887, chapter 665;
33 U.S.C. 701-1 et seq.) Congress approved the Pick-Sloan
Missouri River Basin program--
(A) to promote the general economic development of the
United States;
(B) to provide for irrigation above Sioux City, Iowa;
(C) to protect urban and rural areas from devastating
floods of the Missouri River; and
(D) for other purposes;
(2) the Fort Randall and Big Bend projects are major
components of the Pick-Sloan Missouri River Basin program,
and contribute to the national economy by generating a
substantial amount of hydropower and impounding a substantial
quantity of water;
(3) the Fort Randall and Big Bend projects overlie the
western boundary of the Lower Brule Indian Reservation,
having inundated the fertile, wooded bottom lands of the
Tribe along the Missouri River that constituted the most
productive agricultural and pastoral lands of the Lower Brule
Sioux Tribe and the homeland of the members of the Tribe;
(4) Public Law 85-923 (72 Stat. 1773 et seq.) authorized
the acquisition of 7,997 acres of Indian land on the Lower
Brule Indian Reservation for the Fort Randall project and
Public Law 87-734 (76 Stat. 698 et seq.) authorized the
acquisition of 14,299 acres of Indian land on the Lower Brule
Indian Reservation for the Big Bend project;
(5) Public Law 87-734 (76 Stat. 698 et seq.) provided for
the mitigation of the effects of the Fort Randall and Big
Bend projects on the Lower Brule Indian Reservation, by
directing the Secretary of the Army to--
(A) as necessary, by reason of the Big Bend project,
protect, replace, relocate, or reconstruct--
(i) any essential governmental and agency facilities on the
reservation, including schools, hospitals, offices of the
Public Health Service and the Bureau of Indian Affairs,
service buildings, and employee quarters existing at the time
that the projects were carried out; and
(ii) roads, bridges, and incidental matters or facilities
in connection with those facilities;
(B) provide for a townsite adequate for 50 homes, including
streets and utilities (including water, sewage, and
electricity), taking into account the reasonable future
growth of the townsite; and
(C) provide for a community center containing space and
facilities for community gatherings, tribal offices, tribal
council chamber, offices of the Bureau of Indian Affairs,
offices and quarters of the Public Health Service, and a
combination gymnasium and auditorium;
(6) the requirements under Public Law 87-734 (76 Stat. 698
et seq.) with respect to the mitigation of the effects of the
Fort Randall and Big Bend projects on the Lower Brule Indian
Reservation have not been fulfilled;
(7) although the national economy has benefited from the
Fort Randall and Big Bend projects, the economy on the Lower
Brule Indian Reservation remains underdeveloped, in part as a
consequence of the failure of the Federal Government to
fulfill the obligations of the Federal Government under the
laws referred to in paragraph (4);
(8) the economic and social development and cultural
preservation of the Lower Brule Sioux Tribe will be enhanced
by increased tribal participation in the benefits of the Fort
Randall and Big Bend components of the Pick-Sloan Missouri
River Basin program; and
(9) the Lower Brule Sioux Tribe is entitled to additional
benefits of the Pick-Sloan Missouri River Basin program.
SEC. 3. DEFINITIONS.
In this Act:
(1) Fund.--The term ``Fund'' means the Lower Brule Sioux
Tribe Infrastructure Development Trust Fund established under
section 4(a).
(2) Plan.--The term ``plan'' means the plan for
socioeconomic recovery and cultural preservation prepared
under section 5.
(3) Program.--The term ``Program'' means the power program
of the Pick-Sloan Missouri River Basin program, administered
by the Western Area Power Administration.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(5) Tribe.--The term ``Tribe'' means the Lower Brule Sioux
Tribe of Indians, a band of the Great Sioux Nation recognized
by the United States of America.
SEC. 4. ESTABLISHMENT OF LOWER BRULE SIOUX TRIBE
INFRASTRUCTURE DEVELOPMENT TRUST FUND.
(a) Lower Brule Sioux Tribe Infrastructure Development
Trust Fund.--There is established in the Treasury of the
United States a fund to be known as the ``Lower Brule Sioux
Tribe Infrastructure Development Trust Fund''.
(b) Funding.--Beginning with fiscal year immediately
following the fiscal year during which the aggregate of the
amounts deposited in the Crow Creek Sioux Tribe
Infrastructure Development Trust Fund is equal to the amount
specified in section 4(b) of the Crow Creek Sioux Tribe
Infrastructure Development Trust Fund Act of 1996 (110 Stat.
3026 et seq.), and for each fiscal year thereafter, until
such time as the aggregate of the amounts deposited in the
Fund is equal to $39,300,000, the Secretary of the Treasury
shall deposit into the Fund an amount equal to 25 percent of
the receipts from the deposits to the Treasury of the United
States for the preceding fiscal year from the Program.
[[Page S541]]
(c) Investments.--The Secretary of the Treasury shall
invest the amounts deposited under subsection (b) only in
interest-bearing obligations of the United States or in
obligations guaranteed as to both principal and interest by
the United States.
(d) Payment of Interest to Tribe.--
(1) Establishment of account and transfer of interest.--The
Secretary of the Treasury shall, in accordance with this
subsection, transfer any interest that accrues on amounts
deposited under subsection (b) into a separate account
established by the Secretary of the Treasury in the Treasury
of the United States.
(2) Payments.--
(A) In general.--Beginning with the fiscal year immediately
following the fiscal year during which the aggregate of the
amounts deposited in the Fund is equal to the amount
specified in subsection (b), and for each fiscal year
thereafter, all amounts transferred under paragraph (1) shall
be available, without fiscal year limitation, to the
Secretary of the Interior for use in accordance with
subparagraph (C).
(B) Withdrawal and transfer of funds.--For each fiscal year
specified in subparagraph (A), the Secretary of the Treasury
shall withdraw amounts from the account established under
paragraph (1) and transfer such amounts to the Secretary of
the Interior for use in accordance with subparagraph (C). The
Secretary of the Treasury may only withdraw funds from the
account for the purpose specified in this paragraph.
(C) Payments to tribe.--The Secretary of the Interior shall
use the amounts transferred under subparagraph (B) only for
the purpose of making payments to the Tribe.
(D) Use of payments by tribe.--The Tribe shall use the
payments made under subparagraph (C) only for carrying out
projects and programs pursuant to the plan prepared under
section 5.
(3) Prohibition on per capita payments.--No portion of any
payment made under this subsection may be distributed to any
member of the Tribe on a per capita basis.
(e) Transfers and Withdrawals.--Except as provided in
subsection (d)(1), the Secretary of the Treasury may not
transfer or withdraw any amount deposited under subsection
(b).
SEC. 5. PLAN FOR SOCIOECONOMIC RECOVERY AND CULTURAL
PRESERVATION.
(a) Plan.--
(1) In general.--The Tribe shall, not later than 2 years
after the date of enactment of this Act, prepare a plan for
the use of the payments made to the Tribe under section
4(d)(2). In developing the plan, the Tribe shall consult with
the Secretary of the Interior and the Secretary of Health and
Human Services.
(2) Requirements for plan components.--The plan shall, with
respect to each component of the plan--
(A) identify the costs and benefits of that component; and
(B) provide plans for that component.
(b) Content of Plan.--The plan shall include the following
programs and components:
(1) Educational facility.--The plan shall provide for an
educational facility to be located on the Lower Brule Indian
Reservation.
(2) Comprehensive inpatient and outpatient health care
facility.--The plan shall provide for a comprehensive
inpatient and outpatient health care facility to provide
essential services that the Secretary of Health and Human
Services, in consultation with the individuals and entities
referred to in subsection (a)(1), determines to be--
(A) needed; and
(B) unavailable through facilities of the Indian Health
Service on the Lower Brule Indian Reservation in existence at
the time of the determination.
(3) Water system.--The plan shall provide for the
construction, operation, and maintenance of a municipal,
rural, and industrial water system for the Lower Brule Indian
Reservation.
(4) Recreational facilities.--The plan shall provide for
recreational facilities suitable for high-density recreation
at Lake Sharpe at Big Bend Dam and at other locations on the
Lower Brule Indian Reservation in South Dakota.
(5) Other projects and programs.--The plan shall provide
for such other projects and programs for the educational,
social welfare, economic development, and cultural
preservation of the Tribe as the Tribe considers to be
appropriate.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such funds as may
be necessary to carry out this Act, including such funds as
may be necessary to cover the administrative expenses of the
Fund.
SEC. 7. EFFECT OF PAYMENTS TO TRIBE.
(a) In General.--No payment made to the Tribe pursuant to
this Act shall result in the reduction or denial of any
service or program to which, pursuant to Federal law--
(1) the Tribe is otherwise entitled because of the status
of the Tribe as a federally recognized Indian tribe; or
(2) any individual who is a member of the Tribe is entitled
because of the status of the individual as a member of the
Tribe.
(b) Exemptions; Statutory Construction.--
(1) Power rates.--No payment made pursuant to this Act
shall affect Pick-Sloan Missouri River Basin power rates.
(2) Statutory construction.--Nothing in this Act may be
construed as diminishing or affecting--
(A) any right of the Tribe that is not otherwise addressed
in this Act; or
(B) any treaty obligation of the United States.
______
By Mr. INOUYE:
S. 157. A bill to amend title XIX of the Social Security Act to
provide for coverage of services provided by nursing school clinics
under State medicaid programs; to the Committee on Finance.
the nursing school clinics act of 1997
Mr. INOUYE. Mr. President, I rise today to introduce the Nursing
School Clinics Act of 1997, a bill that has two main purposes. First,
it builds on our concerted efforts to provide access to quality health
care for all Americans by furnishing grants and incentives for nursing
schools to establish primary care clinics in areas where additional
medical services are most needed. Second, it provides the opportunity
for nursing schools to enhance the scope of their students' training
and education by giving them firsthand clinical experience in primary
care facilities.
Any good manager knows that when major problems are at hand and
resources are tight, the most important act is the one that makes full
use of all available resources. The American health care system is
particularly deficient in this regard. We all know only too well that
many individuals in the Nation have no or inadequate access to health
care services, especially if they live in many of our rural towns and
villages or inhabit our Indian communities. Many good people are trying
to deliver services that are so vitally needed, but we need to do more.
We must make full use of all health care practitioners, especially
those who have been long waiting to give the nation the full measure of
their professional abilities.
Nursing is one of the noblest professions, with an enduring history
of offering effective and sensitive care to those in need. Yet it is
only in the last few years that we have begun to recognize the role
that nurses can play as independent providers of care. Only recently,
in 1990, Medicare was changed to authorize direct reimbursements to
nurse practitioners. Medicaid is gradually being reformed to
incorporate their services more effectively. The Nursing School Clinics
Act continues the progress toward fully incorporating nurses in the
delivery of health care services. Under the act, nursing schools will
be able to establish clinics, supervised and staffed by nurse
practitioners and nurse practitioner students, that provide primary
care targeted to medically underserved rural and native American
populations.
In the process of giving direct ambulatory care to their patients,
these clinics will also furnish the forums in which both public and
private schools of nursing can design and implement clinical training
programs for their students. Simultaneous school-based education and
clinical training have been a traditional part of physician
development, but nurses have enjoyed fewer opportunities to combine
classroom instruction with the practical experience of treating
patients. This bill reinforces the principle for nurses of joining
schooling with the actual practice of health care.
To accomplish these objectives, title XIX of the Social Security Act
is amended to designate that the services provided in these nursing
school clinics are reimbursable under Medicaid. The combination of
grants and the provision of Medicaid reimbursement furnishes the
incentives and operational resources to start the clinics and to keep
them going.
To meet the increasing challenges of bringing cost-effective and
quality health care to all Americans, we are going to have to think
about and debate a variety of proposals, both large and small. Most
important, however, we must approach the issue of health care with
creativity and determination, ensuring that all reasonable avenues are
pursued. Nurses have always been an integral part of health care
delivery. The Nursing School Clinics Act of 1997 recognizes the central
role they can perform as care givers to the medically underserved.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
[[Page S542]]
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 157
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING
SCHOOL CLINICS.
(a) In General.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d(a)) is amended--
(1) in paragraph (24), by striking ``and'' at the end;
(2) by redesignating paragraph (25) as paragraph (26); and
(3) by inserting after paragraph (24), the following:
``(25) nursing school clinic services (as defined in
subsection (t)) furnished by or under the supervision of a
nurse practitioner or a clinical nurse specialist (as defined
in section 1861(aa)(5)), whether or not the nurse
practitioner or clinical nurse specialist is under the
supervision of, or associated with, a physician or other
health care provider; and''.
(b) Nursing School Clinic Services Defined.--Section 1905
of such Act (42 U.S.C. 1396d) is amended by adding at the end
the following:
``(t) The term `nursing school clinic services' means
services provided by a health care facility operated by an
accredited school of nursing which provides primary care,
long-term care, mental health counseling, home health
counseling, home health care, or other health care services
which are within the scope of practice of a registered
nurse.''.
(c) Conforming Amendments.--Section 1902 of such Act (42
U.S.C. 1396a) is amended--
(1) in subsection (a)(10)(C)(iv), by striking ``through
(24)'' and inserting ``through (25)''; and
(2) in subsection (j), by striking ``through (25)'' and
inserting ``through (26)''.
(d) Effective Date.--The amendments made by this Act shall
be effective with respect to payments made under a State plan
under title XIX of the Social Security Act for calendar
quarters commencing with the first calendar quarter beginning
after the date of the enactment of this Act.
______
By Mr. INOUYE:
S. 158. A bill to amend title XVII of the Social Security Act to
provide improved reimbursement for clinical social worker services
under the medicare program, and for other purposes; to the Committee on
Finance.
the clinical social worker services act of 1997
Mr. INOUYE. Mr. President, today I am introducing legislation to
amend Title XVIII of the Social Security Act to correct discrepancies
in the reimbursement of clinical social workers covered through
Medicare, Part B. The three proposed changes that are contained in this
legislation are necessary to clarify the current payment process for
clinical social workers and to establish a reimbursement methodology
for the profession that is similar to other health care professionals
reimbursed through the Medicare program.
First, this legislation would set payment for clinical social worker
services according to a fee schedule established by the Secretary.
Currently, the methodology for reimbursing clinical social workers'
services is set at a percentage of the fee for another nonphysician
provider group, creating a greater differential in charges than that
which exists in the marketplace. I am aware of no other provision in
the Medicare statute where one nonphysician's reimbursement rate is
tied to that of another nonphysician provider. This is a precedent that
clinical social workers understandably wish to change. I also wish to
see that clinical social workers' services are valued on their own
merit.
Second, this legislation makes it clear that services and supplies
furnished incident to a clinical social worker's services are a covered
Medicare expense, just as these services are currently covered for
other mental health professionals in Medicare. Third, the bill would
allow a clinical social worker to be reimbursed for services provided
to a client who is hospitalized.
Clinical social workers are valued members of our health care
provider team. They are legally regulated in every state of our nation
and are recognized as independent providers of mental health care
throughout the health care system. Clinical social worker services were
made available to Medicare beneficiaries through the Omnibus Budget
Reconciliation Act of 1989. I believe that it is time now to correct
the reimbursement problems that this profession has experienced through
Medicare.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 158
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER
SERVICES UNDER MEDICARE.
(a) In General.--Section 1833(a)(1)(F)(ii) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to
read as follows: ``(ii) the amount determined by a fee
schedule established by the Secretary,''.
(b) Definition of Clinical Social Worker Services
Expanded.--Section 1861(hh)(2) of such Act (42 U.S.C.
1395x(hh)(2)) is amended by striking ``services performed by
a clinical social worker (as defined in paragraph (1))'' and
inserting ``such services and such services and supplies
furnished as an incident to such services performed by a
clinical social worker (as defined in paragraph (1))''.
(c) Clinical Social Worker Services Not To Be Included in
Inpatient Hospital Services.--Section 1861(b)(4) of such Act
(42 U.S.C. 1395x(b)(4)) is amended by striking ``and
services'' and inserting ``clinical social worker services,
and services''.
(d) Treatment of Services Furnished in Inpatient Setting.--
Section 1832(a)(2)(B)(iii) of such Act (42 U.S.C.
1395k(a)(2)(B)(iii)) is amended by striking ``and services''
and inserting ``clinical social worker services, and
services''.
(e) Effective Date.--The amendments made by this section
shall become effective with respect to payments made for
clinical social worker services furnished on or after January
1, 1998.
______
By Mr. INOUYE:
S. 159. A bill to amend title XVIII of the Social Security Act to
remove the restriction that a clinical psychologist or clinical social
worker provide services in a comprehensive outpatient rehabilitation
facility to a patient only under the care of a physician, and for other
purposes; to the Committee on Finance.
medicare legislation
Mr. INOUYE. Mr. President, today I am introducing legislation to
authorize the autonomous functioning of clinical psychologists and
clinical social workers within the Medicare comprehensive outpatient
rehabilitation facility program.
In my judgment, it is truly unfortunate that programs such as this
currently require clinical supervision of the services provided by
certain health professionals and do not allow each of the various
health professions to truly function to the extent of their state
practice acts. In my judgment, it is especially appropriate that those
who need the services of outpatient rehabilitation facilities have
access to a wide range of social and behavioral science expertise.
Clinical psychologists and clinical social workers are recognized as
independent providers of mental health care services through the
Federal Employee Health Benefits Program, the Civilian Health and
Medical Program of the Uniformed Services, the Medicare (Part B)
Program, and numerous private insurance plans.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 159
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,
SECTION 1. REMOVAL OF RESTRICTION THAT A CLINICAL
PSYCHOLOGIST OR CLINICAL SOCIAL WORKER PROVIDE
SERVICES IN A COMPREHENSIVE OUTPATIENT
REHABILITATION FACILITY TO A PATIENT ONLY UNDER
THE CARE OF A PHYSICIAN.
(a) In General.--Section 1861(cc)(2)(E) of the Social
Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by
inserting before the semicolon ``(except with respect to
services provided by a clinical psychologist or a clinical
social worker)''.
(b) Effective Date.--The amendment made by subsection (a)
shall become effective with respect to services provided on
or after January 1, 1998.
______
By Mr. INOUYE:
S. 160. A bill to amend title 5, United States Code, to require the
issuance of a prisoner-of-war medal to civilian employees of the
Federal Government who are forcibly detained or interned by a enemy
government or a hostile force under wartime conditions; to the
Committee on Governmental Affairs.
[[Page S543]]
prisoner of war medal legislation
Mr. INOUYE. Mr. President, all too often we find that our nation's
civilians who have been captured by a hostile government do not receive
the recognition they deserve. My bill would correct this inequity and
provide a prisoner of war medal for civilian employees of the federal
government.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 160
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled,
SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF
THE FEDERAL GOVERNMENT.
(a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart
A of part III of title 5, United States Code, is amended by
inserting after chapter 23 the following new chapter:
``CHAPTER 25--MISCELLANEOUS AWARDS
``Sec.
``2501. Prisoner-of-war medal: issue.
``Sec. 2501. Prisoner-of-war medal: issue
``(a) The President shall issue a prisoner-of-war medal to
any person who, while serving in any capacity as an officer
or employee of the Federal Government, was forcibly detained
or interned, not as a result of such person's own willful
misconduct--
``(1) by an enemy government or its agents, or a hostile
force, during a period of war; or
``(2) by a foreign government or its agents, or a hostile
force, during a period other than a period of war in which
such person was held under circumstances which the President
finds to have been comparable to the circumstances under
which members of the armed forces have generally been
forcibly detained or interned by enemy governments during
periods of war.
``(b) The prisoner-of-war medal shall be of appropriate
design, with ribbons and appurtenances.
``(c) Not more than one prisoner-of-war medal may be issued
to a person under this section or section 1128 of title 10.
However, for each succeeding service that would otherwise
justify the issuance of such a medal, the President (in the
case of service referred to in subsection (a) of this
section) or the Secretary concerned (in the case of service
referred to in section 1128(a) of title 10) may issue a
suitable device to be worn as determined by the President or
the Secretary, as the case may be.
``(d) For a person to be eligible for issuance of a
prisoner-of-war medal, the person's conduct must have been
honorable for the period of captivity which serves as the
basis for the issuance.
``(e) If a person dies before the issuance of a prisoner-
of-war medal to which he is entitled, the medal may be issued
to the person's representative, as designated by the
President.
``(f) Under regulations to be prescribed by the President,
a prisoner-of-war medal that is lost, destroyed, or rendered
unfit for use without fault or neglect on the part of the
person to whom it was issued may be replaced without charge.
``(g) In this section, the term `period of war' has the
meaning given such term in section 101(11) of title 38.''.
(2) The table of chapters at the beginning of part III of
such title is amended by inserting after the item relating to
chapter 23 the following new item:
``25. Miscellaneous Awards..................................2501''.....
(b) Applicability.--Section 2501 of title 5, United States
Code, as added by subsection (a), applies with respect to any
person who, after April 5, 1917, is forcibly detained or
interned as described in subsection (a) of such section.
______
By Mr. INOUYE:
S. 161. A bill to amend title 38, United States Code, to revise
certain provisions relating to the appointment of clinical and
counseling psychologist in the Veterans Health Administration, and for
other purposes; to the Committee on Veterans Affairs.
the veterans' health administration act of 1997
Mr. INOUYE. Mr. President, I am introducing legislation today to
amend chapter 74 of title 38, United States Code, to revise certain
provisions relating to the appointment of clinical and counseling
psychologists in the Veterans Health Administration (VHA).
The VHA has a long history of maintaining a staff of the very best
health care professionals to provide care to those men and women who
have served their country in the Armed Forces. It is certainly fitting
that this should be done.
Recently a quite distressing situation regarding the care of our
veterans has come to my attention. In particular, the recruitment and
retention of psychologists in the VHA of the Department of Veterans
Affairs has become a significant problem.
The Congress has recognized the important contribution of the
behavioral sciences in the treatment of several conditions from which a
significant portion of our veterans suffer. For example, programs
related to homelessness, substance abuse, and post traumatic stress
disorder [PTSD] have received funding from the Congress in recent
years.
Certainly, psychologists, as behavioral science experts, are
essential to the successful implementation of these programs. However,
the high vacancy and turnover rates for psychologists in the VHA (over
11 percent and 18 percent respectively as reported in one recent
survey) might seriously jeopardize these programs and will negatively
impact overall patient care in the VHA.
Recruitment of psychologists by the VHA is hindered by a number of
factors including a pay scale not commensurate with private sector
rates of pay as well as by the low number of clinical and counseling
psychologists appearing on the register of the Office of Personnel
Management [OPM]. Most new hires have no post-doctoral experience and
are hired immediately after a VA internship. Recruitment, when
successful, takes up to six months or more.
Retention of psychologists in the VA system poses an even more
significant problem. I have been informed that almost 40 percent of VHA
psychologists had five years or less of post-doctoral experience.
Without doubt, our veterans would benefit from a higher percentage of
senior staff who are more experienced in working with veterans and
their particular concerns. My bill provides incentives for
psychologists to continue their work with the VHA and seek additional
education and training.
Several factors are associated with the difficulties in retention of
VHA psychologists including low salaries and lack of career advancement
opportunities. It seems that psychologists are apt to leave the VA
system after five years because they have almost reached peak levels
for salary and professional development in the VHA. Furthermore, under
the present system psychologists cannot be recognized nor appropriately
compensated for excellence or for taking on additional responsibilities
such as running treatment programs.
In effect, the current system for hiring psychologists in the VHA
supports mediocrity, not excellence and mastery. Our veterans with
behavioral disorders and mental health problems are deserving of better
psychological care from more experienced professionals than they are
currently receiving.
A hybrid title 38 appointment authority for psychologists would help
ameliorate the recruitment and retention problems in several ways. The
length of time it takes to recruit psychologists could be abbreviated
by eliminating the requirement for applicants to be rated by the Office
of Personnel Management. This would also facilitate the recruitment of
applicants who are not recent VA interns by reducing the amount of time
between identifying a desirable applicant and being able to offer that
applicant a position.
It is expected that problems in retention of behavioral science
experts will be greatly alleviated with the implementation of a hybrid
title 38 system for VA psychologists, primarily through offering
financial incentives for psychologists to pursue professional
development with the VHA. Achievements that would merit salary
increases under title 38 should include such activities as assuming
supervisory responsibilities for clinical programs, implementing
innovative clinical treatments that improve the effectiveness and/or
efficiency of patient care, making significant contributions to the
science of psychology, earning the ABPP diplomate status, and becoming
a Fellow of the American Psychological Association.
Currently, psychologists are the only doctoral level health care
providers in the VHA who are not included in title 38. This is, without
question, a significant factor in the recruitment and retention
difficulties that I have addressed. Ultimately, an across-the-board
salary increase might be necessary. However, the conversion of
psychologists to a hybrid title 38, as proposed by this amendment,
would provide relief for these difficulties and enhance the quality of
care for our Nations' veterans and their families.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Congressional Record.
[[Page S544]]
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 161
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REVISION OF AUTHORITY RELATING TO APPOINTMENT OF
CLINICAL AND COUNSELING PSYCHOLOGISTS IN THE
VETERANS HEALTH ADMINISTRATION.
(a) In General.--Section 7401(3) of title 38, United States
Code, is amended by striking out ``who hold diplomas as
diplomates in psychology from an accrediting authority
approved by the Secretary''.
(b) Certain Other Appointments.--Section 7405(a) of such
title is amended--
(1) in paragraph (1)(B), by striking out ``Certified or''
and inserting in lieu thereof ``Clinical or counseling
psychologists, certified or''; and
(2) in paragraph (2)(B), by striking out ``Certified or''
and inserting in lieu thereof ``Clinical or counseling
psychologists, certified or''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date of enactment of this
Act.
(d) Appointment Requirement.--Notwithstanding any other
provision of law, the Secretary of Veterans Affairs shall
begin to make appointments of clinical and counseling
psychologists in the Veterans Health Administration under
section 7401(3) of title 38, United States Code (as amended
by subsection (a)), not later than 1 year after the date of
enactment of this Act.
______
By Mr. INOUYE:
S. 162. A bill to amend title 10, United States Code, to permit
former members of the Armed Forces who have a service-connected
disability rated as total on military aircraft in the same manner and
to the same extent as retired members of the Armed Forces are entitled
to travel on such aircraft; to the Committee on Armed Services.
travel privileges legislation
Mr. INOUYE. Mr. President, today I am introducing a bill which is of
great importance to a group of patriotic Americans. This legislation is
designed to extend space-available travel privileges on military
aircraft to those who have been totally disabled in the service of our
country.
Currently, retired members of the Armed Forces are permitted to
travel on a space-available basis on non-scheduled military flights
within the continental United States and on scheduled overseas flights
operated by the Military Airlift Command. My bill would provide the
same benefits for 100 percent service-connected disabled veterans.
Surely, we owe these heroic men and women, who have given so much to
our country, a debt of gratitude. Of course, we can never repay them
for the sacrifice they have made on behalf of our nation but we can
surely try to make their lives more pleasant and fulfilling. One way in
which we can help is to extend military travel privileges to these
distinguished American veterans. I have received numerous letters from
all over the country attesting to the importance attached to this issue
by veterans. Therefore, I ask that my colleagues show their concern and
join me in saying ``thank you'' by supporting this legislation.
Mr. President, I ask unanimous consent that the text of my bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 162
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED
FORMER MEMBERS OF THE ARMED FORCES.
(a) In General.--Chapter 53 of title 10, United States
Code, is amended by adding after section 1060a the following
new section:
``Sec. 1060b. Travel on military aircraft: certain disabled
former members of the armed forces
``The Secretary of Defense shall permit any former member
of the armed forces who is entitled to compensation under the
laws administered by the Secretary of Veterans Affairs for a
service-connected disability rated as total to travel, in the
same manner and to the same extent as retired members of the
armed forces, on unscheduled military flights within the
continental United States and on scheduled overseas flights
operated by the Military Airlift Command. The Secretary of
Defense shall permit such travel on a space-available
basis.''.
(b) Clerical Amendment.--The table of sections at the
beginning of such chapter is amended by adding after the item
relating to section 1060a the following new item:
``1060b. Travel on military aircraft: certain disabled former members
of the armed forces.''.
______
By Mr. INOUYE:
S. 163. A bill to recognize the organization known as the National
Academies of Practice; to the Committee on the Judiciary.
the national academies of practice recognition act of 1997
Mr. INOUYE. Mr. President, today I am introducing legislation that
would provide a federal charter for the National Academies of Practice.
This organization represents outstanding practitioners who have made
significant contributions to the practice of applied psychology,
medicine, dentistry, nursing, optometry, podiatry, social work, and
veterinary medicine. When fully established, each of the nine academies
will possess 100 distinguished practitioners selected by their peers.
This umbrella organization will be able to provide the Congress of the
United States and the executive branch with considerable health policy
expertise, especially from the perspective of those individuals who are
in the forefront of actually providing health care.
As we continue to grapple with the many complex issues surrounding
the delivery of health care services, it is clearly in our best
interest to ensure that the Congress have systematic access to the
recommendations of an interdisciplinary body of health care
practitioners.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 163
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CHARTER.
The National Academies of Practice organized and
incorporated under the laws of the District of Columbia, is
hereby recognized as such and is granted a Federal charter.
SEC. 2. CORPORATE POWERS.
The National Academies of Practice (hereafter referred to
in this Act as the ``corporation'') shall have only those
powers granted to it through its bylaws and articles of
incorporation filed in the State in which it is incorporated
and subject to the laws of such State.
SEC. 3. PURPOSES OF CORPORATION.
The purposes of the corporation shall be to honor persons
who have made significant contributions to the practice of
applied psychology, dentistry, medicine, nursing, optometry,
osteopathy, podiatry, social work, veterinary medicine, and
other health care professions, and to improve the practices
in such professions by disseminating information about new
techniques and procedures.
SEC. 4. SERVICE OF PROCESS.
With respect to service of process, the corporation shall
comply with the laws of the State in which it is incorporated
and those States in which it carries on its activities in
furtherance of its corporate purposes.
SEC. 5. MEMBERSHIP.
Eligibility for membership in the corporation and the
rights and privileges of members shall be as provided in the
bylaws of the corporation.
SEC. 6. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.
The composition and the responsibilities of the board of
directors of the corporation shall be as provided in the
articles of incorporation of the corporation and in
conformity with the laws of the State in which it is
incorporated.
SEC. 7. OFFICERS OF THE CORPORATION.
The officers of the corporation and the election of such
officers shall be as provided in the articles of
incorporation of the corporation and in conformity with the
laws of the State in which it is incorporated.
SEC. 8. RESTRICTIONS.
(a) Use of Income and Assets.--No part of the income or
assets of the corporation shall inure to any member, officer,
or director of the corporation or be distributed to any such
person during the life of this charter. Nothing in this
subsection shall be construed to prevent the payment of
reasonable compensation to the officers of the corporation or
reimbursement for actual necessary expenses in amounts
approved by the board of directors.
(b) Loans.--The corporation shall not make any loan to any
officer, director, or employee of the corporation.
(c) Political Activity.--The corporation, any officer, or
any director of the corporation, acting as such officer or
director, shall not contribute to, support, or otherwise
participate in any political activity or in any manner
attempt to influence legislation.
(d) Issuance of Stock and Payment of Dividends.--The
corporation shall have no power to issue any shares of stock
nor to declare or pay any dividends.
(e) Claims of Federal Approval.--The corporation shall not
claim congressional approval or Federal Government authority
for any of its activities.
SEC. 9. LIABILITY.
The corporation shall be liable for the acts of its
officers and agents when acting within the scope of their
authority.
[[Page S545]]
SEC. 10. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS.
(a) Books and Records of Account.--The corporation shall
keep correct and complete books and records of account and
shall keep minutes of any proceeding of the corporation
involving any of its members, the board of directors, or any
committee having authority under the board of directors.
(b) Names and Addresses of Members.--The corporation shall
keep at its principal office a record of the names and
addresses of all members having the right to vote in any
proceeding of the corporation.
(c) Right To Inspect Books and Records.--All books and
records of the corporation may be inspected by any member
having the right to vote, or by any agent or attorney of such
member, for any proper purpose, at any reasonable time.
(d) Application of State Law.--Nothing in this section
shall be construed to contravene any applicable State law.
SEC. 11. AUDIT OF FINANCIAL TRANSACTIONS.
The first section of the Act entitled ``An Act to provide
for audit of accounts of private corporations established
under Federal law'', approved August 30, 1964 (36 U.S.C.
1101), is amended--
(1) by redesignating paragraph (72) as paragraph (71);
(2) by designating the paragraph relating to the Non
Commissioned Officers Association of the United States of
America, Incorporated, as paragraph (72);
(3) by redesignating paragraph (60), relating to the
National Mining Hall of Fame and Museum, as paragraph (73);
and
(4) by adding at the end the following:
``(75) National Academies of Practice.''.
SEC. 12. ANNUAL REPORT.
The corporation shall report annually to the Congress
concerning the activities of the corporation during the
preceding fiscal year. Such annual report shall be submitted
at the same time as is the report of the audit for such
fiscal year required by section 3 of the Act referred to in
section 11 of this Act. The report shall not be printed as a
public document.
SEC. 13. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.
The right to alter, amend, or repeal this Act is expressly
reserved to the Congress.
SEC. 14. DEFINITION.
For purposes of this Act, the term ``State'' includes the
District of Columbia, the Commonwealth of Puerto Rico, and
the territories and possessions of the United States.
SEC. 15. TAX-EXEMPT STATUS.
The corporation shall maintain its status as an
organization exempt from taxation as provided in the Internal
Revenue Code of 1986 or any corresponding similar provision.
SEC. 16. TERMINATION.
If the corporation fails to comply with any of the
restrictions or provisions of this Act the charter granted by
this Act shall terminate.
______
By Mr. INOUYE:
S. 164. A bill to allow the psychiatric or psychological examinations
required under chapter 313 of title 18, United States Code, relating to
offenders with mental disease or defect, to be conducted by a clinical
social worker; to the Committee on the Judiciary.
the psychiatric and psychological examinations act of 1997
Mr. INOUYE. Mr. President, today I am introducing legislation to
amend Title 18 of the United States Code to allow our nation's clinical
social workers to provide their mental health expertise to the federal
judiciary.
I feel that the time has come to allow our nation's judicial system
to have access to a wide range of behavioral science and mental health
expertise. I am confident that the enactment of this legislation would
be very much in our nation's best interest.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 164
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.
Section 4247(b) of title 18, United States Code, is amended
in the first sentence by--
(1) striking out ``or'' after ``certified psychiatrist''
and inserting a comma; and
(2) inserting after ``psychologist,'' the following: ``or
clinical social worker,''.
______
By Mr. INOUYE:
S. 165. A bill for the relief of Donald C. Pence; to the Committee on
the Judiciary.
private relief legislation
Mr. INOUYE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 165
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. RELIEF OF DONALD C. PENCE.
(a) Relief.--The Secretary of the Treasury shall pay, out
of any moneys in the Treasury not otherwise appropriated, to
Donald C. Pence, of Sanford, North Carolina, the sum of
$31,128 in compensation for the failure of the Department of
Veterans Affairs to pay dependency and indemnity compensation
to Kathryn E. Box, the now-deceased mother of Donald C.
Pence, for the period beginning on July 1, 1990, and ending
on March 31, 1993.
(b) Limitation on Fees.--Not more than a total of 10
percent of the payment authorized by subsection (a) shall be
paid to or received by agents or attorneys for services
rendered in connection with obtaining such payment, any
contract to the contrary notwithstanding. Any person who
violates this subsection shall be fined not more than $1,000.
______
By Mr. INOUYE:
S. 166. A bill to amend section 1086 of title 10, United States Code,
to provide for payment under CHAMPUS of certain health care expenses
incurred by certain members and former members of the uniformed
services and their dependents to the extent that such expenses are not
payable under Medicare, and for other purposes; to the Committee on
Armed Services.
the champus amendment act of 1997
Mr. INOUYE. Mr. President, I feel that it is very important that our
nation continue its firm commitment to those individuals and their
families who have served in the Armed Forces and made us the great
nation that we are today. As this population becomes older, they are
unfortunately finding that they need a wider range of health services,
some of which are simply not available under Medicare. These
individuals made a commitment to their nation, trusting that when they
needed help the nation would honor that commitment. The bill that I am
recommending today would ensure the highest possible quality of care
for these dedicated citizens and their families, who gave so much for
us.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 166
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXPANSION OF MEDICARE EXCEPTION TO THE PROHIBITION
OF CHAMPUS COVERAGE FOR CARE COVERED BY ANOTHER
HEALTH CARE PLAN.
(a) Amendment and Reorganization of Exceptions.--Subsection
(d) of section 1086 of title 10, United States Code, is
amended to read as follows:
``(d)(1) Section 1079(j) of this title shall apply to a
plan contracted for under this section except as follows:
``(A) Subject to paragraph (2), a benefit may be paid under
such plan in the case of a person referred to in subsection
(c) for items and services for which payment is made under
title XVIII of the Social Security Act.
``(B) No person eligible for health benefits under this
section may be denied benefits under this section with
respect to care or treatment for any service-connected
disability which is compensable under chapter 11 of title 38
solely on the basis that such person is entitled to care or
treatment for such disability in facilities of the Department
of Veterans Affairs.
``(2) If a person described in paragraph (1)(A) receives
medical or dental care for which payment may be made under
both title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) and a plan contracted for under subsection (a), the
amount payable for that care under the plan may not exceed
the difference between--
``(A) the sum of any deductibles, coinsurance, and balance
billing charges that would be imposed on the person if
payment for that care were made solely under that title; and
``(B) the sum of any deductibles, coinsurance, and balance
billing charges that would be imposed on the person if
payment for that care were made solely under the plan.
``(3) A plan contracted for under this section shall not be
considered a group health plan for the purposes of paragraph
(2) or (3) of section 1862(b) of the Social Security Act (42
U.S.C. 1395y(b)).
``(4) A person who, by reason of the application of
paragraph (1), receives a benefit for items or services under
a plan contracted for under this section shall provide the
Secretary of Defense with any information relating to amounts
charged and paid for the items and services that, after
consulting with the other administering Secretaries, the
Secretary requires. A certification of such person regarding
such amounts may be accepted for the purposes of determining
the benefit payable under this section.''.
(b) Repeal of Superseded Provision.--Such section is
further amended--
(1) by striking out subsection (g); and
[[Page S546]]
(2) by redesignating subsection (h) as subsection (g).
SEC. 2. CONFORMING AMENDMENT.
Section 1713(d) of title 38, United States Code, is amended
by striking out ``section 1086(d)(1) of title 10 or''.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall take effect with
respect to health care items or services provided on and
after the date of enactment of this Act.
______
By Mr. INOUYE:
S. 167. A bill for the relief of Alfredo Tolentino of Honolulu,
Hawaii; to the Committee on Governmental Affairs.
private relief legislation
Mr. INOUYE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S.167
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That,
notwithstanding the provisions of section 8337(b) of title 5,
United States Code, Alfredo Tolentino of Honolulu, Hawaii may
file an application no later than 60 days after the date of
the enactment of this Act with the Office of Personnel
Management for a claim of disability retirement under the
provisions of such section.
______
By Mr. DeWINE:
S. 168. A bill to reform criminal procedure, and for other purposes;
to the Committee on the Judiciary.
the triggerlock act of 1997
Mr. DeWINE. Mr. President, there are two truly fundamental issues we
need to address in the area of crime. First, what is the proper role of
the Federal Government in fighting crime in this country? Second,
despite all the rhetoric, what really works in law enforcement?
What matters? What doesn't matter?
Today, I would like to discuss one issue that I believe really
matters: How do we go about protecting America from armed career
criminals?
I am talking about repeat violent criminals who use a gun while
committing a crime.
In this area, too, we need to be asking: What works? And what level
of Government should do it?
In the area of gun crimes, we have a pretty good answer.
We all know that there is some controversy over whether general
restrictions on gun ownership would help to reduce crime. But there is
no controversy over whether taking guns away from felons would reduce
crime.
There is legitimate disagreement over whether the Brady bill would
reduce crime. Similarly, reasonable people can disagree on the question
of whether a ban on assault weapons would reduce crime. I happen to
support both those measures--but I recognize that some people think
they are not effective.
But what I am talking about today is something on which there is
absolutely no controversy. There's simply no question that taking the
guns away from armed career criminals will reduce crime.
No question, Mr. President. When it comes to felons, unilateral
disarmament of the thugs is the best policy. Let's disarm the people
who hurt people.
We have actually tried it--and we know it works. One of the most
successful crime-fighting initiatives of recent years was known as
Project Triggerlock. This project was wildly successful precisely
because it addresses a problem squarely--and places the resources where
they are most needed.
Let me tell you a little about project Triggerlock. The U.S. Justice
Department began Project Triggerlock in May 1991. The program targeted
for prosecution--in Federal court--armed and violent repeat offenders.
Under Triggerlock, U.S. Attorneys throughout the country said to
State and local prosecutors: If you catch a felon with a gun, and if
you want us to, we--the Federal prosecutors--will take over the
prosecution.
We will prosecute him. We will convict him. We will hit him with a
stiff Federal mandatory sentence. And we will lock him up in a Federal
prison at no cost to the State or local community.
That's what Triggerlock did. Triggerlock was an assault on the very
worst criminals in America. And it worked.
This program took 15,000 criminals off the streets in an 18-month
period.
Incredibly, the Clinton Justice Department abandoned Project
Triggerlock. It was the most effective Federal program in recent
history for targeting and removing armed career criminals. But the
Justice Department stopped Triggerlock dead in its tracks.
What I am proposing in this bill is that we resurrect Project
Triggerlock.
My bill requires the U.S. attorneys in every jurisdiction in this
country to make a montly report to the Attorney General in Washington
on the number of arrests, prosecutions, and convictions they have
gotten on gun-related offenses. The Attorney General should then
report, semi-annually, to the Congress on the work of these
prosecutors.
Like all prosecutors, U.S. attorneys have limited resources. So--like
all prosecutors--U.S. attorneys have to exercise discretion about whom
to prosecute. We all recognize the Congress can't dictate to
prosecutors whom they should prosecute--but it's clear that we should
go on record with the following proposition: There's nothing more
important than getting armed career criminals off the streets.
Mr. President, I think Project Triggerlock is a very important way to
keep the focus on the prosecution of gun crimes. Getting gun criminals
off the streets is a major national priority--and we ought to behave
accordingly.
MANDATORY MINIMUMS
Mr. President, the second thing we need to do is change the law. We
need to toughen the law against those who use a gun to commit a crime.
My bill would say to career criminals--if you possess a gun after being
convicted for gun crimes, you will get a mandatory 15-year sentence.
Under current law, a first-time felon gets a 5-year mandatory minimum
sentence. A third-time felon gets a mandatory minimum of 15 years. But
there is a gap--there's no mandatory minimum for a second-time felon.
My legislation would fix that. It would provide a mandatory minimum
of 10 years for a second-time felon.
That would make it a lot easier for police to get gun criminals off
our streets.
BAIL REFORM
A third thing we have to do is reform the bail system.
Under current law--the Bail Reform Act--certain dangerous accused
criminals can be denied bail detention if they have been charged with
crimes of violence. But it's unclear under current law whether
possession of firearms should be considered a crime of violence.
Mr. President, let us do a reality check on this. If someone who is a
known convicted felon is walking around with a gun, what's the
likelihood that person is carrying the gun for law-abiding purposes?
I think it is perfectly reasonable to consider that person prima
facie dangerous. We should deny bail--and keep that convicted felon off
the streets while awaiting trial on the new charge.
My legislation would eliminate the ambiguity in current law. May bill
would define a ``crime of violence'' specifically to include possession
of a firearm by a convicted felon.
If you are a convicted felon, and you're walking around with a gun--
you're dangerous. You need to be kept off the streets. We need to give
prosecutors the legal right to protect the community from these people
while they are awaiting trial.
CRACK DOWN ON ILLEGAL GUN SUPPLIERS
A fourth way we can crack down on gun crimes is to go after those who
knowingly provide the guns to felons. Under current law, you can be
prosecuted for providing a gun only if you know for certain that it
will be used in a crime.
The revision I propose would make it illegal to provide a firearm if
you have reasonable cause to believe that it's going to be used in a
crime.
The is the best way to go after the illegal gun trade--those who
provide guns to the predators on society. We will no longer allow these
gun providers to pretend ignorance. They are helping felons--and they
need to be stopped.
All of these proposals are motivated by a single purpose: I--along
with the police officers of this country--believe that we have to get
the guns away from the gun criminals.
Project Triggerlock is one major initiative we can pursue at the
Federal
[[Page S547]]
level to help make this happen. Imposing stiff mandatory minimums and
cracking down on illegal gun providers are also important measures.
All of the gun proposals contained in my crime legislation have the
same goal. They are designed to assure American families who are living
in crime-threatened communities that we're going to do what it takes to
get guns off your streets.
We are going to go after the armed career criminals. We're going to
prosecute them. We're going to convict them. We are going to keep them
off the streets.
This is why we have a government in the first place--to protect the
innocent, to keep ordinary citizens safe from violent, predatory
criminals.
I think Government needs to do a much better job at this fundamental
task--and that's why targeting the armed career criminals is such a
major component of this bill.
______
By Mr. CRAIG:
S. 169. A bill to amend the Immigration and Nationality Act with
respect to the admission of temporary H-2A workers; to the Committee on
the Judiciary.
The Agricultural Work Force Stability and Protection Act
Mr. CRAIG. Mr. President, I rise to introduce the Agricultural Work
Force Stability and Protection Act. This bill would make needed reforms
to the so-called ``H-2A Program,'' the program intended by Congress in
the Immigration and Nationality Act to allow for a reliable supply of
legal, temporary, immigrant workers in the agricultural sector, under
terms that also provide reasonable worker protections, when there is a
shortage of domestic labor in this sector.
Last year, Senator Alan Simpson, then the Chairman of the Judiciary
Committee's Subcommittee on Immigration, and then this body as a whole,
acknowledged the importance of this issue by agreeing to including in
the Illegal Immigration Reform conference report some compromise
language regarding the Sense of the Congress on the H-2A Program and
requiring the General Accounting Office to review the effectiveness of
the program.
The language included in the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 was essentially the same as language agreed
to in the conference report on fiscal year 1997 Agriculture
Appropriations. With these provisions, the Congress went on record
twice on the importance of having a program that helps ensure an
adequate workforce for agricultural producers.
This is an issue that is of the utmost importance to this country's
farmers and ranchers, especially in light of the impact that
immigration reform will have on the supply of agricultural labor. There
is very real concern among Idaho farmers and throughout the country
that these reforms will reduce the availability of agricultural
workers.
Farmers need access to an adequate supply of workers and want to have
certainty that they are hiring a legal work force. In 1995, the total
agricultural work force was about 2.5 million people. That equals 6.7
percent of our labor force, which is directly involved in production
agriculture and food processing.
Hired labor is one of the most important and costly inputs in
farming. U.S. farmers spent more than $15 billion on hired labor
expenses in 1992--one of every eight dollars of farm production
expenses. For the labor-intensive fruit, vegetable and horticultural
sector, labor accounts for 35 to 45 percent of production costs.
The competitiveness of U.S. agriculture, especially in the fruit,
vegetable and horticultural specialty sectors, depends on the continued
availability of hired labor at a reasonable cost. U.S. farmers,
including producers of labor-intensive perishable commodities, compete
directly with producers in other countries for market share in both
U.S. and foreign commodity markets.
Wages of U.S. farmworkers will not be forced up by eliminating alien
labor, because growers' production costs are capped by world market
commodity prices. Instead, a reduction in the work force available to
agriculture will force U.S. producers to reduce production to the level
that can be sustained by a smaller work force.
Over time, wages for these farm workers have actually risen faster
than non-farm worker wages. Between 1986-1994, there was a 34.6 percent
increase in average hourly earnings for farm workers, while non-farm
workers only saw a 27.1 percent increase.
Even with this increase in on-farm wages, this country has
historically been unable to provide a sufficient number of domestic
workers to complete the difficult manual labor required in the
production of many agricultural commodities. In Idaho, this is
especially true for producers of fruit, sugar beets, onions and other
specialty crops.
The difficulty in obtaining sufficient domestic workers is primarily
due to the fact that domestic workers prefer the security of full-time
employment in year round positions. As a result the available domestic
work force tends to prefer the long term positions, leaving the
seasonal jobs unfilled. In addition, many of the seasonal jobs
unfilled. In addition, many of the seasonal agricultural jobs are
located in areas where it is necessary for workers to migrate into the
area and live temporarily to do the work. Experience has shown that
foreign workers are more likely to migrate than domestic workers. As a
result of domestic short supply, farmers and ranchers have had to rely
upon the assistance of foreign workers.
The only current mechanism available to admit foreign workers for
agricultural employment is the H-2A program. The H-2A program is
intended to serve as a safety valve for times when domestic labor is
unavailable. Unfortunately, the H-2A program isn't working.
Despite efforts to streamline the temporary worker program in 1986,
it now functions so poorly that few in agriculture use it without
risking an inadequate work force, burdensome regulations and potential
litigation expense. In fact, usage of the program has actually
decreased from 25,000 workers in 1986 to only 17,000 in 1995.
The bill I am introducing would provide some much-needed reforms to
the H-2A program. I urge my colleagues to consider the following
reasonable modifications of the H-2A program.
First, the bill would reduce the advance filing deadline from 60 to
40 days before workers are needed. In many agricultural operations, 60
days is too far in advance to be able to predict labor needs with the
precision required in H-2A applications. Furthermore, virtually all
referrals of U.S. workers who actually report for work are made close
to the date of need. The advance application period serves little
purpose except to provide time for litigation.
Second, in lieu of the present certification letter, the Department
of Labor [DOL] would issue the employer a domestic recruitment report
indicating that the employer's job offer meets the statutory criteria
and lists the number of U.S. workers referred. The employer would then
file a petition with INS for admission of aliens, including a copy of
DOL's domestic recruitment report and any countervailing evidence
concerning the adequacy of the job offer and/or the availability of
U.S. workers. The Attorney General would make the admission decision.
The purpose is to restore the role of the Labor Department to that of
giving advice to the Attorney General on labor availability, and return
decision making to the Attorney General.
Third, the Department of Labor would be required to provide the
employer with a domestic recruitment report not later than 20 days
before the date of need. The report either states sufficient domestic
workers are not available or gives the names and Social Security
numbers of the able, willing and qualified workers who have been
referred to the employer. The Department of Labor now denies
certification not only on the basis of workers actually referred to the
employer, but also on the basis of reports or suppositions that
unspecified numbers of workers may become available. The proposed
change would assure that only workers actually identified as available
would be the basis for denying foreign workers.
Fourth, the Immigration and Naturalization Service [INS] would
provide expedited processing of employers' petitions, and, if approved,
notify the visa issuing consulate or port of entry within 15 calendar
days. This would ensure timely admission decisions.
[[Page S548]]
Fifth, INS would provide expedited procedures for amending petitions
to increase the number of workers admitted on 5 days before the date of
need. This is to reduce the paperwork and increase the timeliness of
obtaining needed workers very close to or after the work has started.
Sixth, DOL would continue to recruit domestic workers and make
referrals to employers until 5 days before the date of need. This
method is needed to allow the employer at a date certain to complete
his hiring, and to operate without having the operation disrupted by
having to displace existing workers with new workers.
Seventh, the bill would enumerate the specific obligations of
employers in occupations in which H-2A workers are employed. The
proposed definition would define jobs that meet the following criteria
as not adversely affecting U.S. workers:
1. The employer offers a competitive wage for the position.
2. The employer would provide approved housing, or a
reasonable housing allowance, to workers whose permanent
place of residence is beyond normal commuting distance.
3. The employer continues to provide current transportation
reimbursement requirements.
4. A guarantee of employment is provided for at least
three-quarters of the anticipated hours of work during the
actual period of employment.
5. The employer would provide workers' compensation or
equivalent coverage.
6. Employer must comply with all applicable Federal, State,
and local labor laws with respect to both United States and
alien workers.
This combination of employment requirements would eliminate
the discretion of Department of Labor to specify terms and
conditions of employment on a case-by-case basis. In
addition, the scope for litigation would be reduced since
employers (and the courts) would know with particularity the
required terms and conditions of employment.
Eighth, the bill would provide that workers must exhaust
administrative remedies before engaging their employers in
litigation.
Ninth, certainty would be given to employers who comply
with the terms of an approved job order. If at a later date
the Department of Labor requires changes, the employer would
be required to comply with the law only prospectively. This
very important provision removes the possibility of
retroactive liability if an approved order is changed.
As the Illegal Immigration Reform law is implemented,
action on these H-2A reforms will be necessary in the coming
months to avoid jeopardizing the labor supply for American
agriculture.
Therefore, I am introducing this bill at this time and
invite and urge my colleagues to sign on as cosponsors. It is
time to begin in earnest to discuss these issues and examine
these vitally-needed reforms. I hope and expect the Senate
will pass constructive legislation along these lines this
year.
Thank you, Mr. President. At this time, I ask unanimous
consent that a summary of the bill be printed in the Record.
There being no objection, the summary was ordered to be
printed in the Record, as follows:
Summary of the Agricultural Work Force Stability and Protection Act
The following proposed changes to the H-2A program would
improve its timeliness and utility for agricultural employers
in addressing agricultural labor shortages, while providing
wages and benefits that equal or exceed the median level of
compensation in non-H-2A occupations, and reducing the
vulnerability of the program to being hamstrung and delayed
by litigation.
1. Reduce the advance filing deadline from 60 to 40 days
before workers are needed.
Rationale. In many agricultural operations, 60 days is too
far in advance to be able to predict labor needs with the
precision required in H-2A applications. Furthermore,
virtually all referrals of U.S. workers who actually report
for work are made close to the date of need. The advance
application period serves little purpose except to provide
time for litigation.
2. In lieu of the present certification letter, DOL would
issue the employer a domestic recruitment report indicating
that the employer's job offer meets the statutory criteria
(or the specific deficiencies in the order) and the number of
U.S. workers referred, per #3 below. The employer would file
a petition with INS for admission of aliens (or transfer of
aliens already in the United States), including a copy of
DOL's domestic recruitment report and any countervailing
evidence concerning the adequacy of the job offer and/or the
availability of U.S. workers. The Attorney General would make
the admission decision.
Rationale. The purpose is to restore the role of the Labor
Department to that of giving advice to the AG on labor
availability, and return the true gatekeeper role to the AG.
Presently the certification letter is, de facto, the
admission decision.
3. DOL provides employer with a domestic recruitment report
not later than 20 days before the date of need stating either
that sufficient domestic workers are not available, or giving
the names and Social Security Numbers of the able, willing
and qualified workers who have been referred to the employer
and who have agreed to be available at the time and place
needed. DOL also provides a means for the employer to contact
the referred worker to confirm availability close to the date
of need. DOL would be empowered to issue a report that
sufficient domestic workers are not available without waiting
until 20 days before the date of need for workers if there
are already unfilled orders for workers in the same or
similar occupations in the same area of intended employment.
Rationale: DOL now denies certification not only on the
basis of workers actually referred to the employer, but also
on the basis of reports or suppositions that unspecified
numbers of workers may become available. These suppositions
almost never prove correct, forcing the employer into costly
and time wasting redeterminations on or close to the date of
need and delaying the arrival of workers. The proposed change
would assure that only workers actually identified as
available would be the basis for denying foreign workers. DOL
also interprets the existing statutory language as precluding
it from issuing each labor certification until 20 days before
the date of need, even in situations where ongoing
recruitment shows that sufficient workers are not available.
4. INS to provide expedited processing of employer's
petitions, and, if approved, notify the visa issuing
consulate or port of entry within 15 calendar days.
Rationale: To assure timely admission decisions.
5. INS to provide an expedited procedures for amending
petitions to increase the number of workers admitted (or
transferred) on or after 5 days before the date of need, to
replace referred workers whose continued availability can not
be confirmed, who fail to report on the date of need, or who
abandon employment or are terminated for cause, without first
obtaining a redetermination of need from DOL.
Rationale: To reduce the paperwork and increase the
timeliness of obtaining needed workers very close to or after
the work has started.
6. DOL would continue to recruit domestic workers and make
referrals to employers until 5 days before the date of need.
Employers would be required to give preference to able,
willing and qualified workers who agree to be available at
the time and place needed who are referred to the employer
until 5 days before the date workers are needed. After that
time, employers would be required to give preference to U.S.
workers who are immediately available in filling job
opportunities that become available, but would not be
required to bump alien workers already employed.
Rationale: A method is needed to allow the employer at a
date-certain close to the date of need to complete his
hiring, and to operate without having the operation disrupted
by having to displace existing workers with new workers.
7. Create a ``bounded definition'' of adverse effect by
enumerating the specific obligations of employers in
occupations in which H-2A aliens are employed. The proposed
definition would define jobs that meet the following criteria
as not adversely affecting U.S. workers:
7a. Offer at least the median rate of pay for the
occupation in the area of intended employment.
7b. Provide approved housing or, if sufficient housing is
available in the approximate area of employment, a reasonable
housing allowance, to workers whose permanent place of
residence is beyond normal commuting distance.
Note: Provision should also be made to allow temporary
housing that does not meet the full set of Federal standards
for a transitional period in areas where sufficient housing
that meets standards is not presently available, and for such
temporary housing on a permanent basis in occupations in
which the term of employment is very short (e.g. cherry
harvesting, which lasts about 15-20 days) if sufficient
housing that meets the full standards is not available.
Federal law should pre-empt state and local laws and codes
with respect to the provision of such temporary housing.
7c. Current transportation reimbursement requirements (i.e.
employer reimburses transportation of workers who complete 50
percent of the work contract and provides or pays for return
transportation for workers who complete the entire work
contract).
7d. A guarantee of employment for at least three-quarters
of the anticipated hours of work during the actual period of
employment.
7e. Employer-provided Workers' Compensation or equivalent.
7f. Employer must comply with all applicable federal, state
and local labor laws with respect to both U.S. and alien
workers.
Rationale: The objective is to eliminate the discretion of
DOL to specify terms and conditions of employment on a case-
by-case basis and reduce the scope for litigation of
applications. Employers (and the courts) would know with
particularity, up front, what the required terms and
conditions of employment are. The definition also reduces the
cost premium for participating in the program by relating the
Adverse Effect Wage Rate to the minimum wage and limiting the
[[Page S549]]
applicability of the three-quarters guarantee to the actual
period of employment.
8. Provide that workers must exhaust administrative
remedies before engaging their employers in litigation.
Rationale: To reduce litigation costs.
9. Provide that if an employer complies with the terms of
an approved job order, and DOL or a court later orders a
provision to be changed, the employer would be required to
comply with the new provision only prospectively.
Rationale: To reduce the exposure of employers to
litigation seeking to overturn DOL's approval of job orders,
and to retroactive liability if an approved order is changed.
______
By Mr. DeWINE:
S. 170 A bill to provide for a process to authorize the use of clone
pagers, and for other purposes; to the Committee on the Judiciary.
the clone pager authorization act of 1996
Mr. DeWINE. Mr. President, I believe that, to stop crime, we have to
do more. That doesn't mean another rhetorical assault on crime--or even
a flashy ten-point program. Rather, we have to do more of the little
things that--when you put them all together--make a big difference.
The most important of these is giving law enforcement officials the
tools they need to do their jobs. Today, I am introducing legislation
that will help us do that.
The bill I am introducing today would simply rectify an imbalance in
current Federal law which makes it more difficult for law enforcement
officials to fight drug trafficking. Today, drug traffickers have taken
advantage of technological advances to advance their own criminal
interests.
Drug traffickers--on a regular basis--use digital display paging
devices, better known as beepers--in transacting their business. They
do this because it gives them the freedom to run their criminal
enterprise out of any available phone booth, and to avoid police
surveillance. If law enforcement officials knew from whom they were
receiving the calls to their beepers it would certainly aid efforts in
tracking down drug traffickers.
The technology now exists to allow law enforcement to receive the
digital display message, without intercepting the content of any
conversation or message. It is called a ``clone pager.'' This clone
pager is programmed identically to the suspect's pager and allows law
enforcement to receive the digital displays at the same time as the
suspect.
This device functions identically to a pen register. Mr. President,
as you may know, a pen register is a device which law enforcement
attaches to a phone line to decode the numbers which have called a
specific telephone. Like a clone pager, the pen register only
intercepts phone numbers, not the content of any conversation or
message.
Since both devices serve the same purpose, a reasonable person would
conclude that both the system for receiving authorization to use these
devices, and the procedures mandated by the courts once the
authorization was granted would be the same. However, in both cases it
is not.
Under current law, the requirements for obtaining authorization to
use a clone pager are much more stringent than they are for using a pen
register. I would like to briefly outline the differences.
In order to obtain authorization to use a pen register, a Federal
prosecutor must certify to a district court judge the phone number to
which the pen register will be attached, the phone company that
delivers service to that number, and that the pen register serves a
legitimate law enforcement purpose. In other words, the prosecutor must
show only that the use of the pen register is based on an ongoing
investigation. The district court judge may then grant the
authorization on a mere finding that the prosecutor has made the
required certification. The pen register can then be used for a period
of 60 days--with no requirement that law enforcement report pen
register activity to the court.
In contrast, the U.S. Attorney for a particular district must sign
off on a request for clone pager authorization. Once this occurs, a
prosecutor may then go before a district court judge where he must show
that there is probable cause to suspect an individual has committed a
crime--a much higher standard than what is required for a pen register
authorization. He must also detail what other investigative techniques
have been used, why they have not been successful, and why they will
continue to be unsuccessful. Moreover, the prosecutor must disclose
other available investigative techniques and why they are unlikely to
be successful. Only after all of this is done can authorization to use
a clone pager be granted.
But these are not the only differences in treatment. After the
authorization is granted, it can only be used for 30 days. During that
30 days, the prosecutor must report activity from the clone pager to
the issuing judge at least once every 2 weeks.
I do not believe that the authorization disparity in authorization
for these two devices is warranted.
The legislation that I am introducing today would simply amend the
Federal code to end this disparity. This bill would give law
enforcement agents ready access, with warranted limitations, to the
tools they need to do their jobs. This bill will bring Federal law
enforcement into the 21st century. The drug traffickers are already
there. It's time for law and order to catch up with them.
______
By Mr. DeWINE:
S. 171. A bill to amend title 18, United States Code, to insert a
general provision for criminal attempt; to the Committee on the
Judiciary.
THE ATTEMPT ACT OF 1997
Mr. DeWine. Mr. President, I am introducing a bill today that will
give law enforcement officers a tool they need to their jobs--
protecting American families. It would establish, for the first time in
the Federal Criminal Code, a general attempt provision. Thankfully,
criminals to not succeed every time they set out to commit a crime. We
need to take advantage of these failed crimes to get criminals off the
streets.
Mr. President, under current Federal law, there is no general attempt
provision applicable to all Federal offenses. This has forced Congress
to enact separate legislation to cover specific circumstances. This
approach to the law has led to a patchwork of attempt statutes--leaving
gaps in coverage, and failing to adequately define exactly what
constitutes an attempt in all circumstances.
Some statutes include attempt language within the substantive
offense, but don't bother to define exactly what an attempt is. Others
define, as a separate crime, conduct which is only a step toward
commission of a more serious offense. Moreover, there is no offense of
attempt for still other serious crimes, such as disclosing classified
information to an unauthorized person.
This ad hoc approach to attempt statutes is causing problems for law
enforcement officials. At what point is it OK for law enforcement
officials to step in to prevent the completion of a crime? If someone
is seriously dedicated to committing a crime, law enforcement must be
able to intervene and prevent it--without having to worry whether doing
so would cause a criminal to walk. In the absence of a statutory
definition of an attempt, the courts have been called upon to decide
whether specific actions fit within existing statutory language.
When a criminal is attempting to commit a crime where attempt is not
an offense, then law enforcement must wait until the crime is
completed, or find some other charge to fit the criminal's actions. Law
enforcement should never be placed in either of these positions.
The bill that I am introducing today will solve these problems in the
current law. As I mentioned earlier, this legislation will add a
general attempt provision to the U.S. Criminal Code. It provides
congressional direction in defining what constitutes an attempt in all
circumstances. And, it will serve to fill in the irrational gaps in
attempt coverage.
In my view, it's time for the American people--acting through the
Congress--to clarify their intention when it comes to this area of the
law.
Millions of Americans work hard every day to make ends meet and raise
their families and provide a better life for their children.
But, there are some people who choose a different approach to life--a
life of crime. We as Americans need to leave no doubt where we stand on
that choice. If you even try to commit a crime, we're going to
prosecute you
[[Page S550]]
and convict you. This bill will make it easier for our law enforcement
officers to protect our families and our communities.
______
By Mr. DeWINE:
S. 172. A bill to amend title 18, United States Code, to set forth
the civil jurisdiction of the United States for crimes committed by
persons accompanying the Armed Forces outside of the United States, and
for other purposes; to the Committee on the Judiciary.
the military and civilian justice act
Mr. DeWINE. Mr. President, there are shortcomings in the Code of
Military Law that have terrible repercussions in the streets of
civilian America. These failures of the military judicial system too
often result in military criminals being pushed out of the service and
into our civilian streets--where these criminals continue to behave as
lawless predators. This bill closes two such gaps in the Military Code
and ensures that the enlisted criminal is not pushed out to prey on
decent citizens. This bill protects civilians from military personnel
who have committed crimes, just as the Military protects itself from
those same people.
My bill addresses an important gap in the law. Under current law,
many illegal acts committed abroad by U.S. soldiers or accompanying
civilians go unpunished by the military courts. The prosecution of
these crimes is left to the discretion of a military court, which
either chooses to do no more than hand down a dishonorable discharge or
lacks jurisdiction over the civilian defendant. This should not be the
case.
This bill guarantees that a soldier or accompanying civilian abroad,
committing an illegal act punishable under the United States Code by
more than a year's imprisonment, will be handed over to civilian
authorities for prosecution under the United States Code.
There is another aspect of this bill intended to protect civilian
Americans from the actions of those who commit crimes while in the
military. This bill also mandates that when an enlisted criminal is
discharged from the service, the military Secretary will turn over to
the FBI all the criminal records of that soldier for inclusion in the
FBI criminal records system. Again, Mr. President, this is another way
to protect the tax-paying, law-abiding American from dishonorably
discharged criminals. Under current law, the criminal histories of
these military personnel do not become part of the National Crime
Information Center database. This bill will ensure that they do.
______
By Mr. DeWINE:
S. 173. A bill to expedite State reviews of criminal records of
applicants for private security officer employment, and for other
purposes; to the Committee on the Judiciary.
The private security officers quality assurance act
Mr. DeWINE. Mr. President, I rise today to introduce the Private
Security Officer Assurance Act of 1997. This bill establishes an
expedited procedure for State regulators or private security officers
to obtain criminal records background checks through the FBI prior to
issuing state permits to security officers. Currently, it frequently
takes between 6 to 18 months to complete such checks.
My bill would authorize the Attorney General to designate an
association of employers of security officers to collect signature
cards from applicants and forward them to the FBI for a comparison
against the Federal criminal history records on file. The records would
then be forwarded to the appropriate State regulators who would decide
the qualification of the applicants for permits based on State laws.
Under this bill, the applicant would pay fees to compensate for the
cost of the background checks. No criminal history information would go
to the employer.
I would note that Congress has established similar procedures for
banks, the parimutuel industry and the financial securities industry.
The process that I described takes about 3 weeks for these industries.
Mr. President, I believe this bill will help improve public safety by
ensuring the integrity of those hired as security officers.
______
By Mr. DeWINE:
S. 174. A bill to establish the Fallen Timbers Battlefield, Fort
Meigs, and Fort Miamis National Historical Site in the State of Ohio;
to the Committee on Energy and Natural Resources.
THE FALLEN TIMBERS ACT
Mr. DeWINE. Mr. President, I rise today to introduce legislation that
will designate the Fallen Timbers Battlefield, Fort Meigs, and Fort
Miamis as National Historic Sites.
Mr. President, the people of northwest Ohio are committed to
preserving the historic heritage of the United States and the State of
Ohio, as well as that of their own community.
The truly national significance of the Battle of Fallen Timbers and
Fort Meigs have been acknowledged already. In 1960, Fallen Timbers was
designated as a National Historic Landmark. In 1969, Fort Meigs
received this designation.
The Battle of Fallen Timbers is acknowledged by the National Park
Service as a culminating event in the history of the struggle for
dominance in the old Northwest Territory.
Fort Meigs is recognized by the National Park Service as ``the zenith
of the British advance in the west as well as the maximum effort by
Native forces under the Shawnee, Tecumseh, during the War of 1812.''
Fort Miamis, which was attacked twice without success by British
troops, led by General Henry Proctor, in the spring of 1813, is listed
on the National Register of Historic Places.
Recently, the National Park Service completed a special resource
study examining the proposed National Historic Site designation and the
suitability of these sites for inclusion in the National Park System.
The Park Service concluded that these sites were suitable for
inclusion in the National Park System--with non-Federal management and
National Park Service assistance. The bill I am introducing today would
act on that recommendation.
My legislation will accomplish the following:
Recognize and preserve the 185-acre Fallen Timbers Battlefield site;
Formalize the linkage between the Fallen Timbers Battlefield and
Monument to Fort Meigs and Fort Miamis;
Preserve and interpret U.S. military history and Native American
culture during the period from 1794 through 1813; and,
Provide technical assistance to the State of Ohio as well as
interested community and historical groups in the development and
implementation of programming and interpretation of the three sites.
However, my legislation will not require the Federal Government to
provide direct funding to these three sites. That responsibility
remains with--and is welcomed by--the many individuals, community
groups, elected officials, and others who deserve recognition for their
many hours of hard work dedicated to this issue.
Mr. President, we have entered an era where the responsibility and
the drive behind the management, programming, and--in many cases--the
funding for historic preservation is the responsibility of local
community groups, local elected officials, and local business
communities.
This legislation to designate the Fallen Timbers Battlefield, Fort
Meigs, and Fort Miamis as National Historic Sites represents just such
an effort. In my opinion, it is long overdue.
Mr. President, it is time to grant these truly historic areas the
measure of respect and recognition they deserve. I agree with the
National Park Service--and the people of Ohio--on this issue. That is
why I am proposing this important legislation today.
______
By Mr. INOUYE:
S. 175. A bill to amend chapter 81 of title 5, United States Code, to
authorize the use of clinical social workers to conduct evaluations to
determine work-related emotional and mental illnesses; to the Committee
on Governmental Affairs.
the clinical social workers' recognition act of 1997
Mr. INOUYE. Mr. President, I rise today to introduce the Clinical
Social Workers' Recognition Act of 1997 to correct an outstanding
problem in the Federal Employees Compensation Act. This bill will also
provide clinical social workers the recognition they deserve as
independent providers of quality mental health care services.
[[Page S551]]
Clinical social workers are authorized to independently diagnose and
treat mental illnesses through public and private health insurance
plans across the Nation. However, title V, United States Code, does not
permit the use of mental health evaluations conducted by clinical
social workers for use as evidence in determining workers' compensation
claims brought about by Federal employees. The bill I am introducing
corrects this problem.
All 50 States, the District of Columbia, Puerto Rico, and the Virgin
Islands legally regulate social workers through licensure or
certification. Thirty-one States and the District of Columbia have
enacted laws that mandate reimbursement for clinical social workers by
insurance plans that offer mental health care coverage. All Federal
insurance programs that authorize the provision of mental health care
services, including Medicare, the Federal Employee Health Benefits
Program [FEHBP], and the Civilian Health and Medical Program of the
Uniformed Services [CHAMPUS] recognize the ability of clinical social
workers to provide mental health services.
It is a sad irony that Federal employees may select a clinical social
worker through their health plans to provide mental health services but
may not go to this professional for a workers' compensation evaluation.
Studies show that as much as 65 percent of all mental health services
are provided by clinical social workers and clinical social workers are
often the only providers of mental health service in rural areas of the
country. The failure to recognize the validity of evaluations provided
by clinical social workers unnecessarily limits the choice of Federal
employees in selecting a provider to conduct the mental health
evaluation and may well impose an undue burden for Federal employees in
certain areas where clinical social workers are the only available
providers for mental health care. This legislation will correct such an
inequity.
Mr. President, I ask unanimous consent that the text of this bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 175
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Clinical Social Workers'
Recognition Act of 1997''.
SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS FOR FEDERAL
WORKER COMPENSATION CLAIMS.
Section 8101 of title 5, United States Code, is amended--
(1) in paragraph (2) by striking ``and osteopathic
practitioners'' and inserting ``osteopathic practitioners,
and clinical social workers''; and
(2) in paragraph (3) by striking ``and osteopathic
practitioners'' and inserting ``osteopathic practitioners,
and clinical social workers''.
______
By Mr. INOUYE:
S. 176. A bill for the relief of Susan Rebola Cardenas; to the
Committee on the Judiciary.
private relief legislation
Mr. INOUYE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 176
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PERMANENT RESIDENCE.
Notwithstanding any other provision of law, for purposes of
the Immigration and Nationality Act (8 U.S.C. 1101 et seq.),
Susan Rebola Cardenas shall be held and considered to have
been lawfully admitted to the United States for permanent
residence as of the date of the enactment of this Act upon
payment of the required visa fee.
SEC. 2. REDUCTION OF NUMBER OF AVAILABLE VISAS.
Upon the granting of permanent residence to Susan Rebola
Cardenas as provided in this Act, the Secretary of State
shall instruct the proper officer to reduce by one number
during the current fiscal year the total number of immigrant
visas available to natives of the country of the alien's
birth under section 203(a) of the Immigration and Nationality
Act (8 U.S.C. 1153(a)).
______
By Mr. INOUYE:
S. 177. A bill to provide for a special application of section 1034
of the Internal Revenue Code of 1986; to the Committee on Finance.
special application legislation
Mr. INOUYE. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 177
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That, in
the case of Rita Bennington--
(1) who purchased her new principal residence (within the
meaning of section 1034 of the Internal Revenue Code of 1986)
in January 1992, and
(2) who was unable to meet the requirements of such section
with respect to the sale of an old principal residence until
May 1994, because of unexpected delays caused by Hurricane
Iniki, the Secretary of the Treasury, in the administration
of section 1034 of the Internal Revenue Code of 1986, shall
apply subsection (a) of such section by substituting ``2.5
years'' for ``2 years'' each place it appears.
______
By Mr. DeWINE:
S. 178. A bill to amend the Social Security Act to clarify that the
reasonable efforts requirement includes consideration of the health and
safety of the child; to the Committee on Finance.
FOSTER CARE LEGISLATION
Mr. DeWINE. Mr. President, in 1980, Congress passed the Adoption
Assistance and Child Welfare Act, known as CWA. The 1980 Act has done a
great deal of good. It increased the resources available to struggling
families. It increased the supervision of children in the foster care
system. And it gave financial support to people to encourage them to
adopt children with special needs.
But while the law has done a great deal of good, many experts are
coming to believe that this law has actually had some bad unintended
consequences.
Under the 1980 Act, for a state to be eligible for Federal matching
funds for foster care expenditures, the state must have a plan for the
provision of child welfare services approved by the Secretary of HHS
and this State plan must provide, and I quote:
that, in each case, reasonable efforts will be made (A) prior
to the placement of a child in foster care, to prevent or
eliminate the need for removal of the child from his home,
and (B) to make it possible for the child to return to his
home.
In other words, Mr. President, no matter what the particular
circumstances of a household may be the state must make reasonable
efforts to keep it together, and to put it back together if it falls
apart.
What constitutes reasonable efforts? How far does the State have to
go?
This has not been defined by Congress. Nor has it been defined by
HHS.
This failure to define what constitutes ``reasonable efforts'' has
had a very important--and very damaging--practical result. There is
strong evidence to suggest that in the absence of a definition,
reasonable efforts have become in some cases extraordinary efforts.
Efforts to keep families together at all costs.
Mr. President, during the past year, I have traveled throughout the
state of Ohio, talking to social work professionals. In these
discussions I have found that there is great disparity in how the law
is being interpreted by judges and social workers.
Let me give you an example. I posed this hypothetical to
representatives of children's services in both rural and urban
counties.
Mary is a 28-year-old crack-addicted mother who has seven children.
Steve, the 29-year-old father of the children, is an abusive alcoholic,
and all seven of the children have been taken away--permanently--by the
county.
Now, Mary gives birth to an eighth child, little Peggy. The newborn
Peggy tests positive for crack. Therefore, it is obvious that her
mother is still addicted to crack. Steve, the father, is still an
alcoholic.
Pretend for a moment that you work for the county children's services
department. Does the law allow you to get the new baby out of the
household? And if you do, should you file for permanent custody so that
the baby can be adopted?
The answer will surprise you. In fact, I was surprised at the
response I got when I asked a number of Ohio social work professionals
that very same question. The answer varied from county to county, but I
heard too much
[[Page S552]]
``no'' in the answers I got. Some officials said they could apply for
emergency custody of the baby and take her away on a temporary basis,
but they would have to make a continued effort to send the baby back to
her mother!
Other social workers said that if they went to court to get custody
of the baby, they probably wouldn't be able to get even temporary
custody of her. In one county, I was told it would be two years before
the baby could be made available for adoption. Another county said it
would be five years.
One social worker--just one, out of all the ones I asked--told me
that her department would move immediately for permanent custody of the
baby. But she said that their success would still depend on the judge
assigned to the case.
Should our Federal law really push the envelope, so that
extraordinary efforts are made to keep that family together--efforts
that any of us would not consider reasonable?
It is clear after 17 years of experience with this law that there is
a great deal of confusion as to how the act applies.
My legislation would clarify, once and for all, the intent of
Congress in the 1980 Act. My legislation would amend that language in
the following way: ``In determining reasonable efforts, the best
interests of the child, including the child's health and safety, shall
be of primary concern.''
The 1980 Act was a good bill. There are some families that need a
little help if they are going to stay together, and it's right for us
to help them. That's what the Child Welfare Act did.
But by now it should be equally clear that the framers of the 1980
Act did not intend for extraordinary efforts to be made to reunite
children with their abusers. As Peter Digre, the director of the Los
Angeles County Department of Children and Family Services, testified at
a hearing last year before the House Ways and Means Subcommittee on
Human Resources: ``[W]e cannot ignore the fact that at least 22% of the
time infants who are reunified with their families are subjected to new
episodes of abuse, neglect, or endangerment.''
That was not the intention of Congress in the 1980 law. But too
often, that law is being misinterpreted in a way that is trapping these
children in abusive households.
I believe we should leave no doubt about the will of the American
people on this issue affecting the lives of America's children. The
legislation I am proposing today would put the children first.
______
By Mr. HATCH (for himself, Mr. Lott, Mr. Thurmond, Mr. Craig, Mr.
Nickles, Mr. Domenici, Mr. Stevens, Mr. Roth, Mr. Bryan, Mr.
Kohl, Mr. Grassley, Mr. Graham, Mr. Specter, Mr. Baucus, Mr.
Thompson, Mr. Breaux, Mr. Kyl, Ms. Moseley-Braun, Mr. DeWine,
Mr. Robb, Mr. Abraham, Mr. Ashcroft, Mr. Sessions, Mr. D'Amato,
Mr. Helms, Mr. Lugar, Mr. Chafee, Mr. McCain, Mr. Jeffords, Mr.
Warner, Mr. Coverdell, Mr. Cochran, Mrs. Hutchison, Mr. Mack,
Mr. Gramm, Ms. Snowe, Mr. Allard, Mr. Brownback, Ms. Collins,
Mr. Enzi, Mr. Hagel, Mr. Hutchinson, Mr. Roberts, Mr. Gordon
H. Smith, Mr. Bennett, Mr. Bond, Mr. Burns, Mr. Campbell, Mr.
Coats, Mr. Faircloth, Mr. Frist, Mr. Gorton, Mr. Grams, Mr.
Gregg, Mr. Inhofe, Mr. Kempthorne, Mr. McConnell, Mr.
Murkowski, Mr. Santorum, Mr. Shelby, Mr. Smith, and Mr.
Thomas):
S.J. Res. 1. A joint resolution proposing an amendment to the
Constitution of the United States to require a balanced budget; to the
Committee on the Judiciary.
the constitutional balanced budget act
Mr. HATCH. Mr. President, let me just say I compliment my colleagues
for the excellent job they have done in coming up with the first 10
bills of this session. I think they are bills that the American people
have to be very interested in. There is no question that each and every
one is essential for the future of our country. I am very appreciative
that so many colleagues are willing to cosponsor and to push these
particular bills.
Having said that, the No. 1 issue on our agenda is, as it has always
been for Republicans and I think some very courageous Democrats as
well, S.J. Res. 1, the balanced budget constitutional amendment.
Mr. President, this is an amendment that literally could change the
future of our country for the better. We are now approaching a $6
trillion deficit. It has been largely accumulated over the last 15 or
20 years. We have had a period of almost 60 years of unbalanced
budgets, except on very rare occasions.
The Senate and the Hose seem to be institutionally incapable of
reaching balanced budget appropriations and budget acts. And I might
add, the President is incapable, as well. If you look at the last
budgets that the President has submitted, even the one that he called
the balanced budget, it was heavily loaded in the rear end of the
budget, in the last 2 years, knowing that there is no way in the world
that when we ultimately reach 2001 and 2002 that we can actually
balance the budget.
It has been a phony game. It is time to end that game. It is time to
literally strike out for the people of this country and for our
children and grandchildren of future generations by getting our fiscal
house in order. The only way that many of the now 62 cosponsors, and
another 6 who have said to their constituents that they will vote for
this amendment, it is the only way we can bring about a fiscal sanity
that will reduce taxes, reduce the interest rates of our society, keep
the stock market going, protect social security, Medicaid, Medicare,
veterans pensions and other matters, by having a strong fiscal economy
through the balanced budget amendment.
We are very concerned. This is a major, major battle this year. We
have 62 cosponsors--all 55 Republicans and 7 courageous Democrats so
far. We have another six Democrats who have promised their people at
home that they would vote for the balanced budget amendment. Everybody
knows this game. Everybody knows there will be some killer amendments
trying to defeat this amendment. In the end, everybody knows what the
amendment is. It is precisely the same as that found in the House and
that which will be brought up in the House. If we are ever going to get
this fiscal house in order, this is the way to do it. It is only the
first step.
Even if both Houses of Congress do pass the balanced budget amendment
by the requisite two-thirds vote, the amendment still has to be
submitted to the States, and three-quarters of them, or 38 States, have
to ratify the amendment. It is a very, very difficult process at best.
I just believe this is the year to do it. I hope that everybody will
live up to the commitments they have made to their constituents at
home. If they do, we will have set this country on a fiscal order path
that will be very beneficial for all of our children and grandchildren
and future generations.
Mr. President. I rise to speak on the Balanced Budget Amendment,
which I have just introduced. Last Congress, when the Amendment fell a
mere one vote short of passage here in the Senate, I vowed that we
would be back to try to pass this amendment and put America back on the
course of fiscal responsibility. We are back again and I have brought
sixty-one other Senators with me. Every one of the 55 Republicans in
the Senate are original co-sponsors, and we are joined by seven strong
Democrats. The Balanced Budget Amendment has sixty two original
cosponsors. If only five other Senators join us we will have the votes
America needs to see the Senate pass the Balanced Budget Amendment. If
everyone votes as they said they would before the November election and
keeps their promise to their constituents, the Senate will pass the
balanced budget amendment.
The Balanced Budget Amendment will again be S.J. Res. 1. It is right
that it should be, because it is the single most important piece of
legislation that will be voted on this Congress. It is that important
because if enacted it will change forever the way business is done in
Washington.
The idea of a Balanced Budget Amendment is not new. Unfortunately,
neither is the problem it is designed to solve. About thirty years ago,
we got off track and ran a deficit. It was not the first deficit we had
ever run, and it
[[Page S553]]
was only a small one, nothing to get too worried about. But we never
got back on track: we ran another deficit the next year, and again the
next year after that, and never got back into balance. In fact, we have
run a deficit every year since 1969. And that budget in 1969 was the
only balanced budget since 1960.
Today, the national debt is estimated to be $5.311 trillion. Last
Friday, when we began hearings on S.J. Res 1, the debt was at less than
$5.310 trillion. In other words, the debt has already increased by more
than $1 billion since the Senate began consideration of the measure
last week. Portioned out equally, every man, woman, and child in
America owes about $20,000. If the debt were piled into a single stack
of pennies, that pile could reach past the Moon, past Mars, and all the
way to Jupiter! It is enough money to buy every single automobile ever
sold in the United States AND every plane ticket ever sold for travel
in the United States.
And, Mr. President, the debt continues to grow. If you spent a dollar
a second, it would take you over 150,000 years to spend as much as the
national debt. But we have managed to accumulate our national debt much
faster. This year, we will increase the debt by about $4,500 every
second. At this rate it won't be long before we're all going to have to
learn what comes after trillion. The reality is that the bridge we are
building to the 21st century is awash in debt.
I read recently that this year the European Union will be deciding
which nations quality to join the new single currency in the first
tier. In order to join, nations must satisfy several criteria. One of
those criteria is that the nation's total debt must be no greater than
sixty percent of that nation's GDP. Well, Mr. President, our debt is
about seventy percent of our GDP. Which means if we tried to join the
European Union's new currency now, the United States would not qualify.
By international standards, we are too far in debt to be trusted
financially. This nation faces a future with higher taxes, lower wages,
and dramatically reduced world influence if we do not get our spending
habits under control. As well, failure to get our national debt under
control could prove catastrophic to current and future older Americans.
Over the next few weeks, opponents of the balanced budget amendment
are going to try to change the subject to a discussion of social
security and Medicare. For example, Treasury Secretary Rubin testified
before the Judiciary Committee on Friday in opposition to the balanced
budget amendment and suggested--no less than eight times during a six
page statement--that passage of the balanced budget amendment would
result in social security or Medicare checks being stopped. Opponents
of the balanced budget amendment want the public to believe that
passing the balanced budget amendment and balancing our federal budget
threatens the retirement security of older Americans. What they ignore
is that Congress simply never will allow social security or Medicare
checks to stop. It simply will not happen. Furthermore, they fail to
appreciate--or fail to mention--the positive effect the balanced budget
amendment would have on the long term stability of social security as
well as the retirement investments for most every American.
To listen to opponents of the balanced budget amendment, one would
think that Americans are counting exclusively on social security for
their economic security during retirement when in fact, more and more
Americans are relying on Wall Street. A recent PBS Frontline
documentary, ``Betting on the Market,'' explains how Americans are
increasingly entrusting their long-term retirement savings in Wall
Street. There are 34 million households that have invested in the stock
market in some form. As financial expert and the best-selling author of
``Smart Money,'' Jim Cramer, points out, if you have a pension, it's
likely that it's invested in stocks. If you have a 401K plan, it's
probably invested in stocks. Worth magazine's Ken Kurson points out
that in 1996, 34 percent of households headed by someone under 25 had
some sort of mutual fund. Stock mutual funds represent the biggest
chunk of young investor's money. At the same time Americans carry
record credit card debt. As financial historian Peter Bernstein points
out, the money that people used to put in the stock market was money
that they hoped to get rich on. Today, we are investing our blood
money--our savings; our nest eggs. America's affection for the markets
is demonstrated by Paine Webber's recent announcement that it achieved
a fifty percent increase in earnings last quarter. This is all well and
good while the Dow Jones Industrial keeps setting new highs--it closed
yesterday at 6,843. NASDAQ also reached record levels benefiting from a
boost in technology stocks.
With more and more Americans relying on mutual funds and stocks--
whether they know it or not--for their retirement, what happens to our
retirement security if we experience an economic downturn precipitated
by our failure to address our nation's growing debt? What happens if
Congress once again demonstrates an unwillingness to pass the balanced
budget amendment and take this necessary step towards balancing the
budget? With the fortunes of Wall Street effecting the quality of life
for more and more future retirees, Congress needs to concern itself
with how our growing debt and our willingness to make tough choices
will affect Wall Street. Nothing the Congress can do would have a more
positive effect on Wall Street and, in turn, the stability of our
retirement savings than passing the balanced budget amendment and
balancing the budget. More than 250 economists share this view. If my
colleagues are concerned with the financial security of current and
future older Americans, they will refrain from the wedge politics of
Medicare and social security cuts and, instead, support the balanced
budget.
The fact is that every political incentive in this town is to spend
now and let the next guy worry about paying the bill. Fiscal
accountability is the enemy of big government. There is only one way to
break Washington's addiction to spending other people's money and
borrowing from our children to do so: the pressure of a constitutional
amendment for a balanced budget.
I look forward to the debate on this important measure, and I look
forward to more fully explaining why I think that only a structural
change in our basic charter can restore the fiscal responsibility we
seem to have lost over the three or so decades.
Mr. President, I ask unanimous consent that the text of the Joint
Resolution be printed in the Record.
There being no objection, the Joint Resolution was ordered to be
printed in the Record, as follows:
S.J. Res.1
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, (two-thirds
of each House concurring therein), That the following article
is proposed as an amendment to the Constitution, which shall
be valid to all intents and purposes as part of the
Constitution when ratified by the legislatures of three-
fourths of the several States within seven years after the
date of its submission to the States for ratification:
``Article --
``Section 1. Total outlays for any fiscal year shall not
exceed total receipts for that fiscal year, unless three-
fifths of the whole number of each House of Congress shall
provide by law for a specific excess of outlays over receipts
by a rollcall vote.
``Section 2. The limit on the debt of the United States
held by the public shall not be increased, unless three-
fifths of the whole number of each House shall provide by law
for such an increase by a rollcall vote.
``Section 3. Prior to each fiscal year, the President shall
transmit to the Congress a proposed budget for the United
States Government for that fiscal year, in which total
outlays do not exceed total receipts.
``Section 4. No bill to increase revenue shall become law
unless approved by a majority of the hole number of each
House by a rollcall vote.
``Section 5. The Congress may waive the provisions of this
article for any fiscal year in which a declaration of war is
in effect. The provisions of this article may be wived for
any fiscal year in which the Untied States is engaged in
military conflict which causes an imminent and serious
military threat to national security and is so declared by a
joint resolution, adopted by a majority of the whole number
of each House, which becomes law.
``Section 6. The Congress shall enforce and implement this
article by appropriate legislation, which may rely on
estimates of outlays and receipts.
``Section 7. Total receipts shall include all receipts of
the United States Government except those derived from
borrowing. Total outlays shall include all outlays of the
United States Government except for those for repayment of
debt principal.
[[Page S554]]
``Section 8. This article shall take effect beginning with
fiscal year 2002 or with the second fiscal year beginning
after its ratification, whichever is later.''.
Mr. HATCH. I am delighted to yield to my colleague and friend from
Idaho who I think has played not only a singularly important role in
the Senate, but long has played a very important role when he was in
the House of Representatives, as well, and has been a great partner in
fighting this battle. I yield to the distinguished Senator from Idaho.
Mr. CRAIG. Mr. President, let me thank the senior Senator from Utah
for yielding but for a moment, to add to the comments that he has made
as we have introduced S.J. Res. 1, or Senate Joint Resolution 1, the
balanced budget constitutional amendment. The Senator from Utah has
outlined, as chairman of the Judiciary Committee, what we bring to the
floor and the very critical nature of this debate. For a moment, let me
humanize it, if I can, as to what it means to you, to me, to our
children, and to the future of this country.
Without a fiscally responsible Government that begins to rein in the
growth of the Federal debt, already at 5.3 trillion dollars, and the
ongoing year-after-year multibillion-dollar deficit that we have seen
now for decades, the financial future of our country and its citizens
is in doubt. There is no question today that the Congress and our
President mouth the words of a balanced budget. We even work toward
that by the very actions undertaken in writing the annual budgets.
To guarantee it, to assure that when it gets to the time of making
the tough votes to truly create a balanced budget, can we do it? Will
we have the will of the people behind us and the support to accomplish
that? I think that, absent a balanced budget amendment, the strength
will not be there. I say that having watched this institution for many
decades, and recognize that in the end when it really comes to the
business of sorting out Government, the decisions become very tough.
If we pass a balanced budget amendment to our Constitution this year,
and if the States ratify it within the next 2 years, we will offer to
the young people born today a unique opportunity. What is that
opportunity? That they will pay in their lifetime $180,000 less in
taxes, compared to what they would pay under the trends of the status
quo, because of the rate at which our Government currently grows.
We will offer to the average American family an opportunity
unprecedented, and that is a better standard of living and actually
more take-home pay and more dollars to spend, on an annualized basis,
of more than $1,500 a year, in addition to their current income. We
will offer our senior citizens the economic security we have promised
them, by protecting Social Security and Medicare from the ravages of a
massive debt and interest payments that crowd out all our other
priorities. Let us remember, the debt is the threat to Social Security
and to our seniors.
When the Senator from Utah and the Senator from Idaho began to work
to convince the Congress and the American people that a constitutional
amendment to require a balanced budget was necessary in the early
1980's, if it had passed at that time, if it had become part of the
Constitution, the Concord Coalition and others have estimated that the
average income per American family today would be $15,000 more than it
currently is. I think, from that kind of fact, you begin to recognize
the power and the importance of what we offer up today. You begin to
recognize the very critical nature of what a $5.3 trillion debt really
is, and how it is growing by $800 million a day and more than $9,000 a
second. If this Senate is to stand in the shadow of today's work a
decade from now and say that we did for our country what we thought was
necessary to assure the American dream to our children, to be able to
say to Americans that you will have the same unique opportunity that
your forebears had, then we must make sure that we have produced, and
locked in the requirement of, a Government that is fiscally
responsible.
What we offer today and what we will be debating in the coming weeks
is a balanced budget amendment to our Constitution which assures that
this body and the other, as well as the President and his budget
office, must operate in a fiscally sound and responsible way. It is
what the American people say is their No. 1 issue. It must be our No. 1
issue.
I am pleased today to join as a cosponsor in this critical amendment
and look forward to the debate in the coming weeks as we say to the
American people, ``We have heard your message and we will fight to be
fiscally responsible in the building and the maintaining of a federally
balanced budget.''
I yield back to the Senator from Utah.
Mr. HATCH. I thank my colleague from Idaho for his excellent remarks
and for his ardent fight for this amendment through the years.
Mr. President, there are 13 Democrats who have promised to vote for
this amendment. If we add all 55 Republicans and the 13 heroic
Democrats who have agreed to vote for this amendment, that will give us
68 votes, 1 more than we need. We know the President is going to put on
a full-court press. We also know that the minority leader and others
will do the same. It is important that these people live up to the
commitments they made to the constituents at home, and we are counting
on them to do it. I believe they will.
Thus far, only seven have cosponsored, but I believe the others will
be on board when the debate comes to the floor. I hope, with all my
heart, they realize how important this is. I hope they also realize how
very deeply I feel about their courageous stand on this issue.
Mr. ABRAHAM. Mr. President, 2 years ago, the Senate failed by one
vote to support a constitutional amendment requiring a balanced budget.
At the time, opponents told the Senate that balancing the budget didn't
require amending the Constitution. All we needed, they told us, was to
make the tough choices and cast the hard votes. Two budgets, hundreds
of tough votes, and one Government shutdown later, the budget is still
in deficit, and the case for a constitutional balanced budget amendment
is stronger than ever.
That's not to say we haven't made progress in the past 2 years. We
have. Since the 1994 elections, Congress has worked hard to hold the
line on discretionary spending while just last fall we passed historic
reforms to the 60-year-old welfare state. Perhaps just as importantly,
we have witnessed a dramatic shift in the debate itself. Two years ago,
President Clinton submitted a budget that never reached balance. Today
all sides have agreed--at least in principle--to the goal of balancing
the budget by the year 2002.
That's the good news.
The bad news is that while we have all seemingly agreed on the goal
of balancing the budget, we are miles apart on the details. It's one
thing to say you support a balanced budget--it's quite another to make
the tough decisions necessary to make it happen.
Mr. President, that's where Senator Hatch's amendment to the
Constitution comes in. As an original cosponsor of this amendment, I
believe it will force the hand of an unwilling Congress to set its
fiscal house in order. Where Congress has failed, I am confident the
Constitution will succeed. How would it work?
Section 1 of the amendment requires that total outlays of the
Government not exceed receipts unless three-fifths of the whole number
of both Houses waives the requirement. Once this amendment is passed, a
three-fifths vote of both the House and the Senate will be necessary in
order to increase the deficit.
Section 2 prohibits Congress from raising the debt ceiling unless
three-fifths of the whole number of both Houses of Congress waives the
requirement.
And, finally, section 4 requires that there be no revenue increases
unless approved by a majority of the whole number of each House in
Congress. If this proposal becomes the 28th amendment to the
Constitution, then in order to increase taxes, you would need first, a
recorded vote and, second, the support of at least 51 U.S. Senators and
218 Members of the House.
Quite simply, Mr. President, the balanced budget amendment raises the
procedural bar necessary for Congress to incur debt and raise taxes.
Given Congress' historic predilection toward doing both, I believe this
amendment is
[[Page S555]]
possibly the most important measure we will consider in the 105th
Congress.
Having focused on what the balanced budget amendment does, it is just
as important to focus on what it doesn't do. The first thing it doesn't
do is endanger the Social Security System. Social Security currently
operates with a surplus, and some Members have argued that sound fiscal
policy demands that we should exclude that surplus from the amendment
and our deficit calculations.
I am of the opinion that this argument is more of a diversion than
anything else. It has been raised to confuse the issue and provide some
Members with a smokescreen to cover their opposition to a measure that
is supported by an overwhelming majority of Americans. Balancing the
budget will strengthen, not weaken, the Social Security System.
The second thing this amendment doesn't do is endanger the health of
the national economy. Some--including the President--argue the balanced
budget amendment will prevent Congress from responding to shifting
economic recessions and booms.
Mr. President, the amendment being discussed today does not prohibit
running a deficit or borrowing money. It requires a three-fifths vote
in order to do those things. Under the circumstances generally
described in support of an economic exception, I think it is incumbent
upon the exceptions advocates to explain why they could not get the
necessary votes. Furthermore, I am interested to hear why the higher
standards established by the balanced budget amendment would be more
restrictive than the prospect of continued annual deficits, higher debt
and debt payments, and less real discretionary spending under Congress'
control.
Finally, this amendment does not transfer undue power to the
judiciary. One concern raised about the balanced budget amendment is
the role the courts will play in enforcing its provisions. In the past,
some have argued that the courts will involve themselves in the Federal
budget process in order to enforce the balanced budget amendment. As
someone with deep concerns about judicial activism, I have inspected
this issue closely, and I am confident that adoption of this amendment
will not authorize courts to insert themselves into the budget process.
As I mentioned previously, the balanced budget amendment establishes
new procedures that encourage Congress to move toward and adopt a
balanced budget. It does not, however, create a ``right'' to a balanced
budget. It does not disturb the powers of Congress under Article I of
the Constitution, it does not confer those powers on the courts, and it
does not give to the courts authority to interfere in those powers.
Mr. President, in conclusion, let me say the greatest danger facing
our economy, our senior citizens, and future generations is not an
amendment to the Constitution restricting Congress' ability to borrow
money or raise taxes, but rather the endless stream of deficits and
huge mountains of debt that a previous, unrestricted Congresses have
imposed upon this and future generations. It is unfair, irresponsible,
and immoral to pass this burden on to our children, and I applaud you
and the Republican leadership for making passage of Senate Joint
Resolution 1 the No. 1 priority of the 105th Congress.
Mr. CAMPBELL. Mr. President, for many years I have spoken out in
favor of a Balanced Budget Amendment to the Constitution, and have
supported and voted for this measure each time I have had the
opportunity to do so. Now, once again, I join many of my colleagues as
an original cosponsor of the Balanced Budget Amendment which is being
introduced today, and I applaud Senator Orrin Hatch, Majority Leader
Trent Lott, and the leadership for making this particular item a top
priority for the 105th Congress.
It would be so easy to give up on the idea of passing the Balanced
Budget Amendment. For a number of years, despite the hard work of many
individuals, this measure has failed to pass through Congress and move
on to the states for ratification where it belongs. However, I believe
passage of this Amendment is in the best interest of the future of this
country. It will force us to make the tough choices that need to be
made to balance the budget and eventually eliminate the staggering
debt.
There are those that believe there is no need for the Balanced Budget
Amendment, that Congress can continually balance the budget without
being mandated by the Constitution to do so. However, I have been a
member of this institution for ten years now, and I have yet to see
Congress and the administration bite the bullet, balance the budget,
and tackle our enormous debt. If we do not address this important
issue, the amount of the federal budget devoted toward paying off the
interest on the debt and the entitlement programs will increase to the
point that there will be barely any money left for those programs which
deserve and require federal funding such as education, law enforcement,
national security, or even our national parks and monuments. I think we
owe more to the American people and to future generations.
For those of us who remain committed to this effort, this piece of
legislation is a vital tool for tackling the difficult task of
balancing the budget. I would like to see an increase not only in our
standard of living and national savings rate but also in the amount of
money the Federal Government devotes to worthwhile and beneficial
programs--programs which could suffer due to our financial troubles.
Congress came within one vote last session of passing the Balanced
Budget Amendment. I am optimistic that this year we can pass this
legislation and send the measure on to the states for their
deliberation. It is time to allow the American people and the State
legislatures the opportunity to debate the merits of the Balanced
Budget Amendment, and I hope that the Congress will see fit to entrust
this measure to those who must ratify or reject it.
______
By Mr. HOLLINGS (for himself, Mr. Specter, Mr. Daschle, Mr.
Dorgan, Mr. Shelby, Mr. Reid, Mr. Ford, and Mr. Reed):
S.J. Res. 2. A joint resolution proposing an amendment to the
Constitution of the United States relating to contributions and
expenditures intended to affect elections; to the Committee on the
Judiciary.
THE CAMPAIGN FINANCE REFORM CONSTITUTIONAL AMENDMENT
Mr. HOLLINGS. Mr. President, I rise today, along with my collegue and
cosponsor Senator Specter, to introduce for the sixth time a
constitutional amendment to limit campaign spending. Although I commend
the efforts of the Minority Leader and others seeking to statutorily
reform our campaign finance laws, I am convinced the only way to solve
the chronic problems surrounding campaign financing is to reverse the
Supreme Court's flawed decision in Buckley versus Valeo by adopting a
constitutional amendment granting Congress the right to limit campaign
spending.
We all know the score--we're hamstrung by that decision and the ever
increasing cost of a competitive campaign. With the total cost for
congressional elections, just general elections, skyrocketing from $403
million in 1990 to over $626 million in 1996, the need for limits on
campaign expenditures is more urgent than ever. For nearly a quarter of
a century, Congress has tried to tackle runaway campaign spending with
bills aimed at getting around the disjointed Buckley decision. Again
and again, Congress has failed.
Let us resolve not to repeat the mistakes of past campaign finance
reform efforts, which have become bogged down in partisanship as
Democrats and Republicans each tried to gore the other's sacred cows.
During the 103d Congress there was a sign that we could move beyond
this partisan bickering, when the Senate in a bipartisan fashion
expressed its support for a constitutional amendment to limit campaign
expenditures. In May 1993, a non-binding sense of the Senate resolution
was agreed to which advocated the adoption of a constitutional
amendment empowering Congress and States to limit campaign
expenditures.
Now it is time to take the next step. We must strike the decisive
blow against the anything-goes fundraising and spending tolerated by
both political parties. Looking beyond the current headlines regarding
the source of these funds, the massive amount of
[[Page S556]]
money spent is astonishing and serves only to cement the commonly held
belief that our elections are nothing more than auctions and that our
politicians are up for sale. It is time to put a limit on the amount of
money sloshing around campaign war chests. It is time to adopt a
constitutional amendment to limit campaign spending--a simple,
straightforward, nonpartisan solution.
As Prof. Gerald G. Ashdown has written in the New England Law Review,
amending the Constitution to allow Congress to regulate campaign
expenditures is ``the most theoretically attractive of the approaches-
to-reform since, from a broad free speech perspective, the decision in
Buckley is misguided and has worsened the campaign finance
atmosphere.'' Adds Professor Ashdown: ``If Congress could
constitutionally limit the campaign expenditures of individuals,
candidates, and committees, along with contributions, most of the
troubles * * * would be eliminated.''
Right to the point, back in 1974, Congress responded to the public's
outrage over the Watergate scandals by passing, on a bipartisan basis,
a comprehensive campaign finance law. The centerpiece of this reform
was a limitation on campaign expenditures. Congress recognized that
spending limits were the only rational alternative to a system that
essentially awarded office to the highest bidder or wealthiest
candidate.
Unfortunately, the Supreme Court overturned these spending limits in
its infamous Buckley versus Valeo decision of 1976. The Court
mistakenly equated a candidate's right to spend unlimited sums of money
with his right to free speech. In the face of spirited dissents, the
Court came to the conclusion that limits on campaign contributions but
not spending furthered ``* * * the governmental interest in preventing
corruption and the appearance of corruption'' and that this interest
``outweighs considerations of free speech.''
I have never been able to fathom why that same test--the governmental
interest in preventing corruption and the appearance of corruption--
does not overwhelmingly justify limits on campaign spending. The Court
made a huge mistake. The fact is, spending limits in Federal campaigns
would act to restore the free speech that has been eroded by the
Buckley decision.
After all, as a practical reality, what Buckley says is: Yes, if you
have a fundraising advantage or personal wealth, then you have access
to television, radio, and other media and you have freedom of speech.
But if you do not have a fundraising advantage or personal wealth, then
you are denied access. Instead of freedom of speech, you have only the
freedom to say nothing.
So let us be done with this phony charge that spending limits are
somehow an attack on freedom of speech. As Justice Byron White points
out, clear as a bell, in his dissent, both contribution limits and
spending limits are neutral as to the content of speech and are not
motivated by fear of the consequences of the political speech in
general.
Mr. President, every Senator realizes that television advertising is
the name of the game in modern American politics. In warfare, if you
control the air, you control the battlefield. In politics, if you
control the airwaves, you control the tenor and focus of a campaign.
Probably 80 percent of campaign communications take place through the
medium of television. And most of that TV airtime comes at a dear
price. In South Carolina, you're talking between $1,000 and $2,000 for
30 seconds of primetime advertising. In New York City, it's anywhere
from $30,000 to $40,000 for the same 30 seconds.
The hard fact of life for a candidate is that if you're not on TV,
you're not truly in the race. Wealthy challengers as well as incumbents
flushed with money go directly to the TV studio. Those without a
fundraising advantage or personal wealth are sidetracked to the time-
consuming pursuit of cash.
The Buckley decision created a double bind. It upheld restrictions on
campaign contributions, but struck down restrictions on how much
candidates with deep pockets can spend. The Court ignored the practical
reality that if my opponent has only $50,000 to spend in a race and I
have $1 million, then I can effectively deprive him of his speech. By
failing to respond to my advertising, my cash-poor opponent will appear
unwilling to speak up in his own defense.
Justice Thurgood Marshall zeroed in on this disparity in his dissent
to Buckley. By striking down the limit on what a candidate can spend,
Justice Marshall said, ``It would appear to follow that the candidate
with a substantial personal fortune at his disposal is off to a
significant head start.''
Indeed, Justice Marshall went further: He argued that by upholding
the limitations on contributions but striking down limits on overall
spending, the Court put an additional premium on a candidate's personal
wealth.
Justice Marshall was dead right and Ross Perot and Steve Forbes have
proved it. Massive spending of their personal fortunes immediately made
them contenders. Our urgent task is to right the injustice of Buckley
versus Valeo by empowering Congress to place caps on Federal campaign
spending. We are all painfully aware of the uncontrolled escalation of
campaign spending. The average cost of a winning Senate race was $1.2
million in 1980, rising to $2.9 million in 1984, and skyrocketing to
$3.1 million in 1986, $3.7 million in 1988, and up to $4.3 in 1996. To
raise that kind of money, the average Senator must raise over $13,800 a
week, every week of his or her 6-year term. Overall spending in
congressional races increased from $446 million in 1990 to more than
$724 million in 1994--almost a 70 percent increase in 4 short years. I
predict that when the final FEC reports are compiled for 1996, that
figure will go even higher.
This obsession with money distracts us from the people's business. It
corrupts and degrades the entire political process. Fundraisers used to
be arranged so they didn't conflict with the Senate schedule; nowadays,
the Senate schedule is regularly shifted to accommodate fundraisers.
I have run for statewide office 16 times in South Carolina. You
establish a certain campaign routine, say, shaking hands at a mill
shift in Greer, visiting a big country store outside of Belton, and so
on. Over the years, they look for you and expect you to come around.
But in recent years, those mill visits and dropping by the country
store have become a casualty of the system. There is very little time
for them. We're out chasing dollars.
During my 1992 reelection campaign, I found myself raising money to
get on TV to raise money to get on TV to raise money to get on TV. It's
a vicious cycle.
I remember Senator Richard Russell saying: ``They give you a 6-year
term in this U.S. Senate: 2 years to be a statesman, the next 2 years
to be a politician, and the last 2 years to be a demagogue.''
Regrettably, we are no longer afforded even 2 years as statesmen. We
proceed straight to politics and demagoguery right after the election
because of the imperatives of raising money.
My proposed constitutional amendment would change all this. It would
empower Congress to impose reasonable spending limits on Federal
campaigns. For instance, we could impose a limit of, say, $800,000 per
Senate candidate in a small State like South Carolina--a far cry from
the millions spent by my opponent and me in 1992. And bear in mind that
direct expenditures account for only a portion of total spending. For
instance, my 1992 opponent's direct expenditures were supplemented by
hundreds of thousands of dollars in expenditures by independent
organizations and by the State and local Republican Party. When you
total up spending from all sources, my challenger and I spent roughly
the same amount in 1992.
And incidentally, Mr. President, let's be done with the canard that
spending limits would be a boon to incumbents, who supposedly already
have name recognition and standing with the public and therefore begin
with a built-in advantage over challengers. Nonsense. I hardly need to
remind my Senate colleagues of the high rate of mortality in upper
chamber elections. And as to the alleged invulnerability of incumbents
in the House, I would simply note that well over 50 percent of the
House membership has been replaced since the 1990 elections and just 3
weeks ago we swore in 15 new Senators.
I can tell you from experience that any advantages of incumbency are
[[Page S557]]
more than counterbalanced by the obvious disadvantages of incumbency,
specifically the disadvantage of defending hundreds of controversial
votes in Congress.
Moreover, Mr. President, I submit that once we have overall spending
limits, it will matter little whether a candidate gets money from
industry groups, or from PAC's, or from individuals. It is still a
reasonable amount any way you cut it. Spending will be under control,
and we will be able to account for every dollar going out.
On the issue of PAC's, Mr. President, let me say that I have never
believed that PAC's per se are an evil in the current system. On the
contrary, PAC's are a very healthy instrumentality of politics. PAC's
have brought people into the political process: nurses, educators,
small business people, senior citizens, unionists, you name it. They
permit people of modest means and limited individual influence to band
together with others of mutual interest so their message is heard and
known.
For years we have encouraged these people to get involved, to
participate. Yet now that they are participating, we turn around and
say, ``Oh, no; your influence is corrupting, your money is tainted''.
This is wrong. The evil to be corrected is not the abundance of
participation but the superabundance of money. The culprit is runaway
campaign spending.
To a distressing degree, elections are determined not in the
political marketplace but in the financial marketplace. Our elections
are supposed to be contests of ideas, but too often they degenerate
into megadollar derbies, paper chases through the board rooms of
corporations and special interests.
Mr. President, I repeat, campaign spending must be brought under
control. The constitutional amendment Senator Specter and I have
proposed would permit Congress to impose fair, responsible, workable
limits on Federal campaign expenditures and allow States to do the same
with regard to State and local elections.
Such a reform would have four important impacts. First, it would end
the mindless pursuits of ever-fatter campaign war chests. Second, it
would free candidates from their current obsession with fundraising and
allow them to focus more on issues and ideas; once elected to office,
we wouldn't have to spend 20 percent of our time raising money to keep
our seats. Third, it would curb the influence of special interests. And
fourth, it would create a more level playing field for our Federal
campaigns--a competitive environment where personal wealth does not
give candidates an insurmountable advantage.
Finally, Mr. President, a word about the advantages of the amend-the-
Constitution approach that I propose. Recent history amply demonstrates
the practicality and viability of this constitutional route. Certainly,
it is not coincidence that five of the last seven amendments to the
Constitution have dealt with Federal election issues. In elections, the
process drives and shapes the end result. Election laws can skew
election results, whether you're talking about a poll tax depriving
minorities of their right to vote, or the absence of campaign spending
limits giving an unfair advantage to wealthy candidates. These are
profound issues which go to the heart of our democracy, and it is
entirely appropriate that they be addressed through a constitutional
amendment.
And let's not be distracted by the argument that the amend-the-
Constitution approach will take too long. Take too long? We have been
dithering on this campaign finance issue since the early 1970's, and we
haven't advanced the ball a single yard. All-the-while the Supreme
Court continues to strike down campaign limit after campaign limit. It
has been a quarter of a century, and no legislative solution has done
the job.
Except for the 27th amendment, the last five constitutional
amendments took an average of 17 months to be adopted. There is no
reason why we cannot pass this joint resolution, submit it to the
States for a vote, and ratify the amendment in time for it to govern
the 1998 election. Once passed by the Congress, the Joint Resolution
goes directly to the States for ratification. Once ratified, it becomes
the law of the land, and it is a Supreme Court challenge.
And, by the way, I reject the argument that if we were to pass and
ratify this amendment, Democrats and Republicans would be unable to
hammer out a mutually acceptable formula of campaign expenditure
limits. A Democratic Congress and Republican President did exactly that
in 1974, and we can certainly do it again.
Mr. President, this amendment will address the campaign finance mess
directly, decisively, and with finality. The Supreme Court has chosen
to ignore the overwhelming importance of media advertising in today's
campaigns. In the Buckley decision, it prescribed a bogus if-you-have-
the-money-you-can-talk version of free speech. In its place, I urge the
Congress to move beyond these acrobatic attempts at legislating around
the Buckley decision. As we have all seen, no matter how sincere, these
plans are doomed to fail. The solution rests in fixing the Buckley
decision. It is my hope that as the campaign financing debate unfolds,
the Majority Leader will provide us with an opportunity to vote on this
resolution--it is the only solution.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 2
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution of the United
States, to be valid only if ratified by the legislatures of
three-fourths of the several States within 7 years after the
date of final passage of this joint resolution:
``Article--
``Section 1. Congress shall have power to set reasonable
limits on the amount of contributions that may be accepted
by, and the amount of expenditures that may be made by, in
support of, or in opposition to, a candidate for nomination
for election to, or for election to, Federal office.
``Section 2. A State shall have power to set reasonable
limits on the amount of contributions that may be accepted
by, and the amount of expenditures that may be made by, in
support of, or in opposition to, a candidate for nomination
for election to, or for election to, State or local office.
``Section 3. Congress shall have power to implement and
enforce this article by appropriate legislation.''.
____________________