[Congressional Record Volume 143, Number 8 (Tuesday, January 28, 1997)]
[Senate]
[Pages S726-S768]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. INOUYE:
  S. 204. A bill for the relief of Dogan Umut Evans; 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. 204

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

     SECTION 1. IMMEDIATE RELATIVE STATUS FOR DOGAN UMUT EVANS.

       (a) In General.--Dogan Umut Evans shall be classified as a 
     child under section 101(b)(1)(F) of the Immigration and 
     Nationality Act for purposes of approval of a relative visa 
     petition filed under section 204 of such Act by his adoptive 
     parent and the filing of an application for an immigrant visa 
     or adjustment of status.
       (b) Adjustment of Status.--If Dogan Umut Evans enters the 
     United States before the filing deadline specified in 
     subsection (c), he shall be considered to have entered and 
     remained lawfully and shall, if otherwise eligible, be 
     eligible for adjustment of status under section 245 of the 
     Immigration and Nationality Act as of the date of the 
     enactment of this Act.
       (c) Deadline for Application and Payment of Fees.--
     Subsections (a) and (b) shall apply only if the petition and 
     the application for issuance of an immigrant visa or the 
     application for adjustment of status are filed with 
     appropriate fees within 2 years after the date of the 
     enactment of this Act.
       (d) Reduction of Immigrant Visa Number.--Upon the granting 
     of an immigrant visa or permanent residence to Dogan Umut 
     Evans, the Secretary of State shall instruct the proper 
     officer to reduce by 1, for the current or next following 
     fiscal year, the worldwide level of family-sponsored 
     immigrants under section 201(c)(1)(A) of the Immigration and 
     Nationality Act.
       (e) Denial of Preferential Immigration Treatment for 
     Certain Relatives.--The natural parents, brothers, and 
     sisters of Dogan Umut Evans, if any, shall not, by virtue of 
     such relationship, be accorded any

[[Page S727]]

     right, privilege, or status under the Immigration and 
     Nationality Act.
                                 ______
                                 
      By Mr. FRIST (for himself and Mr. Allard):
  S. 205. A bill to eliminate certain benefits for Members of Congress, 
and for other purposes; to the Committee on Governmental Affairs.


                        THE CITIZEN CONGRESS ACT

 Mr. FRIST. Mr. President, I introduce the Citizen Congress 
Act, a bill that ends many of the perks and privileges that separate 
Members of Congress from the American people.
  Our Founding Fathers envisioned a Congress of citizen legislators who 
would leave their families and communities for a short time to write 
legislation and then return home to live under the laws they helped to 
pass. Unfortunately, we have strayed far from that vision. A strong 
perception exists among the American people that elected officials in 
Washington have placed themselves above the laws and separated 
themselves from the public with perks and privileges. Enacting term 
limits would be the best way to re-create a citizen legislature, and I 
remain committed to passing a term limits amendment to the 
Constitution. In the meantime, reforming congressional pensions, pay, 
and perks offers an immediately achievable step toward making Congress 
more directly responsible and accountable to the American people.
  When I was elected to the U.S. Senate a little more than 2 years ago, 
voters placed their trust in me to help change the way the U.S. 
Congress does business. With passage of the Congressional 
Accountability Act and tough lobbying reform in the last Congress, we 
have begun serious, bipartisan reform efforts. But we cannot afford to 
stop there.
  Congressional perks and privileges are not limited to gifts from 
lobbyists and exemptions from certain laws. In fact, most people would 
be surprised--even shocked--to know that Members of Congress can 
receive free health care from military hospitals or that they receive 
automatic cost-of-living adjustments [COLA's] for their salaries and 
pensions. We must address these issues as well. To continue building 
confidence in our Government, we must continue building confidence in 
the people who serve there.
  Today, I join my colleague from Colorado, Senator Wayne Allard, in 
reintroducing a comprehensive congressional reform bill. The 
legislation, entitled the Citizen Congress Act, will help restore faith 
and trust in our Government by attacking the ``10 Pillars of Perkdom.'' 
The 10 Pillars include:
  Eliminating the taxpayer subsidy of congressional pensions.
  Eliminating automatic cost-of-living adjustments for congressional 
pensions.
  Eliminating automatic pay raises for Members of Congress.
  Requiring a rollcall vote for any pay raise.
  Requiring public disclosure of all Members' Federal retirement 
benefits.
  Banning personal use of officially accrued frequent flier miles.
  Banning taxpayer-financed mass mailings.
  Restricting use of military aircraft by Members of Congress.
  Prohibiting free treatment at military medical facilities.
  Banning special parking privileges at Washington-area airports.
  A companion bill, H.R. 436, was introduced in the House of 
Representatives by Congressman Mark Sanford.
  At a time when everyone is tightening their belts to balance the 
Federal budget and restore confidence in our Government, it is only 
right that Members of Congress eliminate the perks and privileges that 
are not necessary to conduct congressional business. The Citizen 
Congress Act launches the next stage of Government reform by focusing 
on the Members of Congress themselves. I encourage my colleagues to 
join me in passing this important legislation and bringing Congress 
another step closer to the American people.
  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. 205

       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 ``Citizen Congress Act''.

     SEC. 2. LIMITATION ON RETIREMENT COVERAGE FOR MEMBERS OF 
                   CONGRESS.

       (a) In General.--Notwithstanding any other provision of 
     law, effective at the beginning of the Congress next 
     beginning after the date of the enactment of this Act, a 
     Member of Congress shall be ineligible to participate in the 
     Civil Service Retirement System or the Federal Employees' 
     Retirement System, except as otherwise provided under this 
     section.
       (b) Participation in the Thrift Savings Plan.--
     Notwithstanding subsection (a), a Member may participate in 
     the Thrift Savings Plan subject to section 8351 of title 5, 
     United States Code, at anytime during the 12-year period 
     beginning on the date the Member begins his or her first 
     term.
       (c) Refunds of Contributions.--
       (1) In general.--Nothing in subsection (a) shall prevent 
     refunds from being made, in accordance with otherwise 
     applicable provisions of law (including those relating to the 
     Thrift Savings Plan), on account of an individual's becoming 
     ineligible to participate in the Civil Service Retirement 
     System or the Federal Employees' Retirement System (as the 
     case may be) as a result of the enactment of this section.
       (2) Treatment of refund.--For purposes of any refund 
     referred to in paragraph (1), a Member who so becomes 
     ineligible to participate in either of the retirement systems 
     referred to in paragraph (1) shall be treated in the same way 
     as if separated from service.
       (d) Annuities Not Affected to the Extent Based on Prior 
     Service.--Subsection (a) shall not be considered to affect--
       (1) any annuity (or other benefit) entitlement to which is 
     based on a separation from service occurring before the date 
     of the enactment of this Act (including any survivor annuity 
     based on the death of the individual who so separated); or
       (2) any other annuity (or benefit), to the extent provided 
     under subsection (e).
       (e) Preservations of Rights Based on Prior Service.--
       (1) In general.--For purposes of determining eligibility 
     for, or the amount of, any annuity (or other benefit) 
     referred to in subsection (d)(2) based on service as a Member 
     of Congress--
       (A) all service as a Member of Congress shall be 
     disregarded except for any such service performed before the 
     date of the enactment of this Act; and
       (B) all pay for service performed as a Member of Congress 
     shall be disregarded other than pay for service which may be 
     taken into account under subparagraph (A).
       (2) Preservation of rights.--To the extent practicable, 
     eligibility for, and the amount of, any annuity (or other 
     benefit) to which an individual is entitled based on a 
     separation of a Member of Congress occurring after such 
     Member becomes ineligible to participate in the Civil Service 
     Retirement System or the Federal Employees' Retirement System 
     (as the case may be) by reason of subsection (a) shall be 
     determined in a manner that preserves any rights to which the 
     Member would have been entitled, as of the date of the 
     enactment of this Act, had separation occurred on such date.
       (f) Regulations.--Any regulations necessary to carry out 
     this section may be prescribed by the Office of Personnel 
     Management and the Executive Director (referred to in section 
     8401(13) of title 5, United States Code) with respect to 
     matters within their respective areas of responsibility.
       (g) Definition.--As used in this section, the terms 
     ``Member of Congress'' and ``Member'' mean any individual 
     under section 8331(2) or 8401(20) of title 5, United States 
     Code.
       (h) Rule of Construction.--Nothing in this section shall be 
     considered to apply with respect to any savings plan or other 
     matter outside of subchapter III of chapter 83 or chapter 84 
     of title 5, United States Code.

     SEC. 3. DISCLOSURE OF ESTIMATES OF FEDERAL RETIREMENT 
                   BENEFITS OF MEMBERS OF CONGRESS.

       (a) In General.--Section 105(a) of the Legislative Branch 
     Appropriations Act, 1965 (2 U.S.C. 104a; Public Law 88-454; 
     78 Stat. 550) is amended by adding at the end the following 
     new paragraph:
       ``(4) The Secretary of the Senate and the Clerk of the 
     House of Representatives shall include in each report 
     submitted under paragraph (1), with respect to Members of 
     Congress, as applicable--
       ``(A) the total amount of individual contributions made by 
     each Member to the Civil Service Retirement and Disability 
     Fund and the Thrift Savings Fund under chapters 83 and 84 of 
     title 5, United States Code, for all Federal service 
     performed by the Member as a Member of Congress and as a 
     Federal employee;
       ``(B) an estimate of the annuity each Member would be 
     entitled to receive under chapters 83 and 84 of such title 
     based on the earliest possible date to receive annuity 
     payments by reason of retirement (other than disability 
     retirement) which begins after the date of expiration of the 
     term of office such Member is serving; and
       ``(C) any other information necessary to enable the public 
     to accurately compute the Federal retirement benefits of each 
     Member based on various assumptions of years of service and 
     age of separation from service by reason of retirement.''.

[[Page S728]]

       (b) Effective Date.--This section shall take effect 1 year 
     after the date of the enactment of this Act.

     SEC. 4. ELIMINATION OF AUTOMATIC ANNUITY ADJUSTMENTS FOR 
                   MEMBERS OF CONGRESS.

       The portion of the annuity of a Member of Congress which is 
     based solely on service as a Member of Congress shall not be 
     subject to a COLA adjustment under section 8340 or 8462 of 
     title 5, United States Code.

     SEC. 5. ELIMINATION OF AUTOMATIC PAY ADJUSTMENTS FOR MEMBERS 
                   OF CONGRESS.

       (a) Pay Adjustments.--Paragraph (2) of section 601(a) of 
     the Legislative Reorganization Act of 1946 (2 U.S.C. 31) is 
     repealed.
       (b) Conforming Amendment.--Section 601(a)(1) of such Act is 
     amended--
       (1) by striking ``(a)(1)'' and inserting ``(a)'';
       (2) by redesignating subparagraphs (A), (B), and (C) as 
     paragraphs (1), (2), and (3), respectively; and
       (3) by striking ``, as adjusted by paragraph (2) of this 
     subsection''.

     SEC. 6. ROLLCALL VOTE FOR ANY CONGRESSIONAL PAY RAISE.

       It shall not be in order in the Senate or the House of 
     Representatives to dispose of any amendment, bill, 
     resolution, motion, or other matter relating to the pay of 
     Members of Congress unless the matter is decided by a 
     rollcall vote.

     SEC. 7. TRAVEL AWARDS FROM OFFICIAL TRAVEL OF A MEMBER, 
                   OFFICER, OR EMPLOYEE OF THE HOUSE OF 
                   REPRESENTATIVES TO BE USED ONLY WITH RESPECT TO 
                   OFFICIAL TRAVEL.

       (a) In General.--Notwithstanding any other provision of 
     law, or any rule, regulation, or other authority, any travel 
     award that accrues by reason of official travel of a Member, 
     officer, or employee of the House of Representatives may be 
     used only with respect to official travel.
       (b) Regulations.--The Committee on House Oversight of the 
     House of Representatives shall have authority to prescribe 
     regulations to carry out this section.
       (c) Definitions.--As used in this section--
       (1) the term ``travel award'' means any frequent flier 
     mileage, free travel, discounted travel, or other travel 
     benefit, whether awarded by coupon, membership, or otherwise; 
     and
       (2) the term ``official travel'' means, with respect to the 
     House of Representatives, travel performed for the conduct of 
     official business of the House of Representatives.

     SEC. 8. BAN ON MASS MAILINGS.

       (a) In General.--Paragraph (6)(A) of section 3210(a) of 
     title 39, United States Code, is amended to read as follows:
       ``(6)(A) It is the intent of Congress that a Member of, or 
     Member-elect to, Congress may not mail any mass mailing as 
     franked mail.''.
       (b) Technical and Conforming Amendments.--
       (1) The second sentence of section 3210(c) of title 39, 
     United States Code, is amended by striking ``subsection (a) 
     (4) and (5)'' and inserting ``subsection (a) (4), (5), and 
     (6)''.
       (2) Section 3210 of title 39, United States Code, is 
     amended--
       (A) in subsection (a)(3)--
       (i) in subparagraph (G) by striking ``, including general 
     mass mailings,''; and
       (ii) in subparagraphs (I) and (J) by striking ``or other 
     general mass mailing'';
       (B) in subsection (a)(6) by repealing subparagraphs (B), 
     (C), and (F), and the second sentence of subparagraph (D);
       (C) by repealing paragraph (7) of subsection (a); and
       (D) by repealing subsection (f).
       (3) Section 316(a) of the Legislative Branch Appropriations 
     Act, 1990 (39 U.S.C. 3210 note) is repealed.
       (4) Subsection (f) of section 311 of the Legislative Branch 
     Appropriations Act, 1991 (2 U.S.C. 59e(f)) is repealed.
       (c) Effective Date.--The amendments made by this section 
     shall take effect at the beginning of the Congress next 
     beginning after the date of the enactment of this Act.

     SEC. 9. RESTRICTIONS ON USE OF MILITARY AIR COMMAND BY 
                   MEMBERS OF CONGRESS.

       (a) Restrictions.--
       (1) In general.--Chapter 157 of title 10, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2646. Restrictions on provision of air transportation 
       to Members of Congress

       ``(a) Restrictions.--A Member of Congress may not receive 
     transportation in an aircraft of the Military Air Command 
     unless--
       ``(1) the transportation is provided on a space-available 
     basis as part of the scheduled operations of the military 
     aircraft unrelated to the provision of transportation to 
     Members of Congress;
       ``(2) the use of the military aircraft is necessary because 
     the destination of the Member of Congress, or an airfield 
     located within reasonable distance of the destination, is not 
     accessible by regularly scheduled flights of commercial 
     aircraft; or
       ``(3) the use of the military aircraft is the least 
     expensive method for the Member of Congress to reach the 
     destination by aircraft, as demonstrated by information 
     released before the trip by the member or committee of 
     Congress sponsoring the trip.
       ``(b) Destination.--In connection with transportation 
     provided under subsection (a)(1), the destination of the 
     military aircraft may not be selected to accommodate the 
     travel plans of the Member of Congress requesting such 
     transportation.
       ``(c) Aircraft Defined.--For purposes of this section, the 
     term `aircraft' includes both fixed-wing airplanes and 
     helicopters.''.
       (2) Technical and conforming amendment.--The table of 
     sections at the beginning of such chapter is amended by 
     adding at the end the following:

``2646. Restrictions on provision of air transportation to Members of 
              Congress.''.

       (b) Effect on Members Currently Receiving Transportation.--
     Section 2643 of title 10, United States Code, as added by 
     subsection (a), shall not apply with respect to a Member of 
     Congress who, as of the date of the enactment of this Act, is 
     receiving air transportation or is scheduled to receive 
     transportation in an aircraft of the Military Air Command 
     until the Member completes the travel plans for which the 
     transportation is being provided or scheduled.

     SEC. 10. PROHIBITION ON USE OF MILITARY MEDICAL TREATMENT 
                   FACILITIES BY MEMBERS OF CONGRESS.

       (a) Prohibition.--
       (1) In general.--Chapter 55 of title 10, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1107. Prohibition on provision of medical and dental 
       care to Members of Congress

       ``A Member of Congress may not receive medical or dental 
     care in any facility of any uniformed service unless--
       ``(1) the Member of Congress is eligible or entitled to 
     such care as a member or former member of a uniformed service 
     or as a covered beneficiary; or
       ``(2) such care is provided on an emergency basis unrelated 
     to the person's status as a Member of Congress.''.
       (2) Technical and conforming amendment.--The table of 
     sections at the beginning of such chapter is amended by 
     adding at the end the following:

``1107. Prohibition on provision of medical and dental care to Members 
              of Congress.''.

       (b) Effect on Members Currently Receiving Care.--Section 
     1107 of title 10, United States Code, as added by subsection 
     (a), shall not apply with respect to a Member of Congress who 
     is receiving medical or dental care in a facility of the 
     uniformed services on the date of the enactment of this Act 
     until the Member is discharged from that facility.

     SEC. 11. ELIMINATION OF CERTAIN RESERVED PARKING AREAS AT 
                   WASHINGTON NATIONAL AIRPORT AND WASHINGTON 
                   DULLES INTERNATIONAL AIRPORT.

       (a) In General.--Effective 30 days after the date of the 
     enactment of this section, the Airports Authority--
       (1) shall not provide any reserved parking areas free of 
     charge to Members of Congress, other Government officials, or 
     diplomats at Washington National Airport or Washington Dulles 
     International Airport; and
       (2) shall establish a parking policy for such airports that 
     provides equal access to the public, and does not provide 
     preferential parking privileges to Members of Congress, other 
     Government officials, or diplomats.
       (b) Definitions.--As used in this section, the terms 
     ``Airports Authority'', ``Washington National Airport'', and 
     ``Washington Dulles International Airport'' have the same 
     meanings as in section 6004 of the Metropolitan Washington 
     Airports Act of 1986 (49 U.S.C. App. 2453).
  Mr. ALLARD. Mr. President, I am proud to be an original 
sponsor of the citizen Congress Act with my distinguished colleague 
from Tennessee, Senator Bill Frist. As a Member of the other body, I 
was an original sponsor of this bill with Representative Mark Sanford, 
who reintroduced the CCA earlier this month.
  This legislation is an important element of true political reform. A 
first step was the passage of the Congressional Accountability Act 
which applied labor laws to Congress. The next important step is the 
Citizen Congress Act. This act is to be a reminder to members of both 
legislative bodies that we are citizen legislators in the true sense of 
service as envisioned by our Founding Fathers.
  The CCA is a comprehensive bill which eliminates many of the perks 
and privileges which Congress are afforded. It uses the congressional 
pension system to encourage limited service and calls for full 
disclosure of estimates of our retirement benefits. It also eliminates 
the automatic COLA for Member's salaries. If we want a salary increase, 
we will have to vote for an increase. The CCA disallows any personal 
use of frequent flier mileage accrued on official business. This bill 
would limit the use of frequent flier miles for only trips to and from 
the Senator's State. The CCA also bans all postal patron franked 
mailings. This means no more unsolicited mailings to constituents.
  Also, Senators will no longer be able to travel on military aircraft, 
except where there is space available on already scheduled military 
flights or where there are no commercial flights to a specific 
destination. Members will

[[Page S729]]

no longer receive free medical attention at military hospitals unless 
they are veterans and can receive this medical benefit like any other 
veteran. Finally, the CAA eliminates special parking privileges for 
Members of Congress, Supreme Court Justices, and foreign diplomats at 
Washington National and Dulles airports.
  I believe this will make us more responsive to our constituents 
because no longer will we have the special privileges which citizens 
are not given. Legislators should have to walk in the same shoes as 
everyone else, thus making them more sensitive to the concerns and 
trials of the constituents which we are serving.
  Again, I thank Senator Frist for all his hard work and effort in this 
endeavor.
                                 ______
                                 
      By Mr. REID:
  S. 206. A bill to prohibit the application of the Religious Freedom 
Restoration Act of 1993, or any amendment made by such act, to an 
individual who is incarcerated in a Federal, State, or local 
correctional, detention, or penal facility, and for other purposes; to 
the Committee on the Judiciary.


The Religious Freedom Restoration Act of 1993 Prisoner Prohibition Act 
                                of 1997

  Mr. REID. Mr. President, the reason I came to the floor today was not 
to talk about the balanced budget amendment, which I have been happy to 
do, but I came here because I am going to introduce legislation today 
that will exclude prison inmates from the protections of the Religious 
Freedom Restoration Act.
  Why would I want to do something like that? Well, when this bill came 
to the Senate floor approximately 2 years ago, I offered an amendment 
at that time that said I want people's religious freedoms restored but 
I think we have to be careful about prisoners and they should not be 
part of this because they are going to take advantage of it. Well, they 
are taking advantage of it. One prisoner in New York has filed 3,000 
lawsuits.
  What are these lawsuits about?
  In Nebraska there was a lawsuit filed because an inmate thinks he is 
a woman trapped in a man's body and strip searches by male prison 
officials are not allowed by his religion. Should we take up the 
courts' time with this type of litigation?
  We have another case where a satanic group--they are in prison, of 
course--filed suit because they were not given unbaptized baby fat for 
their candles.
  About 40 percent of the courts' time, the Federal court's time in 
Nevada is taken up with this kind of stuff.
  In Nevada we have an inmate suing a chaplain for refusing to conduct 
a marriage ceremony for this man and his male friend. The plaintiff and 
his friend are both members of the Universal Life Church which he 
claims allows two people of the same sex to marry.
  In Nevada inmates allege their inability to practice a religion is 
being denied in violation of the first amendment because they want 
special services, including incense and special jewelry.
  Mr. President, this is serious business that the prisoners have made 
a mockery of. My amendment should have passed when I offered it. We 
should make sure that this nonsense is stopped. There are protections 
in my legislation. If someone is being denied their religious 
practices, certainly there are protections there. But protections of 
the Religious Freedom Restoration Act would be denied these prisoners, 
and I believe rightfully so.
  As I indicated, I addressed this problem several years go. The 
problem is inmates abuse the special protections provided under the 
Religious Freedom Restoration Act. During consideration of this bill in 
1993 or 1994, I offered an amendment to exempt prisoners from the 
coverage of this act as I have indicated. I did so then because I 
feared these special protections would be abused by inmates. They have 
been abused by inmates. Whatever I said on the Senate floor was not 
enough, because they have even outdone my expectations.
  I say, regrettably, I wish I would have been wrong. I wish that I had 
been wrong and that these inmates would not have abused the legislation 
that did pass. But it is apparent now that inmates are in fact abusing 
the special rights under this act.
  I have worked with the chairman of the Judiciary Committee, my friend 
from the State of Utah, to address the larger problem of frivolous 
prisoner lawsuits, and we were able to accomplish something last year, 
maybe not enough. We may even need to revisit that to find out if we 
were able to plug all the holes with the Prisoner Litigation Reform 
Act.
  I believe we need to do more to curb the ongoing abuses occurring 
under the Religious Freedom Restoration Act despite the Prisoner 
Litigation Reform Act.
  Today I am introducing this bill which will prohibit the application 
of the Religious Freedom Restoration Act to inmates in a Federal, 
State, or local penal facility. I intend to meet with the Attorney 
General of the United States so that she appreciates the growing 
litigation that they face in the area. Criminals should not enjoy the 
same rights and privileges as law-abiding citizens. The sad commentary 
in our present system, Mr. President, is they enjoy more rights than 
many people who are outside prisons.
  We need not go through the litany of cable television, gyms better 
than people can buy membership in on the outside, libraries that are 
unsurpassed, exercise areas, food, three square meals a day, nice clean 
clothes. They have a pretty good deal. One of the deals I do not think 
they should have is the ability to file these lawsuits with an unending 
array of ideas at the expense of the taxpayers.
  The Religious Freedom Restoration Act sought to provide the legal 
protections supporting the right to freely exercise one's religious 
beliefs. Providing inmates with these same rights, I said, was a 
disaster and was a recipe for disaster; and it has been proven to be an 
understatement.
  Our courts now have to spend their time wading through lawsuits filed 
by inmates that are ridiculous, for lack of a better description. I 
have described some of these lawsuits this morning. I have described 
them in the past. I ask my colleagues to join with me to take this 
pressure off our court system and off the taxpayers of this country. 
This is wrong, what they are doing, and we have the obligation to stop 
it.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Thompson, Mr. Kerry, Mr. 
        Feingold, Mr. Kennedy, Mr. Coats, Mr. Glenn, Mr. Lieberman, and 
        Mr. Brownback):
  S. 207. A bill to review, reform, and terminate unnecessary and 
inequitable Federal subsidies; to the Committee on Governmental 
Affairs.


              the corporate subsidy reform commission act

 Mr. McCAIN. Mr. President, today I am introducing legislation 
to establish an independent, nonpartisan Commission to eliminate 
corporate pork from the Federal budget.
  The nine-member Commission, called the Corporate Subsidy Reform 
Commission, would be charged with reviewing all Federal subsidies to 
private industry, including special interest tax provisions. The 
Commission would identify those programs which are unnecessary, unfair, 
or not in the clear and compelling public interest, and recommend them 
to Congress for reform or termination. Congress would then be required 
to consider and vote on a comprehensive corporate subsidy reform 
package under expedited floor procedures.
  Mr. President, our Nation cannot continue to bear the financial 
burden of servicing an ever-growing $5.3 trillion national debt--which 
equates to more than $19,000 in debt for every man, woman, and child in 
the country. We are asking millions of Americans--from families who 
receive food stamps to our men and women in uniform--to sacrifice in 
order to rein in our annual budget deficits and begin to pay down that 
debt.
  As a matter of simple fairness, we have an obligation to ensure that 
corporate interests share the burden of deficit reduction. Last year, 
the CATO Institute and the Progressive Policy Institute identified 125 
Federal programs that subsidize industry to the tune of $85 billion 
every year, and the Progressive Policy Institute found an additional 
$30 billion in tax loopholes for powerful industries.
  The American public cannot understand why we continue to pay these 
huge subsidies to corporate interests,

[[Page S730]]

at a time when we are asking average private citizens to tighten their 
belts. Corporate pork cannot be justified in an environment where our 
highest fiscal priority is balancing the Federal budget.
  Let me say very frankly that I do not generally like the idea of 
commissions. It is a sad commentary on the state of politics today that 
the Congress cannot even cut those programs that are obviously 
wasteful, unnecessary, or unfair. Unfortunately, however, Members of 
Congress have demonstrated time and again their unwillingness to cut 
programs that serve their own interests.
  For many years, I have tried to cut wasteful and unnecessary spending 
from the annual appropriations bills--with only limited success, I must 
admit. A little over a year ago, I offered an amendment to eliminate 12 
particularly egregious corporate pork barrel programs, and I garnered 
only 25 votes in the Senate.
  Clearly, Members will not gore their own ox, unless others are forced 
to do the same. The recently ordered military base closures were 
finally accomplished only through the workings of an independent 
commission established by Congress. It appears we have reached a point 
that, unless congress is forced to act to eliminate programs, it will 
not. Perhaps independent commissions are the only fair way to ensure 
that neither side is given an advantage to protect their special 
interest corporate pork.
  The independent commission and expedited congressional review process 
established by this legislation would depoliticize the process and 
guarantee that the pain is shared. In reality, the corporate pork 
commission is probably the only means of achieving the meaningful 
reform that the public and our dire fiscal circumstances demand.
  Mr. President, corporate pork wastes resources, increases the 
deficit, and distorts markets. Corporate pork has no place either in a 
free-market economy or in a budget where we are asking millions of 
Americans to sacrifice for the good of future generations.
  Finally, Mr. President, I want to take a moment to thank my 
cosponsors on both sides of the aisle--Senators Thompson, Kerry, 
Feingold, Kennedy, Coats, Glenn, Lieberman, and Brownback--and 
Congressman Kasich, who will introduce similar legislation in the 
House. I also want to thank the several private organizations who have 
lent their good names in support of this legislation--the Progressive 
Policy Institute, Citizens Against Government Waste, and Friends of the 
Earth--and I ask unanimous consent that statements of support from 
these organizations be included in the Record. With their help, I 
intend to pursue this effort in the 105th Congress to 
enactment.
                                 ______
                                 
      By Mr. BOND:

  S. 208. A bill to provide Federal contracting opportunities for small 
business concerns located in historically underutilized business zones, 
and for other purposes; to the Committee on Small Business.


                        The Hubzone Act of 1997

  Mr. BOND. Mr. President, today I introduce the HUBZone Act of 1997. 
The purpose underlying this bill is to create new opportunities for 
growth in distressed urban and rural communities, which have suffered 
tremendous economic decline. This legislation would provide for an 
immediate infusion of cash through the creation of new jobs in our 
Nation's economically distressed areas. During the 8 years I served as 
Governor of Missouri, I met frequently with community leaders who were 
seeking help in attracting business and jobs to their cities, their 
central downtown areas, their towns, and the rural areas of the State. 
We tried various programs, including the enterprise-zone concept, and 
we met with limited success. I am proud of the successes that we 
achieved there. But now, as U.S. Senator and as chairman of the 
Committee on Small Business, I continue to receive similar pleas for 
help. I hear the concerns expressed to me by people from all over my 
State. Since we have had the opportunity to expand hearings in other 
States, we have heard from other States as well.
  So far, nothing that we put in place is the best formula for bringing 
economic hope and independence to these communities. The message, 
however, has changed somewhat. Although help from the Federal 
Government has been forthcoming, there is still high unemployment and 
poverty. For example, when I was talking about a summer jobs program 
with one very, very good community leader, he told me that the summer 
jobs program was nice, but, he said, ``Stop sending me job training 
money. What we need right here in this part of the city is jobs, and 
more jobs. We have all the job training money we need. We need jobs to 
put these young people to work.'' And that is a problem that I hear 
time and time again.
  Last March, I chaired a hearing before the Committee on Small 
Business on revitalizing inner cities and rural America and S. 1574, 
the HUBZone Act of 1996, which is nearly identical to the bill I am 
introducing today. Testifying before the committee were the cofounder 
and employees of e.villages, which has established a data management 
enterprise at Edgewood Terrace, an assisted multifamily housing project 
right here in Washington, DC. Residents of the housing project have 
been trained and they have established a new enterprise, Edgewood 
Technology Services, or ETS, which to me is a prototype HUBZone 
business.
  The HUBZone Act of 1997 can have an important impact on our Nation's 
economically distressed inner cities as housing and income subsidies 
are reduced and put under constraints and as we work toward the 
national goal of moving people off the welfare rolls and into 
meaningful jobs.
  Testifying in support of the HUBZone Act of 1996 was C. Austin Fitts, 
cofounder of e.villages, who testified about the ``significant 
relationship between'' S. 1574 and Federal housing policy. Ms. Fitts 
emphasized the importance of this legislation to create new inner city 
jobs for unemployed or underemployed residents.
  The income generated by these new HUBZone jobs can offset the 
reduction of housing and income supplements. Furthermore, as an 
employee of ETS testified in support of the HUBZone bill, ``We at 
e.villages are encouraged that the Congress is trying to find some ways 
to get work for us to do, and to enhance our standard of living.''
  I do not claim that the HUBZone Act of 1997 is going to solve all the 
problems, but I think it is a significant step in the right direction. 
These people who benefited from an enterprise started up in an assisted 
housing development without the benefit of the HUBZone provisions know 
that their example of success can be expanded. It can work and it can 
work on a broader basis. And it can bring more and more people into 
productive employment.
  What distinguishes the HUBZone Act of 1997 from some other excellent 
proposals and well-intentioned efforts is that this bill would have an 
immediate impact on economically distressed communities. In recent 
years, numerous legislative proposals have stressed the importance of 
changing the U.S. Tax Code and providing other incentives to attract 
businesses to the needy communities. Many of these proposals have 
merit, and I have supported them. As I said, I have supported 
enterprise zones. I have recommended it to the Missouri General 
Assembly. As Governor, I signed it into law. I saw it work. I saw it 
could bring benefits to areas of high unemployment. I urge my 
colleagues on other committees to take a look at those measures which 
can have an impact. No one of them is going to be the total solution. 
Let us move forward on all of them.

  But I ask my colleagues to focus on the critical differences between 
those proposals and the provisions of the HUBZone Act of 1997. Under 
the HUBZone bill, entire communities would benefit because we would 
create absolute incentives for small businesses to operate and provide 
employment directly within America's most disadvantaged inner city 
neighborhoods and in the areas of high unemployment and poverty in 
rural areas. It is a matter of timing. The HUBZone Act of 1997 helps 
communities and their residents now. This bill is a matter of direct 
focus. This is not just incentives; this is bringing business to the 
areas of high unemployment and high poverty.
  Specifically, the HUBZone Act of 1997 creates a new class of small 
businesses eligible for Federal Government contract set-asides and 
preferences.
  To be eligible, a small business must be located in what we call a 
Historically Underutilized Business Zone--

[[Page S731]]

that is where HUBZone comes from, Historically Underutilized Business 
Zone--and not less than 35 percent of the work force must reside in a 
HUBZone. That is a key difference between some of the programs that are 
initially targeting to bring jobs to areas of need, bring jobs where 
social problems had flared up, such as the Watts riots many years ago.
  It is important to contrast the HUBZone proposal with the Executive 
order promulgated by President Clinton to establish an empowerment 
contracting commission. I commend the President for focusing on the 
value of targeting Federal Government assistance to low-income 
communities, but I think the program falls short of meeting the goal of 
helping low-income communities and their residents. For example, under 
the President's plan, any business, large or small, located in a low-
income community, would qualify for a valuable contracting preference, 
even if it does not employ one resident of the community. This is 
clearly a major deficiency or loophole when trying to assist the 
unemployed or underemployed.
  A further weakness in the President's proposal is the failure to 
define more clearly criteria which makes a community eligible for this 
program. Unfortunately, we see the possibility, and it has been set 
forth in specific detail by the inspector general of HUD, that a lack 
of objective criteria may invite other influences in the political 
selection of an area to receive these preferences.
  We must avoid creating another Federal Government program that ends 
up helping well-off individuals and companies while failing to have a 
significant impact on the poor, the unemployed and the underemployed.
  I think the HUBZone Act of 1997 can and will make a difference. It 
makes a contracting preference available only if the small business is 
located in an economically distressed area and employs 35 percent of 
its work force from a HUBZone. This is a significant difference and one 
that is clearly designed to help attack deeply seated poverty in too 
many areas of the United States.
  To qualify for the program, the small business must certify to the 
Administrator of the U.S. Small Business Administration that it is 
located in a HUBZone and will comply with certain rules governing 
subcontracting. In addition, a qualified small business must agree to 
perform at least 50 percent of the contract in a HUBZone, unless the 
terms of the contract require they be located outside the HUBZone. That 
would happen, for example, with a service contract requiring the small 
business' employees and workers be present in a Government-owned or 
leased building. In the latter case, no less than 50 percent of the 
work must be performed by employees who reside in a HUBZone.
  Mr. President, the HUBZone Act of 1997 is designed to cut through 
Government redtape, while stressing a streamlined effort to place 
Government contracts and new jobs in economically distressed 
communities. Americans don't want another new law that creates a 
cottage industry of consultants necessary to fill out Government 
paperwork for a new Federal program.
  Many of my colleagues are familiar with SBA's 8(a) Minority Small 
Business Program and the sometimes cumbersome rules for small 
businesses seeking to qualify for the program. Typically, an applicant 
to the 8(a) program has to hire a lawyer to help prepare the 
application and shepherd it through SBA. The procedure can take months. 
In fact, Congress was forced to legislate the maximum time the agency 
could review an application in our last-ditch effort to speed up the 
process.
  The HUBZone Act of 1997 is specifically designed to avoid 
bureaucratic roadblocks that have delayed and discouraged small 
businesses from taking advantage of Government programs. Simply put, if 
you are a small business located in a HUBZone and you employ people 
from a HUBZone, at least 35 percent, then you are eligible. Once 
eligible, the small business notifies the SBA of its participation in 
the HUBZone program and is qualified to receive Federal Government 
contract benefits.

  My goal is to have new Government contracts being awarded to small 
businesses in economically distressed communities. Therefore, I have 
included some fairly ambitious goals for each Government agency to 
meet.
  In 1998, 1 percent of the total value of all prime Government 
contracts would be awarded to small businesses in HUBZones. The goal 
would increase to 2 percent in 1999, 3 percent in 2000 and 4 percent in 
the year 2001 and each succeeding year.
  HUBZone contracting is a bold undertaking. Passage of the HUBZone Act 
of 1997 will create more hope for inner cities with high unemployment, 
distressed rural communities where poverty and joblessness reign and 
have too long been ignored. Most importantly, passage of the HUBZone 
Act will create hope for hundreds of thousands of underemployed or 
unemployed who long ago thought our country had given up on them. The 
hope is tangible; the hope is for jobs and income.
  I think this bill can deliver. I soon hope to chair additional 
hearings before the Committee on Small Business on the HUBZone Act of 
1997 and the role our Nation's small business community can play in 
revitalizing our distressed cities and counties. I firmly believe the 
HUBZone proposal has great merit. I urge my colleagues to study this 
proposal and give me their comments. I ask for cosponsors and I ask for 
good ideas. There are many, many ideas which have been incorporated in 
this bill that were presented to me by colleagues, both on the Small 
Business Committee and elsewhere.
  I ask all of my colleagues, particularly if they are concerned about 
unemployment and underemployment in areas of their States--and I know 
of very few States that don't have that problem--I ask them to sit down 
with us and talk about how we can make this a better program. I would 
like to see it passed. I think it could provide a very significant 
boost and help get our country on the right track.
  I ask unanimous consent that the text of the bill and a section-by-
section analysis of the provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 208

       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 ``HUBZone Act of 1997''.

     SEC. 2. HISTORICALLY UNDERUTILIZED BUSINESS ZONES.

       (a) Definitions.--Section 3 of the Small Business Act (15 
     U.S.C. 632) is amended by adding at the end the following:
       ``(o) Definitions Relating to Historically Underutilized 
     Business Zones.--In this section:
       ``(1) Historically underutilized business zone.--The term 
     `historically underutilized business zone' means any area 
     located within one or more qualified census tracts or 
     qualified nonmetropolitan counties.
       ``(2) Small business concern located in a historically 
     underutilized business zone.--The term `small business 
     concern located in a historically underutilized business 
     zone' means a small business concern--
       ``(A) that is owned and controlled by one or more persons, 
     each of whom is a United States citizen;
       ``(B) the principal office of which is located in a 
     historically underutilized business zone; and
       ``(C) not less than 35 percent of the employees of which 
     reside in a historically underutilized business zone.
       ``(3) Qualified areas.--
       ``(A) Qualified census tract.--The term `qualified census 
     tract' has the same meaning as in section 42(d)(5)(C)(i)(I) 
     of the Internal Revenue Code of 1986.
       ``(B) Qualified nonmetropolitan county.--The term 
     `qualified nonmetropolitan county' means, based on the most 
     recent data available from the Bureau of the Census of the 
     Department of Commerce, any county--
       ``(i) that is not located in a metropolitan statistical 
     area (as that term is defined in section 143(k)(2)(B) of the 
     Internal Revenue Code of 1986); and
       ``(ii) in which the median household income is less than 80 
     percent of the nonmetropolitan State median household income.
       ``(4) Qualified small business concern located in a 
     historically underutilized business zone.--
       ``(A) In general.--A small business concern located in a 
     historically underutilized business zone is `qualified', if--
       ``(i) the small business concern has certified in writing 
     to the Administrator that--

       ``(I) it is a small business concern located in a 
     historically underutilized business zone;
       ``(II) it will comply with the subcontracting limitations 
     specified in Federal Acquisition Regulation 52.219-14;

[[Page S732]]

       ``(III) in the case of a contract for services (except 
     construction), not less than 50 percent of the cost of 
     contract performance incurred for personnel will be expended 
     for employees of that small business concern or for employees 
     of other small business concerns located in historically 
     underutilized business zones; and
       ``(IV) in the case of a contract for procurement of 
     supplies (other than procurement from a regular dealer in 
     such supplies), the small business concern (or a 
     subcontractor of the small business concern that is also a 
     small business concern located in a historically 
     underutilized business zone) will perform work for not less 
     than 50 percent of the cost of manufacturing the supplies 
     (not including the cost of materials) in a historically 
     underutilized business zone; and

       ``(ii) no certification made by the small business concern 
     under clause (i) has been, in accordance with the procedures 
     established under section 30(c)(2)--

       ``(I) successfully challenged by an interested party; or
       ``(II) otherwise determined by the Administrator to be 
     materially false.

       ``(B) Change in percentages.--The Administrator may utilize 
     a percentage other than the percentage specified in under 
     subclause (III) or (IV) of subparagraph (A)(i), if the 
     Administrator determines that such action is necessary to 
     reflect conventional industry practices among small business 
     concerns that are below the numerical size standard for 
     businesses in that industry category.
       ``(C) Construction and other contracts.--The Administrator 
     shall promulgate final regulations imposing requirements that 
     are similar to those specified in subclauses (III) and (IV) 
     of subparagraph (A)(i) on contracts for general and specialty 
     construction, and on contracts for any other industry 
     category that would not otherwise be subject to those 
     requirements. The percentage applicable to any such 
     requirement shall be determined in accordance with 
     subparagraph (B).
       ``(D) List of qualified small business concerns.--The 
     Administrator shall establish and maintain a list of 
     qualified small business concerns located in historically 
     underutilized business zones, which list shall--
       ``(i) include the name, address, and type of business with 
     respect to each such small business concern;
       ``(ii) be updated by the Administrator not less than 
     annually; and
       ``(iii) be provided upon request to any Federal agency or 
     other entity.''.
       (b) Federal Contracting Preferences.--The Small Business 
     Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 30 as section 31; and
       (2) by inserting after section 29 the following:

     ``SEC. 30. HISTORICALLY UNDERUTILIZED BUSINESS ZONES PROGRAM.

       ``(a) In General.--There is established within the 
     Administration a program to be carried out by the 
     Administrator to provide for Federal contracting assistance 
     to qualified small business concerns located in historically 
     underutilized business zones in accordance with this section.
       ``(b) Contracting Preferences.--
       ``(1) Contract set-aside.--
       ``(A) Requirement.--The head of an executive agency shall 
     afford the opportunity to participate in a competition for 
     award of a contract of the executive agency, exclusively to 
     qualified small business concerns located in historically 
     underutilized business zones, if the Administrator determines 
     that--
       ``(i) it is reasonable to expect that not less than 2 
     qualified small business concerns located in historically 
     underutilized business zones will submit offers for the 
     contract; and
       ``(ii) the award can be made on the restricted basis at a 
     fair market price.
       ``(B) Covered contracts.--Subparagraph (A) applies to a 
     contract that is estimated to exceed the simplified 
     acquisition threshold.
       ``(2) Sole-source contracts.--
       ``(A) Requirement.--The head of an executive agency, in the 
     exercise of authority provided in any other law to award a 
     contract of the executive agency on a sole-source basis, 
     shall award the contract on that basis to a qualified small 
     business concern located in a historically underutilized 
     business zone, if any, that--
       ``(i) submits a reasonable and responsive offer for the 
     contract; and
       ``(ii) is determined by the Administrator to be a 
     responsible contractor.
       ``(B) Covered contracts.--Subparagraph (A) applies to a 
     contract that is estimated to exceed the simplified 
     acquisition threshold and not to exceed $5,000,000.
       ``(3) Price evaluation preference in full and open 
     competitions.--In any case in which a contract is to be 
     awarded by the head of an executive agency on the basis of 
     full and open competition, the price offered by a qualified 
     small business concern located in a historically 
     underutilized business zone shall be deemed as being lower 
     than the price offered by another offeror (other than another 
     qualified small business concern located in a historically 
     underutilized business zone) if the price offered by the 
     qualified small business concern located in a historically 
     underutilized business zone is not more than 10 percent 
     higher than the price offered by the other offeror.
       ``(4) Relationship to other contracting preferences.--
       ``(A) Subordinate relationship.--A procurement may not be 
     made from a source on the basis of a preference provided in 
     paragraph (1), (2), or (3) if the procurement would otherwise 
     be made from a different source under section 4124 or 4125 of 
     title 18, United States Code, or the Javits-Wagner-O'Day Act.
       ``(B) Superior relationship.--A procurement may not be made 
     from a source on the basis of a preference provided in 
     section 8(a), if the procurement would otherwise be made from 
     a different source under paragraph (1), (2), or (3) of this 
     subsection.
       ``(5) Definitions.--In this subsection, the terms 
     `executive agency', `full and open competition', and 
     `simplified acquisition threshold' have the meanings given 
     such terms in section 4 of the Office of Federal Procurement 
     Policy Act.
       ``(c) Enforcement; Penalties.--
       ``(1) In general.--The Administrator shall enforce the 
     requirements of this section.
       ``(2) Verification of eligibility.--In carrying out this 
     subsection, the Administrator shall establish procedures 
     relating to--
       ``(A) the filing, investigation, and disposition by the 
     Administration of any challenge to the eligibility of a small 
     business concern to receive assistance under this section 
     (including a challenge, filed by an interested party, 
     relating to the veracity of a certification made by a small 
     business concern under section 3(o)(4)(A)); and
       ``(B) verification by the Administrator of the accuracy of 
     any certification made by a small business concern under 
     section 3(o)(4)(A).
       ``(3) Random inspections.--The procedures established under 
     paragraph (2) may provide for random inspections by the 
     Administrator of any small business concern making a 
     certification under section 3(o)(4).
       ``(4) Provision of data.--Upon the request of the 
     Administrator, the Secretary of Labor and the Secretary of 
     Housing and Urban Development shall promptly provide to the 
     Administrator such information as the Administrator 
     determines to be necessary to carry out this subsection.
       ``(5) Penalties.--In addition to the penalties described in 
     section 16(d), any small business concern that is determined 
     by the Administrator to have misrepresented the status of 
     that concern as a `small business concern located in a 
     historically underutilized business zone' for purposes of 
     this section, shall be subject to the provisions of--
       ``(A) section 1001 of title 18, United States Code; and
       ``(B) sections 3729 through 3733 of title 31, United States 
     Code.''.

     SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL 
                   BUSINESS ACT.

       (a) Performance of Contracts.--Section 8(d) of the Small 
     Business Act (15 U.S.C. 637(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``,, small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals'' and inserting ``, qualified small 
     business concerns located in historically underutilized 
     business zones, small business concerns owned and controlled 
     by socially and economically disadvantaged individuals''; and
       (B) in the second sentence, by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'';
       (2) in paragraph (3)--
       (A) by inserting ``qualified small business concerns 
     located in historically underutilized business zones,'' after 
     ``small business concerns,'' each place that term appears; 
     and
       (B) by adding at the end the following:
       ``(F) In this contract, the term `qualified small business 
     concern located in a historically underutilized business 
     zone' has the same meaning as in section 3(o) of the Small 
     Business Act.'';
       (3) in paragraph (4)--
       (A) in subparagraph (D), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''; and
       (B) in subparagraph (E), by striking ``small business 
     concerns and'' and inserting ``small business concerns, 
     qualified small business concerns located in historically 
     underutilized business zones, and'';
       (4) in paragraph (6), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'' each 
     place that term appears; and
       (5) in paragraph (10), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''.
       (b) Awards of Contracts.--Section 15 of the Small Business 
     Act (15 U.S.C. 644) is amended--
       (1) in subsection (g)(1)--
       (A) by inserting ``qualified small business concerns 
     located in historically underutilized business zones,'' after 
     ``small business concerns,'' each place that term appears; 
     and
       (B) by inserting after the second sentence the following: 
     ``The Governmentwide goal for participation by qualified 
     small business concerns located in historically underutilized 
     business zones shall be established at not less than 1 
     percent of the total value of all prime contract awards for 
     fiscal year 1998, not less than 2 percent of the total value 
     of all prime contract awards for fiscal year 1999, not less 
     than 3 percent of the total value of all prime contract 
     awards for fiscal year 2000, and not less than 4 percent of 
     the total value of all prime contract awards for

[[Page S733]]

     fiscal year 2001 and each fiscal year thereafter.'';
       (2) in subsection (g)(2)--
       (A) in the first sentence, by striking ``,, by small 
     business concerns owned and controlled by socially and 
     economically disadvantaged individuals'' and inserting ``, by 
     qualified small business concerns located in historically 
     underutilized business zones, by small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals'';
       (B) in the second sentence, by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''; and
       (C) in the fourth sentence, by striking ``by small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals and participation by small business 
     concerns owned and controlled by women'' and inserting ``by 
     qualified small business concerns located in historically 
     underutilized business zones, by small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals, and by small business concerns 
     owned and controlled by women''; and
       (3) in subsection (h), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'' each 
     place that term appears.
       (c) Offenses and Penalties.--Section 16 of the Small 
     Business Act (15 U.S.C. 645) is amended--
       (1) in subsection (d)(1)--
       (A) by inserting ``, a `qualified small business concern 
     located in a historically underutilized business zone','' 
     after `` `small business concern',''; and
       (B) in subparagraph (A), by striking ``section 9 or 15'' 
     and inserting ``section 9, 15, or 30''; and
       (2) in subsection (e), by inserting ``, a `small business 
     concern located in a historically underutilized business 
     zone','' after `` `small business concern',''.

     SEC. 4. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Title 10, United States Code.--Section 2323 of title 
     10, United States Code, is amended--
       (1) in subsection (a)(1)(A), by inserting before the 
     semicolon the following: ``, and qualified small business 
     concerns located in historically underutilized business zones 
     (as that term is defined in section 3(o) of the Small 
     Business Act)''; and
       (2) in subsection (f), by inserting ``or as a qualified 
     small business concern located in a historically 
     underutilized business zone (as that term is defined in 
     section 3(o) of the Small Business Act)'' after ``subsection 
     (a))''.
       (b) Federal Home Loan Bank Act.--Section 21A(b)(13) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is 
     amended--
       (1) by striking ``concerns and small'' and inserting 
     ``concerns, small''; and
       (2) by inserting ``, and qualified small business concerns 
     located in historically underutilized business zones (as that 
     term is defined in section 3(o) of the Small Business Act)'' 
     after ``disadvantaged individuals''.
       (c) Small Business Economic Policy Act of 1980.--Section 
     303(e) of the Small Business Economic Policy Act of 1980 (15 
     U.S.C. 631b(e)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) qualified small business concerns located in 
     historically underutilized business zones (as that term is 
     defined in section 3(o) of the Small Business Act).''.
       (d) Small Business Investment Act of 1958.--Section 
     411(c)(3)(B) of the Small Business Investment Act of 1958 (15 
     U.S.C. 694b(c)(3)(B)) is amended by inserting before the 
     semicolon the following: ``, or to a qualified small business 
     concern located in a historically underutilized business 
     zone, as that term is defined in section 3(o) of the Small 
     Business Act''.
       (e) Title 31, United States Code.--
       (1) Contracts for collection services.--Section 3718(b) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)(B), by inserting ``and law firms that 
     are qualified small business concerns located in historically 
     underutilized business zones (as that term is defined in 
     section 3(o) of the Small Business Act)'' after 
     ``disadvantaged individuals''; and
       (B) in paragraph (3)--
       (i) in the first sentence, by inserting before the period 
     ``and law firms that are qualified small business concerns 
     located in historically underutilized business zones'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act.''.
       (2) Payments to local governments.--Section 6701(f) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) qualified small business concerns located in 
     historically underutilized business zones.''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act (15 
     U.S.C. 632(o)).''.
       (3) Regulations.--Section 7505(c) of title 31, United 
     States Code, is amended by striking ``small business concerns 
     and'' and inserting ``small business concerns, qualified 
     small business concerns located in historically underutilized 
     business zones, and''.
       (f) Office of Federal Procurement Policy Act.--
       (1) Enumeration of included functions.--Section 6(d) of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 405(d)) 
     is amended--
       (A) in paragraph (11), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones (as that term is defined in section 3(o) of 
     the Small Business Act),'' after ``small businesses,''; and
       (B) in paragraph (12), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones (as that term is defined in section 3(o) of 
     the Small Business Act (15 U.S.C. 632(o)),'' after ``small 
     businesses,''.
       (2) Procurement data.--Section 19A of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 417a) is amended--
       (A) in subsection (a)--
       (i) by inserting ``the number of qualified small business 
     concerns located in historically underutilized business 
     zones,'' after ``Procurement Policy''; and
       (ii) by inserting a comma after ``women''; and
       (B) in subsection (b), by adding at the end the following: 
     ``In this section, the term `qualified small business concern 
     located in a historically underutilized business zone' has 
     the same meaning as in section 3(o) of the Small Business Act 
     (15 U.S.C. 632(o)).''.
       (g) Energy Policy Act of 1992.--Section 3021 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13556) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``or'';
       (B) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(4) qualified small business concerns located in 
     historically underutilized business zones.''; and
       (2) in subsection (b), by adding at the end the following:
       ``(3) The term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act (15 
     U.S.C. 632(o)).''.
       (h) Title 49, United States Code.--
       (1) Project grant application approval conditioned on 
     assurances about airport operation.--Section 47107(e) of 
     title 49, United States Code, is amended--
       (A) in paragraph (1), by inserting before the period ``or 
     qualified small business concerns located in historically 
     underutilized business zones (as that term is defined in 
     section 3(o) of the Small Business Act)'';
       (B) in paragraph (4)(B), by inserting before the period 
     ``or as a qualified small business concern located in a 
     historically underutilized business zone (as that term is 
     defined in section 3(o) of the Small Business Act)''; and
       (C) in paragraph (6), by inserting ``or a qualified small 
     business concern located in a historically underutilized 
     business zone (as that term is defined in section 3(o) of the 
     Small Business Act)'' after ``disadvantaged individual''.
       (2) Minority and disadvantaged business participation.--
     Section 47113 of title 49, United States Code, is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking the period at the end and 
     inserting a semicolon;
       (ii) in paragraph (2), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(3) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act (15 
     U.S.C. 632(o)).''; and
       (B) in subsection (b), by inserting before the period ``or 
     qualified small business concerns located in historically 
     underutilized business zones''.

   Historically Underutilized Business Zone Act of 1997-- Section-by-
                            Section Analysis


                         SECTION 1. SHORT TITLE

       Historically Underutilized Business Zone Act of 1997, 
     hereinafter referred to as the ``HUBZone Act of 1997.''


          SECTION 2. HISTORICALLY UNDERUTILIZED BUSINESS ZONES

                              Definitions

       Historically Underutilized Business Zone (HUBZone) is any 
     area located within a qualified metropolitan statistical area 
     or qualified non-metropolitan area.
       Small business concern located in a Historically 
     Underutilized Business Zone is a small business whose 
     principal office is located in a HUBZone and whose workforce 
     includes at least 35% of its employees from one or more 
     HUBZones.

[[Page S734]]

       Qualified Metropolitan Statistical Area is an area where 
     not less than 50% of the households have an income of less 
     than 60% of the metropolitan statistical area median gross 
     income as determined by the Department of Housing and Urban 
     Development.
       Qualified Non-metropolitan Area is an area where the 
     household income is less than 80% of the non-metropolitan 
     area median gross income as determined by the Bureau of the 
     Census of the Department of Commerce.
       Qualified Small Business Concern must certify in writing to 
     the Small Business Administration (SBA) that it (a) is 
     located in a HUBZone, (b) will comply with subcontracting 
     rules in the Federal Acquisition Regulations (FAR), (c) will 
     insure that not less than 50% of the contract cost will be 
     performed by the Qualified Small Business.

                        Contracting Preferences

       Contract Set-Aside to a qualified small business located in 
     a HUBZone can be made by a procuring agency if it determines 
     that 2 or more qualified small businesses will submit offers 
     for the contract and the award can be made at a fair market 
     price.
       Sole-source Contracts can be awarded if a qualified small 
     business submits a reasonable and responsive offer and is 
     determined by SBA to be a responsible contractor. Sole-source 
     contracts cannot exceed $5 million.
       10% Price Evaluation Preference in full and open 
     competition can be made on behalf of the Qualified Small 
     Business if its offer is not more than 10% higher than the 
     other offeror, so long as it is not a small business concern.

                         Enforcement; Penalties

       The SBA Administrator or his designee shall establish a 
     system to verify certifications made by HUBZone small 
     businesses to include random inspections and procedures 
     relating to disposition of any challenges to the accuracy of 
     any certification. If SBA determines that a small business 
     concern may have misrepresented its status as a HUBZone small 
     business, it shall be subject to prosecution under title 18, 
     section 1001, U.S.C., False Certifications, and title 31, 
     sections 3729-3733, U.S.C., False Claims Act.


 SECTION 3. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL BUSINESS 
                                  ACT

                           HUBZone Preference

       The Small Business Act is amended to give qualified small 
     business concerns located in HUBZones a higher preference 
     than small business concerns owned and controlled by socially 
     and economically disadvantaged individuals (8(a) 
     contractors).

                             HUBZone Goals

       This section sets forth government-wide goals for awarding 
     government contracts to qualified small businesses. In Fiscal 
     Year 1998, the goal will be not less than 1% of the total 
     value of all prime contracts awarded to qualified small 
     businesses located in HUBZones. In FY 1999, this goal will 
     increase to 2%, in FY 2000, it will be 3%; and it will reach 
     4% in FY 2001 and each year thereafter.

                         Offenses and Penalties

       This section provides that anyone who misrepresents any 
     entity as being a qualified small business in order to obtain 
     a government contract or subcontract can be fined up to 
     $500,000 and imprisoned for not more than 10 years and be 
     subject to the administrative remedies prescribed by the 
     Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-
     3812).


           SEC. 4. OTHER TECHNICAL AND CONFORMING AMENDMENTS

       This section makes technical amendments to other federal 
     government agency programs that have traditionally provided 
     contract set asides and preferences to disadvantaged small 
     businesses by expanding each program to include small 
     businesses located in an Historically Underutilized Business 
     Zone.
                                 ______
                                 
      By Mr. BREAUX:
  S. 209. A bill to increase the penalty for trafficking in powdered 
cocaine to the same level as the penalty for trafficking in crack 
cocaine, and for other purposes; to the Committee on the Judiciary.


                  Illegal Drug Trafficking Legislation

 Mr. BREAUX. Mr. President, last year I was shocked to learn of 
the huge difference that exists between the Federal penalties for 
trafficking powder cocaine and for trafficking the exact same amount of 
crack cocaine.
  Right now, selling five grams of crack cocaine results in the same 5-
year mandatory minimum prison term as selling 500 grams of powder 
cocaine. Selling 50 grams of crack cocaine gets you a 10-year minimum 
sentence, while you'd have to sell 5,000 grams of powder cocaine to get 
the same 10 years in prison.
  While these penalties are vastly different--100 times greater if you 
sell crack cocaine--the damage caused by these criminal acts are the 
same. Lives are lost, families are destroyed, careers are ruined, and 
our Nation itself is seriously threatened.
  Tough penalties are necessary to send a clear signal that the United 
States will not tolerate selling illegal drugs. The answer to the 
problem presented by this wide difference in penalties is not to lower 
penalties for selling crack cocaine but to increase the penalties for 
selling powder cocaine.
  Therefore, my legislation is very simple and very clear. 
Trafficking--that is the manufacture, distribution, or sale--of 50 
grams of powder cocaine will result in a 10-year minimum sentence--the 
same as dealing in crack cocaine.
  Manufacture, distribution or sale of 5 grams of powder cocaine will 
result in a 5-year minimum sentence--the same as dealing in crack 
cocaine.
  I look forward to working with my colleagues to pass a bill that 
deters the use of all cocaine--powder and crack.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself and Mr. Akaka):
  S. 210. A bill to amend the Organic Act of Guam, the Revised Organic 
Act of the Virgin Islands, and the Compact of Free Association Act, and 
for other purposes; to the Committee on Energy and Natural Resources.


                         Amendment Legislation

  Mr. MURKOWSKI. Mr. President, I send to the desk for appropriate 
referral legislation dealing with the several issues of the territories 
of the United States and the freely associated States. This is 
legislation that is similar to measures reported by the Committee on 
Energy and Natural Resources at the end of the last Congress and could 
not be considered prior to adjournment, although we had managed to work 
out the text with both the House and the administration. I want to 
acknowledge the contribution of the staff of the Energy and Natural 
Resources Committee, as well as the Resource Committee in the House as 
well.
  Section 1 of the legislation proposed will extend the agriculture and 
food programs that the United States provides for the populations on 
the atolls in the Marshall Islands affected by the nuclear testing 
program for an additional 5 years.
  The support program was initiated under the trusteeship and continued 
under the Compact of Free Association for a limited time period. 
Unfortunately, the atolls are not yet capable of fully supporting the 
populations, and an additional extension time is necessary.
  The amendment will also alter the program to reflect changes in 
population since the effective date of the compact. I visited many of 
these areas last year and certainly concur with the recommendations in 
section 1.
  Section 2 of the legislation would repeal a provision of law dealing 
with the American Memorial Park in Saipan that would permit the 
government of the Commonwealth to take over the park. While I think 
some transfer could be considered of the marina area if the 
Commonwealth were interested, I think that the actual war memorial and 
interpretive areas should remain under the jurisdiction of the National 
Park Service during the remainder of the lease.
  Section 3 of the legislation makes a series of technical amendments 
to permit each of the three educational institutions in the freely 
associated States to operate independently as land grant institutions 
rather than having to operate as a College of Micronesia.
  I visited that college and was very impressed with the dedication and 
the commitment of those who were responsible for education as well as 
the people of the area. They are very proud of that institution. I can 
tell you, Mr. President, there is a tremendous sacrifice being made to 
foster higher education in the College of Micronesia.
  These amendments, as we propose, reflect the new status of the 
representative Republic of Palau, the Federated States of Micronesia, 
and the Republic of the Marshall Islands and were requested by the 
President of the College of Micronesia-FSM when Senator Akaka and I 
visited the campus last year.
  Section 4, hopefully, will resolve a different issue and one that is 
difficult for Guam relating to the disposal of real property that the 
Department of Defense no longer needs for military purposes. These 
lands were acquired by the United States for defense purposes after 
World War II when Guam had been liberated from occupation by Japan and 
while Guam was a closed defense area.

[[Page S735]]

  We have the residents of Guam and their attitude where they have 
indicated that they are prepared to support the Federal Government of 
the United States as they are a territory, but did so with the 
expectation--in other words, the people of Guam expected that those 
lands, if no longer needed for defensive purposes, would be returned to 
either public or private ownership in Guam.
  The Department of Defense presently owns about one-third of Guam, 
although we have been able to return several parcels over the past few 
years. As part of the discussion on the Commonwealth, the 
administration had agreed to similar general transfer language, but 
when we considered this legislation last year, the Fish and Wildlife 
Service testified in opposition. The Fish and Wildlife Service, in 
testifying in opposition, said that they had a desire to acquire some 
portions for a wildlife refuge.
  I am going to talk a little bit about the U.S. Fish and Wildlife 
Services' interest in acquiring this refuge because I think there is a 
lack of continuity that deserves some examination.
  I am not going to go into the curious presentation from the Service 
at our hearing or the question that they are unwilling to expend any of 
their own money on the eradication of the brown snake, which has 
virtually overrun the island, but only note they were able to block any 
agreement on land transfer previously.
  What I am proposing this year is a general transfer authorization for 
all lands except those within the proposed overlay that would be a 
refuge overlay that are identified on a map that is subject to transfer 
only by statute. That, hopefully, will release the other lands to Guam.
  No specific disposition is recommended for the other lands, and 
Congress will consider them on a parcel-by-parcel basis as they become 
surplus to defensive needs. This will allow both Guam and the Fish and 
Wildlife Service to make their case, assuming both want the lands, or 
anyone else.
  I note that Congress, not the Executive, has the plenary authority 
under the Constitution to deal with territories and with the disposal 
of Federal properties. So it is appropriate that Congress--Congress--
decide on the disposition of these lands when the time is right. And I 
think the time is right. The people of Guam have waited long enough.
  I also note that this is the only method I can think of that will 
guarantee the Government of Guam an opportunity to participate in the 
process. I hope that the administration will support the public 
process.
  One of the inconsistencies here in this land that is in dispute, 
approximately 2,000 acres that is held by the Department of Defense--
clearly the defensive requirements are no longer pertinent that 
necessitate the Department of Defense to hold this land. So it is 
basically surplus land. The U.S. Fish and Wildlife Service, in its 
interest in acquiring the land, the rationale is to protect the various 
species on the island and maintain a natural habitat. Some of the 
species may be facing endangerment.

  The inconsistency here is the U.S. Fish and Wildlife Service's 
inability to address what is eradicating many of the species that are 
in decline and may be in danger. That is the brown snake. The island is 
virtually overrun with the brown snake. The U.S. Fish and Wildlife 
Service refuses to initiate any action to eradicate the brown snake, 
which is really causing the decline in various other species that are 
unique to the island.
  So I think it is fair to say that the U.S. Fish and Wildlife Service 
has been somewhat irresponsible in its obligation to address the 
perpetrator causing the decline of the various birdlife on Guam and 
other species because the ferociousness of the brown snake is such that 
it has really taken over the island. And they refuse to spend any of 
their own money.
  I had an opportunity to visit with the Governor of Guam. We had an 
evening at his residence. He brought several of the brown snakes in 
cages and gave us a little rundown of what the brown snakes were doing 
in overrunning Guam and the inability of the U.S. Fish and Wildlife 
Service to meet its obligation to address any type of control, of 
predator-type control, to reduce and eliminate this.
  So I think it is fair to say the U.S. Fish and Wildlife Service has 
had its opportunity. They cannot justify taking land and just holding 
it in a habitat without addressing their obligation to try to enhance 
the species native to Guam by eradicating the brown snake. So until 
they come up with some kind of realistic program, I do not have much 
sympathy for their claim for further land.
  I think this land should go to the Commonwealth of Guam and be 
disposed of under the legislative jurisdiction by the elected people of 
Guam and get on with it. I intend to pursue that with a great deal of 
energy to ensure that we see that land transferred over to Guam for 
their disposition and designation as they see fit. I think they are the 
most appropriate ones to address some procedure relative to the concern 
of the brown snake and its continued expansion over the land mass of 
Guam.
  Section 5 of the legislation--I might add further, the Fish and 
Wildlife Service testified last year that they had 18 listed species on 
Guam. I am told that three are extinct and five more no longer occur on 
Guam. At the rate that the Fish and Wildlife Service is dealing with 
the brown snake, this will be probably the only refuge dedicated to an 
extinct species.
  I think that says something about the stewardship of the U.S. Fish 
and Wildlife Service with regard to the unique species that were native 
to Guam, and now the brown snake has taken over and that seems to be 
taking care of whatever is left. But the Fish and Wildlife Service 
continues to, I think, neglect its responsibility.
  Moving on, section 5 of the legislation, Mr. President, makes a 
technical change in statutes dealing with drug enforcement to provide 
equal treatment for all the territories as we contemplated when the 
original act passed.
  Section 6 of the legislation would make two changes to the Revised 
Organic Act of the Virgin Islands. The first would authorize the 
issuance of parity rather than priority bonds secured by the Rum fund--
an authority generally available in the States; and the second would 
provide that the Governor would retain his authority when absent from 
the territory on official business, which is often the case.
  Section 7 of the legislation provides for an economic study 
commission for the Virgin Islands. I think the idea of a study on what 
the future holds is important and timely. I want to emphasize that I 
want this commission to focus directly and quickly on realistic 
economic alternatives that are helpful to the Virgin Islands and the 
Congress and not produce a theoretical tome to gather dust on a shelf.
  Section 8 clarifies the availability of assistance from the Public 
Health Service in the radiation related medical surveillance and 
treatment programs provided under section 177(b) of the Compact of Free 
Association in the Republic of the Marshall Islands to persons directly 
exposed as a result of the nuclear testing program in the Marshall 
Islands.
  We observed those areas when we were over there last year, as well as 
meeting with the people. I think this is an appropriate action.
  Section 9 would clarify that residents of the freely associated 
States who are lawfully admitted to the United States under the Compact 
of Free Association are eligible for assistance under certain programs. 
This assistance had been provided before the effective date of the 
Compact under the Trusteeship and subsequently until a particularly 
strained and convoluted interpretation by attorneys who demonstrated a 
questionable familiarity with English created a problem. As usual, the 
answer was that the interpretation didn't make a lot of sense and was 
contrary to past practice, but if Congress disagreed, it could clarify 
the law. Well I disagree and this language should clarify the law. One 
problem that was raised is that under current law, aliens are given a 
preference over United States citizens and that creates inequities in 
small areas like Guam and the Commonwealth of the Northern Mariana 
Islands. The answer, of course, is to treat residents of the freely 
associated States like United States citizens, not to fabricate a legal 
opinion to deny them benefits altogether. Section 9

[[Page S736]]

would provide equal but not preferential treatment, and I think that is 
fully in line with our intent under the Compact in encouraging 
residents of the freely associated States to come to the United States 
for work and study.
  Section 10 would provide the consent of the United States to two 
amendments to the Hawaiian Homes Commission Act as required by the 
Admissions Act for the State of Hawaii. This language was requested by 
the administration and is supported by the Hawaii delegation and I'm 
pleased to say by my colleagues, Senators Inouye and Akaka.
  Section 11 would provide for an economic study commission for 
American Samoa similar to that provided for the Virgin Islands. Like 
the Virgin Islands Commission, the Secretary of the Interior will be a 
voting member ex officio in recognition of his responsibilities. Given 
the unique cultural situation in American Samoa and the importance of 
land tenure and Matai rights, three of the seven members of the 
commission will come from nominations by the Governor. Unlike the 
Virgin Islands, American Samoa still relies on annual appropriations 
for both operations and infrastructure, and the commission is directed 
to focus on the needs in those areas over the next decade and look to 
ways to minimize that dependence. As part of its report, the commission 
is directed to provide an historical overview of the relationship 
between American Samoa and the United States and include copies of 
relevant documents in an appendix to the report. I want to emphasize 
that this is an overview and I do not want the commission to depart 
from its focus on what economic opportunities exist to replicate 
scholarly studies. There are certain constraints on economic 
development in American Samoa as a result of its status outside the 
customs territory of the United States, for example, and that needs to 
be noted.
  Mr. President, the Committee on Energy and Natural Resources plans to 
hold a hearing on this legislation on February 6. I hope to be able to 
report the measure and have it considered by the Senate prior to the 
February recess. I hope that the administration will support this 
measure, although I know they dislike commissions and studies. I am not 
a great fan of them either, but from time to time a fresh look at a 
problem can be useful. I do not want these commissions to go beyond 
their limited life and I want them to produce something useful. I hope 
the administration will agree with the unique circumstances surrounding 
these provisions and the need for them. and recognize the obligation 
that we have to these areas under the Organic Act of Guam and the 
revised Organic Act of the Virgin Islands and the Compact of Free 
Association Act that mandates an oversight and continued responsibility 
by the Federal Government.

  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                                 S. 210

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

     SECTION 1. MARSHALL ISLANDS AGRICULTURAL AND FOOD PROGRAMS.

       Section 103(h)(2) of the Compact of Free Association Act of 
     1985 (48 U.S.C. 1903(h)(2) is amended by striking ``ten'' and 
     inserting ``fifteen'' and by adding at the end of 
     subparagraph (B) the following:
       ``The President shall ensure that the amount of commodities 
     provided under these programs reflects the changes in the 
     population that have occurred since the effective date of the 
     Compact.''.

     SEC. 2. AMERICAN MEMORIAL PARK.

       Section 5 of Public Law 95-348 is amended by striking 
     subsection (f).

     SEC. 3. TERRITORIAL LAND GRANT COLLEGES

       (a) Land Grant Status. Section 506(a) of the Education 
     Amendments of 1972 (Public Law 92-318, as amended; 7 U.S.C. 
     301 note) is amended by striking ``the College of 
     Micronesia,'' and inserting ``the College of the Marshall 
     Islands, the College of Micronesia-FSM, the Palau Community 
     College,''.
       (b) Endowment. The amount of the land grant trust fund 
     attributable to the $3,000,000 appropriation for Micronesia 
     authorized by the Education Amendments of 1972 (Public Law 
     92-318, as amended; 7 U.S.C. 301 note) shall, upon enactment 
     of this Act, be divided equally among the Republic of the 
     Marshall Islands, the Federated States of Micronesia, and the 
     Republic of Palau for the benefit of the College of the 
     Marshall Islands, the Collage of Micronesia-FSM, and the 
     Palau Community College.
       (c) Treatment. Section 1361(c) of the Education Amendments 
     of 1980 (Public Law 96-374, as amended; 7 U.S.C. 301 note) is 
     amended by striking ``and the Trust Territory of the Pacific 
     Islands (other than the Northern Mariana Islands)'' and 
     inserting ``the Republic of the Marshall Islands, and the 
     Federated States of Micronesia, and the Republic of Palau''.

     SEC. 4. AMENDMENT TO THE GUAM ORGANIC ACT.

       Section 28 of the Organic Act of Guam (48 U.S.C. 1421f) is 
     amended by adding at the end the following new subsection:
       ``(d) Transfer of Excess Land. (1) At least 180 days before 
     transferring to any Federal agency excess real property 
     located in Guam other than real property identified on map __ 
     and dated __ as land subject to transfer only by statute, the 
     Administrator of General Services Administration shall notify 
     the government of Guam that the property is available under 
     this section.
       ``(2) The Administrator shall transfer to the government of 
     Guam all right, title, and interest of the United States in 
     and to excess real property located in Guam, by quit claim 
     deed and without reimbursement, if the government of Guam, 
     within 180 days after receiving notification under paragraph 
     (1) regarding the property, notifies the Administrator that 
     the government of Guam intends to acquire the property under 
     this section.
       ``(3) For purposes of this subsection, the term `excess 
     real property' means excess property (as that term is defined 
     in section 3 of the Federal Property and Administrative 
     Services Act of 1949) that is real property.
       ``(4) With respect to any real property identified on the 
     map referenced in paragraph (1) of this subsection, such 
     property may not be transferred to another federal agency or 
     out of federal ownership except pursuant to an Act of 
     Congress specifically identifying such property.''.

     SEC. 5. CLARIFICATION OF ALLOTMENT FOR TERRITORIES.

       Section 901(a)(2) of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3791(a)(2)) is amended to read 
     as follows:
       ``(2) `State' means any State of the United States, the 
     District of Columbia, the Commonwealth of Puerto Rico, 
     the Virgin Islands, American Samoa, Guam, and the 
     Commonwealth of the Northern Mariana Islands;''.

     SEC. 6. AMENDMENTS TO THE REVISED ORGANIC ACT OF THE VIRGIN 
                   ISLANDS.

       (a) Temporary Absence of Officials. Section 14 of the 
     Revised Organic Act of the Virgin Islands (48 U.S.C. 1595) is 
     amended by adding at the end the following new subsection:
       ``(g) An absence from the Virgin Islands of the Governor or 
     the Lieutenant Governor, while on official business, shall 
     not be a `temporary absence' for purposes of this section.''.
       (b) Priority of Bonds. Section 3 of Public Law 94-392 (48 
     U.S.C. 1574c) is amended--
       (1) by striking ``priority for payment'' and inserting ``a 
     parity lien with every other issue of bonds or other 
     obligations issued for payment''; and
       (2) by striking ``in the order of the date of issue''.
       (c) Application. The amendments made by subsection (b) 
     shall apply to obligations issued on or after the date of 
     enactment of this section.

     SEC. 7. COMMISSION ON THE ECONOMIC FUTURE OF THE VIRGIN 
                   ISLANDS.

       (a) Establishment and Membership.
       (1) There is hereby established a Commission on the 
     Economic future of the Virgin Islands (the ``Commission''). 
     The Commission shall consist of six members appointed by the 
     President, two of whom shall be selected from nominations 
     made by the Governor of the Virgin Islands. The President 
     shall designate one of the members of the Commission to be 
     Chairman.
       (2) In addition to the six members appointed under 
     paragraph (1), the Secretary of the Interior shall be an ex-
     officio member of the Commission.
       (3) Members of the Commission appointed by the President 
     shall be persons who by virtue of their background and 
     experience are particularly suited to contribute to 
     achievement of the purposes of the Commission.
       (4) Members of the Commission shall serve without 
     compensation, but shall be reimbursed for travel, subsistence 
     and other necessary expenses incurred by them in the 
     performance of their duties.
       (5) Any vacancy in the Commission shall be filled in the 
     same manner as the original appointment was made.
       (b) Purpose and Report.
       (1) The purpose of the Commission is to make 
     recommendations to the President and Congress on the policies 
     and actions necessary to provide for a secure and self-
     sustaining future for the local economy of the Virgin Islands 
     through 2020 and on the role of the Federal Government. In 
     developing recommendations, the Commission shall--
       (A) solicit and analyze information on projected private 
     sector development and shifting tourism trends based on 
     alternative forecasts of economic, political and social 
     conditions in the Caribbean;
       (B) analyze capital infrastructure, education, social, 
     health, and environmental needs in light of these alternative 
     forecasts; and
       (C) assemble relevant demographic, economic, and revenue 
     and expenditure data from over the past twenty-five years.

[[Page S737]]

       (2) The recommendations of the Commission shall be 
     transmitted in a report to the President, the Committee on 
     Energy and Natural Resources of the United States Senate and 
     the Committee on Resources of the United States House of 
     Representatives no later than June 30, 1999. The report shall 
     set forth the basis for the recommendations and include an 
     analysis of the capability of the Virgin Islands to meet 
     projected needs based on reasonable alternative economic, 
     political and social conditions in the Caribbean, including 
     the possible effect of expansion in the near future of Cuba 
     in trade, tourism and development.
       (c) Powers.
       (1) The Commission may--
       (A) hold such hearings, sit and act at such times and 
     places, take such testimony and receive such evidence as it 
     may deem advisable;
       (B) use the United States mail in the same manner and upon 
     the same conditions as departments and agencies of the United 
     States; and
       (C) within available funds, incur such expenses and enter 
     into contracts or agreements for studies and surveys with 
     public and private organizations and transfer funds to 
     Federal agencies to carry out the Commission's functions.
       (2) Within funds available for the Commission, the 
     Secretary of the Interior shall provide such office space, 
     furnishings, equipment, staff, and fiscal and administrative 
     services as the Commission may require.
       (3) The President, upon request of the Commission, may 
     direct the head of any Federal agency or department to assist 
     the Commission and if so directed such head shall--
       (A) furnish the Commission to the extent permitted by law 
     and within available appropriations such information as may 
     be necessary for carrying out the functions of the Commission 
     and as may be available to or procurable by such department 
     or agency; and
       (B) detail to temporary duty with the Commission on a 
     reimbursable basis such personnel within his administrative 
     jurisdiction as the Commission may need or believe to be 
     useful for carrying out its functions, each such detail to be 
     without loss of seniority, pay or other employee status.
       (d) Chairman. Subject to general policies that the 
     Commission may adopt, the Chairman of the Commission shall be 
     the chief executive officer of the Commission and shall 
     exercise its executive and administrative powers. The 
     Chairman may make such provisions as he may deem appropriate 
     authorizing the performance of his executive and 
     administrative functions by the staff of the Commission.
       (e) Funding. There is hereby authorized to be appropriated 
     to the Secretary of the Interior such sums as may be 
     necessary, but not to exceed an average of $300,000 per year, 
     in fiscal years 1997, 1998 and 1999 for the work of the 
     Commission.
       (f) Termination. The Commission shall terminate three 
     months after the transmission of the report and 
     recommendations under subsection (b)(2).

     SEC. 8. PUBLIC HEALTH SERVICE PHYSICIANS.

       The Secretary of Health and Human Services shall provide, 
     on a non-reimbursable basis, assistance for direct radiation 
     related medical surveillance and treatment programs under 
     section 177(b) of the Compact of Free Association. Such 
     programs may include the services of physicians, surgeons, 
     dentists, nurses, and other health care practitioners.

     SEC. 9. ELIGIBILITY FOR HOUSING ASSISTANCE.

       (a) Section 214(a) of the Housing Community Development Act 
     of 1980 (42 U.S.C. 1436a(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (5);
       (2) by striking the period at the end of paragraph (6) and 
     inserting ``; or''; and
       (3) by adding at the end the following new paragraph:
       ``(7) an alien who is lawfully resident in the United 
     States and its territories and possessions under section 141 
     of the Compacts of Free Association between the Government of 
     the United States and the Governments of the Marshall 
     Islands, the Federated States of Micronesia (48 U.S.C. 1901 
     note) and Palau (48 U.S.C. 1931 note) while the applicable 
     section is in effect: Provided, That, within Guam and the 
     Commonwealth of the Northern Mariana Islands any such alien 
     shall not be entitled to a preference in receiving assistance 
     under this Act over any United States citizen or national 
     resident therein who is otherwise eligible for such 
     assistance.''.

     SEC. 10. CONSENT TO HAWAIIAN HOMES COMMISSION ACT AMENDMENTS.

       As required by section 4 of the Act entitled ``An Act to 
     provide for the admission to the State of Hawaii into the 
     Union'', approved March 18, 1959 (73 Stat. 4), the United 
     States consents to the following amendments to the Hawaiian 
     Homes Commission Act, 1920, adopted by the State of Hawaii in 
     the manner required for State legislation:
       (1) Act 339 of the Session Laws of Hawaii, 1993, and
       (2) Act 37 of the Session Laws of Hawaii, 1994.

     SEC. 11. AMERICAN SAMOA STUDY COMMISSION.

       (a) Short Title.--This section may be cited as ``The 
     American Samoa Development Act of 1997''.
       (b) Establishment and Membership.
       (1) There is hereby established a Commission on the 
     Economic Future of American Samoa (the ``Commission''). The 
     Commission shall consist of six members appointed by the 
     President, three of whom shall be selected from nominations 
     made by the Governor of American Samoa, and the Secretary of 
     the Interior ex officio. The President shall designate one of 
     the appointed members of the Commission to be Chairman.
       (2) Members of the Commission appointed by the President 
     shall be persons who by virtue of their background and 
     experience are particularly suited to contribute to 
     achievement of the purposes of the Commission.
       (3) Members of the Commission shall serve without 
     compensation, but shall be reimbursed for travel, subsistence 
     and other necessary expenses incurred by them in the 
     performance of their duties.
       (4) Any vacancy in the Commission shall be filled in the 
     same manner as the original appointment was made.
       (c) Purpose and Report.
       (1) The purpose of the Commission is to make 
     recommendations to the President and Congress on the policies 
     and actions necessary to provide for a secure and self-
     sustaining future for the local economy of American Samoa 
     through 2020 and on the role of the Federal Government. In 
     developing recommendations, the Commission shall--
       (A) solicit and analyze information on projected private 
     sector development, including, but not limited to, tourism, 
     manufacturing and industry, agriculture, and transportation 
     and shifting trends based on alternative forecasts of 
     economic, political and social conditions in the Pacific;
       (B) analyze capital infrastructure, education, social, 
     health, and environmental needs in light of these alternative 
     forecasts;
       (C) assemble relevant demographic, economic, and revenue 
     and expenditure data from over the past twenty-five years;
       (D) review the application of federal laws and programs and 
     the effects of such laws and programs on the local economy 
     and make such recommendations for changes in the application 
     as the Commission deems advisable;
       (E) consider the impact of federal trade and other 
     international agreements, including, but not limited to those 
     related to marine resources, on American Samoa and make such 
     recommendations as may be necessary to minimize or eliminate 
     any adverse effects on the local economy.
       (2) The recommendations of the Commission shall be 
     transmitted in a report to the President, the Committee on 
     Energy and Natural Resources of the United States Senate and 
     the Committee on Resources of the United States House of 
     Representatives no later than June 30, 1999. The report shall 
     set forth the basis for the recommendations and include an 
     analysis of the capability of American Samoa to meet 
     projected needs based on reasonable alternative economic, 
     political and social conditions in the Pacific Basin. The 
     report shall also include projections of the need for 
     direct or indirect federal assistance for operations and 
     infrastructure over the next decade and what additional 
     assistance will be necessary to develop the local economy 
     to a level sufficient to minimize or eliminate the need 
     for direct federal operational assistance. As part of the 
     report, the Commission shall also include an overview of 
     the history of American Samoa and its relationship to the 
     United States from 1872 with emphasis on those events or 
     actions that affect future economic development and shall 
     include, as an appendix to its report, copies of the 
     relevant historical documents, including, but not limited 
     to, the Convention of 1899 (commonly referred to as the 
     Tripartite Treaty) and the documents of cession of 1900 
     and 1904.
       (d) Powers.
       (1) The Commission may--
       (A) hold such hearings, sit and act at such times and 
     places, take such testimony and receive such evidence as it 
     may deem advisable: Provided, That the Commission shall 
     conduct public meetings in Tutuila, Ofu, Olosega, and Tau;
       (B) use the United States mail in the same manner and upon 
     the same conditions as departments and agencies of the United 
     States; and
       (C) within available funds, incur such expenses and enter 
     into contracts or agreements for studies and surveys with 
     public and private organizations and transfer funds to 
     Federal agencies to carry out the Commission's functions.
       (2) Within funds available for the Commission, the 
     Secretary of the Interior shall provide such office space, 
     furnishings, equipment, staff, and fiscal and administrative 
     services as the Commission may require.
       (3) The President, upon request of the Commission, may 
     direct the head of any Federal agency or department to assist 
     the Commission and if so directed such head shall--
       (A) furnish the Commission to the extent permitted by law 
     and within available appropriations such information as may 
     be necessary for carrying out the functions of the Commission 
     and as may be available to or procurable by such department 
     or agency; and
       (B) detail to temporary duty with the Commission on a 
     reimbursable basis such personnel within his administrative 
     jurisdiction as the Commission may need or believe to be 
     useful for carrying out its functions, each such detail to be 
     without loss of seniority, pay or other employee status.
       (e) Chairman. Subject to general policies that the 
     Commission may adopt, the Chairman of the Commission shall be 
     the chief executive officer of the Commission and shall 
     exercise its executive and administrative

[[Page S738]]

     powers. The Chairman may make such provisions as he may deem 
     appropriate authorizing the performance of his executive and 
     administrative functions by the staff of the Commission.
       (f) Funding. There are hereby authorized to be appropriated 
     to the Secretary of the Interior such sums as may be 
     necessary, but not to exceed an average of $300,000 per year, 
     in fiscal years 1997, 1998 and 1999 for the work of the 
     Commission.
       (f) Termination. The Commission shall terminate three 
     months after the transmission of the report and 
     recommendations under subsection (c)(2).
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 211. A bill to amend title 38, United States Code, to extend the 
period of time for the manifestation of chronic disabilities due to 
undiagnosed symptoms in veterans who served in the Persian Gulf war in 
order for those disabilities to be compensable by the Secretary of 
Veterans Affairs; to the Committee on Veterans Affairs.


         The Persian Gulf War Veterans Compensation Act of 1997

 Mr. WELLSTONE. Mr. President, I am pleased and proud to 
introduce a bill today that will address a serious problem faced by 
many Persian Gulf veterans--the denial of their claims for VA 
compensation based solely on the fact that their symptoms arose more 
than 2 years after they last served in the gulf. This bill is a 
companion to H.R. 466 introduced recently by Congressman Lane Evans, 
ranking minority member of the House Veterans' Affairs Committee and an 
outstanding, energetic, and dedicated veterans' advocate.
  This bill would extend from 2 to 10 years the time by which a veteran 
must develop symptoms after departing the gulf to be eligible to file 
for VA disability compensation.
  While this legislation is simple and straight forward, there are a 
number of reasons that I am introducing it that require some 
elaboration.
  Over a month ago Congressman Evans and I sent a joint letter to VA 
Secretary Jesse Brown asking him to administratively extend the 
presumptive period from 2 to 10 years. We pointed out that the VA had 
denied about 95 percent of Persian gulf veterans' claims for 
undiagnosed illnesses and noted that in House testimony last March 
Secretary Brown himself said that ``most of the people we are denying, 
a large percentage of the people that we are denying, do not have a 
disease within the 2-year period.'' The Secretary added that there was 
a need to examine health problems emerging after that time period.
  Mr. President, our letter also noted that continuing disclosures 
about possible exposures of our troops in the gulf to chemical weapons 
make it clear that it may take many years before we have a full 
understanding of what occurred during the Persian Gulf war and how 
these events affected our veterans. In closing, we stressed that gulf 
war veterans must be given the benefit of the doubt.
  Although Secretary Brown has not yet replied to our letter, I know 
that he is a fearless and deeply committed advocate of our Nation's 
veterans and fully shares my view that America's veterans must always 
be given the benefit of the doubt. Under his leadership, the VA is now 
reviewing 11,000 cases to ensure that Persian Gulf veterans are indeed 
given the benefit of the doubt in the development and adjudication of 
their compensation claims.
  Secretary Brown, at the request of President Clinton, is formulating 
a plan to expand the deadline for compensation which is to be submitted 
to the President in March. I anticipate that the administration will 
extend the deadline and believe that when this occurs they'll want 
congressional authorization. This bill is intended to grant them that 
authority.

  Mr. President, so that my colleagues on both sides of the aisle will 
better understand my reasons for introducing this bill and why I 
believe the administration must and will extend the deadline for filing 
gulf war claims, permit me to list some of the key factors involved:
  Sick Persian Gulf veterans shouldn't be kept in limbo, waiting years 
for the completion of research that should have been done years ago on 
the long-term health effects of low-level exposures to chemical and 
other agents;
  In this connection, the experience of atomic veterans for over 50 
years is hardly encouraging, with disputes among scientists persisting 
about the long-term effects of exposure to low-level radiation and 
about the validity of U.S. Government-funded radiation dose 
reconstructions--dose reconstructions which continue to be a major 
factor in denial of the vast majority of atomic veterans' claims for VA 
compensation;
  While I'm pleased that research is finally taking place after a delay 
of over 5 years stemming from DOD's contention that there were no 
chemical exposures and that low-level exposures had no health effects, 
I fear there is a possibility that the etiology of Persian Gulf 
illnesses may never be known because needed scientific data was not 
collected immediately after the war and because of the complexity of 
figuring out the synergistic effects of various combinations of harmful 
agents present during the gulf war.
  DOD and CIA are developing new information about possible chemical 
and other exposures during the gulf war that could further complicate 
the search for the causes of illnesses, while the media sometimes carry 
contradictory reports on such exposures that add to the uncertainties 
and anxieties of veterans and their families;
  There are a number of serious diseases that are not manifested until 
10 years or more after initial exposure to harmful agents.
  In closing, Mr. President, I would like to pay tribute to the brave 
Minnesota veterans of Operation Desert Shield/Desert Storm whom I met 
with over a month ago. These Minnesota veterans who are my mentors told 
me about the illnesses and symptoms they developed after the war, 
including skin rashes, hair loss, reproductive problems, memory loss, 
headaches, aching joints, and internal bleeding. They said that they 
are scared to death about their health problems. I was deeply moved by 
their accounts and pledged to do all I could to help them. Moreover, I 
was distressed to learn that as of last month, out of 171 Minnesota 
gulf veterans who had filed disability claims, only 18 were receiving 
full or partial disability benefits.
  As part of an action plan to help Minnesota gulf veterans, I told 
them that Congressman Evans and I were writing to Secretary Brown to 
extend the 2-year period to 10 years. This initiative was supported 
both by Minnesota Persian Gulf veterans and State veterans' leaders and 
the bill I'm now introducing is a logical followup to the letter sent 
to Secretary Brown.
  I am very pleased to note that this legislation is supported by the 
American Legion and the Vietnam Veterans of America and I urge my 
colleagues to join these organizations in strongly supporting this 
bill.
  I dedicate this bill to the patriotic and courageous Minnesota 
veterans who served in the Persian Gulf war.
  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. 211

       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 ``Persian Gulf War Veterans 
     Compensation Act of 1997''.

     SEC. 2. EXTENSION OF PRESUMPTIVE PERIOD FOR MANIFESTATION OF 
                   CHRONIC DISABILITIES DUE TO UNDIAGNOSED 
                   SYMPTOMS IN VETERANS WHO SERVED IN THE PERSIAN 
                   GULF WAR.

       Subsection (b) of section 1117 of title 38, United States 
     Code, is amended to read as follows:
       ``(b) The provisions of subsection (a) shall apply in the 
     case of a disability of a veteran becoming manifest within 10 
     years after the last date on which the veteran performed 
     active military, naval, or air service in the Southwest Asia 
     theater of operations during the Persian Gulf War.''
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 212. A bill to increase the maximum Federal Pell Grant award in 
order to allow more American students to afford higher education, and 
to express the sense of the Senate; to the Committee on Labor and Human 
Resources.


        The Affordable Higher Education Through Pell Grants Act

  Mr. WELLSTONE. Mr. President, on January 21 I cosponsored S. 212, the 
Senate leadership's version of President Clinton's education tax 
deduction and credit plan. As an educator for 20

[[Page S739]]

years and a Senator who believes in education, I couldn't be more 
enthusiastic that the President and the leadership have chosen to 
invest $35 billion over the next 5 years into higher education in this 
country. This is a marvelous goal and I support it without hesitation.
  When it comes to investing a large sum of money into education, with 
the goal of making education more affordable for more students and 
working families, I think that it is important to explore every viable 
option. The tax system is one way to distribute money to working 
families. Another existing system is the Pell Grant Program, which is 
already geared toward targeting money at the students who are most 
likely not to attend college because of a lack of funds. Currently, 
Pell Grants go almost exclusively to lower income families. But that is 
not how Pell was designed. It was designed to reach families based on 
their need, not based on their income. If the Pell Grant Program were 
to be funded up to its authorized level, it would be of great benefit 
to many middle-class families as well as lower middle-class families. 
Because Pell is a proven entity and a great deal could be gained by 
investing in it, I rise today to introduce a second option on how to 
bring higher education into the reach of more Americans.
  It is both saddening and shameful that in this country, the best 
predictor of attending college is the family income. We have engineered 
a system in this country where the doors to college are closed for 
those who have the most to gain from higher education. Only 16 percent 
of college freshmen come from households earning $20,000 a year or 
less. Only half of them actually graduate by age 24, and those that 
drop out cite the expense of college as their No. 1 concern. Clearly, 
we are doing an inadequate job of addressing the financial needs of our 
Nation's college bound youth. According to David Wessel of the Wall 
Street Journal, three-quarters of higher income students attend 
college. Half of middle income students attend college. But just one-
quarter of poorest income students attend college.
  As reported by the New York Times, ``the impact of [financial 
pressures on the poor] has been camouflaged by the steady growth in 
college attendance by more affluent students and by older people. But 
students from poor families have increasingly been left behind.'' The 
proportion of students earning college degrees by age 24 from families 
in the richest quarter of the population has jumped from 31 percent in 
1979 to 79 percent in 1994. But the rate among students from families 
in the poorest population over the exact same years, 1979 to 1994, has 
stayed dead flat at 8 percent.
  Looked at another way, affluent students in 1979 were 4 times more 
likely to graduate from college at 24 than poor students, but 10 times 
more likely in 1994. According to Thomas Mortenson, a higher education 
policy analyst in Iowa City, ``there has been a redistribution of 
educational opportunity. We have a greater inequality of educational 
attainment by age 24 than at any time during the last 25 years. Lower 
income kids are having a terrible time in higher education.''
  Mr. President, 25 years ago, the Pell Program was created to respond 
to these discrepancies. The goal of Pell grants was to target funds 
toward those families that were likely to send their children to 
college but couldn't afford to. Consequently, Pell grants have no 
income limit. Even a family with a very high income is eligible for 
Pell, if it can be shown that they have need--for example, if they have 
several children and all the kids are in college, they are supposed to 
fall under the umbrella of the Pell Program. Pell grant awards go first 
to the neediest students, and are phased out as need decreases.

  It was hoped that the Pell Program would pay off in three very 
important ways. First, it would enable more motivated but financially 
insecure students to gain the skills necessary to have productive 
lives. Second, it would increase the number of students enrolled in 
institutions of higher learning, and therefore reduce the cost of 
higher education for everyone. Third, it would provide to the Nation 
all the wonderful benefits of a well-educated population--a skilled 
work force, an improved ability to compete with other nations, a more 
financially secure country.
  The Pell Grant Program has done a world of good. Over the 25 years, 
68.2 million awards have been given out to an estimated 30 million 
students. Millions of lower income students have been able to attend 
college thanks to Pell. While Pell itself has been unable to actually 
reduce college tuitions, it is frightening to imagine how expensive 
colleges would be without the Pell Program, and how few lower income 
families would be able to obtain diplomas. In terms of overall effect 
of the Pell Program on our country, it is almost impossible to 
overstate the significance of having educated so many people who 
otherwise would have been unlikely to have increased their standard of 
living and the standards of their families and those around them.
  When Pell was created, it bore a price tag of $47.5 million--in 1971 
dollars, $118 million in 1997 dollars--and benefited 176,000 grant 
recipients. By 1980 it aided 2.7 million students, and today, the Pell 
Grant Program invests $6.4 billion a year into the education of 3.6 
million grant recipients a year. We should not misinterpret the growth 
of this program as having successfully met the need for the program; 
however, Pell Grants are something of which the Congress should be 
extremely proud.
  Let me explain how the Pell Program works, and how it manages to 
invest money right where it is needed. The formula is simple. First, 
the ``expected family contribution'' is determined through a formula 
used for all Federal student aid programs. The nickname for the 
expected family contribution is EFC. The EFC takes into account the 
family income, the number of dependents in the family, the number of 
family members currently receiving aid or attending college, and 
certain assets if the family earns more than $50,000 a year.
  Here's an example. A typical two-earner family with an income of 
$50,000 that has one dependent child in college would be expected to 
contribute $4,000 per year toward their child's education. The EFC is 
then subtracted from the maximum Pell Grant award, which under current 
law is authorized to be $4,500. If you add up the cost of the child's 
tuition, fees, room, board, and books and it comes out to more than 
$4,500, then that family could expect to receive $500 in Pell grants.
  This example also succeeds in demonstrating the problem with the Pell 
grant system. Currently, the Pell maximum award is, indeed, authorized 
to be $4,500. However, because there was not enough money available for 
the Pell Program last year, the appropriators lowered the Pell maximum 
award to only $2,700. That means that the average three person family, 
which I have described above, will not receive a Pell grant award if 
their income is over $38,600.

  You see, Pell, as originally designed, is supposed to benefit the 
middle class. But for this to be successful, enough money must be 
allocated to the program so that the appropriations process can provide 
the statutory maximum award for each student.
  But this has seldom happened over the years. While the statute sets 
the maximum award, limited funds available for the program have meant 
that appropriations language has almost always reduced the maximum 
award.
  Because the appropriations process reduces the maximum Pell award 
every year, the purchasing power of Pell grants has dwindled in 
relation to college costs. During the 80's and 90's, college costs have 
increased at an annual rate of between 5 percent and 8 percent, 
increases that have always outpaced inflation. In 1980, the average 
Pell award of $882 paid 26 percent of the total annual cost of 
attendance for a 4-year public institution--$3,409--as compared to 
today, when the average award of $1,579 pays only 16 percent of total 
costs of $9,649. This, in light of the fact that, as stated in the 
Higher Education Act, the purpose of the Pell Grant Program is to 
provide an award that ``in combination with reasonable family and 
student contribution and--other Federal grant aid--will meet at least 
75 percent of a student's cost of attendance.''
  In real dollars, appropriations for the Pell Grant Program have 
increased by almost 50 percent since 1980. However, the appropriated 
maximum grant has

[[Page S740]]

increased only 34 percent, which means that if inflation is factored 
in, the maximum award has fallen 13 percent. The result is that few 
families with incomes above $30,000 are likely to qualify for Pell. 
Last year, 54 percent of Pell recipients had incomes of less than 
$10,000.
  This is where the bill I introduce today comes in. At a similar cost 
to the President's tax deduction and credit proposals--$35 billion over 
5 years--my bill would increase the maximum Pell grant award to $5,000 
from the present level of $2,700, thus bringing the award to the level 
at which it was created, adjusted for inflation. With the maximum 
increased, two intents would be accomplished. First, lower income 
students would be entitled to a larger award, thus having more 
opportunity to attend college. Second, because the maximum is 
increased, more students--including students from middle income 
families--would be eligible for Pell grants.
  Here are a few illustrations. Under current law, a single, 
independent student with no children is ineligible for even a minimum 
Pell grant award if she has an income of over $9,800. My bill would 
effectively double the income eligibility; a single student with no 
children with an income of over $16,200 would still be eligible for 
Pell. If that student is a single parent, with two children, her income 
could be as high as $50,600 and she would still be eligible for Pell, 
as opposed to current law, which would eliminate her eligibility at an 
income of $38,800.
  Parents trying to put a dependent child through college would also 
benefit from this bill. For example, a two-parent family with one child 
in college under current law is eligible only if their income is lower 
than $38,600. My bill would raise this eligibility to just under 
$50,000. Under Pell as it exists today, a family with four children in 
college receives the minimum award for each of their children as long 
as their income is lower than $72,600. Under this bill, an average 
family with four children in college would receive the minimum award 
for each child even if their income was as high as $107,300.

  Now let me take a moment to explain why my proposal and the Clinton 
proposal are so deserving of the attention and support of this body.
  These days, parents putting children through college, and young 
adults trying to do it on their own, are facing an increasingly 
daunting challenge. According to the college board, tuition costs have 
gone up more than 40 percent since 1985. Expressed in constant 1994 
dollars, in 1985 tuition at the average private college was $10,058. By 
1994, it was $14,486--a 44 percent increase. The average public college 
tuition was $2,095 in 1985. By 1994, it was $2,948--a 41 percent 
increase.
  Last year alone, college tuition went up 6 percent, more than double 
the rate of inflation. Since 1980, college tuition has risen faster 
than medical costs, and more than twice as fast as family income.
  For the last 10 years, tuition increases at State universities, 
community colleges, and technical colleges in Minnesota have ranged 
from 2 to almost 9 percent every single year. The largest trend in 
tuition increases began in the early 1980's. Since then, tuition at the 
University of Minnesota has risen 264 percent while the Consumer Price 
Index has gone up 71 percent--available chart shows only the increase 
between 1981 and 1992, that is why its numbers are smaller. Next 
academic year, a freshman at the UM Liberal Arts College will pay 
$3,618, plus a higher activity fee, plus a new $135 computing fee.
  All over Minnesota--at private schools, public universities and 
colleges--tuition is going up faster than personal disposable income 
per capita.
  Meanwhile, Government and private aid has declined. Federal 
appropriations for student aid fell 9 percent between 1980 and 1993 
while States allocations fell 13 percent between 1986 and 1992. 
Corporate and private giving is far too small to offset these declines. 
Last year, the Federal Government spent nearly 40 percent less than it 
did the year before to help young people in Minnesota pay for college 
with Perkins loans. That's $1.5 million less in loans--3,214 fewer 
students getting help with their educations. Overall, public subsidies 
to higher education have shrunk from 45 percent of higher education's 
revenues in 1980 to 35 percent today, most of it to public 
universities. Today, more than 80 percent of America's college students 
study at public universities.
  The trend in Federal aid to post-secondary students is towards more 
loans and away from grants. Although more money is now available to 
college students, a greater proportion of it must be paid back. 
According to the college board, the Federal Government invested 80 
percent of its higher education budget into Grants and only 20 percent 
in loans. Today, those numbers are almost exactly reversed. This is a 
trend that affects poorer students much more than those who are 
wealthier, as poor students are forced to ask themselves--what if I 
don't graduate, what will I do with my debt? For these students, Pell 
Grants are a lifeline that keeps being pulled out of their reach.
  Between 1985 and 1994, the share of college costs covered by the 
maximum Pell grant has steadily fallen for all types of institutions. 
For example, at a private university, a Pell Grant covered about 17 
percent the cost of attendance in 1985. By 1994, that fell to about 10 
percent. Similarly, at a public university, a Pell Grant paid for about 
50 percent of college costs in 1985. In 1994, that figure was down to 
about 30 percent.
  As a result, the average debt of those emerging from higher education 
grows at a rate much greater than inflation. Six-and-a-half million 
students, nearly half of the Nation's enrollment, have loans totaling 
$23.8 billion. Student borrowing has grown at an average rate of 22 
percent per year since 1990, outpacing personal income growth four 
times over.
  At Moorehead State University in Moorehead, MN, students are 
graduating with a staggering amount of debt. The average student 
graduating this spring who finished her degree in 4 years owes $10,762. 
For those who take 5 years to graduate, their debt is even higher, an 
average of $11,450. Those figures are both much higher than only 4 
years ago.
  The Minnesota State Colleges and Universities report that students 
graduating from 2-year colleges incur debt of $8,000 to $10,000. Those 
attending State universities are coming out of school with $15,000 to 
$20,000 of debt.
  It should be no surprise that defaults cost the Federal Government 
over $2 billion a year.
  It's not only students that are increasingly saddled with debt. 
Parents are borrowing more and more in order to finance their 
children's educations. The average loan in the PLUS Program--parental 
loans for undergraduate students--between 1992 and 1993 jumped from 
$3,260 to $4,525. In addition, the loan volume for the program grew by 
26 percent.
  If you are a student planning to attend college, or a parent planning 
on paying for your child, you'd better start saving now. Even if you 
plan to send your child to a State school, and even if you start saving 
17 years in advance, you are going to have to start putting away a 
chunk of change.
  Put together, rising costs of education and decreasing Government aid 
spells a greater burden on students and their families--a burden that 
is often impossible to initiate, and at times, if attempted, impossible 
to sustain.
  But it's crazy for us to allow this to go on. Education is the key to 
the economic security of this Nation. By the year 2000, 50 percent of 
all new jobs will require a college education. It is not only our duty 
and obligation to assist these students in their higher education 
endeavors, it is essential for our country's future.
  Higher education pays off. Every year of higher education increases 
an individual's income between 6 and 12 percent. In fact, a college-
educated male earns 83% more during his lifetime than a noncollege-
educated male.
  Education is married to earnings potential. A high school dropout can 
expect to earn, on average, under $13,000 a year; a high school 
graduate, under $19,000; while a college graduate can earn over $32,000 
and a master's degree recipient can earn over $40,000; a doctoral 
recipient can earn over $54,000; and a professional degree recipient 
earns, on average, over $74,000.

  A recent survey of managers showed that an investment in the 
educational

[[Page S741]]

level of their work force resulted in twice the return in increased 
productivity of a comparable increase in work hours and nearly three 
times the return of an investment in capital stock.
  Data from the Society of Research also reveals that poverty rate 
declines as education levels increase. According to the 1992 Census, 
almost a quarter of the children under the age of 6 in the United 
States live in poverty. For many, the opportunity for a higher 
education lies only in the availability of Pell grants. Therefore, the 
Pell Grant Program is integral in breaking the chain of poverty. In 
fact, a national study conducted in 1995 revealed that AFDC recipients 
receiving financial aid are 80 percent more likely to graduate college 
and obtain permanent jobs.
  Families who live in the middle or higher socio-economic bracket will 
send their children to college regardless of available financial 
assistance. Such is not the case for low income groups. Cut backs in 
financial assistance correlate to lack of enrollment and long term 
attendance among lower socio-economic groups. Without the availability 
of Pell grants, low income students will not have the opportunity for 
advanced degrees.
  Mr. President, these are the reasons that I am introducing this bill. 
Ultimately, education is what separates those who achieve from those 
who can never realize the American Dream. The Government needs to 
invest in its citizens if democracy is to flourish, if we are to 
compete in the global marketplace, and if we are to live up to our 
responsibility to the American people.
  As we plan for our country's future and that of its youth, let us be 
sure that a higher education is available and accessible for all. Let's 
create a system in the 21st century in which the No. 1 predictor of 
college attendance is not income, but rather desire.
  I urge my colleagues to support S. 212 and to support this bill.
  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:

                                 S. 212

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

     SECTION 1. TITLE

       This bill shall be known as ``The Affordable Higher 
     Education through Pell Grants Act.''

     SEC. 2. FEDERAL PELL GRANTS.

       Section 401(b)(2)(A) of the Higher Education Act of 1965 
     (20 U.S.C. 1070a(b)(2)(A) is amended--
       (1) in clause (iv), by striking ``and'' after the comma;
       (2) in clause (v), by inserting ``and'' after the comma; 
     and
       (3) by inserting after clause (v) the following:
       ``(vi) $5,000 for academic year 1998-1999 and each of the 4 
     succeeding academic years,''.

     SEC. 3. SENSE OF THE SENATE

       It is the sense of the Senate that Congress should 
     appropriate funds to provide the maximum Federal Pell Grant 
     award permitted under this Act for academic year 1998-1999 
     and each of the 4 succeeding academic years to all eligible 
     students.
                                  ____


         Aid Cuts Put College Beyond Reach of Poorest Students

                         (By Karen W. Arenson)

       As state governments keep whittling away their support for 
     higher education, tuition at public institutions is likely to 
     continue rising as financial aid shrinks, moving college 
     further beyond the reach of poor students, education experts 
     say.
       ``There has been a redistribution of educational 
     opportunity,'' said Thomas G. Mortenson, a higher education 
     policy analyst in Iowa City and a senior scholar at the 
     National Council of Educational Opportunity Associations in 
     Washington.
       To some experts, New York State is a case in point. Earlier 
     this month, Gov. George E. Pataki proposed to increase 
     tuition at New York's public universities by $400 a year and 
     reduce state aid for the state's neediest students. Tuition 
     at both the State University colleges and City University 
     would rise to $3,600 a year at CUNY's four-year colleges and 
     $3,800 a year at SUNY's.
       Governor Pataki's proposals are not certain to be adopted; 
     the Legislature rejected similar cuts last year. But experts 
     say that higher tuition and reduced aid are inevitable.
       ``It's not this 400 bucks that Governor Pataki is 
     proposing, it's the general pattern,'' said Arthur Levine, 
     president of Teachers College at Columbia University.
       At the City University of New York, which charged no 
     tuition until 1976, tuition now accounts for 43 percent of 
     the four-year college's budget, up from 19 percent seven 
     years ago, CUNY's current budget proposal shows. Students 
     there say any increases strain their stretched personal 
     budgets.
       ``If tuition goes up, I don't think I will have to drop 
     out, but it will not be pleasant,'' said Michelle Whitfield, 
     a 34-year-old Harlem resident who is a voice student at 
     Brooklyn College's Conservatory of Music.
       She works 30 hours a week as a temporary worker doing word 
     processing on Wall Street to pay for college and to support 
     herself and her elderly mother. She earns too much to qualify 
     for financial aid, she said, but had to withdraw from college 
     last spring when she ran out of money. Although she is back 
     in school, she said she might have to sit out future 
     semesters if costs rise.
       Higher-income and middle-income students have been going to 
     college in evergreater numbers as college becomes an 
     increasingly important factor in earning a decent salary. But 
     lower-income students are going in about the same proportions 
     that they did in the 1970's.
       For decades, public universities have remained an important 
     source of higher education for those who cannot afford 
     private institutions. Today, more than 80 percent of 
     America's college students study at public universities.
       But while these universities are still considerably less 
     expensive than most private colleges, they, too, are 
     increasingly pricing themselves beyond the means of the 
     poorest Americans, experts say.
       Morton Owen Schapiro, dean at the University of Southern 
     California and a specialist in the economics of higher 
     education, said that tuition at public colleges and 
     universities had risen by an annual average of 4 percent to 
     4.5 percent after inflation since the late 1970's, well ahead 
     of the growth in financial aid.
       ``That is going to hurt a lot of people,'' he said, adding 
     that while some private colleges offer generous financial aid 
     to needy students, most of them go to public institutions.
       He and Michael S. McPherson, president of Macalester 
     College in St. Paul, Minn., have found that public subsidies 
     to higher education have shrunk from 45 percent of higher 
     education's revenues in 1980 to 35 percent today--most of it 
     to public universities.
       Compounding the financial problems of many students are 
     continuing cuts in financial aid. Federal Pell grants, aimed 
     at helping the nation's neediest students pay expenses other 
     than tuition, now amount to a maximum of $2,700 for students 
     at public four-year colleges. Mr. Mortenson calculates that 
     had they kept pace with inflation, they would amount to more 
     than $5,500 today.
       For many students, state tuition support has declined, too. 
     For 20 years, New York's Tuition Assistance Program--
     available to students with incomes below a certain level--had 
     always covered tuition at the public universities for 
     students who qualified. But in 1995, New York reduced the 
     maximum award for public university students to 90 percent of 
     tuition.
       And now Governor Pataki has again proposed that students 
     who receive Pell grants are well as state tuition assistance 
     should receive less from the state program.
       To some extent, the impact of these financial pressures has 
     been camouflaged by the steady growth in college attendance 
     by more affluent students and by older people. But students 
     from poor families have increasingly been left behind.
       Mr. Mortenson has found that the proportion of students 
     earning college degrees by age 24 from families in the 
     richest quarter of the population (in 1994, those with 
     incomes above $65,000) has jumped sharply, to 79 percent in 
     1994 from 31 percent in 1979. But the rate among students 
     from families in the poorest population (with 1994 incomes 
     below $22,000) stayed flat over the same years, at about 8 
     percent.
       Looking at the trend another way, affluent students were 
     nearly four times as likely as the poorest ones to graduate 
     from college by age 24 in 1979, but nearly 10 times as likely 
     in 1994. ``We have greater inequality of educational 
     attainment by age 24 than at any time in the last 25 years,'' 
     Mr. Mortenson said. ``Lower income kids are having a terrible 
     time in higher education.''
       In 1995, City University surveyed 545 CUNY students who had 
     left the university system even though they were in good 
     academic standing. Thirty-four percent cited lack of money or 
     the need to work as the reason. When the City University 
     raised tuition by $750 in 1995 and New York State cut 
     financial aid, the university saw a sudden drop in 
     undergraduates: 138,000 students enrolled at its four-year 
     colleges, 4,500 fewer than the previous year and about 6,500 
     fewer than projected.
       ``I am convinced that the reason was simply financial,'' 
     said the university's Chancellor, W. Ann Reynolds. ``Students 
     needed to have much more cash on the barrel. I am convinced 
     that we are denying opportunity for poor students to go to 
     college.''
       City University, the nation's largest urban university 
     system, has the highest percentage of students in poverty: 
     about 40 percent of the 139,000 undergraduates at its four-
     year colleges come from households with incomes of less than 
     420,000. More than half of all undergraduates--85,000--
     qualify for Pell grants, and 72,000 get tuition assistance 
     from New York State.
       Still, more than half of the students also work: 27 percent 
     hold full-time jobs and 32 percent work part time--many to 
     support their own families, because 29 percent have children.

[[Page S742]]

       Even with multiple sources of support, many City University 
     students encounter financial problems, which are reflected in 
     their frequent moves in and out of school and the longer time 
     they take to graduate.
       Abdul Khan, a 36-year-old immigrant from Pakistan and an 
     engineering major at City College, has been forced to skip 
     semesters because his full-time job at a newsstand--which 
     pays $13,000 a year--leaves little extra money after living 
     expenses. If costs rise further, he said, ``maybe I can take 
     one semester every year.''
       Mr. Mortenson, the analyst of higher education, said that 
     if financial aid is not increased, one answer for students 
     like Mr. Khan may be to take out more loans--an often 
     unpalatable option for those unsure they will be able to 
     finish college.
       David Torres, a 35-year-old psychology major at Brooklyn 
     College who lives in Ozone Park, Queens, said he had weighed 
     taking out a loan, now that he has exhausted his state 
     tuition assistance.
       ``But loans terrify me,'' he said. ``What if I don't finish 
     and can't pay if off? It's scary.''
       Mr. Mortenson has an answer for students like Mr. Torres.
       ``What I tell kids,'' he said, ``is that as scary as paying 
     for college is, you have to go. The only thing more expensive 
     than going to college is not going to college.''
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Feingold, and Mr. Jeffords):
  S. 213. A bill to amend section 223 of the Communications Act of 1934 
to repeal amendments on obscene and harassing use of telecommunications 
facilities made by the Communications Decency Act of 1996 and to 
restore the provisions of such section on such use in effect before the 
enactment of the Communications Decency Act of 1996; to the Committee 
on Commerce, Science, and Transportation.


    legislation to repeal the internet censorship provisions of the 
                       communications decency act

  Mr. LEAHY. Mr. President, I rise to introduce a bill to repeal the 
Internet censorship law that the 104th Congress hastily passed as part 
of the new Telecommunications Act. I vigorously opposed the so-called 
Communications Decency Act, along with Senator Feingold, as 
unnecessary, unworkable and--most significantly--unconstitutional.
  So far, every court to consider this law has agreed with us that the 
Communications Decency Act flunks the constitutionality test. Two 
separate panels of Federal judges in Pennsylvania and New York have 
determined that the Internet censorship law serves as an 
unconstitutional ban on constitutionally protected indecent speech 
between and among adults communicating on-line. The first amendment to 
our Constitution will not tolerate this level of governmental intrusion 
into what people say to each other over computer networks. The matter 
is now before the Supreme Court, which will hear argument on this case 
in March.
  We will be ready to pass this bill and repeal the Internet censorship 
law as soon as the Supreme Court acts--as I am confident they will--to 
strike down the law as unconstitutional. I exhort the Supreme Court to 
make clear that we do not forfeit our first amendment rights when we go 
on-line. Only such guidance will stop wrong-headed efforts in Congress 
and in State legislatures to censor the Internet.
  The first amendment to our Constitution expressly states that 
``Congress shall make no law abridging the freedom of speech.'' The CDA 
flouts that prohibition for the sake of political posturing and in the 
name of protecting our children. Giving full-force to the first 
amendment on-line would not be a victory for obscenity or child 
pornography. This would be a victory for the first amendment and for 
American technology.
  Let us be emphatically clear that the people at risk of committing a 
felony under the CDA are not child pornographers, purveyors of obscene 
materials or child sex molesters. These people can already be 
prosecuted and should be prosecuted under longstanding Federal criminal 
laws that prevent the distribution over computer networks of obscene 
and other pornographic materials harmful to minors, under 18 U.S.C. 
sections 1465, 2252, and 2423(a); that prohibit the illegal 
solicitation of a minor by way of a computer network, under 18 U.S.C 
section 2252; and that bar the illegal luring of a minor into sexual 
activity through computer conversations, under 18 U.S.C section 
2423(b). In fact, we recently passed unanimously a new law that sharply 
increases penalties for people who commit these crimes.
  There is absolutely no disagreement in the Senate about wanting to 
protect children from harm. All 100 Senators, no matter where they are 
from, would agree that obscenity and child pornography should be kept 
out of the hands of children and that those who sexually exploit 
children or abuse children should be vigorously prosecuted. As a former 
prosecutor, I have prosecuted people for abusing children. This is 
something where there are no political or ideological differences among 
us.
  But that is not the issue before us. In the heated debate over 
censoring the Internet, I fear that many Members, who have never used a 
computer let alone surfed the Internet, may have been under the 
misapprehension that the Internet is full of sexually explicit 
material. While such material may be accessible on the Internet, one 
court estimated that ``the percentage of Internet addresses providing 
sexually explicit content would be well less than one-tenth of 1 
percent of such addresses'' and that ``as much as 30 percent of the 
sexually explicit material currently available on the Internet 
originates in foreign countries.'' Shea versus Reno, 930 F. Supp. 916, 
931, S.D.N.Y. 1996. Banning indecent material from the Internet is like 
using a meat cleaver to deal with the problems better addressed with a 
scalpel.
  We all want to protect our children from offensive or indecent online 
materials. But we must be careful that the means we use to protect our 
children does not do more harm than good. We can already control the 
access our children have to indecent material with blocking 
technologies available for free from some online service providers and 
for a relatively low cost from software manufacturers. At some point we 
ought to stop saying the Government is going to make a determination of 
what we read and see, the Government will determine what our children 
have or do not have. Let us encourage the technology that empowers 
parents--not the government--to make choices for about what is best for 
their children.
  The CDA is a terribly misguided effort to protect children that 
instead tramples on the free speech rights of all Americans who want to 
enjoy this medium. The Internet censorship law takes a blunderbuss 
approach that puts all Internet users at risk of committing a crime. It 
penalizes with 2-year jail terms and large fines anyone who transmits 
indecent material to a minor, or displays or posts indecent material in 
areas where a minor can see it. By criminalizing what is vaguely 
referred to as ``indecent'' speech, this law imposes far-reaching new 
Federal crimes on Americans for exercising their free speech rights on-
line and on the Internet.
  What strikes some people as indecent or patently offensive may look 
very different to other people in another part of the country. Given 
these differences, a vague ban on patently offensive and indecent 
communications may make us feel good but threatens to drive off the 
Internet and computer networks an unimaginable amount of valuable 
political, artistic, scientific, health and other speech. Let me give a 
couple of examples of what is at risk.

  A university professor would risk prosecution by making available on-
line to a freshman literature class excerpts from certain classics, 
such as Catcher in the Rye or Of Mice and Men, all of which have been 
challenged in a number of communities as indecent for minors.
  Forwarding to a child an on-line version of Seventeen magazine, which 
is a frequently challenged school library material, might violate this 
law, even though children are free to buy the magazine at newsstands.
  An e-mail message from one teenager to another with certain four-
letter swear words would violate this law.
  Museums with Web sites will think twice before posting images of 
classic nude paintings or sculptures showing sexual organs, that are 
suspect under the new censorship law.
  On-line discussions about AIDS and other sexually transmitted 
diseases may be illegal under this new law. No one knows.
  Advertisements that would be perfectly legal in print could subject 
the advertiser to criminal liability if circulated on-line.
  In short, the Internet censorship law leaves in the hands of the most 
aggressive prosecutor in the least tolerant

[[Page S743]]

community the power to set standards for what every other Internet user 
may say on-line.
  In bookstores and on library shelves, the protections of the first 
amendment are clear. The courts are unwavering in the protection of 
indecent speech. Altering the protections of the first amendment for 
online communications could cripple this new mode of communication.
  The Internet is an American technology that has swept around the 
world. As its popularity has grown, so have efforts to censor it in 
Germany, in China, in Singapore, and other countries. We should be 
leading the efforts to keep the Internet uncensored, and taking the 
high ground to champion first amendment freedoms. Instead, however, the 
Communications Decency Act tramples on the principles of free speech 
and free flow of information that has fueled the growth of this medium.
  Let us get this new unconstitutional law off the books as soon as 
possible. This bill would repeal the provisions of Communications 
Decency Act that result in a ban of constitutionally protected on-line 
speech, and simply restores the provisions of section 223 of the 
Communications Act of 1934 in effect before passage of the CDA.
  Mr. President, in the last Congress this body and the other body 
passed a piece of legislation called the Communications Decency Act. It 
was done I believe because many felt a concern about what might be seen 
by children on the Internet. Unfortunately--and I said this at the time 
on the floor--the bill is overly broad. It stepped into the first 
amendment in a way that would not have been done with anything else.
  We would not have gone down the road of trampling on the first 
amendment and say that we would have to close down all magazine stores 
because they might sell a magazine, which while acceptable to adults 
might be objectionable to children. We would never say that we would 
close every library in the country, including the Library of Congress, 
because it may have books there that while acceptable to all adults 
might not be acceptable to children. And we would never pass a law to 
close down a publishing house because it published books that might be 
acceptable to adults but unacceptable to children.
  But basically that is what we said we would do with the Internet. We 
said that even though the Internet may be providing something that is 
acceptable to adults, we would basically close down large segments of 
it with criminal penalties because it might have something unacceptable 
to children.
  The first amendment to our Constitution says that Congress shall make 
no law abridging the freedom of speech. And what the CDA, or the 
Communications Decency Act, did was to go way beyond what we believe 
the first amendment stands for. I do not in any way hold any brief for 
child pornographers or child abusers. I am one of the few people in 
this body who have sent child abusers to prison. Whenever I had 
somebody who was involved in child molestation or abusing when I was 
the prosecutor, I prosecuted this as a top priority in my office and 
sought the strongest penalties possible. Everyone, whether parents or 
grandparents, would do everything possible to stop anybody from abusing 
our children. As parents, we would take the responsibility to make sure 
that our children are protected from offensive or indecent material, 
whether it is online, or the Internet, or elsewhere.
  But, unfortunately, no matter what every single one of us feel, 
Republicans or Democrats, or no matter where we are from, the CDA is a 
terribly misguided effort to protect children that instead tramples on 
the free speech of all Americans who want to use the Internet. It takes 
a blunderbuss approach. It puts all Internet users at risk of 
committing a crime. It penalizes by a 2-year jail term and large fines 
anyone who transmits indecent material to a minor, or places or posts 
indecent material in areas where a minor might see it--not whether they 
do or not but they might.
  What this means is a university professor risks prosecution by making 
available online to a freshman literature class excerpts from Catcher 
in the Rye, or Of Mice and Men--all of which have been challenged in 
communities as indecent for minors. Or forwarding to a child online a 
version of Seventeen magazine might violate the law, even though any 
child could buy that magazine freely at a newsstand. E-mail messages 
from one teenager to another using some four-letter words violates the 
law. Museums for web sites are going to think twice before posting 
images of something like Michelangelo's David because showing sexual 
organs would be specifically excluded under this law. Online 
discussions about sexually transmitted diseases could be illegal. 
Advertisements that would be illegal in print could be illegal here.
  So it is because of that, because it went so far, that the courts 
have looked at this and have unanimously struck it down. They have said 
that it is unconstitutional. Multijudge panels in Philadelphia and New 
York City came unanimously to that view, and it is now before the U.S. 
Supreme Court.
  Experts from the right to the left that I have spoken with 
on constitutional law predict that the Supreme Court will uphold the 
unanimous decision of the lower Federal court and find it 
unconstitutional.

  So I am going to introduce a bill to repeal the Internet censorship 
parts of the Communications Decency Act, and I will do this along with 
Senator Feingold because the law is unnecessary, unworkable, and, most 
significantly, unconstitutional. There are better ways of doing this. 
Let us work with computer software producers on programs that can 
screen out material which parents find offensive and allow a parent to 
know where a child has gone on the Internet and allow parents to make 
this decision--just as when my children were growing up before the 
Internet, I would say, ``I know you can go to such and such a bookstore 
and buy this or that magazine but your mother and I prefer you do not. 
And let us instead give you some ideas of better things to read,'' and 
work with them.
  Technology will allow parents to do that. It will allow them to block 
out offensive material. But perhaps more importantly when their 
children become computer literate--something that those of our age may 
not be able to do--allow parents to work with their children and find 
out how the Internet works and find out about the tremendous things 
available from the Smithsonian, the Library of Congress, the Vatican 
museum, the sports pages, computer games, information from major 
magazines and writers--and things that are sometimes junkie and 
frivolous but harmless nonetheless.
  That is what we should do and not be in the position of putting the 
heavy hand of Government censorship on something that is so 
quintessentially American as the Internet, which has shown the genius 
of what we are able to do in this country and how we are able now to 
bring it to all other countries around the world. This happened 
because--and very specifically because--the Government stepped out of 
the picture and allowed the genius of individuals to do it. That means, 
just like the publishing of newspapers, magazines and everything else, 
that you get a certain amount of junk that gets in there. Most of us 
can pretty well decide what is junk and what is not. We discard that, 
and we go on to the best. We can do this.
  So I summit, Mr. President, on behalf of myself, Mr. Feingold, and 
Mr. Jeffords, legislation as I said, to repeal the Internet censorship 
provisions of the Communications Decency Act, and simply restore the 
law in effect before we banned constitutionally protected on-line 
speech. I ask unanimous consent that it be appropriately referred.
  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. 213

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

     SECTION 1. REPEAL OF PROVISIONS ON OBSCENE AND HARASSING USE 
                   OF TELECOMMUNICATIONS FACILITIES ENACTED BY 
                   COMMUNICATIONS DECENCY ACT OF 1996.

       Section 223 of the Communications Act of 1934 (47 U.S.C. 
     223) is amended by striking subsections (a) and (d) through 
     (h).

[[Page S744]]

     SEC. 2. RESTORATION OF PROVISIONS ON OBSCENE AND HARASSING 
                   USE OF TELECOMMUNICATIONS FACILITIES IN EFFECT 
                   BEFORE COMMUNICATIONS DECENCY ACT OF 1996.

       Section 223 of the Communications Act of 1934 (47 U.S.C. 
     223), as amended by section 1 of this Act, is further amended 
     by inserting before subsection (b) the following new 
     subsection (a):
       ``(a) Whoever--
       ``(1) in the District of Columbia or in interstate or 
     foreign communications by means of telephone--
       ``(A) makes any comment, request, suggestion or proposal 
     which is obscene, lewd, lascivious, filthy, or indecent;
       ``(B) makes a telephone call, whether or not conversation 
     ensues, without disclosing his identity and with intent to 
     annoy, abuse, threaten, or harass any person at the called 
     number;
       ``(C) makes or causes the telephone of another repeatedly 
     or continuously to ring, with intent to harass any person at 
     the called number; or
       ``(D) makes repeated telephone calls, during which 
     conversation ensues, solely to harass any person at the 
     called number; or
       ``(2) knowingly permits any telephone facility under his 
     control to be used for any purpose prohibited by this 
     section,

     shall be fined not more than $50,000 or imprisoned not more 
     than six months, or both.''.

  Mr. FEINGOLD. Mr. President, I am pleased to join the Senator from 
Vermont [Mr. Leahy] in introducing this legislation to repeal the 
Communications Decency Act [CDA]. I believe Congress made a grave 
mistake in enacting the CDA and it is time to correct it.
  Congress passed the CDA without taking the time to fully examine its 
ability to protest children and its effect on the free speech rights of 
Americans. As a result, the CDA has been the subject of a court 
challenge since the day it was signed into law. Last June, a three-
judge Federal panel granted a preliminary injunction against the 
Federal enforcement of key provisions of the CDA finding them 
unconstitutional. The Supreme Court will hear oral arguments in the 
first amendment challenge to the CDA on March 19, 1997.
  The Communications Decency Act, enacted as part of the 
Telecommunications Act of 1996, subjected anyone who transmitted 
indecent material to minors over the Internet to criminal sanctions. 
The commonly accepted definition of ``indecency'' includes mild 
profanity.
  I strongly opposed the CDA not only because I believe it violates our 
constitutionally guaranteed right to free speech, but also because I 
feel strongly that it fails to truly protect children from those who 
might seek to harm them.
  The fundamental error of CDA proponents was their attempt to apply 
decades-old broadcasting standards to an emerging technology that 
defies categorization--the Internet. While the Supreme Court has 
allowed speech restrictions for broadcast media, it has made clear that 
such restrictions do not violate the first amendment only if there is a 
compelling Government interest in restricting speech and the 
restriction is applied in the least restrictive means. It is 
predominantly the nature of the medium which determines whether or not 
a criminal prohibition on speech is the least restrictive means of 
meeting a compelling Government interest. in the case of a radio or 
television, the fact that a child might simply turn on a station and 
hear offensive material provides a basis for allowing an arguably 
tighter restriction on indecent speech. Restraints upon newspapers and 
other print media, which are inherently noninvasive, have been very 
limited.
  While the Net bears some similarities to both media, it is a unique 
and ever-changing communications medium. One can be a speaker, a 
publisher and a listener using the Internet. Currently, anyone with the 
know-how and the proper hardware and software can set up a Web page, 
become a de facto publisher, making information available to others at 
little cost to oneself or the consumer of that information. One can 
also post a message to an Internet newsgroup, an informal and often 
unmoderated information sharing forum, which can then be ready by 
anyone accessing that newsgroup.
  The promise of the Internet is its free flow of information across 
vast physical distances and boundaries to anyone with access to a 
computer and an Internet connection. The threat of the Communications 
Decency Act is its undeniable ability to stifle this free-flowing 
speech on the Net. Mr. President, that threat exists because Congress 
failed to recognize the danger of applying an overly broad indecency 
standard to a technology with the characteristics of the Internet.

  Out of fear of prosecution, the vagueness of the indecency standard, 
and an inability to control the age of those who might ultimately see 
the information, speakers on the Net will become silent. Those offering 
commercial access to the Internet will be required to restrict access 
to speech in order to protect themselves from criminal prosecution.
  Last year, a panel of three Federal judges came to the same 
conclusion: this statute cannot be enforced without violating the 
Constitution. The Court stated:

       . . . the Internet may fairly be regarded as a never-ending 
     worldwide conversation. The Government may not, through the 
     CDA, interrupt that conversation. As the most participatory 
     form of mass speech yet developed, the Internet deserves the 
     highest protection from government intrusion.

  I believe the Federal Court came to this conclusion because the 
judges took the time to study and understand the characteristics of the 
Net before rushing to judgement--something Congress failed to do.
  It is time to undo that mistake by repealing the Communications 
Decency Act. Not only does the CDA infringe on free speech rights of 
adults, it does not protect children from those who seek to harm them 
using the Internet, and it may actually impede the development of more 
sophisticated screening software in the marketplace. When Congress 
passed the CDA, there already existed filtering software which gave 
parents the ability to filter out objectionable content such as 
indecency, violence, adult topics etc. The passage of the CDA 
necessarily will reduce demand for such software products, which are 
effective in preventing children's access to such content. The CDA 
merely provides parents with a false sense of security that the Federal 
Government will somehow protect their children, so they no longer have 
to worry about the Internet themselves.
  And that is the irony, Mr. President. The CDA is simply not capable 
of protecting children on the Internet. Much Internet content 
originates on foreign soil, making effective enforcement of the CDA 
impossible. Furthermore, the dissemination of materials which we all 
agree are most harmful to children--obscenity and child pornography--is 
already illegal on the Internet and subject to hefty criminal 
sanctions. We should put our law enforcement resources into 
aggressively prosecuting these criminal violations and recognize that 
the Internet is merely another tool used by those seeking to harm our 
children. We must prosecute the crime, not demonize the medium used by 
the criminal.
  Mr. President, it is time to repeal the Communications Decency Act--
an unconstitutional statute that fails to protect children. We owe that 
to all Americans and most important, we owe it to this country's 
children.
                                 ______
                                 
      By Mr. AKAKA (for himself, Mr. Inouye and Mr. Glenn):

  S. 214. A bill to amend the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act to combat fraud and price-gouging committed in 
connection with the provision of consumer goods and services for the 
cleanup, repair, and recovery from the effects of a major disaster 
declared by the President, and for other purposes; to the Committee on 
Environment and Public Works.


           The Disaster Victims Crime Prevention Act of 1997

  Mr. AKAKA. Mr. President, today I am introducing the Disaster Victims 
Crime Prevention Act of 1997, on behalf of myself, Senator Inouye, and 
Senator Glenn to combat fraud against victims of Federal disasters. 
Like similar legislation I introduced in the 103d and 104th Congresses, 
this measure would make it a Federal crime to defraud persons through 
the sale of materials or services for cleanup, repair, and recovery 
following a federally declared disaster.
  We are all aware of the tremendous costs incurred during a natural 
disaster. California is recovering from the devastating floods that 
have caused nearly $1.6 billion in damage and has made 42 of the 
State's 58 counties eligible for disaster assistance. Just before

[[Page S745]]

the dams and levees in California overflowed, the Pacific Northwest was 
hit with violent storms, and recently Minnesota, North Dakota and South 
Dakota have been declared Federal disaster areas, as have 13 counties 
in Idaho and four in Nevada.
  During the 1990's, a number of deadly natural disasters have occurred 
throughout the United States and its territories including hurricanes, 
floods, earthquakes, tornadoes, wild fires, mudslides, and blizzards. 
Many were declared Federal natural disasters like Hurricane Iniki, 
which in 1993 leveled the island of Kauai in Hawaii causing $1.6 
billion in damage and Hurricane Andrew which devastated southern 
Florida.
  Through instant, onscreen media coverage, the Nation has had ringside 
seats to the destruction caused by these catastrophic events. We 
sympathetically watch television as families sift through the debris of 
their lives and as men and women assess the loss of their businesses. 
We witness the concern of others, such as Red Cross volunteers passing 
out blankets and food and citizens traveling hundreds of miles to help 
rebuild strangers' homes.
  Despite the outpouring of public support that follows these 
catastrophes, there are unscrupulous individuals who prey on trusting 
and unsuspecting victims, whose immediate concerns are applying for 
disaster assistance, seeking temporary shelter, and dealing with the 
rebuilding of their lives.
  The Disaster Victims Crime Prevention Act of 1997 would criminalize 
some of the activities undertaken by these unprincipled people whose 
sole intent is to defraud hard-working men and women. This legislation 
will make it a Federal crime to defraud persons through the sale of 
materials or services for cleanup, repair, and recovery following a 
federally declared disaster.
  Every disaster has examples of individuals who are victimized twice--
first by the disaster and later by unconscionable price hikes and 
fraudulent contractors. In the wake of the 1993 Midwest flooding, Iowa 
officials found that some vendors raised the price of portable toilets 
from $60 a month to $60 a day. In other flood-hit areas, carpet 
cleaners hiked their prices to $350 per hour, while telemarketers set 
up telephone banks to solicit funds for phony flood-related charities.
  Nor will television viewers forget the scenes of beleaguered south 
Floridians buying generators, plastic sheeting, and bottled water at 
outrageous prices in the aftermath of Hurricane Andrew.
  After Hurricane Iniki devastated the island of Kauai, a contractor 
promising quick home repair took disaster benefits from numerous 
homeowners and fled the area without completing promised construction. 
These fraud victims have yet to find relief.
  While the Stafford Natural Disaster Act currently provides for civil 
and criminal penalties for the misuse of disaster funds, it fails to 
address contractor fraud. To fill this gap, our legislation would make 
it a Federal crime to take money fraudulently from a disaster victim 
and fail to provide the agreed-upon material or service for the 
cleanup, repair, and recovery.

  The Stafford Act also fails to address price gouging. Although it is 
the responsibility of the States to impose restrictions on price 
increases prior to a Federal disaster declaration, Federal penalties 
for price gouging should be imposed once a Federal disaster has been 
declared. I am pleased to incorporate in this measure an initiative 
Senator Glenn began following Hurricane Andrew to combat price gouging 
and excessive pricing of goods and services. Fortunately, citizens in 
Hawaii were spared spiraling cost increases after Hurricane Iniki 
because the State government acted swiftly to counteract attempts at 
price gouging by instituting price and rent freezes.
  There already is tremendous cooperation among the various State and 
local offices that deal with fraud and consumer protection issues, and 
it is quite common for these fine men and women to lend their expertise 
to their colleagues from out-of-State during a natural disaster. This 
exchange of experiences and practical solutions has created a strong 
support network.
  However, a Federal remedy is needed to assist States when a disaster 
occurs. There should be a broader enforcement system to help 
overburdened State and local governments during a time of disaster. The 
Federal Government is in a position to ensure that residents within a 
federally declared disaster area do not fall victim to fraud. Federal 
agencies should assist localities to provide such a support system.
  In addition to making disaster-related fraud a Federal crime, this 
bill would also require the Director of the Federal Emergency 
Management Agency to develop public information materials to advise 
disaster victims about ways to detect and avoid fraud. I have seen a 
number of antifraud materials prepared by State consumer protection 
offices and believe this section would assist States to disseminate 
antifraud-related material following the declaration of a disaster by 
the President.
  I look forward to working with my colleagues to pass legislation that 
sends a clear message to anyone thinking of defrauding a disaster 
victim or raising prices unnecessarily on everyday commodities during a 
natural disaster.
                                 ______
                                 
      By Mr. JEFFORDS:
  S. 215. A bill to amend the Solid Waste Disposal Act to require a 
refund value for certain beverage containers, to provide resources for 
State pollution prevention and recycling programs, and for other 
purposes; to the Committee on Commerce, Science, and Transportation,


    THE NATIONAL BEVERAGE CONTAINER REUSE AND RECYCLING ACT OF 1997

  Mr. JEFFORDS. Mr. President, I introduce the National Beverage 
Container Reuse and Recycling Act of 1997. This bill is identical to 
legislation that Senator Hatfield and I have introduced in past 
Congresses. I introduce this bill again today because I firmly believe 
that deposit laws are a common sense, proven method to increase 
recycling, save energy, create jobs, and decrease the generation of 
waste and proliferation of overflowing landfills.
  The experience of 10 States, including Vermont, attest to the success 
of a deposit law or bottle bill as it is commonly called. Recycling 
rates of well over 70 percent have been achieved for beverage 
containers in bottle bill States. The rate is over 90 percent in 
Vermont. To put this in perspective, consider this: 30 percent of 
Americans who live in bottle bill States account for over 80 percent of 
beverage container recycling in this country.
  The concept of a national bottle bill is simple: To provide the 
consumer with an incentive to return the container for reuse or 
recycling. Consumers pay a nominal cost per bottle when purchasing a 
beverage and are refunded their money when they bring the bottle back 
either to a retailer or redemption center. Retailers are paid a fee for 
their participation in the program, and any unclaimed deposits are used 
to finance State environmental programs.
  Under my proposal, a 10-cent deposit on beer, water, and soft-drink 
containers would take effect in States which have beverage container 
recovery rates of less than 70 percent, the minimum recovery rate 
achieved by existing bottle bill States. Labels showing the deposit 
value would be affixed to containers, and retailers would receive a 2-
cent fee per container for their participation in the program.
  We are constantly reminded of the growing problem of excess waste as 
we hear news reports of waste washing up on our Nation's beaches, 
pitched battles over the siting of landfills and communities lacking 
adequate waste disposal facilities. Our country's solid waste problems 
are very real, and they will continue to haunt us until we take action. 
The throw-away ethic that has emerged in this country is not 
insurmountable, and recycling is part of the solution.
  Finally, a national bottle bill serves a much greater purpose than 
merely cleaning up littered highways. Recycling creates jobs, saves 
energy, and preserves our Nation's precious natural resources. In fact, 
the demand for recycled glass and aluminum has grown to such a point 
that the Chicago Board of Trade now sells futures in these materials. 
Recycling makes good business sense.
  The legislation I introduce today is consistent with our Nation's 
solid waste management objectives. A national bottle bill would reduce 
solid waste and litter, save natural resources and energy, and create a 
much needed partnership between consumers, industry, and local 
governments. I urge my colleagues to support this important 
legislation.

[[Page S746]]

                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Frist, and Mrs. Hutchison):
  S. 216. A bill to amend the Individuals With Disabilities Education 
Act to authorize appropriations for fiscal years 1998 through 2002, and 
for other purposes; to the Committee on Labor and Human Resources.


   THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT AMENDMENTS OF 1997

  Mr. JEFFORDS. Mr. President, with my colleague, Senator Frist, I am 
introducing the Individuals With Disabilities Education Act Amendments 
of 1997. This legislation is identical to S. 1578, which was reported 
out of the Labor and Human Resources Committee in the last Congress. 
Senator Frist did a tremendous job in assisting, getting that prepared 
and passed out of committee. Unfortunately, the bill did not pass in 
the last legislative session.

  We are introducing this legislation today so everyone will have a 
common frame of reference. However, I want to make it very clear to my 
colleagues in the Senate and to my colleagues and friends within the 
education and disability community across the Nation that this 
legislation is not perfect and it can and will be improved. This is the 
beginning of the process, not the end.
  I am well aware that there are still issues to be resolved and I 
intend to work with my colleagues to examine these issues and to move 
forward with revisions to this important law that are commonsense 
solutions to issues which are very real at the local school level.
  We are aided in this effort by the majority leader, who is committed 
to helping us achieve the broadest based consensus on a final project, 
one that has the support of families of children with disabilities and 
educators, but also of all Members of Congress and the President. We 
have set an ambitious schedule for completing our work on IDEA, and by 
introducing the IDEA Amendments of 1997 today, we are taking a very 
important first step.
  IDEA was originally enacted in 1975. I was a Member of the House at 
the time, and participated in the development of this landmark law. It 
was a response to court decisions that created a patchwork of legal 
standings, which in turn generated considerable uncertainty about 
rights and responsibilities. IDEA guaranteed each child with a 
disability access to a free, appropriate public education, and we all 
support that goal. In that sense, the legislation has clearly stood the 
test of time. But it has not in terms of the level of funding support 
that we promised to the States to assist them in meeting their 
obligation to educate children with disabilities.
  In IDEA, Congress promised to contribute 40 percent of the cost of 
educating children with disabilities. Our colleague, Senator Gregg, has 
kept our feet to the fire, reminding us that we should keep our 
promise. In last year's appropriations measure we were able to garner 
large increases for this program. We must continue our effort to reach 
our full Federal commitment.
  After 22 years, I think it is appropriate to thoroughly review the 
administrative and fiscal demands that are associated with providing a 
free appropriate education to children with disabilities. The 
population of students demanding assistance has changed significantly, 
but the law has not provided enough flexibility to States to meet those 
changing demands.
  The writing is on the wall. If we do not make needed changes to IDEA 
now, based on common sense, school districts and parents will 
increasingly turn to the courts to get the answers. School districts 
will do so in hope of getting relief from or clarification of their 
responsibilities. The parents will do so in hope of procuring the 
services that they believe their child needs. Since the genesis of IDEA 
lay in avoiding litigation, true to its intent to do so today, we have 
an opportunity, through the reauthorization of IDEA, to ensure the 
emphasis will shift once again and remain on educating children, well 
into the next century.
  If we work together, we have the power to ease the pressure on local 
communities and States. Through the reauthorization of IDEA, we have 
the power to give educators incentives and opportunities to educate 
children with disabilities, including those at risk of failing, with 
less bureaucracy and meaningful accountability. Let us do it now.
  Mr. FRIST. Mr. President, the Individuals with Disabilities Education 
Act, commonly known as IDEA, is a civil rights law that ensures that 
children with disabilities have access to a free appropriate public 
education. This 22-year-old law has been a great success.
  During the 104th Congress, I served as Chairman of the Subcommittee 
on Disability Policy. In that capacity, I worked extensively on a 
bipartisan, common sense approach to reauthorizing this vital law, but 
time ran out before the full Senate could vote on this comprehensive 
bill.
  Today, Senator Jeffords and I are picking up where we left off by 
introducing the Individuals with Disabilities Education Act Amendments 
of 1997. The IDEA Amendments of 1997, which will serve as the starting 
point, is the very bill that I introduced last year and that was passed 
unanimously by the Labor and Human Resources Committee on March 21, 
1996.
  We are introducing the IDEA Amendments of 1997 not because the law is 
failing, but because it is succeeding.
  These amendments reflect the recognition that our Nation's schools 
are moving past the initial challenge of how to educate children with 
disabilities to today's challenge of how to educate children with 
disabilities so that they may become productive, independent citizens. 
The IDEA Amendments of 1997 will help the Nation's schools succeed in 
that.
  Twenty-two years ago, before IDEA, a newborn with a disability had 
little hope of receiving help during the critical early years of 
development; children with disabilities who went to school were 
segregated in buildings away from their siblings and peers; and many 
young people with disabilities were destined to spend their lives in 
institutions.
  Young people with less-obvious disabilities, like learning 
disabilities and attention deficit disorder, were denied access to 
public education because they were considered too disruptive or unruly. 
These children tended to grow up on the streets and at home with no 
consistent access to an appropriate education.
  Today, infants and toddlers with disabilities receive early 
intervention services; many children with disabilities attend school 
together with children without disabilities; and many young people with 
disabilities learn study skills, life skills and work skills that will 
allow them to be more independent and productive adults.
  Children without disabilities are learning first hand that disability 
is a natural part of the human experience, and they are benefiting from 
individualized education techniques and strategies developed by the 
Nation's special educators.
  Children with disabilities are now much more likely to be valued 
members of school communities, and the Nation can look forward to a day 
when the children with disabilities currently in school will be 
productive members of our community.
  As a nation, we have come to see our citizens with disabilities as 
contributing members of society, not as victims to be pitied.
  As a nation, we have begun to see that those of us who happen to have 
disabilities also have gifts to share, and are active participants in 
American society who must have opportunities to learn.
  While there is no doubt that the Nation is accomplishing its goals to 
provide a free, appropriate public education to children with 
disabilities, many challenges remain, and we have made an effort to 
deal with them in the IDEA Amendments of 1997.
  IDEA was originally enacted by the 94th Congress as a set of 
consistent rules to help States provide equal access to a free 
appropriate public education to children with disabilities. But over 
the years, that initial need to provide consistent guidelines to the 
States has sometimes been misinterpreted as a license to write 
burdensome compliance requirements.
  The IDEA Amendments of 1997 address these problems. These amendments 
give educators the flexibility and the tools they need to achieve 
results and ease the paperwork burden that has kept teachers from 
spending the maximum time teaching.
  By shifting the emphasis of IDEA to helping schools help children 
with disabilities achieve educational results,

[[Page S747]]

we are able to reduce many of the most burdensome administrative 
requirements currently imposed on States and local school districts.
  The IDEA Amendments of 1997 streamline planning and implementation 
requirements for local school districts and States. In assessment and 
classification, these amendments would allow schools to shift emphasis 
from generating data dictated by bureaucratic needs to gathering 
relevant information that is needed to teach a child.
  These amendments also give schools and school boards more control 
over how they use special purpose funds to provide training, research 
and information dissemination. We want to encourage every school in 
America to create programs that best serve the needs of all of their 
students, with and without disabilities.
  The IDEA Amendments of 1997 clarify that the general education 
curriculum and standards associated with that curriculum should be used 
to teach children with disabilities and to assess their educational 
progress.
  Educators at both the local and State levels will use indicators of 
student progress that allow them to track the progress of children with 
disabilities in meaningful ways along with the progress of other 
children.
  In an effort to reduce confrontation and costly litigation, the IDEA 
Amendments of 1997 require States to offer mediation to parents who 
have a dispute over their child's education. The amendments also 
address the serious issue of disciplining children with disabilities 
who break school rules that apply to all children.
  By providing fair and balanced guidelines to help schools discipline 
students with disabilities, the amendments ensure that all children in 
our public schools are given the opportunity to learn in a safe 
environment.
  By preserving the right of children with disabilities to a free 
appropriate public education, by providing school districts with new 
degrees of procedural, fiscal, and administrative flexibility, and by 
promoting the consideration of children with disabilities in actions to 
reform schools and make them accountable for student progress, IDEA 
will remain a viable, useful law that will provide guidance well into 
the next century.
  The introduction of the Individual with Disabilities Education 
Amendments of 1997 today represents my continued commitment to the 
reauthorization of IDEA. I am pleased that the substantial work done on 
the reauthorization of IDEA during the last Congress will serve as a 
foundation for our efforts during this Congress. I recognize that there 
is still much debate to come, and much hard work to be done before we 
successfully strengthen and extend this vital law into the 21st 
century. I look forward to working with my Senate colleagues on both 
sides of the aisle and the disability and education communities during 
the upcoming reauthorization effort.
  Together we have the opportunity to bring common sense improvements 
to IDEA, improving the law and opportunities for children with 
disabilities.
  Mr. JEFFORDS. Mr. President, I thank the Senator from Tennessee for 
all the work he has done. He deserves, and should get, accolades and 
helpful attention to this bill, because we do need help in making sure 
it gets into law. But the work he did last year has been incredibly 
helpful. It moves us a long way toward that goal.
                                 ______
                                 
      By Mr. BIDEN:
  S. 217. A bill to amend title 38, United States Code, to provide for 
the payment to States of plot allowances for certain veterans eligible 
for burial in a national cemetery who are buried in cemeteries of such 
States; to the Committee on Veterans' Affairs.


                the veterans plot allowance act of 1997

 Mr. BIDEN. Mr. President, for the third consecutive Congress, 
I am introducing legislation to expand the Federal Government's $150 
payment to States when they bury veterans in State-owned veterans 
cemeteries.
  For those who are not familiar with my proposal, it is quite simple. 
My bill says that if a State buries a veteran free of charge in a 
State-owned cemetery--and that veteran is eligible for burial in a 
national veterans cemetery--the Federal Government will pay the State 
$150 for the cost of the plot.
  In other words, Mr. President, rather than the multiple and 
restricted criteria of plot allowance payments to States under current 
law, there would instead be only one standard in judging whether a 
State receives assistance from the Federal Government. And, that 
standard is: Is the veteran eligible for burial in a national cemetery? 
Period.
  Not only is it simple, it is the only thing that makes sense and the 
only thing that is fair. When the plot allowance for States was first 
established a decade ago, Congress did it in part to relieve the 
pressure on the national cemetery system. Our national cemeteries were 
filling up rapidly. That trend continues today. More than half of all 
national cemeteries are closed to additional burials, and there is no 
where near enough space for all of America's World War II veterans, let 
alone the veterans from later conflicts. So, rather than undertake the 
expensive process of building more national cemeteries, we entered into 
a partnership with the States for the creation of State-owned veterans 
cemeteries.
  That partnership has worked well, especially in States like Delaware 
that do not have a national cemetery to begin with. But, after entering 
into this partnership, the Federal Government then limited for whom it 
would reimburse States for the cost of the plot. We said that States 
would receive the $150 payment only if the veteran was receiving 
disability compensation or a pension; died in a veterans hospital; was 
indigent and the body was unclaimed; or was discharged from the 
military due to a disability.
  In other words, we ask States to bury all veterans eligible for 
burial in a national cemetery--but then we do not financially help them 
when they do.
  And, States are not even being reimbursed for all wartime veterans 
that they bury. Let me repeat that. States are not being reimbursed for 
all wartime veterans that are buried in State-owned veterans 
cemeteries. I mention that, Mr. President, because some people have 
characterized this bill as an attempt to provide the plot allowance to 
States for the burial of nonwartime veterans, and an attempt to give a 
benefit intended for those who fought in wartime to those who did not. 
That is simply not the case.
  There are thousands of wartime veterans who do not meet the current 
law's criteria. In fact, each year, about 5,000 veterans--many of them 
wartime veterans--are eligible for burial in a national cemetery and 
are buried without charge in State-owned veterans cemeteries, but do 
not meet the criteria set forth in current law for the States to 
receive the plot allowance. That is not fair to the States, and it is 
not right for America's veterans.
  Mr. President, the Congressional Budget Office has estimated that 
this proposal would cost $1 million per year. While we all want to 
balance the budget--and this proposal will be paid for--$1 million per 
year is a relatively small sum in order to fulfill our commitment to 
America's veterans.
  In 1995, the Senate recognized this in unanimously approving this 
proposal as an amendment to the budget bill. Whether this bill is voted 
on separately or as part of another measure, it does not matter. What 
matters is that we work to ensure that America's veterans are 
guaranteed a decent and dignified burial.
  I encourage my colleagues to join me in this effort.
                                 ______
                                 
      By Mr. BIDEN:
  S. 218. A bill to invest in the future American work force and to 
ensure that all Americans have access to higher education by providing 
tax relief for investment in a college education and by encouraging 
savings for college costs, and for other purposes; to the Committee on 
Finance.


                           the get ahead act

 Mr. BIDEN. Mr. President, today I am reintroducing a 
comprehensive bill I first introduced last summer to make college more 
affordable for middle-class families. Formally titled the ``Growing the 
Economy for Tomorrow: Assuring Higher Education is Affordable and 
Dependable'' Act, it is known as the Get Ahead Act for short.
  This legislation contains numerous provisions--some of which have 
been or will be introduced by others as separate bills; other 
provisions are novel to this bill--but they all have one thing in

[[Page S748]]

common. They all are an attempt to renew our commitment to see that the 
American Dream of a college education remains within reach of all 
Americans.
  Because, the plain truth is, that dream is slipping out of reach for 
many middle-class families. When I was in college 30 some years ago, my 
parents could send me to a State university for less than 5 percent of 
their income. And, it stayed about that much--college costs went up 
each year by about the same amount that the average family's income 
went up--until 1980. And, then, college costs exploded. Since 1980, the 
cost of public college tuition and fees has increased nearly three 
times faster than the average family's income.
  We can debate endlessly the reasons why and who or what is to blame. 
But, all that middle-class families know is that the costs have 
skyrocketed, and they must constantly worry about how they will ever be 
able to afford to send their children to college.
  For a long time now, Members on both sides of the aisle have believed 
that the Federal Government has a role and responsibility in helping 
Americans get to college. Not to guarantee that everyone in America 
goes to college, but to guarantee that no one who qualifies for college 
is turned away just because they cannot afford it. It is important for 
individual Americans--and it is important for the future of America as 
a whole.
  But, I think it is legitimate to question that commitment today when 
costs are rising out of control; when we spend more on loans that have 
to be repaid and less on grants that do not; and when the tax law 
rewards investment in machines but not investment in people.
  It is time, Mr. President, to renew and reaffirm our commitment to 
higher education. And, so, I offer the Get Ahead Act, and I invite my 
colleagues to join me in this effort.
  Let me take just a few minutes to review what this bill would do. 
And, I ask that a much more detailed summary of the bill be included in 
the Record at the conclusion of my remarks.
  First, the Get Ahead Act provides direct tax relief for the costs of 
higher education. This is accomplished by creating a $10,000 tax 
deduction for college tuition and fees as well as the interest on 
student loans. We currently give tax breaks to businesses for 
investment in the future--in research and development and in the 
purchase of new plant and equipment. I support that. But, at the same 
time, we do not provide tax relief to middle-class families who invest 
in their own children's future through higher education. We should.

  In addition, under the Get Ahead Act, all scholarships, including 
that used for room and board, would be excluded from taxable income, as 
was the case prior to the 1986 Tax Reform Act.
  And, the tax exclusion for employer-provided educational assistance 
would be extended and made permanent. As my colleagues know, when an 
employer pays part or all of the costs of an employee's education, that 
does not have to be counted as income to the employee for tax purposes. 
Last year, we extended that provision through May 31, 1997. What my 
bill does is make it a permanent part of the Tax Code--so we do not 
have to keep coming back and extending it every year or so--and my bill 
ensures that the tax exclusion applies to both undergraduate and 
graduate education. Last year, unfortunately in my view, in extending 
the tax exclusion, we applied it only to undergraduate education.
  Second, Mr. President, the Get Ahead Act encourages people to save 
for the costs of higher education. Specifically, it would allow 
individuals to withdraw funds from their Individual Retirement Accounts 
for education expenses--without incurring a 10-percent penalty tax. 
Also, more Americans would be able to take advantage of Series EE 
Savings Bonds. These are the bonds where you do not have to pay tax on 
the interest if the money from the bonds is used to pay for college 
tuition.
  And, my bill would create Education Savings Accounts--accounts 
similar to IRA's. Each year, families could put tax free up to $2,000 
per child into an ESA for their children. That money would accumulate 
tax free--and you would never have to pay taxes on it if the money was 
used to pay for college.
  Finally, Mr. President, the Get Ahead Act would award merit 
scholarships to all students who graduate in the top 5 percent of their 
class. While the $1,000 scholarship would cover about two-thirds of the 
cost of a community college, I realize this is not a large sum of money 
for someone attending a 4-year institution, especially if it is a 
private college. But, it could make a difference for many students, and 
I believe that, regardless, it is important that we start to reward 
students who meet high academic standards.
  There is one provision not in the bill that was in last year's bill. 
Last year, I included a section clarifying the Federal tax treatment of 
State prepaid tuition plans. Similar provisions were enacted last year 
as part of the minimum wage bill, and therefore I did not need to 
include them in this year's bill.
  Mr. President, the Get Ahead Act is aimed at seeing that individual 
Americans have the opportunity to get ahead. In today's economy, in 
today's world, you need a college education to do it. And, for those 
who would criticize this proposal as a handout to the middle class, let 
them ponder what the future of America will be like if the vast masses 
of the middle class are denied a college education.
  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:

                           The Get Ahead Act


 title i--tax incentives for higher education; subtitle a--tax relief 
for higher education costs; section 101--deduction for higher education 
                                expenses

       An above-the-line tax deduction (available even to those 
     who do not itemize deductions) would be allowed for the costs 
     of college tuition and fees as well as interest on college 
     loans.
       In the case of tuition costs, beginning in tax year 2000, 
     the maximum annual deduction would be $10,000 per year; a 
     maximum deduction of $5,000 would be available in tax years 
     1997, 1998, and 1999. The full deduction would be available 
     to single taxpayers with incomes under $70,000 and married 
     couples with incomes under $100,000; a reduced (phased-out) 
     deduction would be available to those with incomes up to 
     $90,000 (singles) and $120,000 (couples). The income 
     thresholds would be indexed annually for inflation.
       Interest on student loans would be deductible beginning 
     with interest payments made in tax year 1997. Interest 
     payments could be deducted on top of the $10,000 deduction 
     for payment of college tuition and fees. There would be no 
     annual maximum and no income limits with regard to the 
     deductibility of interest on student loans.
       Language is included to coordinate this tax deduction with 
     other education provisions of the tax code--to ensure that 
     individuals do not receive a double benefit for the same 
     payments. Specifically, qualified higher education expenses 
     that could be tax deductible would be reduced by any payments 
     made from Series EE savings bonds (and excluded from taxable 
     income), any veterans educational assistance provided by the 
     federal government, and any other payments from tax-exempt 
     sources (e.g. employer-provided educational assistance). 
     Also, tax-free scholarships and tax-excluded funds from 
     Education Savings Accounts (see section 112) would first be 
     attributed to room and board costs; the remainder, if any, 
     would count against tuition and fees and would reduce the 
     amount that would be tax deductible. However, if tuition and 
     fees still exceeded $10,000 even after the reductions, the 
     full tax deduction would be available.


        section 102--exclusion for scholarships and fellowships

       College scholarships and fellowship grants would not be 
     considered income for the purposes of federal income taxes. 
     This returns the tax treatment of scholarships and 
     fellowships to their treatment prior to the 1986 Tax Reform 
     Act (which limited the exclusion of scholarships and 
     fellowships to that used for tuition and fees).
       Scholarships and fellowship grants would be fully 
     excludable for degree candidates. In the case of non-degree 
     candidates, individuals would be eligible for a lifetime 
     exclusion of $10,800--$300 per month for a maximum 36 months.
       Language is included to clarify that federal grants for 
     higher education that are conditioned on future service (such 
     as National Health Service Corps grants for medical students) 
     would still be eligible for tax exclusion.
       This section would be effective beginning with scholarships 
     and fellowship grants used in tax year 1997.


      section 103--permanent exclusion for educational assistance

       As part of the minimum wage/small business tax relief bill 
     enacted in 1996, the tax exclusion for employer-provided 
     educational assistance was reinstated retroactively and 
     extended through May 31, 1997. But, as of July 1, 1996, the 
     tax exclusion only applies to educational assistance for 
     undergraduate education.

[[Page S749]]

       This section would extend the employer-provided educational 
     assistance tax exclusion by making it a permanent part of the 
     tax code. In addition, it would retroactively reinstate the 
     tax exclusion for graduate education.


  subtitle b--encouraging savings for higher education costs; section 
   111--ira distributions used without penalty for higher education 
                                expenses

       Funds could be withdrawn from Individual Retirement 
     Accounts (IRAs) before age 59\1/2\ without being subject to 
     the 10 percent penalty tax if the funds were used for higher 
     education tuition and fees. (However, withdrawn funds, if 
     deductible when contributed to the IRA, would be considered 
     gross income for the purposes of federal income taxes.)
       This section would be effective upon enactment.


                section 112--education savings accounts

       This section would create IRA-like accounts--known as 
     Education Savings Accounts (ESAs)--for the purpose of 
     encouraging savings for a college education.
       Each year, a family could invest up to $2000 per child 
     under the age of 19 in an ESA. For single taxpayers with 
     incomes under $70,000 (phased out up to $90,000) and married 
     couples with incomes under $100,000 (phased out up to 
     $120,000), the contributions would be tax deductible. (These 
     income thresholds would be indexed annually for inflation.) 
     For all taxpayers, the interest in an ESA would accumulate 
     tax free; the contributions would not be subject to the 
     federal gift tax; and, the balance in an ESA would not be 
     treated as an asset or income for the purposes of determining 
     eligibility for federal means-tested programs.
       ESA funds could be withdrawn to meet the higher education 
     expenses--tuition, fees, books, supplies, equipment, and room 
     and board--of the beneficiary. Funds withdrawn for other 
     purposes would be subject to a 10 percent penalty tax and 
     would be considered income for the purposes of federal income 
     taxes (to the extent that the funds were tax deductible when 
     contributed). The penalty tax would not apply in cases of 
     death or disability of the beneficiary of the ESA and in 
     cases of unemployment of the contributors.
       In addition, when the beneficiary of the account turns age 
     30 and is not enrolled in college at least half time, any 
     funds remaining in the ESA would be (1) transferred to 
     another ESA; (2) donated to an educational institution; or 
     (3) refunded to the contributors. In the first two cases, 
     there would be no penalty tax and the money would not be 
     considered taxable income. In the third case, the penalty tax 
     would not apply, but the funds would be counted as income to 
     the extent that the funds were tax deductible when 
     contributed.
       Finally, parent could roll over funds from one child's ESA 
     to another child's ESA without regard to any taxes, without 
     regard to the $2000 annual maximum contribution to an ESA, 
     and without regard to the age 30 requirement note above. 
     Funds rolled over would also not be subject to the federal 
     gift tax.
       Language is also included to allow individuals to designate 
     contributions to an ESA as nondeductible even if such 
     contributions could be tax deductible. This gives families 
     the option to build up the principal in an ESA while at a 
     lower tax rate, rather than having to pay taxes on unspent 
     ESA funds when the contributors are older and likely in a 
     higher tax bracket.
       Tax deductible contributions to ESAs would be allowed 
     beginning in tax year 1997.


   section 113--increase in income limits for savings bond exclusion

       For taxpayers with incomes below certain thresholds, the 
     interest earned on Series EE U.S. Savings Bonds are not 
     considered taxable income if the withdrawn funds are used to 
     pay for higher education tuition and fees. This section 
     increases the income thresholds to allow more Americans to 
     use the Series EE Savings Bonds for education expenses.
       Effective with tax year 1997, the income thresholds would 
     be the same as the income thresholds for the higher education 
     tax deduction (see section 101): $70,000 for single taxpayers 
     (phased out up to $90,000), and $100,000 for couples (phased 
     out up to $120,000). As with the higher education tax 
     deduction, these income thresholds would be indexed annually 
     for inflation.


            title ii--scholarships for academic achievement

       Beginning with the high school graduating class of 1998, 
     the top 5 percent of graduating seniors at each high school 
     in the United States would be eligible for a $1000 merit 
     scholarship. If an individual receiving such a scholarship 
     achieved a 3.0 (``B'') average during his or her first year 
     of college, a second $1000 scholarship would be awarded.
       However, the merit scholarships would be available only to 
     those students in families with income under $70,000 (single) 
     and $100,000 (couples). These income thresholds would be 
     increased annually for inflation.
       Funds are authorized (and subject to annual appropriations) 
     for five years. The first year authorization (fiscal year 
     1998) is $130 million. In each of the next four years (FY 
     1999-FY 2002), because the scholarships could be renewed for 
     a second year, the authorization is $260 million per year. 
     Total five-year authorization: $1.17 billion.


                     title iii--deficit neutrality

       To ensure that the ``GET AHEAD'' Act does not increase the 
     deficit, this title declares it the sense of the Senate that 
     the costs of the bill should be paid by closing corporate tax 
     loopholes.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Grassley):

  S. 219. A bill to amend the Trade Act of 1974 to establish procedures 
for identifying countries that deny market access for value-added 
agricultural products of the United States; to the Committee on 
Finance.


      Value-added Agricultural Products Market Access Act of 1997

  Mr. DASCHLE. Mr. President, I am pleased to introduce today with my 
distinguished colleague, Senator Grassley, two important pieces of 
international trade legislation. These bills are designed with one very 
simple, clear goal in mind: to secure fair trade opportunities for 
America's highly competitive producers of agricultural products.
  There is no more important sector of the U.S. economy than 
agriculture as far as international trade is concerned. Last year, the 
trade surplus in agricultural products reached $28.5 billion, the 
largest of any industry, including aircraft. This surplus offset to an 
important degree the Nation's large and persistent deficit in 
manufactured goods.
  Trade is vitally important to farmers. Production from more than one-
third of harvested acreage is exported. Agricultural exports are 
important to the rest of the economy as well. According to the U.S. 
Department of Agriculture, each dollar generated by agricultural 
exports stimulates another $1.39 in supporting economic activity to 
produce those exports. Nearly every State exports farm products.
  Despite the obvious success American producers are enjoying in world 
markets, a closer look reveals that we could be doing far better. 
Judging from the annual surveys compiled by the Office of the U.S. 
Trade Representative, roughly half of all foreign trade barriers facing 
U.S. products are in the agricultural sector. This suggests that our 
overall merchandise trade deficit, which is estimated to total nearly 
$170 billion for 1996, could be considerably lower if we succeeded in 
removing more of these barriers.
  The recent Uruguay round took only the first, tentative steps toward 
devising effective and fair rules governing international agricultural 
trade. As our able negotiators would be the first to acknowledge, we 
have a long way to go. Although we made significant progress in 
subjecting export subsidies to international rules, the Uruguay round 
secured only modest commitments by governments to open their markets 
and administer food health and safety standards fairly. In the long 
run, the fairness of world trade in agricultural products will depend 
on how aggressively and systematically the U.S. Government insists on 
compliance by foreign governments with their existing commitments and 
presses them for new ones.
  The two bills we introduce today will improve our ability to meet 
this challenge both institutionally and with respect to one specific, 
immediate problem regarding the European Union. Passage of this 
legislation will help to assure farmers and their communities that 
trade liberalization remains in their interest as much in practice as 
in theory.


         the Value-Added Agricultural Market Access Act of 1997

  The first bill, the Value-Added Agricultural Market Access Act of 
1997, would improve our institutional capacity to set priorities among 
the vast array of foreign agricultural trade barriers we face and give 
those priorities the high-level attention they deserve within the 
executive branch. In so doing, it would provide our negotiators with an 
important new tool with which to increase their leverage in 
consultations with foreign governments.
  The bill would create a ``Special 301'' procedure for value-added 
agricultural products virtually identical to that which currently 
exists for intellectual property products. It would require the U.S. 
Trade Representative [USTR] each year to designate as ``priority 
countries'' those trading partners having the most onerous or egregious 
acts, policies, or practices resulting in the greatest adverse impact--
actual or potential--on U.S. value-added agricultural products.

[[Page S750]]

  The USTR would be required to initiate a section 301 investigation 
within 30 days after the identification of a priority foreign country 
with respect to any act, policy, or practice that was the basis of the 
identification, unless the USTR determines initiation of the 
investigation would be detrimental to U.S. economic interests and 
reports the reasons in detail to Congress. The procedural and other 
requirements of section 301 authority would generally apply to these 
cases with the important exception that investigations, and 
negotiations must be concluded and determinations made on whether the 
measures are actionable within 6 months, as opposed to 12 or 18 months 
for conventional section 301 cases. This 6-month deadline may be 
extended to 9 months if certain criteria are met. USTR may choose not 
to designate a country as a priority foreign country if it is entering 
into good faith negotiations or making significant progress in 
bilateral or multilateral negotiations to provide fair and equitable 
access to its markets.
  According to the Congressional Research Service, agriculture as a 
whole is the largest positive contributor to the U.S. trade balance, 
and exports of value-added products--intermediate products such as 
wheat flour, feedstuffs, and vegetable oils or consumer-ready products 
such as meats--have recently become the largest component of our 
agricultural trade. In fiscal year 1996, these higher value exports 
accounted for $32 billion, or 54 percent by value, of all such exports.
  It is no wonder that U.S. value-added agriculture is making such 
gains. Our farmers have worked hard to increase their value-added 
production, and they should be proud of what they have accomplished. 
Unfortunately, they are being denied the full fruits of their labors by 
a varied and complex array of market restrictions in many foreign 
countries. Notwithstanding the progress made in the Uruguay round, many 
foreign governments maintain considerably stricter limits on U.S. 
products than we do on theirs. In addition, even as formal barriers 
fall or become more transparent as a result of the Uruguay round, new 
and informal trade barriers often take their place. These may take the 
form of arbitrary sanitary and phytosanitary measures that ignore sound 
principles of science and globally accepted food safety and inspection 
standards.
  In the past few years alone, United States sausages have been denied 
entry to Korea because the Korean Government imposed arbitrary and 
unscientific shelf-life standards on imported sausages; the European 
Union has banned U.S. beef treated with natural hormones even though 
scientists from Europe and around the world have declared natural-
hormone-treated beef to be safe; and, high-value U.S. pork products 
cannot be exported to Europe because European meat inspectors require 
U.S. slaughter and packing plants to meet standards that even their own 
producers cannot meet.
  These are but a few examples of the barriers to entry facing U.S. 
producers of value-added farm products. The unfortunate result is that 
our farmers are being prevented from realizing their full export 
potential. The Foreign Agricultural Service estimates that U.S. 
agricultural exports are reduced by $4.7 billion annually due to 
unjustifiable sanitary and phytosanitary measures alone. Imagine the 
impact on farm income, rural communities, and the U.S. economy if these 
barriers were removed.
  The Value-Added Agricultural Market Access Act of 1997 will bring 
added focus to this set of issues within the trade policymaking 
machinery of the U.S. Government. We have a strong inter-agency team of 
trade negotiators and analysts; over the years, through Democratic and 
Republican administrations alike, it has been one of the most efficient 
operations anywhere in the Federal Government. However, the USTR and 
its support agencies confront an almost overwhelming variety of demands 
and challenges. They currently are deeply involved in several very 
ambitious multilateral trade negotiations or preparations for them, 
including free trade arrangements in the Western Hemisphere and the 
Pacific rim, NAFTA expansion, and WTO agreements on high-technology 
products and telecommunications equipment and services.
  The sheer number and complexity of the issues confronting the USTR 
make priority-setting one of USTR's most important responsibilities. 
With so much attention now on visionary multilateral initiatives, we 
must take care not to lose sight of two other practical aspects of 
trade policy: our bilateral efforts to improve market access and our 
responsibility to ensure that governments comply with the agreements 
they have already signed with us, be they multilateral or bilateral. 
These two aspects of U.S. trade policy are particularly important to 
the agricultural community, which, as I have emphasized, is second to 
none in terms of our international commercial prospects.
  As my colleague, Senator Grassley, the distinguished chairman of the 
Finance Subcommittee on International Trade, knows well, Congress holds 
a major share of the responsibility, indeed prerogative, for setting 
U.S. trade policy. It is explicitly assigned that power under article 
I, section 8 of the U.S. Constitution. Our bill would exercise this 
authority to institutionalize an appropriate degree of attention on 
agriculture in U.S. trade policy.
  U.S. agriculture traditionally has been one of the strongest of any 
segment of the economy in its support for multilateral trade 
liberalization, including the negotiation of free trade agreements. 
Yet, in talking to individual farmers in my State as well as their 
national representatives, I have the impression that the strength of 
American agriculture's future support for such initiatives will hinge 
on how well our Government performs in these areas of our bilateral 
trade relations. Indeed, I believe that adroit use by the USTR of the 
procedures established by this bill would enhance our chance of 
achieving new multilateral rules for agriculture in the next 
negotiating round of the World Trade Organization in the same way that 
creation of ``Special 301'' by Congress in 1988 created leverage and 
momentum for our negotiators in the run-up to the adoption of 
intellectual property rules in the Uruguay round.


            Fair Trade in Meat and Meat Products Act of 1997

  The second bill we are introducing today addresses one specific, 
egregious barrier to U.S. value-added agricultural exports: the 
European Union's [EU] continuing refusal to implement a commitment it 
made in 1992 to treat our food safety and inspection standards as 
roughly equivalent in effectiveness to their own. This procedural form 
of protectionism has shut American exports of pork and beef out of the 
European market. The loss of this lucrative market has contributed to 
the severe drop in cattle prices in this country and deprived American 
pork producers of an estimated $60 million in sales last year. By any 
objective standard, U.S. meat products are among the most competitive 
in the world and represent one of the most promising areas of growth 
for American trade.
  On November 1, 1990, the European Union prohibited imports of U.S. 
pork and beef on the grounds that our products did not comply with the 
safety and inspection requirements of the EU's Third Country Meat 
Directive [TCD]. The prohibition was imposed despite the fact that the 
requirements of the TCD are largely similar to those already mandated 
by the U.S. Department of Agriculture. As a result, American pork and 
beef exports to the European Union virtually ceased.
  Following this action, the industry filed and the Bush administration 
accepted a petition under section 301 of the 1974 Trade Act. After USTR 
concluded preliminarily that the EU's administration of the TCD imposed 
a burden and restriction on U.S. commerce, the EU agreed to resolve the 
dispute in an exchange of letters that came to be known as the 1992 
Meat Agreement. At the time, U.S. Trade Representative Carla Hills 
noted that the practices of the European Union would have been 
actionable under section 301 absent the 1992 agreement and would become 
so again if the European Union violated its terms. Overwhelming 
evidence now indicates that the European Union has done just that.
  The 1992 Meat Agreement outlined a specific series of steps that 
American producers could take to become eligible for export to the 
European Union,

[[Page S751]]

and concluded that the inspection systems of the United States and 
European Union provided ``equivalent safeguards against public health 
risks.'' The GATT Agreement on Sanitary and Phytosanitary Measures 
corroborated this finding and required the European Union to treat USDA 
inspection requirements as equivalent to its own.
  Five years later, after millions of dollars in investment by American 
producers to meet the terms of the 1992 Meat Agreement, only a handful 
of American plants have been recertified for export to the European 
Union. Plants managers report that inspections for certification have 
not been conducted in an objective or transparent manner, and the 
European Union has failed to acknowledge changes enacted specifically 
at its request. The cost of this unjustified action has been millions 
of dollars in lost sales to American pork and beef producers.
  The administration has been more than patient with the European 
Union, consulting with its diplomats for many months. In my view, the 
time for waiting has ended. The European Union must tear down its walls 
and give our farmers and ranchers the level playing field they were 
promised. Indeed, in just the last few weeks, the European Union has 
been considering yet another change in animal product approval 
procedures that would block an additional $1 billion in agricultural 
exports to the European Union. This action was taken despite the fact 
that the United States has been working in good faith for over 2 years 
on a veterinary equivalence agreement that would accommodate European 
Union concerns. Simply put, it is time to send the European Union a 
clear message that we will not stand by while they ignore their 
obligations.

  For this reason, Senator Grassley and I are introducing legislation 
to require the USTR to determine formally whether the European Union 
has violated its international obligations, seek prompt initiation of 
the relevant international dispute settlement proceedings, and review 
our certification of their meat exporting facilities. This is a 
straightforward response to a blatant breach of faith on the part of 
the European Union. The bill sends a clear message that trade is a two-
way street, and procedural protectionism is every bit as unacceptable 
as traditional market barriers like discriminatory quotas and tariffs.
  Mr. President, we have consulted with the USTR and Department of 
Agriculture as we have drafted the legislation, and I am pleased to 
inform my colleagues that the administration is fast coming to an 
appreciation of the need for the type of action prescribed by the bill. 
Last week, it notified the European Union via telex that, absent a 
resolution of this issue, as of April 1, 1997, all European Union meat 
and meat product exports will have to ``specifically adhere to and meet 
U.S. regulatory standards.'' Moreover, ``Any plant in the member states 
of the European Unionropean Union which desires to ship meat, meat 
products, poultry, or poultry products to the United States will have 
to be inspected by officials of the Food Safety and Inspection Service 
of the U.S. Department of Agriculture and be certified before it is 
eligible to ship to market.''
  I am pleased that the administration is headed in the direction 
prescribed by our bill. I call on my colleagues to support this 
legislation as well as the value-added agricultural products market 
access bill as a way to reinforce our Government's emerging stance on 
this immediate problem and ensure that similar problems in the future 
receive the serious and timely attention they deserve.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 219

       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 ``Value-added Agricultural 
     Products Market Access Act of 1997''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The export of value-added agricultural products is of 
     vital importance to the economy of the United States.
       (2) In 1995, agriculture was the largest positive 
     contributor to the United States merchandise trade balance 
     with a trade surplus of $25,800,000,000.
       (3) The growth of United States value-added agricultural 
     exports should continue to be an important factor in 
     improving the United States merchandise trade balance.
       (4) Increasing the volume of value-added agricultural 
     exports will increase farm income in the United States, 
     thereby protecting family farms and contributing to the 
     economic well-being of rural communities in the United 
     States.
       (5) Although the United States efficiently produces high-
     quality value-added agricultural products, United States 
     producers cannot realize their full export potential because 
     many foreign countries deny fair and equitable market access 
     to United States agricultural products.
       (6) The Foreign Agricultural Service estimates that United 
     States agricultural exports are reduced by $4,700,000,000 
     annually due to unjustifiable imposition of sanitary and 
     phytosanitary measures that deny or limit market access to 
     United States products.
       (7) The denial of fair and equitable market access for 
     United States value-added agricultural products impedes the 
     ability of United States farmers to export their products, 
     thereby harming the economic interests of the United States.
       (b) Purposes.--The purposes of this Act are--
       (1) to reduce or eliminate foreign unfair trade practices 
     and to remove constraints on fair and open trade in value-
     added agricultural products;
       (2) to ensure fair and equitable market access for exports 
     of United States value-added agricultural products; and
       (3) to promote free and fair trade in value-added 
     agricultural products.

     SEC. 3. IDENTIFICATION OF COUNTRIES THAT DENY MARKET ACCESS.

       (a) Identification Required.--Chapter 8 of title I of the 
     Trade Act of 1974 is amended by adding at the end the 
     following:

     ``SEC. 183. IDENTIFICATION OF COUNTRIES THAT DENY MARKET 
                   ACCESS FOR VALUE-ADDED AGRICULTURAL PRODUCTS.

       ``(a) In General.--Not later than the date that is 30 days 
     after the date on which the annual report is required to be 
     submitted to Congressional committees under section 181(b), 
     the United States Trade Representative (hereafter in this 
     section referred to as the `Trade Representative') shall 
     identify--
       ``(1) those foreign countries that--
       ``(A) deny fair and equitable market access to United 
     States value-added agricultural products, or
       ``(B) apply standards for the importation of value-added 
     agricultural products from the United States that are not 
     related to public health concerns or cannot be substantiated 
     by reliable analytical methods; and
       ``(2) those foreign countries identified under paragraph 
     (1) that are determined by the Trade Representative to be 
     priority foreign countries.
       ``(b) Special Rules for Identifications.--
       ``(1) Criteria.--In identifying priority foreign countries 
     under subsection (a)(2), the Trade Representative shall only 
     identify those foreign countries--
       ``(A) that engage in or have the most onerous or egregious 
     acts, policies, or practices that deny fair and equitable 
     market access to United States value-added agricultural 
     products,
       ``(B) whose acts, policies, or practices described in 
     subparagraph (A) have the greatest adverse impact (actual or 
     potential) on the relevant United States products, and
       ``(C) that are not--
       ``(i) entering into good faith negotiations, or
       ``(ii) making significant progress in bilateral or 
     multilateral negotiations,

     to provide fair and equitable market access to United States 
     value-added agricultural products.
       ``(2) Consultation and consideration requirements.--In 
     identifying priority foreign countries under subsection 
     (a)(2), the Trade Representative shall--
       ``(A) consult with the Secretary of Agriculture and other 
     appropriate officers of the Federal Government, and
       ``(B) take into account information from such sources as 
     may be available to the Trade Representative and such 
     information as may be submitted to the Trade Representative 
     by interested persons, including information contained in 
     reports submitted under section 181(b) and petitions 
     submitted under section 302.
       ``(3) Factual basis requirement.--The Trade Representative 
     may identify a foreign country under subsection (a)(1) only 
     if the Trade Representative finds that there is a factual 
     basis for the denial of fair and equitable market access as a 
     result of the violation of international law or agreement, or 
     the existence of barriers, referred to in subsection (d)(3).
       ``(4) Consideration of historical factors.--In identifying 
     foreign countries under paragraphs (1) and (2) of subsection 
     (a), the Trade Representative shall take into account--
       ``(A) the history of value-added agricultural trade 
     relations with the foreign country, including any previous 
     identification under subsection (a)(2), and
       ``(B) the history of efforts of the United States, and the 
     response of the foreign country, to achieve fair and 
     equitable market access for United States value-added 
     agricultural products.

[[Page S752]]

       ``(c) Revocations and Additional Identifications.--
       ``(1) Authority to act at any time.--If information 
     available to the Trade Representative indicates that such 
     action is appropriate, the Trade Representative may at any 
     time--
       ``(A) revoke the identification of any foreign country as a 
     priority foreign country under this section, or
       ``(B) identify any foreign country as a priority foreign 
     country under this section.
       ``(2) Revocation reports.--The Trade Representative shall 
     include in the semiannual report submitted to the Congress 
     under section 309(3) a detailed explanation of the reasons 
     for the revocation under paragraph (1) of the identification 
     of any foreign country as a priority foreign country under 
     this section.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Value-added agricultural product.--The term `value-
     added agricultural product' means a product that has 
     traditionally been considered by the Secretary of Agriculture 
     as being a value-added product within the scope of section 
     303 of the Agricultural Trade Act of 1978 (7 U.S.C. 5653).
       ``(2) Fair and equitable market access.--A foreign country 
     denies fair and equitable market access if the foreign 
     country effectively denies access to a market for a product 
     through the use of laws, procedures, practices, or 
     regulations which--
       ``(A) violate provisions of international law or 
     international agreements to which both the United States and 
     the foreign country are parties, or
       ``(B) constitute discriminatory nontariff trade barriers.
       ``(e) Publication.--The Trade Representative shall publish 
     in the Federal Register a list of foreign countries 
     identified under subsection (a) and shall make such revisions 
     to the list as may be required by reason of the action under 
     subsection (c).
       ``(f) Annual Report.--The Trade Representative shall, not 
     later than the date by which countries are identified under 
     subsection (a), transmit to the Committee on Ways and Means 
     and the Committee on Agriculture of the House of 
     Representatives and the Committee on Finance and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate, a report on the actions taken under this section 
     during the 12 months preceding such report, and the reasons 
     for such actions, including a description of progress made in 
     achieving fair and equitable market access for United States 
     value-added agricultural products.''.
       (b) Clerical Amendment.--The table of contents for the 
     Trade Act of 1974 is amended by inserting after the item 
     relating to section 182 the following:

``Sec. 183. Identification of countries that deny market access for 
              value-added agricultural products.''.

     SEC. 4. INVESTIGATIONS.

       (a) Investigation Required.--Subparagraph (A) of section 
     302(b)(2) of the Trade Act of 1974 (19 U.S.C. 2412(b)(2)) is 
     amended by inserting ``or 183(a)(2)'' after ``section 
     182(a)(2)'' in the matter preceding clause (i).
       (b) Conforming Amendment.--Subparagraph (D) of section 
     302(b)(2) of such Act is amended by inserting ``concerning 
     intellectual property rights that is'' after ``any 
     investigation''.

     SEC. 5. AUTHORIZED ACTIONS BY UNITED STATES TRADE 
                   REPRESENTATIVE.

       Section 301(c)(1) of the Trade Act of 1974 (19 U.S.C. 
     2411(c)(1)) is amended--
       (1) by striking ``or'' at the end of subparagraph (C);
       (2) by striking the period at the end of subparagraph 
     (D)(iii)(II) and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(E) with respect to an investigation of a country 
     identified under section 183(a)(1), to request that the 
     Secretary of Agriculture (who, upon receipt of such a 
     request, shall) direct the Food Safety and Inspection Service 
     of the Department of Agriculture to review certifications for 
     the facilities of such country that export meat and other 
     agricultural products to the United States.''.
                                 ______
                                 
      By Mr. GRASSLEY (for himself and Mr. Daschle):
  S. 220. A bill to require the U.S. Trade Representative to determine 
whether the European Union has failed to implement satisfactorily its 
obligations under certain trade agreements relating to U.S. meat and 
pork exporting facilities, and for other purposes; to the Committee on 
Finance.


            fair trade in meat and pork products act of 1997

  Mr. GRASSLEY. Mr. President, I join the minority leader today in 
introducing two important bills regarding agricultural trade. The first 
is a bill that requires the U.S. Trade Representative to determine 
whether the European Union has violated its trade agreements with the 
United States by failing to certify U.S. beef and pork processing 
plants for export to the European Union. The failure to certify our 
plants has cost the pork industry alone as much as $60 million 
annually.
  The problem arises under the E.U.'s so-called Third Country Meat 
Directive. This directive, which has been in place since 1985, calls 
for E.U. inspection and certification of U.S. meat plants as a 
condition for accepting exports from those plants. Simply put, if a 
plant has not been certified, it cannot export to the E.U. member 
nations. Since the mid-1980's the E.U. has used this directive to 
prohibit over 400 U.S. facilities from exporting beef and pork to the 
E.U.
  Many bilateral discussions have taken place between the E.U. and the 
United States on this issue since 1985. But no satisfactory resolution 
has ever been reached. In early 1991, the then-U.S. Trade 
Representative, Carla Hills, initiated an action under section 301 of 
the 1974 Trade Act. After a year of consultations and the certification 
of some U.S. plants, we entered into a settlement agreement, known as 
the 1992 meat agreement. In exchange for the settlement agreement, the 
United States agreed to withdraw its 301 action.
  Under the 1992 meat agreement, the E.U. agreed that U.S. plants would 
be certified if their inspection systems are equivalent to the E.U.'s. 
In spite of this agreement, and its commitments made under the WTO 
Agreement on Sanitary and Phytosanitary Measures, the E.U. has not made 
any significant progress in certifying U.S. plants. Europe effectively 
remains a closed market for United States beef and pork.
  What this bill does is require the USTR to determine under section 
306 whether the E.U. has violated its trade agreements. This is 
important because once a determination has been made, the USTR is 
required to take action. The action could take the form of unilateral 
retaliation, for example. Furthermore, the bill requires the U.S. 
Department of Agriculture to reconsider our certification of European 
plants if this problem continues.
  Mr. President, the impact of the E.U.'s blatant disregard of our 
trade agreements is substantial for the U.S. meat industry. Our cattle 
and hog farmers have been effectively shut out of the entire European 
market. This comes at a time when American agriculture is becoming more 
dependent on foreign markets. In fact, USDA calculates that American 
farmers will soon derive up to 30 percent of their net income from 
foreign trade. So global market access is critical to the viability of 
the family farmer.
  This bill sends a strong signal to the E.U. that we are no longer 
willing to tolerate this egregious behavior. Bilateral negotiations 
have failed. It is time to take swift and strong action to eliminate 
this barrier to our value-added agricultural products.
  We must also send a signal to our other foreign trading partners. 
Trade agreements must be followed. Commitments must be kept. The United 
States will no longer sit idly by as the rest of the world thumbs it 
nose at their responsibilities as a trading partner. The stakes are 
simply too high in terms of American jobs and standard of living.
  This leads me to the second bill that I have cosponsored today with 
the minority leader. This bill requires the USTR to identify, on an 
annual basis, those countries that deny market access to our value-
added agricultural products. It also requires identifying countries who 
are violating the sanitary and phytosanitary provisions of the GATT. 
This procedure is similar to the special 301 procedure for intellectual 
property rights.
  It is necessary to identify and understand the trade barriers faced 
by American agriculture so we can work to eliminate them. Not only is 
foreign trade vital to American farmers, it is vital to the U.S. 
balance of payments. Agriculture trade is the shining star in an 
otherwise increasing trade deficit. But we cannot rest on the success 
of the past. In existing markets we could be doing much better in terms 
of market share. And many markets remain closed to U.S. ag products.
  This bill will help pinpoint our successes and our failures so we can 
move forward on bilateral negotiations and, eventually, a new round of 
agricultural negotiations in the World Trade Organization, beginning in 
1999. This annual report will serve as a blueprint to achieving 
worldwide access for the commodities produced on America's family 
farms.
  I appreciate the minority leader's hard work on these two pieces of 
legislation. And I look forward to working

[[Page S753]]

with him during this Congress to get these bill enacted into law.
  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. 220

       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 ``Fair Trade in Meat and Pork 
     Products Act of 1997''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The European Union's Third Country Meat Directive has 
     been used to decertify more than 400 United States facilities 
     exporting beef and pork products to the European Union even 
     though United States health inspection procedures are 
     equivalent to those provided for in the Third Country Meat 
     Directive.
       (2) An effect of the decertifications is to prohibit the 
     importation of United States beef and pork products into the 
     European Union.
       (3) As a result of the decertifications, the highly 
     competitive United States pork industry loses as much as 
     $60,000,000 each year from trade with European Union 
     countries.
       (4) In July 1987 and November 1990, at the request of 
     affected United States industries, the United States 
     initiated investigations under section 301 of the Trade Act 
     of 1974 into the European Union's administration of the Third 
     Country Meat Directive and sought resolution of the meat and 
     pork trade problems through the dispute settlement process 
     established under the General Agreement on Tariffs and Trade.
       (5) The United States Trade Representative preliminarily 
     concluded on October 10, 1992, that the European Union's 
     administration of the Third Country Meat Directive created a 
     burden on and restricted United States commerce.
       (6) Bilateral talks, initiated as a result of that finding, 
     resulted in an Exchange of Letters in which the United States 
     and the European Union concluded that the meat inspection 
     systems of the United States and the European Union provided 
     ``equivalent safeguards against public health risks'' and 
     agreed to take steps to resolve remaining differences 
     regarding meat inspection.
       (7) Even though the United States terminated the section 
     301 investigation as a result of the Exchange of Letters, the 
     United States determined that the practices under 
     investigation would have been actionable if an acceptable 
     agreement had not been reached.
       (8) United States meat and pork producers have displayed 
     consistent interest in exporting products to the European 
     Union and have undertaken substantial investment to take the 
     steps specified by the Exchange of Letters.
       (9) The European Union has failed to acknowledge changes in 
     plant safety and inspection procedures undertaken in the 
     United States specifically at the European Union's request 
     and has not fulfilled its obligation to inspect and relist 
     United States producers who have taken the steps specified by 
     the Exchange of Letters.
       (10) The actions of the European Union in conducting United 
     States plant inspections places the European Union in 
     violation of commitments made in the Exchange of Letters.
       (11) The European Union, in addition to being a party to 
     the Exchange of Letters, is a signatory to GATT 1994 and to 
     the Agreement on the Application of Sanitary and 
     Phytosanitary Measures, which requires that meat and pork 
     inspection procedures under Department of Agriculture 
     regulations be treated as equivalent to inspection procedures 
     required by the European Union under the Third Country Meat 
     Directive if the regulations achieve the European level of 
     sanitary protection.
       (12) Whenever a foreign country is not satisfactorily 
     implementing an international trade measure or agreement, the 
     United States Trade Representative is required under section 
     306(b)(1) of the Trade Act of 1974 (19 U.S.C. 2416(b)(1)) to 
     determine the actions to be taken under section 301(a) of 
     such Act.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) Exchange of letters.--The term ``Exchange of Letters'' 
     means the exchange of letters concerning the application of 
     the Community Third Country Directive, signed in May 1991 and 
     November 1992, which constitute the agreement between the 
     United States and the European Economic Community regarding 
     the Third Country Meat Directive.
       (2) GATT 1994.--The term ``GATT 1994'' means the General 
     Agreement on Tariffs and Trade annexed to the WTO Agreement.
       (3) Third country meat directive; community third country 
     directive.--The terms ``Third Country Meat Directive'' and 
     ``Community Third Country Directive'' mean the European 
     Union's Council Directive 72/462/EEC relating to inspection 
     and certification of slaughter and processing plants that 
     export meat and pork products to the European Union.
       (4) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement establishing the World Trade Organization entered 
     into on April 15, 1994.

     SEC. 4. REQUIREMENT FOR DETERMINATION BY UNITED STATES TRADE 
                   REPRESENTATIVE.

       Not later than 30 days after the date of enactment of this 
     Act, the United States Trade Representative shall determine, 
     for purposes of section 306(b)(1) of the Trade Act of 1974, 
     whether the European Union has failed to implement 
     satisfactorily its obligations under the Exchange of Letters, 
     the Agreement on the Application of Sanitary and 
     Phytosanitary Measures, or any other Agreement.

     SEC. 5. REQUEST FOR DISPUTE SETTLEMENT.

       If the United States Trade Representative determines under 
     section 4 that the European Union has failed to implement 
     satisfactorily its obligations under the Exchange of Letters, 
     the Agreement on the Application of Sanitary and 
     Phytosanitary Measures, or any other agreement, the United 
     States Trade Representative shall promptly request 
     proceedings on the matter under the formal dispute settlement 
     procedures applicable to the agreement.

     SEC. 6. REVIEW OF CERTAIN MEAT FACILITIES.

       (a) Review by Food Safety and Inspection Service.--If the 
     United States Trade Representative determines pursuant to 
     section 4 that the European Union has failed to implement 
     satisfactorily its obligations under the Exchange of Letters, 
     the Agreement on the Application of Sanitary and 
     Phytosanitary Measures, or any other Agreement, the United 
     States Trade Representative shall request the Secretary of 
     Agriculture (who, upon receipt of the request, shall) direct 
     the Food Safety and Inspection Service of the Department of 
     Agriculture to review certifications for European Union 
     facilities that import meat and other agricultural products 
     into the United States.
       (b) Relationship to USTR Authority.--The review authorized 
     under subsection (a) is in addition to the authority of the 
     United States Trade Representative to take actions described 
     in section 301(c)(1) of the Trade Act of 1974 (19 U.S.C. 
     2411(c)(1)).
                                 ______
                                 
      By Mr. GREGG:
  S. 221. A bill to amend the Social Security Act to require the 
Commissioner of Social Security to submit specific legislative 
recommendations to ensure the solvency of the Social Security trust 
funds; to the Committee on Finance.


                     social security act amendments

  Mr. GREGG. Mr. President, I rise to introduce legislation which I now 
send to the desk.
  Mr. President, I am sure that my colleagues are familiar with the 
report recently released by the Social Security Advisory Council. That 
group, appointed by HHS Secretary Donna Shalala, was charged with 
making recommendations as to how to place our largest and most popular 
program--Social Security--on a stable and secure path for the 21st 
century. Their recommendations have accelerated an already vigorous 
debate concerning the eventual course of Social Security reform.
  As someone who is greatly concerned about the future of Social 
Security, let me offer my view that we cannot afford the kind of 
gridlock and partisanship in rescuing that program that we have seen in 
the Medicare debate. It is vitally important that all of us come 
together to address problems of retirement security in a bipartisan 
way--one that involves all of the important players in this debate--
both in Congress and within the administration.
  My legislation, Mr. President, would simply establish an additional 
safeguard for the solvency of the Social Security system on which so 
many American senior citizens depend. Specifically, it will require the 
Commissioner of Social Security--at the same time each year that the 
Social Security trustees report to Congress on the solvency of the 
Social Security system--to recommend those legislative actions which 
the Commissioner deems necessary to place the Social Security system in 
long-term actuarial balance.
  Mr. President, I believe that there is broad bipartisan consensus 
about certain aspects of Social Security. Certainly there is wide 
bipartisan support for the view that protecting the stability and 
solvency of the system should be among our highest national priorities. 
And, most of us recognize the stark fiscal realities facing the Social 
Security system. I refer to the fact that according to the Social 
Security trustees, beginning in the year 2012, the Social Security 
system will face annual operating deficits, meaning that there will 
then be inadequate revenues coming into the system to support current 
benefits. From that year onward--indeed for most of the 75-year period 
during which actuarial solvency is measured--there is an ever widening

[[Page S754]]

gap between the promises of Social Security and the means available to 
pay for them, unless we act to change the law.
  It is beyond those points of agreement, however, that our bipartisan 
consensus breaks down. Even though we all know that it will take 
bipartisan action to safeguard this system, the Social Security system 
could well become a sharpening focus of partisan political activity. 
Apparently the temptations here are simply too great for politicians to 
resist. It is the easier--though less responsible--course to ignore the 
problems within the system, and to take political advantage of those 
who seek to repair them.
  We thus find ourselves in a peculiar situation. Each year, the Social 
Security trustees send information to Congress about Social Security's 
troubled future, and call upon Congress to act to restore the system to 
long-term solvency. Yet, at the same time, the custodians of that 
system--indeed, the soon-departing Social Security Commissioner 
herself--remain utterly silent as to how this is to be done. It is 
astounding to me that an individual will again be placed in charge of 
this most enormous and vital Government program, and yet not be 
required under the law to forward proposals to keep it stable and 
secure.
  Toward the end of last year, the staff of the Budget Committee were 
briefed by representatives of the Social Security Administration as to 
how they were meeting their established performance goals under the 
Government Performance and Results Act. One of the goals established by 
the Social Security Administration was to improve public confidence in 
Social Security. Meanwhile, no recommendations are coming from the 
Commissioner of Social Security as to how to justify that confidence in 
the long term. It is long past time to repair this discontinuity.
  I believe that this legislation should not be controversial. It 
stands to elementary reason that it should be part and parcel of the 
duties inherent in the position of Social Security Commissioner, to 
make such recommendations as are necessary to protect the future of the 
Social Security system. I hope that Congress will act quickly, and will 
pass this legislation early in this session.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 222. A bill to establish an advisory commission to provide advice 
and recommendations on the creation of an integrated, coordinated 
Federal policy designed to prepare for and respond to serious drought 
emergencies; to the Committee on Governmental Affairs.


             the national drought policy study act of 1997

  Mr. DOMENICI. Mr. President, I rise to introduce legislation that I 
believe will finally start us down the long neglected road of 
developing a coherent, integrated, and coordinated national drought 
policy. I offer this legislation, Mr. President, in the wake of one of 
the most devastating droughts the southwestern United States has seen 
in a century, a drought for which there was simply no preparation at 
either Federal, State, or local levels.
  Mr. President, some people do not consider a drought to be a 
disaster, but if live in a drought, and live through a drought, it is 
just as much a disaster as a tornado or an earthquake. It causes just 
as much devastation.
  The problem is it kind of creeps up. And in the flow of its 
destructive force are many ruined lives, many lost businesses, many 
people who cannot make the mortgages on their farms and homes. It is 
time we have some coordinated effort to address these disasters. This 
legislation seeks to get that done.
  Before I talk about the particulars of my bill, however, I would like 
to spend a few minutes describing to my colleagues just how devastating 
a serious drought disaster can be. Unfortunately, my State of New 
Mexico can be used as a prime example of this devastation.
  Mr. President, water is everything in New Mexico. Ours is an arid 
State, and the rain and snowfall we receive in the spring and winter is 
literally a matter of life and death to our cities, towns, businesses, 
and environment. In 1995-96, however, precipitation levels were the 
lowest the had been in the 100 years that the State has been keeping 
such records. The results were nothing less than disastrous.
  For example, the drought decimated the State's agricultural 
community. Every single county in the State received disaster 
declarations from the USDA. Farmers in the southern part of the State 
were forced to go to water wells, depleting an already-taxed aquifer. 
And, in northeastern New Mexico, winter wheat crops failed for the 
first time in anyone's memory.
  The drought also destroyed forage for livestock producers, causing an 
industry already hit hard by high feed prices to hurt even more. In 
all, it was estimated that ranchers lost up to 85 percent of their 
capital.
  The drought had a catastrophic impact on New Mexico's forests. The 
Dome, Hondo, and Chino Wells fires were all sparked by the incredibly 
dry conditions brought on by the drought, and were exacerbated by the 
lack of water needed to extinguished them. In all, there were over 
1,200 fires in New Mexico last year burning over 140,000 acres of land 
and wiping out dozens of homes and businesses.
  The drought also caused municipal water systems to be taxed to the 
hilt, forcing many cities and towns to consider drastically raised 
water rates for their citizens. And the drought meant that critical 
stretches of the Rio Grande River were almost completely dry, which in 
turn meant vastly reduced amounts of water for wildlife such as the 
endangered silvery minnow.
  And New Mexico's problems were those of just one State: the 1995-96 
drought devastated the entire southwestern region. Arizona, California, 
Colorado, Nevada, Oklahoma, Texas, Utah, and Kansas were all severely 
impacted by the drought. Small businessmen, farmers, and ranchers all 
across the area were wiped out. Oklahoma experienced almost $500 
million in agricultural losses alone. Texas's agricultural losses 
exceeded $2 billion, while its overall statewide losses were over $5 
billion. And in the southwest as a whole, almost 3 million acres of 
land were engulfed by fire, an amount almost three times the 5-year 
acreage.
  In short, Mr. President, this drought was a killer. We in the 
Southwest were fortunate that this year is proving to be a much better 
year for precipitation than the last. But we do not know what the next 
year will bring. There could be yet another drought, again sending 
towns scrambling to drill new water wells, sweeping fire across bone-
dry forests, and forcing farmers and ranchers to watch their way of 
life being wiped out.
  But I do not want to give the impression that severe droughts are 
solely the curse of the Southwest. Every region in the United States 
can be hit by these catastrophes. In 1976-77, a short but intense 
drought struck the Pacific Northwest, requiring the construction of 
numerous dams and reservoirs to secure millions of additional acre feet 
of needed water. The 1988 Midwest drought caused over $5 billion in 
losses. And the infamous 7-year drought of 1986-93 experienced by 
California, the Pacific Northwest, and the Great Basin States caused 
extensive damage to water systems, water quality, fish and wildlife, 
and recreational activities.
  And yet, even though they are so pervasive, and even though they so 
seriously impact the economic and environmental well-being of the 
entire Nation, we in New Mexico have learned from hard experience that 
the United States is poorly prepared to deal with serious drought 
emergencies. As a result of the hardships being suffered in every part 
of my state last year, I convened a special Multi-State Drought Task 
Force of Federal, State, local, and tribal emergency management 
agencies to coordinate efforts to respond to the drought. The task 
force was ably headed up by the Federal Emergency Management Agency, 
and included every Federal agency that has programs designed to deal 
with drought.
  Unfortunately, what the task force found was that although the 
Federal Government has numerous drought related programs on the books, 
there simply is no integrated, coordinated system of implementing those 
programs. For example, while most of the Federal drought programs 
require a person to apply proactively for relief under them, there was 
almost a total lack of knowledge about those programs on the part of 
the victims they were designed to help. Worse yet, the programs that 
are in place are fragmented and ad hoc, and stop well short

[[Page S755]]

of comprehensively helping people prepare for or respond to drought. 
Consequently, at first drought victims in this Nation do not know who 
to turn to for help, and then find that the help that is available is 
too late and totally inadequate.
  These fundamental problems were specifically identified by the Multi-
State Drought Task Force in its final report on the drought of 1995-96. 
The task force stated that ``[t]he States are left are left to navigate 
the ocean of applicable assistance programs as best they can.'' The 
task force went on to observe:

       The Federal government does not have a national drought 
     policy, national climatic monitoring system, nor an 
     institutionalized organizational structure to address 
     drought. Therefore, every time a drought occurs the Federal 
     government is behind the power curve playing catch up in an 
     ad hoc fashion to meet the needs of the impacted states and 
     their citizens.

  The Western Governors' Association recognized the exact same problems 
in its 1996 Drought Response Action Plan. The WGA stated that ``[t[he 
absence of a lead agency to handle drought--in addition to the lack of 
Federal interagency coordination--has significantly reduced the Federal 
Government's ability to provide adequate support over the long term.''
  Indeed, the Multi-State Drought Task Force recommended that 
``Congress in coordination with the administration develop and adopt a 
National Drought Policy to include a national drought monitory system 
and an institutionalized organizational structure with a designated 
lead Federal agency to direct and coordinate the efforts of the Federal 
Government in preparing for, responding to, and recovering from 
drought, as well as mitigating the impacts of drought.''
  Similarly, the Western Governors' Association recommends 
``[d]evelop[ing] a national drought policy or framework that integrates 
actions and responsibilities among all levels of government (Federal, 
State, regional, and local). This policy should plainly spell out 
preparedness, response, and mitigation measures to be provided by each 
entity.'' And it is my understanding that the National Governors' 
Association is considering adopting a similar recommendation sponsored 
by Governor Johnson of New Mexico.
  All of this, Mr. President, has led me to introduce today's 
legislation. I believe that my bill will be the first step toward 
finally establishing a coherent, effective national drought policy. My 
bill creates a commission comprised of representatives of those 
Federal, State, local, and tribal agencies and organizations which are 
most involved with drought issues. On the Federal side, the Commission 
will include representatives from USDA, Interior, the Army, FEMA, SBA, 
and Commerce--agencies which all currently have drought-related 
programs on the books. Equally important will be the nonfederal 
members, including representatives from the National Governors' 
Association, the U.S. Conference of Mayors, and four persons 
representative of those groups that are always hardest hit by drought 
emergencies.
  The Commission will be charged with determining what needs exists on 
the Federal, State, local, and tribal levels with regard to drought; 
with reviewing existing Federal, State, local, and tribal drought 
programs; and with determining what gaps exist between the needs of 
drought victims and those programs currently designed to deal with 
drought.
  More importantly, the Commission will then be charged with making 
recommendations on how Federal drought laws and programs can be better 
integrated into a comprehensive national policy to mitigate the impacts 
of, and respond to, serious drought emergencies. Should Federal drought 
programs be consolidated under one single existing agency? How can the 
Nation be better prepared for these disasters? Should emergency loan 
programs that stand the risk of sinking drought victims deeper into 
debt be reevaluated? These are just some of the questions that we in 
Congress need guidance on if we are to move to the next level in 
developing a national drought strategy.
  In conclusion, Mr. President, my legislation is just the first step 
in addressing the major national problem of drought disasters, but it 
is a step that must be taken quickly. Drought can strike any State, at 
any time, for any duration. I urge my colleagues to support this bill.
                                 ______
                                 
      By Mr. THURMOND (for himself, Mr. Faircloth, Mr. Helms, Mr. 
        Hutchinson, Mr. Kempthorne, Mr. Shelby, and Mr. Sessions):
  S. 223. A bill to prohibit the expenditure of Federal funds on 
activities by Federal agencies to encourage labor union membership, and 
for other purposes; to the Committee on Labor and Human Resources.


                   LABOR UNION MEMBERSHIP LEGISLATION

  Mr. THURMOND. Mr. President, I rise today to introduce a very 
important piece of legislation that would affect every American 
taxpayer. This measure would prohibit Federal funds from being used to 
encourage labor union membership.

  Mr. President, I was shocked to learn that the Department of Labor 
has published and distributed brochures which state, If you don't have 
a union, you may want to consider joining an existing union or working 
with others to start one. These brochures are designed to help American 
workers know their rights when it comes to various forms of 
discrimination. I recognize the importance of these brochures, but I 
firmly believe that it is not the responsibility of the Federal 
Government to encourage or discourage labor union membership in any 
form. Organized labor has the resources and the manpower to do their 
own recruiting. They certainly should not be receiving free 
solicitation at the expense of the American taxpayer.
  The legislation that I am introducing today specifically prohibits 
any Federal agency from using Federal funds for programs, seminars, 
staff positions, or publications which would compel, instruct, 
encourage, urge, or persuade individuals to join labor unions. As I 
stated before, it simply is not the responsibility of the Federal 
Government to encourage union membership. The American taxpayer should 
not bear the burden of promoting labor unions.
  My distinguished colleagues, Senators Faircloth, Helms, Hutchinson, 
Kempthorne, Shelby, and Sessions, join me as original cosponsors of 
this measure that I send to the desk. I invite our other colleagues to 
join us in support of this important legislation.
                                 ______
                                 
      By Mr. WARNER:
  S. 224. A bill to amend title 10, United States Code, to permit 
covered beneficiaries under the military health care system who are 
also entitled to Medicare to enroll in the Federal Employees Health 
Benefits Program, and for other purposes; to the Committee on Armed 
Services.


             military retirees health benefits legislation

  Mr. WARNER. Mr. President, I rise today to introduce legislation 
which will return a sense of fairness to the military health care 
system by providing Medicare-eligible military retirees the same health 
care plan that is currently available to every other retired Federal 
employee. Under this legislation, all Medicare-eligible military 
retirees and their family members will be given the option to 
participate in the Federal Employee Health Benefits Plan [FEHBP].
  Under the current system military retirees lose their guaranteed 
access to military medical care at age 65 and are forced to rely 
exclusively on Medicare. It is worth noting that our military retirees 
are the only group of Federal employees whose health plan is taken away 
at age 65. I am sure that my colleagues would agree that this situation 
is not only inherently unfair, but that it also breaks a long standing 
health care commitment to our military retirees. When these men and 
women joined the Armed Forces, they were promised health care for both 
them and their families, for the rest of their lives. This was a 
commitment. This was in writing. Now, at age 65, they find out that 
this commitment is being withdrawn.
  Mr. President, the commonly held belief that the health care provided 
for military retirees is second to none is a myth. The truth is that 
when you compare it to what is provided by other large employers 
including General Motors, IBM, Exxon, and the rest of the Federal 
Government, the health care that is provided to our Medicare-eligible 
military retirees and their family members has become second to almost 
all others.

[[Page S756]]

  This bill that I am introducing today is the same legislation that I 
introduced in the 104th Congress. Although my legislation was not 
adopted, the fiscal year 1997 Senate-passed version of the National 
Defense Authorization Act Conference Report directed the Department of 
Defense to conduct a study of the cost and feasibility of extending the 
option of enrollment in FEHBP to our Medicare-eligible military 
retirees. This report is due to Congress on March 1, 1997. I am hopeful 
that this study will thoroughly examine this issue and provide 
meaningful recommendations that we can use to strengthen the military 
health care system during the Armed Services Committee's consideration 
of the bill I am introducing today.
  Mr. President, this legislation represents a major step forward in 
the application of equitable standards of health care for all Federal 
employees and honors our commitment to those veterans who served our 
Nation faithfully through many years of arduous military service. I 
invite my colleagues to join me as cosponsors of this bill.
                                 ______
                                 
      By Mr. KOHL:
  S. 225. A bill to amend chapter 111 of title 28, United States Code, 
relating to protective orders, sealing of cases, disclosures of 
discovery information in civil actions, and for other purposes; to the 
Committee on the Judiciary.


                     the sunshine in litigation act

  Mr. KOHL.
  Mr. President, I rise today to offer the Sunshine in Litigation Act, 
a measure that addresses the growing abuse of secrecy orders issued by 
our Federal courts. All too often our Federal courts allow vital 
information that is discovered in litigation--and which directly bears 
on public health and safety--to be covered up, to be shielded from 
people whose lives are potentially at stake, and from the public 
officials we have asked to protect our health and safety.
  All this happens because of the use of so-called protective orders--
really gag orders issued by courts--that are designed to keep 
information discovered in the course of litigation secret and 
undisclosed. Typically, injured victims agree to a defendant's request 
to keep lawsuit information secret. They agree because defendants 
threaten that, without secrecy, they will refuse to pay a settlement. 
Victims cannot afford to take such chances. And while courts in these 
situations actually have the legal authority to deny requests for 
secrecy, typically they do not--because both sides have agreed, and 
judges have other matters they prefer to attend to. So judges are 
regularly and frequently entering these protective orders, using the 
power of the Federal Government to keep people in the dark about the 
dangers they face.
  The measure that I am introducing today will bring crucial 
information out of the darkness and into the light. The measure amends 
rule 26 of the Federal Rules of Civil Procedure to require that judges 
weigh the impact on public health and safety before approving these 
secrecy orders. It is simple, effective, and straightforward. The 
Judiciary Committee reported out identical legislation last Congress by 
a bipartisan 11 to 7 majority.
  Our bill essentially codifies what is already the practice of the 
best judges. In cases that do not affect public health safety, existing 
practice would continue, and courts could still issue protective orders 
as they do today. But in cases affecting public health and safety 
courts would apply a balancing test: they could permit secrecy only if 
the need for privacy outweighs the public's need to know about 
potential health or safety hazards. Moreover, courts could not, under 
this measure, issue protective orders that would prevent disclosures to 
regulatory agencies.
  Although the law may result in some small additional burden on 
judges, a little extra work from judges seems a tiny price to pay for 
protecting blameless people from dangers. Every day, in the course of 
litigation, judges make tough calls about how to construe the public 
interest and interpret other laws that Congress passes. I am confident 
that the courts will administer this law fairly and sensibly. If this 
requires extra work, then the work is well worth it. After all no one 
argues that spoiled meat should be let out on the market because 
stricter regulations mean more work for FDA meat inspectors.

  The problem of excessive secrecy orders in cases involving public 
health and safety has been apparent for many years. The Judiciary 
Committee first held hearings on this issue in 1990. ``Court Secrecy,'' 
Hearings before the Subcommittee. On Courts and Administrative 
Practice, Committee on the Judiciary, May 17, 1990, 101st Congress, 2d 
Session. The committee held hearings again in 1994.
  In 1990, Arthur Bryant, the executive director of Trial Lawyers for 
Public Justice, told us: ``The one thing we learned * * * is that this 
problem is far more egregious than we ever imagined. It goes the length 
and depth of this country, and the frank truth is that much of civil 
litigation in this country is taking place in secret.'' Four years 
later, the attorney Gerry Spence told us about 19 cases he had been 
involved in in which his clients had to sign secrecy agreements. They 
included cases involving defects in a hormonal pregnancy test that 
caused severe birth defect, a defective braking system of a steam 
roller, and an improperly manufactured tire rim.
  Individual examples of this problem abound. For over a decade, 
Miracle Recreation, a U.S. playground equipment company, marketed a 
merry-go-round that caused serious injuries to scores of small 
children--including severed fingers and feet. Lawsuits brought against 
the manufacturer were confidentially settled, preventing the public and 
the Consumer Products Safety Commission from learning about the hazard. 
It took more than a decade for regulators to discover the hazard and 
for the company to recall the merry-go-round.
  There are yet more cases like these. In 1973, GM began marketing 
vehicles with dangerously-placed fuel tanks that tended to rupture, 
burn, and explode on impact more frequently than regular tanks. Soon 
after these vehicles hit the American road, tragic accidents began 
occurring, and lawsuits were filed. More than 150 lawsuits were settled 
confidentially by GM. For years, this secrecy prevented the public from 
learning of the dangers of these vehicles--6 million of which are still 
on the road. It wasn't until a trial in 1993 that the public began 
learning of the dangers of GM sidesaddle gas tanks and the GM crash 
test data which demonstrated these dangers.
  Another case involves Fred Barbee, a Wisconsin resident whose wife, 
Carol, died because of a defective heart valve. Mr. Barbee told us that 
months and years before his wife died, the valve manufacturer had 
quietly, without public knowledge, settled dozens of lawsuits in which 
the valve's defects were demonstrated. So when Mrs. Barbee's valve 
malfunctioned, she rushed to a health clinic in Spooner, WI, thinking, 
as did her doctors, that she was suffering from a heart attack. 
Ignorant of the evidence that her valve was defective, Mrs. Barbee was 
misdiagnosed. Mrs. Barbee was treated incorrectly and died. To this 
day, Mr. Barbee believes that but for the secret settlement of heart 
valve lawsuits, he and his wife would have been aware of the valve 
defect, and his wife would be alive today.

  At the 1994 Judiciary Committee hearing, we heard from a family which 
I must call the Does because they are under a secrecy order and were 
afraid to use their own names when talking to us and to our committee. 
The Does were the victims of tragic medical malpractice that resulted 
in serious brain damage to their child. A friend of the Does is using 
the same doctor, but Mrs. Doe is terrified of saying anything to her 
friend for fear of violating the secrecy order that governed her 
lawsuit settlement. Mrs. Doe is afraid that if she talks, the defendant 
in her case will suspend the ongoing settlement payments that allow her 
to care for her injured child.
  What sort of court system prohibits a woman from telling her friend 
that her child might be in danger? And the more disturbing question is 
this: What other secrets are currently held under lock and key which 
could be saving lives if they were made public?
  Mr. President, having said all this, I must in fairness recognize 
that there is another side to this problem. Privacy is a cherished 
possession, and business information is an important commodity. For 
this reason, the courts must,

[[Page S757]]

in some cases, keep trade secrets and other business information 
confidential. The goal of this measure I have introduced is to ensure 
that courts do not carelessly and automatically sanction secrecy when 
the health and safety of the American public is at stake. At the same 
time, it will still allow defendants to obtain secrecy orders when the 
need for privacy is significant and substantial.
  To attack the problem of excessive court secrecy is not to attack the 
business community. Most of the time, businesses seek protective orders 
for legitimate reasons. And although a few opponents of product 
liability reform may dispute that businesses care about public health 
and safety, we know that they do. Business people want to know about 
dangerous and defective products, and they want regulatory agencies to 
have the information necessary to protect the public.
  The Sunshine in Litigation Act is a simple effort to protect the 
safety of the American people. Its benefits far outweigh any of the 
worst imaginable disadvantages. And the longer we wait to enact the 
legislation, the more people are put at risk.
  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. 225

       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 ``Sunshine in Litigation Act 
     of 1997''.

     SEC. 2. PROTECTIVE ORDERS AND SEALING OF CASES AND 
                   SETTLEMENTS RELATING TO PUBLIC HEALTH OR 
                   SAFETY.

       (a) In General.--Chapter 111 of title 28, United States 
     Code, is amended by adding at the end thereof the following 
     new section:

     ``Sec. 1659. Protective orders and sealing of cases and 
       settlements relating to public health or safety

       ``(a)(1) A court shall enter an order under rule 26(c) of 
     the Federal Rules of Civil Procedure restricting the 
     disclosure of information obtained through discovery or an 
     order restricting access to court records in a civil case 
     only after making particularized findings of fact that--
       ``(A) such order would not restrict the disclosure of 
     information which is relevant to the protection of public 
     health or safety; or
       ``(B)(i) the public interest in disclosure of potential 
     health or safety hazards is clearly outweighed by a specific 
     and substantial interest in maintaining the confidentiality 
     of the information or records in question; and
       ``(ii) the requested protective order is no broader than 
     necessary to protect the privacy interest asserted.
       ``(2) No order entered in accordance with the provisions of 
     paragraph (1) shall continue in effect after the entry of 
     final judgment, unless at or after such entry the court makes 
     a separate particularized finding of fact that the 
     requirements of paragraph (1)(A) or (B) have been met.
       ``(b) The party who is the proponent for the entry of an 
     order, as provided under this section, shall have the burden 
     of proof in obtaining such an order.
       ``(c)(1) No agreement between or among parties in a civil 
     action filed in a court of the United States may contain a 
     provision that prohibits or otherwise restricts a party from 
     disclosing any information relevant to such civil action to 
     any Federal or State agency with authority to enforce laws 
     regulating an activity relating to such information.
       ``(2) Any disclosure of information to a Federal or State 
     agency as described under paragraph (1) shall be confidential 
     to the extent provided by law.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 111 of title 28, United States Code, is 
     amended by adding after the item relating to section 1658 the 
     following:

``1659. Protective orders and sealing of cases and settlements relating 
              to public health or safety.''.
       SEC. 3. EFFECTIVE DATE.
       The amendments made by this Act shall take effect 30 days 
     after the date of the enactment of this Act and shall apply 
     only to orders entered in civil actions or agreements entered 
     into on or after such date.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. DeWine):
  S. 226. A bill to establish felony violations for the failure to pay 
legal child support obligations, and for other purposes; to the 
Committee on the Judiciary.


              the deadbeat parents punishment act of 1997

 Mr. KOHL. Mr. President, I introduce the Deadbeat Parents 
Punishment Act of 1997. Along with Senator Shelby and Congressmen Hyde 
and Schumer, I introduced the original Child Support Recovery Act in 
1992, and today Senator DeWine and I are pleased to introduce a measure 
that will toughen the original law to ensure that more serious crimes 
receive more serious punishment. In so doing, we can send a clear 
message to deadbeat dads and moms: ignore the law, ignore your 
responsibilities, and you will pay a high price. In other words, pay up 
or go to jail.
  Current law already makes it a Federal offense to willfully fail to 
pay child support obligations to a child in another State if the 
obligation has remained unpaid for longer than a year or is greater 
than $5,000. However, current law provides for a maximum of just 6 
months in prison for a first offense, and a maximum of 2 years for a 
second offense. A first offense, however--no matter how egregious--is 
not a felony under current law.
  Police officers and prosecutors have used the current law 
effectively, but they have found that current misdemeanor penalties do 
not adequately deal with more serious cases--those cases in which 
parents move from State to State to intentionally evade child support 
penalties, or fail to pay child support obligations for more than 2 
years--serious cases that deserve serious, felony punishment. In 
response to these concerns, President Clinton has drafted legislation 
that would address this problem, and we are pleased to introduce it 
today.
  This new effort builds on past successes achieved through bipartisan 
work. In the 4 years since the original deadbeat parents legislation 
was signed into law by President Bush, collections have increased by 
nearly 50 percent, from $8 to $11.8 billion, and we should be proud of 
that increase. Moreover, a new national database has helped identify 
60,000 delinquent fathers, over half of whom owed money to women on 
welfare.
  Nevertheless, there is much more we can do. It has been estimated 
that if delinquent parents fully paid up their child support, 
approximately 800,000 women and children could be taken off the welfare 
rolls. So our new legislation cracks down on the worst violators, and 
makes clear that intentional or long-term evasion of child support 
responsibilities will not receive a slap on the wrist. In so doing, it 
will help us continue the fight to ensure that every child receives the 
parental support they deserve.
  Mr. President, with this bill we have a chance to make a difference 
in the lives of families across the country. So I look forward to 
working with my colleagues to give police and prosecutors the tools 
they need to effectively pursue individuals who seek to avoid their 
family obligations.
  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:

                                 S. 226

       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 ``Deadbeat Parents Punishment 
     Act of 1997''.

     SEC. 2. ESTABLISHMENT OF FELONY VIOLATIONS.

       Section 228 of title 18, United States Code, is amended to 
     read as follows:

     ``Sec. 228. Failure to pay legal child support obligations

       ``(a) Offense.--Any person who--
       ``(1) willfully fails to pay a support obligation with 
     respect to a child who resides in another State, if such 
     obligation has remained unpaid for a period longer than one 
     year, or is greater than $5,000;
       ``(2) travels in interstate or foreign commerce with the 
     intent to evade a support obligation, if such obligation has 
     remained unpaid for a period longer than one year, or is 
     greater than $5,000; or
       ``(3) willfully fails to pay a support obligation with 
     respect to a child who resides in another State, if such 
     obligation has remained unpaid for a period longer than two 
     years, or is greater than $10,000;

     shall be punished as provided in subsection (c).
       ``(b) Presumption.--The existence of a support obligation 
     that was in effect for the time period charged in the 
     indictment or information creates a rebuttable presumption 
     that the obligor has the ability to pay the support 
     obligation for that time period.
       ``(c) Punishment.--The punishment for an offense under this 
     section is--
       ``(1) in the case of a first offense under subsection 
     (a)(1), a fine under this title, imprisonment for not more 
     than 6 months, or both; and

[[Page S758]]

       ``(2) in the case of an offense under subsection (a)(2) or 
     (a)(3), or a second or subsequent offense under subsection 
     (a)(1), a fine under this title, imprisonment for not more 
     than 2 years, or both.
       ``(d) Mandatory Restitution.--Upon a conviction under this 
     section, the court shall order restitution under section 
     3663A in an amount equal to the total unpaid support 
     obligation as it exists at the time of sentencing:
       ``(e) Definitions.--As used in this section--
       ``(1) the term `support obligation' means any amount 
     determined under a court order or an order of an 
     administrative process pursuant to the law of a State to be 
     due from a person for the support and maintenance of a child 
     or of a child and the parent with whom the child is living; 
     and
       ``(2) the term `State' includes any State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.''.
                                  ____


                      Section-by-Section Analysis

       The Child Support Recovery Amendments Act of 1996 amends 
     the current criminal statute regarding the failure to pay 
     legal child support obligations, 18 U.S.C. Sec. 228, to 
     create felony violations for egregious offenses. Current law 
     makes it a federal offense willfully to fail to pay a child 
     support obligation with respect to a child who lives in 
     another State if the obligation has remained unpaid for 
     longer than a year or is greater than $5,000. A first offense 
     is subject to a maximum of six months of imprisonment, and a 
     second or subsequent offense to a maximum of two years.
       The bill addresses the law enforcement and prosecutorial 
     concern that the current statute does not adequately address 
     more serious instances of nonpayment of support obligations. 
     A maximum term of imprisonment of just six months does not 
     meet the sentencing goals of punishment and deterrence. 
     Egregious offenses, such as those involving parents who move 
     from State-to-State to evade child support payments, require 
     more severe penalties.
       Section 2 of the bill creates two new categories of felony 
     offenses, subject to a two-year maximum prison term. These 
     are: (1) traveling in interstate or foreign commerce with the 
     intent to evade a support obligation if the obligation has 
     remained unpaid for a period longer than one year or is 
     greater than $5,000; and (2) willfully failing to pay a 
     support obligation regarding a child residing in another 
     State, if the obligation has remained unpaid for a period 
     longer than two years or is greater than $10,000. These 
     offenses, proposed 18 U.S.C. Sec. 228(a) (2) and (3), 
     indicate a level of culpability greater than that reflected 
     by the current six-month maximum prison term for a first 
     offense. The level of culpability demonstrated by offenders 
     who commit the offenses described in these provisions is akin 
     to that demonstrated by repeat offenders under current law, 
     who are subject to a maximum two-year prison term.
       Proposed section 228(b) of title 18, United States Code, 
     states that the existence of a support obligation in effect 
     for the time period charged in the indictment or information 
     creates a rebuttable presumption that the obligor has the 
     ability to pay the support obligation for that period. 
     Although ``ability to pay'' is not an element of the offense, 
     a demonstration of the obligor's ability to pay contributes 
     to a showing of willful failure to pay the known obligation. 
     The presumption in favor of ability to pay is needed because 
     proof that the obligor is earning or acquiring income or 
     assets is difficult. Child support offenders are notorious 
     for hiding assets and failing to document earnings. A 
     presumption of ability to pay, based on the existence of a 
     support obligation determined under State law, is useful in a 
     jury's determination of whether the nonpayment was willful. 
     An offender who lacks the ability to pay a support obligation 
     due to legitimate, changed circumstances occurring after the 
     issuance of a support order has civil means available to 
     reduce the support obligation and thereby avoid violation 
     of the federal criminal statute in the first instance. In 
     addition, the presumption of ability to pay set forth in 
     the bill is rebuttable; a defendant can put forth evidence 
     of his or her inability to pay.
       The reference to mandatory restitution in proposed section 
     228(d) of title 18, United States Code, amends the current 
     restitution requirement in section 228(c). The amendment 
     conforms the restitution citation to the new mandatory 
     restitution provision of federal law, 18 U.S.C. Sec. 3663A, 
     enacted as part of the Antiterrorism and Effective Death 
     Penalty Act of 1996, P.L. 104-132, section 204. This change 
     simply clarifies the applicability of that statute to the 
     offense of failure to pay legal child support obligations.
       For all of the violations set forth in proposed subsection 
     (a) of section 228, the requirement of the existence of a 
     State determination regarding the support obligation is the 
     same as under current law. Under proposed subsection (e)(1), 
     as under current subsection (d)(1)(A), the government must 
     show that the support obligation is an amount determined 
     under a court order or an order of an administrative process 
     pursuant to the law of a State to be due from a person for 
     the support and maintenance of a child or of a child and the 
     parent with whom the child is living.
       Proposed subsection (e)(2) of section 228 amends the 
     definition of ``State,'' currently in subsection (d)(2), to 
     clarify the prosecutions may be brought under this statute in 
     a commonwealth, such as Puerto Rico. The current definition 
     of ``State'' in section 228, which includes possessions and 
     territories of the United States, does not include 
     commonwealths.
      By Mr. DORGAN (for himself, Mr. Daschle, Mr. Reid, Mrs. 
        Feinstein, Mr. Ford, Mr. Hollings and Mr. WYDEN):

  S.J. Res. 12. A joint resolution proposing a balanced budget 
constitutional amendment; to the Committee on the Judiciary


                Balanced Budget Constitutional Amendment

  Mr. DROGAN. Mr. President, I rise today to introduce a constitutional 
amendment for myself, Senator Daschle, Senator Reid, Senator Feinstein, 
Senator Hollings, Senator Ford, and Senator Wyden.
  The constitutional amendment will be familiar to most Senators 
because it is about something that we are discussing a lot these days: 
balancing the Federal budget. It is a constitutional amendment to 
balance the Federal budget.
  A number of us have taken the position that we would support a 
constitutional amendment to balance the budget if the constitutional 
amendment is the right kind of amendment. I want to talk a little about 
the constitutional amendment being proposed and the one was proposed 2 
years ago here in the U.S. Senate.
  I think fiscal discipline is necessary in this country, because our 
fiscal policy is out of whack. I think we have borrowed from our 
children and grandchildren. I think we ought to balance the Federal 
budget. I do not object to--in fact, I have supported and will 
support--the right kind of balanced budget constitutional amendment.
  I will not, however, support a proposal to amend the U.S. 
Constitution that would enshrine in the Constitution the practice of 
using the Social Security trust funds to balance the Federal budget. 
That is precisely what the balanced budget amendment that the Judiciary 
Committee will mark up later this week would do. That is why Senator 
Hollings and I and so many others are introducing a constitutional 
amendment to balance the budget, but one that will not use the Social 
Security trust funds to do so.
  Let me explain why that is important. If you were in the private 
sector and you had a business and in that business you put away some 
money for your employees in a pension fund, and then at the end of the 
year you discovered that you had run a big loss, you might say, ``Well, 
I will just take my employees' pension funds and bring them over into 
the operating side of the business, and I will tell everybody that I 
didn't have a loss. I am using the employee pension fund to cover my 
operating loss.''
  If you did that, you would be on your way to doing 2 years hard 
tennis in some minimum security prison because it is against the law. 
You can't do that. And we ought not be able to do it in the public 
sector either.
  We are going to collect $78 billion more this year in Social Security 
revenues than we will expend in the Social Security system. We will, 
just this year alone, accrue a $78 billion surplus in Social Security. 
Why? Because we need the money after the turn of the century when the 
baby boomers retire. We have the biggest baby crop in the history of 
our country. When that baby crop retires after the turn of the century, 
we are going to have the largest strain on the Social Security system. 
Therefore, we are collecting more now than we need in the Social 
Security system and that savings is going to be used at the turn of the 
century to help fund the system when we need it.
  But what is happening? What is happening is that extra revenue is 
used as just ordinary operating money and is used to say, ``Well, now 
we have reached a balanced budget in the year 2002,'' when, in fact, 
the budget is not in balance at all. It appears in balance only because 
you use the Social Security revenue or trust funds to show a balanced 
budget.
  I want to demonstrate this with a chart. This chart is important 
because I was at a hearing the other day and they had the debt clock at 
the hearing--this clock that keeps running at $4,000 a second, or it 
is. The debt clock keeps running and running. I said to the chairman of 
the committee, Senator Hatch, the debt clock actually

[[Page S759]]

makes the point I wanted to make at this hearing, because when you 
balance the budget, presumably you have stopped the debt clock from 
increasing. If you balance the Federal budget, the Federal Government 
ought not be taking on more debt. You have stopped the increase in 
debt. But guess what happens? In the very year in which the majority 
party says it will have balanced the budget, the Federal debt will 
increase by $130 billion, according to the Congressional Budget Office.

  This is the debt. These are the numbers: $5.4 trillion in 2002, and 
it is still increasing on that year, by $130 billion. Why will the debt 
increase by $130 billion in the year in which you claim you have 
balanced the budget? Answer: The budget isn't in balance because you 
have collected the Social Security moneys that are an obligation 
because you need to use them later. But then you have brought them over 
here to use them to say you have balanced the budget.
  We have not balanced the budget until and unless we stop the Federal 
debt increases. And the proposal to balance the budget before the 
Judiciary Committee does not do that. The congressional majority 
claimed that its budget plan would reach balance, but then the 
Congressional Budget Office says the deficit for that year is $104 
billion, and the debt increases by $130 billion. This is a giant ruse. 
It, unfortunately, dishonestly uses the Social Security trust funds for 
a purpose that Congress never intended.
  I know a little something about this because in 1983 I was on the 
House Ways and Means Committee when the Social Security reform bill was 
enacted. When it was enacted, it was determined there would be savings 
for the future when the Social Security trust funds would be needed. I 
offered an amendment that day 14 years ago in the committee saying, 
``If you do not put these savings aside and out of the reach of people 
who want to use them for other purposes, they will not in fact be 
saved.'' Now these have grown to significant surpluses, and they are 
not out of reach. They are supposed to be out of reach because of what 
the Senator from South Carolina did when he wrote section 13301 of the 
Budget Enforcement Act, but they are not out of reach. They are used to 
show a balanced budget when the budget is not in balance.
  So what we have done is very simply say, go ahead and pass a 
constitutional amendment to balance the budget. Let's do it the right 
and honest way. Let us make sure that the massive surpluses that we are 
going to accrue in the Social Security system are set aside, not 
counted as ordinary revenue, and that we balance the budget and save 
the Social Security trust fund revenues that are being taken out of 
workers' paychecks for that very purpose.
  Last evening I was on the phone with Congressman Mark Neumann from 
Wisconsin of the House of Representatives. Incidentally, he is a 
Republican Congressman from Wisconsin. He feels exactly the same way 
and says there are a couple dozen Members of the House who feel exactly 
the same way. They want to balance the budget. They believe it is 
appropriate to put a provision in the U.S. Constitution to do so, but 
they also believe it is inappropriate to use the Social Security trust 
funds which are saved for another purpose to show a balanced budget 
when, in fact, you are still increasing the Federal debt and you still 
have increases each year in the Federal deficit.
  I have said before that I come from a town of 300 people and 
graduated in a high school class of nine. I probably didn't take the 
fanciest math in the whole world, but back in my hometown cafe, if they 
sit around and start talking about what ``balances'' are and what 
``deficits and debts'' are, and if someone said, ``Do you think it 
would be appropriate to claim you have balanced the budget when the 
debt and deficit is still going to increase,'' it wouldn't take a lot 
of strong coffee to persuade people that that is not the right way to 
approach it and that is not an honest budget.
  So we are introducing today a constitutional amendment to balance the 
budget that says when the budget is balanced, you will not have an 
increase in the Federal debt. You will have turned that debt clock into 
a stopwatch: no more increases in Federal debt and no more Federal 
deficits. There is a right way to do things and a wrong way to do 
things.
  We propose that if we change the U.S. Constitution, we do it the 
right way. We propose that no one enshrine in the Constitution an 
opportunity to misuse up to $3 trillion of Social Security revenues 
that are taken from workers' paychecks with a solemn promise: this tax 
taken from your paycheck goes into a trust fund to be used for only one 
purpose, and that is to fund the Social Security system.
  Some in this Congress, believing double-entry bookkeeping means you 
use the same money twice, have said we can promise that to the workers 
and then we can also use their money as an accounting entry over here 
to claim we have in fact reached a balanced budget.
  That is wrong. It is certainly the wrong way to amend the U.S. 
Constitution. And we propose that when this Congress acts on a 
constitutional amendment, it act on an amendment that does the right 
thing--the right thing for workers, the right thing for retired folks 
in this country, but especially the right thing to balance this 
country's books and prevent us from continually seeing an increase in 
debt and deficits year after year.
  Mr. President, we intend to talk about this later today, but I am 
delighted to see that my colleague from Kentucky, Senator Ford, is 
here, and my colleague, Senator Hollings from South Carolina. Both 
Senators are cosponsoring this constitutional amendment.
  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. 12

       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, 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 whole 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 waived for 
     any fiscal year in which the United 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. The receipts (including attributable 
     interest) and outlays of the Federal Old-Age and Survivors 
     Insurance and the Federal Disability Insurance Trust Funds 
     (as and if modified to preserve the solvency of the Funds) 
     used to provide old age, survivors, and disabilities benefits 
     shall not be counted as receipts or outlays for purposes of 
     this article.
       ``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. HOLLINGS. I thank the distinguished Chair. Let me thank my 
distinguished colleague from North Dakota. Senator Dorgan has been 
forthright and persistent on this particular score. He has given us the 
necessary leadership to bring truth in budgeting.
  I will never forget when we started out in this budget process back 
in 1973 and 1974--and I am the only remaining Member in either body, 
House and Senate, that still serves on that Budget Committee--the 
litany was all for a 10-year period and, particularly up through Gramm-
Rudman-Hollings, about truth in budgeting. No more smoke and mirrors, 
no more rosy scenarios and those kinds of things--certainly no use of 
trust funds to obscure the actual size of the deficit.
  It is very easy to determine what a deficit is. All you need to do is 
find out what the debt is this year and then what the debt is the 
ensuing year, and a simple subtraction will determine for you, if you 
please, that the debt this past fiscal year, for 1996, was $261 
billion--not $107 billion. Not $107 billion, $261 billion.
  I ask unanimous consent to have printed in the Record, if you please, 
a chart which shows that the U.S. budget ``busts'' the trust funds. It 
shows the trust fund surpluses, the real deficit, the gross Federal 
debt, and the gross interest costs.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

----------------------------------------------------------------------------------------------------------------
                               U.S. budget                                 Annual         Gross
     President and year       (outlays--in   Trust funds  Real deficit     deficit    Federal debt      Gross
                                billions)                                  change      (billions)     interest
----------------------------------------------------------------------------------------------------------------
Truman:
    1945....................          92.7           5.4  ............  ............         260.1  ............
    1946....................          55.2           3.9         -10.9  ............         271.0  ............
    1947....................          34.5           3.4         +13.9  ............         257.1  ............
    1948....................          29.8           3.0          +5.1  ............         252.0  ............
    1949....................          38.8           2.4          -0.6  ............         252.6  ............
    1950....................          42.6          -0.1          -4.3  ............         256.9  ............
    1951....................          45.5           3.7          +1.6  ............         255.3  ............
    1952....................          67.7           3.5          -3.8  ............         259.1  ............
    1953....................          76.1           3.4          -6.9  ............         266.0  ............
Eisenhower:
    1954....................          70.9           2.0          -4.8  ............         270.8  ............
    1955....................          68.4           1.2          -3.6  ............         274.4  ............
    1956....................          70.6           2.6          +1.7  ............         272.7  ............
    1957....................          76.6           1.8          +0.4  ............         272.3  ............
    1958....................          82.4           0.2          -7.4  ............         279.7  ............
    1959....................          92.1          -1.6          -7.8  ............         287.5  ............
    1960....................          92.2          -0.5          -3.0  ............         290.5  ............
    1961....................          97.7           0.9          -2.1  ............         292.6  ............
Kennedy:
    1962....................         106.8          -0.3         -10.3  ............         302.9           9.1
    1963....................         111.3           1.9          -7.4  ............         310.3           9.9
Johnson:
    1964....................         118.5           2.7          -5.8  ............         316.1          10.7
    1965....................         118.2           2.5          -6.2  ............         322.3          11.3
    1966....................         134.5           1.5          -6.2  ............         328.5          12.0
    1967....................         157.5           7.1         -11.9  ............         340.4          13.4
    1968....................         178.1           3.1         -28.3  ............         368.7          14.6
    1969....................         183.6          -0.3          +2.9  ............         365.8          16.6
Nixon:
    1970....................         195.6          12.3         -15.1  ............         380.9          19.3
    1971....................         210.2           4.3         -27.3  ............         408.2          21.0
    1972....................         230.7           4.3         -27.7  ............         435.9          21.8
    1973....................         245.7          15.5         -30.4  ............         466.3          24.2
    1974....................         269.4          11.5         -17.6  ............         483.9          29.3
Ford:
    1975....................         332.3           4.8         -58.0  ............         541.9          32.7
    1976....................         371.8          13.4         -87.1  ............         629.0          37.1
Carter:
    1977....................         409.2          23.7         -77.4  ............         706.4          41.9
    1978....................         458.7          11.0         -70.2  ............         776.6          48.7
    1979....................         503.5          12.2         -52.9  ............         829.5          59.9
    1980....................         590.9           5.8         -79.6  ............         909.1          74.8
Reagan:
    1981....................         678.2           6.7         -85.7        [-6.1]         994.8          95.5
    1982....................         745.8          14.5        -142.5       [-56.8]       1,137.3         117.2
    1983....................         808.4          26.6        -234.4       [-91.9]       1,371.7         128.7
    1984....................         851.8           7.6        -193.0       [+41.4]       1,564.7         153.9
    1985....................         946.4          40.6        -252.9       [-59.9]       1,817.6         178.9
    1986....................         990.3          81.8        -303.0       [-50.1]       2,120.6         190.3
    1987....................       1,003.9          75.7        -225.5       [+77.5]       2,346.1         195.3
    1988....................       1,064.1         100.0        -255.2       [-29.7]       2,601.3         214.1
Bush:
    1989....................       1,143.2         114.2        -266.7       [-11.5]       2,868.0         240.9
    1990....................       1,252.7         117.2        -338.6       [-71.9]       3,206.6         264.7
    1991....................       1,323.8         122.7        -391.9       [-53.3]       3,598.5         285.5
    1992....................       1,380.9         113.2        -403.6       [-11.7]       4,002.1         292.3
Clinton:
    1993....................       1,408.2          94.2        -349.3       [+54.3]       4,351.4         292.5
    1994....................       1,460.6          89.1        -292.3       [+57.0]       4,643.7         296.3
    1995....................       1,514.4         113.4        -277.3       [+15.0]       4,920.0         332.4
    1996....................       1,560.0         154.0        -261.0       [-16.3]       5,181.0         344.0
----------------------------------------------------------------------------------------------------------------
Note.--Historical Tables, Budget of the U.S. Government FY 1996; Beginning in 1962 CBO's 1995 Economic and
  Budget Outlook.


  Mr. HOLLINGS. You see, by subtracting last year's debt from this 
year's debt, the increase of the debt over the last fiscal year gives 
us a deficit of $261 billion. Immediately the question is: How do we 
all run around claiming that we have a $107 billion deficit? The truth 
of the matter is that we go and borrow from other trust funds.
  I ask unanimous consent at this particular point to have printed in 
the Record a list of those particular borrowings in trust funds.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Gross debt 1996...................................................5,181
Gross debt 1995...................................................4,920
                                                               ________
                                                               
    Difference......................................................261

                                                                   1996
Deficit.............................................................107
Trust Funds:
  Social Security....................................................66
  Medicare HI........................................................-4
  Medicare SMI.......................................................14
  Military, civilian, other..........................................42
                                                               ________
                                                               
    Total...........................................................118

Additional borrowing:
  Banking............................................................16
  Treasury loans.....................................................20
Real deficit........................................................261
Gross interest......................................................344

Note.--The HI part of Medicare is projected to go broke by 2001. Based 
on numbers reported by the Treasury Department.
  Mr. HOLLINGS. You will see that we had in 1995 a debt of $4.920 
trillion and a gross debt in 1996 of $5.181 trillion. So the difference 
was $261 billion. And the reason that we listed the $107 billion is 
because we borrowed $66 billion from Social Security, a net of some $10 
billion from Medicare, some $42 billion from the military and civilian 
retirement funds, banking and Treasury loans amounted to some $36 
billion, for a total of $154 billion.
  Trying to put Government on a pay-as-you-go basis has been my intent 
since I arrived here 30 years ago. I balanced the budget in South 
Carolina, and as Governor I received the first AAA credit rating of any 
Southern State, ahead of Texas on up through Maryland. I am proud of 
running Government on a pay-as-you-go basis.
  I worked with George Mahon back in 1968-69, and we balanced the 
budget under President Lyndon Johnson. Incidentally, we did not use 
Social Security trust funds. Even though he

[[Page S761]]

changed it to the unified budget, at this particular time the use of 
the funds was not necessary to balance the budget. So we have to credit 
President Johnson with the last balanced budget we have had in that 30-
year period.
  By the early 1980's, we realized that Social Security was going 
broke, and we came in here in a very formal fashion after a wonderful 
study by Alan Greenspan, the present Chairman of the Federal Reserve 
Board. We passed the Greenspan Commission program of tax increases in 
order to make Social Security solvent.
  Let me go right now to the Greenspan Commission report, and you will 
find therein that ``a majority of the members of the national 
commission recommends that the operations of the OASI, DI, HI, SMI, 
trust funds,'' which is Social Security trust funds, ``should be 
removed from the unified budget. The national commission believes that 
changes in Social Security programs should be made only for 
programmatic reasons,'' and not--not--Mr. President, for balancing the 
budget.
  When we debated this, we increased the taxes so that we would keep 
Social Security solvent until the distinguished occupant of the Chair 
was ready to receive his amount. This particular Senator is already 
receiving it. I am paying into Social Security. Senator Thurmond and I 
are also receiving Social Security. But, Mr. President, you are not 
going to receive it under the Domenici balanced budget to the 
Constitution. They absolutely prohibit it in the wording of this 
particular amendment.
  Let me show you exactly what I am saying. You come right now to the 
resolution, S.J. Res. 1, just put in a couple days ago, and you will 
find:

       Total receipts shall include all receipts of the U.S. 
     Government except those derived from borrowing. Total outlays 
     shall include all outlays of the U.S. Government except for 
     those for repayment of debt.

  That repeals section 13-301. And if there were any doubt about it, 
let us read section 1.

       Total outlays for any fiscal year shall not exceed total 
     receipts for that fiscal year.

  I repeat very calmly, very clearly: ``Total outlays for any fiscal 
year shall not exceed total receipts for that fiscal year--unless 
three-fifths of the whole Congress votes it.''
  So that means that the very intent of the Greenspan Commission, 
namely that surpluses be built up to protect the baby boomers into the 
next generation--that money, even if it were saved, even if the surplus 
were built up and not being expended, as is the case--that money under 
this particular constitutional amendment could not be expended. You 
would have to cut right straight across the board. And let me be 
specific on just exactly what the Greenspan Commission stated at that 
particular time. If you refer to statement 5 on page 2, they talk about 
for the ``75-year valuation period, ending with 2056.'' You can move on 
further. They refer to 75 years several times in the report. On page 5, 
statement 5, 75 years. They were trying to provide solvency to the year 
2056. In the 75 years ending in 2056, we were going to have a solvent 
surplus, a redeemable Social Security trust fund. And they recommended 
it be put off budget, not included in the unified budget, and not 
expended for other matters.

  Now, let us get to that particular point about the taxes Congress 
voted for in 1983, because when you continue doing what we are doing 
now, you violate the trust. Back in 1983 we did not vote an increase in 
the payroll taxes for defense or for housing or for welfare or for 
foreign aid or for the expenses of the President or the Congress. It 
was a trust fund. You would have never gotten a majority vote in this 
national Government, in this Congress of the United States; you would 
have never gotten an affirmative vote, as we did in a bipartisan 
fashion, to increase the payroll taxes for the other instances of 
Government. We all pledged that that money was going into Social 
Security, and to make sure that the trust was maintained we voted it 
formally in July 1990.
  I refer, as a past chairman of the Budget Committee, to the 
conference report of the Committee on the Budget on the Social Security 
Preservation Act, dated July 10, 1990. If you see, at that particular 
point on page 20, there was a Hollings motion to report the Social 
Security Preservation Act. It passed by a vote of 20 to 1--only the 
distinguished Senator from Texas, Mr. Gramm, voted against it. All of 
the other present Senators voted it out at that particular time.
  Then, of course, later on the floor of the U.S. Senate we had a vote 
of 98 to 2. It was on October 18, 1990. A bipartisan vote of 98 
Senators here said, Take Social Security and put it out as a trust 
fund, not a unified budget.
  It is very interesting to read in this particular Social Security 
Preservation Act, the language--and I want all the Members' attention 
to this, because this is the present chairman of the Budget Committee--
I ask unanimous consent for 5 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HOLLINGS. I refer, on page 29, to the additional views, by Mr. 
Domenici, the present chairman of our Budget Committee. I quote:

       I voted for Senator Hollings' proposal because I support 
     the concept of taking Social Security out of the budget 
     deficit calculation. But I cast this vote with reservations.

  And what was his reservation? It was that my provision was not strong 
enough. He wanted to build a firewall. He goes on to say:

       We need a firewall around those trust funds to make sure 
     the reserves are there to pay Social Security benefits in the 
     next century. Without a firewall or the discipline of budget 
     constraints, the trust funds would be unprotected and could 
     be spent on any number of costly programs.

  I ask unanimous consent that these additional views of the 
distinguished chairman, the Senator from New Mexico, be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Additional Views of Mr. Domenici

       It is somewhat ironic that the first legislative mark-up in 
     the 16 year history of the Senate Budget Committee produced a 
     bill that does not do what its authors suggest and, more 
     importantly, weakens the fiscal discipline inherent in the 
     Gramm-Rudman-Hollings budget law.
       I voted for Senator Hollings' proposal because I support 
     the concept of taking Social Security out of the budget 
     deficit calculation. But I cast this vote with reservations.
       The best way to protect Social Security is to reduce the 
     Federal budget deficit. We need to balance our non-Social 
     Security budget so that the Social Security trust fund 
     surpluses can be invested (by lowering our national debt) 
     instead of used to pay for other Federal operating costs. We 
     could move toward this goal without changing the unified 
     budget, a concept which has served us well for over twenty 
     years now.
       Changes in our accounting rules without real deficit 
     reduction will not make Social Security more sound. In fact, 
     we could make matters worse by opening up the trust funds to 
     unrestrained spending. Under current law, the trust funds are 
     protected by the budget process. Congress cannot spend the 
     trust fund reserves without new spending cuts or revenue 
     increases in the rest of the budget to meet Gramm-Rudman-
     Hollings deficit reduction requirements. If we take Social 
     Security out of GRH without any new protection for the trust 
     funds, Congress could spend the reserves without facing new 
     spending cuts or revenue increases in other programs. And if 
     we spend the trust fund reserves today, we will threaten the 
     solvency of the Social Security program, putting at risk the 
     benefits we have promised to today's workers.
       Of course, I also understand that we might be able to 
     restore some public trust by taking Social Security out of 
     the deficit calculation. Trust that we in Congress are not 
     ``masking the budget deficit'' with Social Security. That is 
     why I believe we should take Social Security out of the 
     deficit, but only if we provide strong protection against 
     spending the trust fund reserves. We need a ``firewell'' 
     around those trust funds to make sure the reserves are there 
     to pay Social Security benefits in the next century. Without 
     a ``firewall'' or the discipline of budget constraints, the 
     trust funds would be unprotected and could be spent on any 
     number of costly programs.
       Unfortunately, the Hollings bill does not protect Social 
     Security, which is why Senator Nickles and I offered our 
     ``firewall'' amendment, defeated by a vote of 8 to 13. The 
     amendment, drafted over the last six months by myself and 
     Senators Heinz, Rudman, Gramm, and DeConcini, included: a 60 
     vote point of order against legislation which would reduce 
     the 75 year actuarial balance of the Social Security trust 
     funds; additional Gramm-Rudman-Hollings deficit reduction 
     requirements in all years in which legislation lowered the 
     Social Security surpluses; and notification to Social 
     Security taxpayer on the Personal Earnings and Benefit 
     Estimate Statements (PEBES) each time Congress lowered the 
     reserves available to pay benefits to future retirees.
       With just one exception, the other side of the aisle voted 
     against this protection for Social Security beneficiaries.
       Furthermore, the Hollings bill says nothing about how or 
     when we will achieve balance in the non-Social Security 
     budget. The

[[Page S762]]

     bill simply takes Social Security out of the deficit 
     calculation. If enacted, the Hollings bill would require $173 
     billion in deficit reduction in 1991 to meet the statutory 
     GRH target (see attached table). Obviously, that is not going 
     to happen.
       I believe we need to extend Gramm-Rudman-Hollings to ensure 
     we have the discipline to achieve balance in the non-Social 
     Security portion of the budget. The Budget Summit negotiators 
     are discussing a goal of $450 to $500 billion in deficit 
     reduction over the next five years. Once we reach an 
     agreement, that plan should be the framework for extending 
     the GRH law.
       I offered a Sense of the Congress amendment during the 
     mark-up expressing this view. I offered this to put the 
     Hollings bill in some context.
       But the Democratic members of the Committee refused to 
     consider even an amendment acknowledging the facts about our 
     budget situation, rejecting my proposal by another 8 to 13 
     vote. In fact, the Chairman indicated that there was some 
     concern on his side of the aisle about extending the Gramm-
     Rudman-Hollings discipline. One might infer that, for some, 
     this mark-up was really an effort to kill Gramm-Rudman-
     Hollings.
       I am not sure what we accomplished in reporting out a bill 
     with no protection for Social Security and with no suggestion 
     of what we think should happen regarding the deficit targets. 
     I, for one, do not want to do anything which could endanger 
     Social Security or Gramm-Rudman-Hollings budget discipline. 
     At a minimum, I will offer the ``firewall'' amendment to 
     protect Social Security should the reported bill be 
     considered by the full Senate.
                                                 Pete V. Domenici.

                                       CBO JUNE BASELINE DEFICIT ESTIMATES
                                              [Dollars in billions]
----------------------------------------------------------------------------------------------------------------
                                                                       1991     1992     1993     1994     1995
----------------------------------------------------------------------------------------------------------------
Baseline deficit excluding RTC.....................................     $164     $158     $162     $160     $142
Baseline deficit including RTC.....................................      232      239      194      146      138
Social Security surplus............................................       73       83       95      109      124
Baseline deficit excluding RTC, and excluding Social Security            237      241      257      269      266
 surplus...........................................................
Baseline deficit including RTC, and excluding Social Security            305      322      289      255      262
 surplus...........................................................
GRH targets........................................................       64       28        0        0        0
Deficit reduction required to meet GRH targets from: Baseline            173      213      257      269      266
 deficit excluding RTC, and excluding Social Security surplus......
Baseline deficit including RTC, and excluding Social Security            241      294      289      255     262
 surplus...........................................................
----------------------------------------------------------------------------------------------------------------
Prepared by SBC Minority Staff, 23-Jul-90.


  Mr. HOLLINGS. So at that particular time, and when 98 percent of this 
U.S. Senate voted for it, we had, if you please, the distinguished 
chairman who was very much concerned that it was not enough protection.
  Now, here is what he writes today--you will see the difference here--
on January 13, 1997 to Republican colleagues, the statement of Senator 
Domenici to his Republican colleagues here earlier this month.
  Mr. President, I ask unanimous consent that letter be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:


                                                  U.S. Senate,

                                 Washington, DC, January 13, 1997.
       Dear Republican Colleagues: We are likely to debate early 
     in the 105th Congress the Constitutional amendment to require 
     a balanced federal budget. When that debate begins, some 
     Senators will push to remove Social Security from the 
     balanced budget requirement.
       I have always believed this effort to exempt Social 
     Security from the Constitutional amendment was more of a 
     diversion than anything else. It is raised to confuse the 
     debate and provide a rationale for some to oppose the effort.
       Nontheless, in preparation for debate in the Senate, I 
     thought it was important to review with you the consequences 
     of such a proposal so that we can all effectively debate it 
     using facts.
       One of the arguments made by those who push for excluding 
     Social Security from the balanced budget amendment is that 
     excluding Social Security will force us to ``save'' the 
     Social Security surpluses and therefore enhance fiscal 
     responsibility.
       This is only a very small part of the story.
       It is true that Social Security is currently running 
     surpluses, and these surpluses offset deficit spending in the 
     rest of the budget. If the balanced budget requirement 
     excludes Social Security, we would be required by the 
     Constitution to achieve balance in the ``on-budget'' portion 
     of the federal government--which is everything except Social 
     Security. The total, or unified, budget--which is the sum of 
     the ``on-budget'' programs and Social Security--would 
     therefore be in surplus in amounts equal to the Social 
     Security surpluses. Between 2002 and 2018, these surpluses 
     would total $1.2 trillion in 1996 dollars.
       It should go without saying that, when we are amending the 
     Constitution--now into its third century--we should take the 
     long view. And in the long run, these near term Social 
     Security surpluses will be overwhelmed by massive, long-term 
     Social Security deficits.
       These deficits are projected to total $9.3 trillion in 1996 
     dollars between 2019 and 2050, with a deficit of about $630 
     billion in 2050 alone, again in constant 1996 dollars.
       If it is true that excluding Social Security from the 
     balanced budget amendment would force us to ``save'' the 
     short-term surpluses, it is equally true that excluding 
     Social Security would allow us to run massive deficits equal 
     to the deficits that are projected to occur in the Social 
     Security trust funds beginning in 2019.
       These deficits would be real deficits--just like the 
     deficits we are experiencing today. And they would have the 
     same negative economic consequences: lower national savings, 
     higher interest rates, lower investment and productivity, and 
     sluggish growth. The only difference is that these deficits 
     would be much larger than anything we have ever experienced, 
     and therefore the consequences would be much worse.
       Ironically, these massive and unprecedented deficits would 
     be specifically sanctioned by an amendment to the 
     Constitution calling for ``balanced budgets'' excluding 
     Social Security. Congress could continue to pass so-called 
     ``balanced budgets'' while running up massive new debt which 
     would tremendously burden our economy.
       The attached chart shows graphically what I have just 
     described. ``On-budget'' would show a zero deficit throughout 
     the time period, as required by the Constitution. The total 
     budget, which includes Social Security, would show surpluses 
     for two decades or so followed by massive and unprecedented 
     deficits.
       It should be obvious from this analysis that, contrary to 
     assertions by some who want to exclude Social Security, such 
     a move will weaken fiscal responsibility, not strengthen it.
           Sincerely,
                                                 Pete V. Domenici.

  Mr. HOLLINGS. Mr. President, he said:

       It is true that Social Security is currently running 
     surpluses, and these surpluses offset deficit spending in the 
     rest of the budget.

  Well, heavens above, that is what we are trying to stop. We are not 
trying to pass a constitutional amendment as a subterfuge to the 
American people. He comes now and says we, who want to protect Social 
Security--as he voted to do in the Budget Committee, and provided in 
his formal views in the Budget Committee report, and thereupon, as he 
did on the floor of the U.S. Senate--are using the surpluses to 
``offset deficit spending in the rest of the budget.'' That is a 
gimmick. That is a subterfuge. He expresses concern because we might 
build up deficits for Social Security in the next century. How about 
our deficit to Social Security this minute? Spending $66 billion, this 
past year over $70-some billion, we owe Social Security this minute 
$570 billion and by the year 2002 we will owe it $1 trillion.
  Who is going to raise taxes $1 trillion to make Social Security 
solvent?
  I ask unanimous consent to have printed in the Record, with this 
limited time, the Report of the Center on Budget and Policy Priorities.
  There being no objection, the report was ordered to be printed in the 
Record, as follows:

           The Balanced Budget Amendment and Social Security

       In recent years, Congress has considered two versions of 
     the balanced budget amendment. The version supported by the 
     Republican Congressional leadership (herein termed the 
     ``Leadership version'') requires the ``unified budget'' to be 
     balanced each year, including Social Security. The other 
     version, which Senators Wyden, Feinstein, Dorgan and others 
     introduced in the last Congress, requires the budget 
     exclusive of Social Security to be in balance.
       The version that includes Social Security in the unified 
     budget poses serious dangers for the Social Security system. 
     It also is inequitable to younger generations, as it would 
     likely cause those who are children today to be saddled with 
     too heavy a tax load when they reach their peak earnings 
     years. The Wyden/Feinstein version does not pose these 
     problems.

                               background

       In coming decades, Social Security faces a demographic 
     bulge. The baby boomers are so numerous that when they 
     retire, the ratio of workers to retirees will fall to a low 
     level.
       This poses a problem because Social Security has 
     traditionally operated on a ``pay-as-you-go'' basis. The 
     payroll taxes contributed by today's workers finance the 
     benefits of today's retirees. Because there will be so many 
     retirees when the baby boomers grow old, however, it will be 
     difficult for the workers of that period to carry the load 
     without large increases in payroll taxes.
       The acclaimed 1983 bipartisan Social Security commission 
     headed by Alan Greenspan recognized this problem. It moved 
     Social Security from a pure ``pay-as-you-go'' system to one 
     under which the baby boomers would contribute more toward 
     their own retirement. As a result, the Social Security system 
     is now building up surpluses. By 2019, these surpluses will 
     equal $3 trillion. After that, as the bulk of the baby boom 
     generation moves into retirement, the system will

[[Page S763]]

     draw down the surpluses. This is akin to what families do in 
     saving for retirement during their working years and drawing 
     down their savings when they retire.
       This approach has important merits. It promotes 
     generational equity by keeping the burden on younger 
     generations from becoming too high. In addition, if the 
     Social Security surpluses were to be used in the next two 
     decades to increase national saving rather than to offset the 
     deficit in the rest of the budget, that would likely result 
     in stronger economic growth, which in turn would better 
     enable the country to afford to support the baby boomers when 
     they reach their twilight years.
       To pursue this approach, the tasks ahead are to reduce 
     significantly or eliminate the deficit in the non-Social 
     Security budget so that the surpluses in the Social Security 
     trust funds contribute in whole or large part to national 
     saving, and to institute further reforms in Social Security 
     to restore long-term actuarial balance to the Social Security 
     system. Restoring long-term balance will almost certainly 
     entail a combination of building the surpluses to somewhat 
     higher levels and reducing somewhat the benefits paid out 
     when the boomers retire.


                 The Leadership BBA and Social Security

       Unfortunately, the balanced budget amendment pushed by the 
     Leadership would undermine this approach to protecting Social 
     Security and promoting generational equity. Under this 
     version of the BBA, total government expenditures in any 
     year--including expenditures for Social Security benefits--
     could not exceed total revenues collected in the same year. 
     The implications of this requirement for Social Security are 
     profound. It would mean that the Social Security surpluses 
     could not be used to cover the benefit costs of the baby boom 
     generation when it retires. The benefits for the baby boom 
     generation would instead have to be financed in full by the 
     taxes of those working in those years. The Leadership version 
     thus would eviscerate the central achievement of the 
     Greenspan commission.
       The reason the Leadership version would have this effect is 
     that even though the Social Security trust funds would have 
     been accumulating large balances, drawing down those balances 
     when the baby boomers retire would mean that the trust funds 
     were spending more in benefits in those years than they were 
     taking in, in taxes. Under the Leadership version, that would 
     result in impermissible deficit spending.
       By precluding use of the Social Security surpluses in the 
     manner that the 1983 legislation intended, the Leadership 
     version would be virtually certain to precipitate a massive 
     crisis in Social Security about 20 years from now, even if 
     legislation had been passed in the meantime putting Social 
     Security in long-term actuarial balance. Since the $3 
     trillion surplus could not be used to help pay the benefits 
     of the baby boom generation, the nation would face an 
     excruciating choice between much deeper cuts in Social 
     Security benefits that were needed to make Social Security 
     solvent and much larger increases in payroll taxes than would 
     otherwise be required. The third and only other allowable 
     alternative would be to finance Social Security deficits in 
     those years not by drawing down the Social Security surplus 
     but instead by slashing the rest of government so severely 
     that it failed to provide adequately for basic services, 
     potentially including the national defense.
       Given the numbers of baby boomers who will be retired or on 
     the verge of retirement in those years, deep cuts in Social 
     Security benefits are not likely at that time. Thus, under 
     the leadership BBA, it is almost inevitable that younger 
     generations will face a combination of sharp payroll tax 
     increases and deep reductions in basic government services.
       For these reasons, the Leadership BBA is highly inequitable 
     to younger generations. Aggravating this problem, the 
     Leadership version would undermine efforts to pass Social 
     Security reforms in the near future. Why should Congress and 
     the President bother to make hard choices now in Social 
     Security that would build the surpluses to more ample 
     levels if these surpluses can't be used when the boomers 
     retire? Under the leadership BBA, there is no longer any 
     reason to act now rather than to let Social Security's 
     financing problems fester.

      leadership bba also poses other problems for social security

       Under the Leadership version, reductions in Social Security 
     could be used to help Congress and the President balance the 
     budget when they faced a budget crunch. This could lead to 
     too little being done to reduce or eliminate deficits in the 
     non-Social Security part of the budget and unnecessary 
     benefit cutbacks in Social Security.
       At first blush, that may sound implausible politically. But 
     the balanced budget amendment is likely to lead to periodic 
     mid-year crises, when budgets thought to be balanced at the 
     start of a fiscal year fall out of balance during the year, 
     as a result of factors such as slower-than-expected economic 
     growth. When sizable deficits emerge with only part of the 
     year remaining, they will often be very difficult to address. 
     Congress and the President may be unable to agree on a 
     package of budget cuts of the magnitude needed to restore 
     balance in the remaining months of the year. Congress also 
     may be unable to amass three-fifths majorities in both 
     chambers to raise the debt limit and allow a deficit.
       In such circumstances, the President or possibly the courts 
     may feel compelled to act to uphold the Constitutional 
     requirement for budget balance. In documents circulated in 
     November 1996 explaining how the amendment would work, the 
     House co-authors of the amendment--Reps. Dan Schaefer and 
     Charles Stenholm--write that in such circumstances, ``The 
     President would be bound, at the point at which the 
     `Government runs out of money' to stop issuing checks.'' This 
     would place Social Security benefits at risk.

                      the wyden/feinstein approach

       The Wyden/Feinstein approach resolves the problems the 
     Leadership version creates in the Social Security area. It 
     reinforces the 1983 Social Security legislation rather than 
     undermining that legislation. It does so both by requiring 
     that the surpluses in the Social Security system contribute 
     to national saving rather than be used to finance deficits in 
     the rest of the budget and by enabling the surpluses to be 
     drawn down when the baby boomers retire.
       The Wyden/Feinstein amendment thus improves 
     intergenerational equity rather than undermining it. It 
     ensures the surpluses will be intact when they are needed, 
     rather than lent to the government for other purposes in the 
     interim.
       The amendment also ensures that Social Security benefits 
     will not be cut--and Social Security checks not placed in 
     jeopardy--if the balanced budget amendment leads to future 
     budget crises and showdowns. However those crises would be 
     resolved, Social Security would not be involved, because cuts 
     in Social Security would not count toward achieving budget 
     balance.

  Mr. HOLLINGS. I will read just one paragraph from this report and 
then my statement will be complete.
  Unfortunately, the balanced budget amendment pushed by the leadership 
would undermine the approach to protect Social Security in promoting 
generational equity. Under this version of the balanced budget 
amendment, total Government expenditures in any year, including 
expenditures for Social Security benefits, could not exceed total 
revenues collected in the same year. The implications of this 
requirement for Social Security are profound. It would mean that Social 
Security surpluses could not be used to cover the benefit costs of the 
baby boom generation when it retires. The benefits for the baby boom 
generation would, instead, have to be financed in full by the taxes of 
those working in those years. The leadership version thus would 
eviscerate the central achievement of the Greenspan Commission.
  Mr. President, we have some 33 cosponsors to Senate Joint Resolution 
1, who now want to eviscerate the Social Security protections they 
voted for earlier. I have counted them. The majority of these 
cosponsors were here in 1990 when we voted to take it off budget--the 
others were not here in 1990 when this vote was taken, but 33 of these 
cosponsors were here.
  We wrote a letter just a few years ago to Senator Dole, some five 
Members on this side. It was a letter dated March 1, 1995.
  I ask unanimous consent that letter be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  U.S. Senate,

                                    Washington, DC, March 1, 1995.
     Hon. Robert J. Dole,
     Majority Leader, U.S. Senate,
     Washington, DC.
       Dear Mr. Leader: We have received from Senator Domenici's 
     office a proposal to address our concerns about using the 
     Social Security trust funds to balance the Federal budget. We 
     have reviewed this proposal, and after consultations with 
     legal counsel, believe that this statutory approach does not 
     adequately protect Social Security. Specifically, 
     Constitutional experts from the Congressional Research 
     Service advise us that the Constitutional language of the 
     amendment will supersede any statutory constraint.
       We want you to know that all of us have voted for, and are 
     prepared to vote for again, a balanced budget amendment. In 
     that spirit, we have attached a version of the balanced 
     budget amendment that we believe can resolve the impasse over 
     the Social Security issue.
       To us, the fundamental question is whether the Federal 
     Government will be able to raid the Social Security trust 
     funds. Our proposal modifies those put forth by Senators Reid 
     and Feinstein to address objections raised by some Members of 
     the Majority. Specifically, our proposal prevents the Social 
     Security trust funds from being used for deficit reduction, 
     while still allowing Congress to make any warranted changes 
     to protect the solvency of the funds. The prior language of 
     the Reid and Feinstein amendments was not explicit that 
     adjustments could be made to ensure the soundness of the 
     trust funds.
       If the Majority Party can support this solution, then we 
     are confident that the Senate

[[Page S764]]

     can pass the balanced budget amendment with more than 70 
     votes. If not, then we see no reason to delay further the 
     vote on final passage of the amendment.
           Sincerely,
     Byron L. Dorgan.
     Ernest F. Hollings.
     Wendell H. Ford.
     Harry M. Reid.
     Dianne Feinstein.

  Mr. HOLLINGS. Look, I have cosponsored a balanced budget amendment to 
the Constitution. I voted for a balanced budget amendment to the 
Constitution. But I am not going to, by gosh, play tricks with the 
Social Security trust fund and repeal the law that I worked so 
diligently to have enacted and signed, on November 5, 1990, by George 
Walker Herbert Bush into law. So we said: Not one vote of Senator 
Hatfield from Oregon, here, Mr. Leader Dole, you can pick up five 
votes.
  I cannot speak for the other four this morning. I have not checked 
with them. But he can get the vote of this particular Senator from 
South Carolina, if they write the constitutional amendment so as not to 
violate the trust that we so formally voted into law.
  Mr. FORD. Mr. President, if there ever was a statement that the 
American people should listen to, that was just given by my 
distinguished colleague from South Carolina. He is here with 
institutional memory about what transpired and why--the intent. Now we 
find ourselves where this couple of words, balance the budget, 
supersedes all the work that has been done, cuts it off at its knees, 
so to speak, the Social Security trust fund. I think the people of this 
country, once they understand what the Senator from South Carolina, Mr. 
Hollings, has just said, they will not be so interested in passing this 
particular balance the budget amendment.
  I am one of those the other side criticized last time, I am one of 
the six. I changed my vote from balance the budget to against it. Why 
wouldn't I? Listen to Senator Hollings, that is the reason I changed my 
vote. I have a responsibility to the seniors. We promised them we would 
not cut it or increase it to balance the budget, and we voted 83 to 16 
last year saying that. That was just last year. Was that a political 
gimmick? Was that a campaign slogan? Or did we really mean it? I hope 
83 of us really meant it. But we voted 83 to 16, saying we shall not 
raise or cut the Social Security in order to balance the budget.
  I do not know where we are coming from. You may fool all of the 
people some of the time; you can even fool some of the people all the 
time; but you can't fool all of the people all the time. So what we are 
trying to do here now is fool the American people, saying to balance 
the budget it is going to give tax cuts, it is going to give interest 
rates cuts, it is going to do all these fabulous things. But we turn 
right around and break our word to the American people.
  During the last debate on a balanced budget amendment, the other side 
of the aisle proposed not touching the Social Security trust fund until 
the year 2008. Don't touch it until 2008. That was a tacit admission 
that the Republicans planned to utilize the trust funds--and I make 
that plural--to balance the budget.
  As my distinguished friend from South Carolina said, the money in the 
Social Security surplus, $71 billion in this year alone and 
accumulating to nearly $3 trillion by the year 2019, will be too 
tempting, Mr. President, for a Congress bound by the Constitution to 
balance the budget.
  Once the Constitution is amended to require that, and I quote--and 
you heard it from the Senator from South Carolina--``total outlays for 
any fiscal year shall not exceed total receipts for that fiscal year.''
  Social Security, I say to my friends, is placed in imminent danger, 
and it is likely that any attempt to exclude Social Security trust 
funds by implementing legislation--statutory language, that is--would 
be deemed then unconstitutional.
  So, protecting the Social Security trust fund is not just a seniors 
issue. We promised not to reduce benefits--voted here for current 
Social Security beneficiaries--in order to balance the budget. We are 
just not going to do it.
  But what about future retirees? Using the trust fund to offset other 
spending undermines generational equity, because under this scenario, 
total Government expenditures in any year, including expenditures for 
Social Security benefits, could not exceed total revenues collected in 
the same year. That would mean that Social Security surpluses could not 
be used to cover the benefit costs of the baby-boom generation when it 
retires.
  We raised the taxes in 1983. We made a difference, so we would be 
able to cover. So now we say we can't expend more than we take in, and 
the trust fund is there so we can do it. So, therefore, we break our 
word to generations yet to come, as the Senator from South Carolina 
said to the occupant of the chair. The benefits, instead, would have to 
be financed in full by the taxes of those working in those years.
  Using the Social Security surplus to pay for other spending programs 
would not only bankrupt Social Security, but would leave a system that 
needs long-term reform in order to meet the growth of future retirees 
virtually worthless. We need to reform and protect the Social Security 
trust fund in order to fulfill our contract of retirement security to 
working Americans.
  You make a dollar and they take out your Social Security trust fund 
payments--all of it. Excluding the Social Security trust fund from a 
constitutional amendment to balance the budget is an important first 
step in fulfilling our contract with our working Americans and with 
those who want us to balance the budget.
  Mr. President, I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.
  Mr. HOLLINGS. Mr. President, there are those in public service who 
feel that since posterity can do nothing for them, they see no reason 
to do anything for posterity. They look to the next election rather 
than the next generation, and this is the contrary for that.
  We are not vying for the AARP or really the senior citizens. You 
don't get any letters on what we are talking about this morning from 
the AARP or any of those other seniors because they got their money. 
They know that surpluses are there right now. They are worried about 
Medicare, but they are not worried about this one.
  The youngsters, the baby boomers that we are trying to look out for, 
the unborn that we are looking out for now have been told they are 
never going to get it, so they are all running around with IRAs and all 
these other kinds of things totally distorting a social insurance 
program.
  Right to the point, and then I will sit down. We are doing this for 
the trust of the baby boomers, for the yet unborn in the next 
generation, not for the senior citizens right now. This is not a 
political thing for senior citizens or gimmick or tactic, as they call 
it in this morning's Washington Post. This is truth in budgeting and 
maintaining the trust that we all voted for 98 to 2.
  Mr. REID. Mr. President, I say to all those within the sound of my 
voice that the two men whom you have just heard are people with an 
institutional memory, as Senator Ford has spoken. That is true. But 
also, these two Senators are gentlemen who have balanced budgets in 
their own States. They are Governors from two of the outstanding States 
in the Union, South Carolina and Kentucky. They know what they are 
talking about in truth in budgeting.
  I am very happy to have been able to sit on the floor and listen to 
these two statements made by these two gentlemen who understand what we 
are talking about when we talk about balanced budgets. Of course, the 
three of us--the Senator from Kentucky, the Senator from South 
Carolina, the Senator from Nevada--support a balanced budget. We 
support a constitutional amendment to balance the budget, but we want 
to make sure it is a truth-in-budgeting balanced budget amendment, one 
that protects senior citizens and, most importantly, protects the real 
contract with America. That is the one that was developed some 50 years 
ago during the Great Depression when Social Security was first enacted.
  We have an obligation to make sure that the moneys paid into that 
trust fund by the employers and employees is not used as a gimmick to 
balance the budget. Of course, it is easy to balance the budget if you 
use the hundreds of billions of dollars in the Social Security trust 
fund. But let's do it the hard way. Let's do it the right way. And

[[Page S765]]

that is why, Mr. President, I was so elated, felt so good about the 
fact that in the other body, there are Members of the House of 
Representatives in both parties who are talking about maybe those few 
straggling voices in the Senate who last year were able to talk about 
the importance of the Social Security trust fund had something. Maybe 
we should look at what has gone on in the House when they pell-mell 
voted for a constitutional amendment and, in the process, said that we 
are going to destroy Social Security.

  I think it is good that the other body is talking about having a vote 
on a constitutional amendment that will protect Social Security. That 
is all that we are asking. That seems fair. It seems, if we are going 
to balance the budget, we should do it the right way.
  Finally, let me say this. Our position has been strengthened during 
the past year. It has been strengthened because the bipartisan 
commission to study Social Security has reported back, and they have 
said a number of things, but for purposes of this statement, I think 
the most important they have said is that all 13 members believe that 
all or part of the Social Security trust fund moneys should be invested 
in the private sector in some way. I say, Mr. President, how can those 
moneys be invested if there are not any? It is impossible.
  So, if the 13 members believe some of the Social Security trust fund 
moneys should be invested in the private sector, then our 
constitutional amendment, which we are going to introduce today, which 
says we want a balanced budget but we want to do it excluding Social 
Security, then I think we have the support of those 13 members of the 
bipartisan commission.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, I have, in the last few minutes, secured 
what I observed last evening on television by a statement by the most 
distinguished of distinguished Senators--there is none more 
responsible--the distinguished Senator from Utah, Senator Orrin Hatch.
  I now have his news release, Judiciary Committee, dated January 21, 
1997.
  I ask unanimous consent that the statement be printed in its entirety 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

        Balanced Budget Amendment Legislative Priority for Hatch

       Washington, D.C. Balancing the budget topped Sen. Orrin 
     Hatch's legislative agenda for the 105th Congress as 61 
     senators joined him today in introducing a constitutional 
     amendment requiring the President and Congress to balance the 
     federal budget and put an end to the growing addiction to 
     deficit spending.
       ``The Balanced Budget Amendment will again be S.J. Res. 1 
     and that is appropriate because it is the single most 
     important piece of legislation that will be voted on this 
     Congress,'' Hatch said. ``The idea of a Balanced Budget 
     Amendment is not new--unfortunately, neither is the problem 
     it is designed to solve,'' Hatch said. ``Since the balanced 
     budget in 1969, Congress has promised balanced budgets and 
     failed to deliver them. With our national debt at nearly $5.3 
     trillion, we still have people telling us we do not need the 
     Balanced Budget Amendment. The truth is the only way to 
     change Washington's addiction to spending other people's 
     money is to use the pressure of a constitutional amendment 
     requiring a balanced budget.''
       ``Last Congress, when the Amendment fell a mere one vote 
     short of passage in the Senate, I vowed that we would be back 
     to try and pass this amendment and put America back on the 
     course of fiscal responsibility,'' the senator added. ``Every 
     one of the 55 Republicans in the Senate are original 
     cosponsors and we are joined by seven strong Democrats giving 
     us 62 original cosponsors. If only five other senators join 
     us we will have the votes necessary. If everyone keeps their 
     promises to their constituents and votes as they said they 
     would before the November elections, we will pass the 
     balanced budget amendment.''
       Hatch noted that opponents to a constitutional amendment 
     have tried and will continue to try to divert attention from 
     the pressing issue of controlling our nation's debt. ``The 
     fact is, contrary to opponent's scare tactics, the balanced 
     budget amendment would ensure the long term stability of 
     social security and other retirement investments of every 
     American, as well as long term growth of the U.S. economy.''
       The amendment introduced in the Senate today is the same as 
     the one introduced in the last Congress. It requires a 
     balanced federal budget by the year 2002. Any amendment to 
     the Constitution needs a two-thirds approval in both houses 
     of Congress as well as ratification by three-fourths of the 
     states.
       Hatch held hearings on the amendment Friday in the Senate 
     Judiciary Committee and will convene a second hearing on the 
     amendment Wednesday, January 22, 1997 at 10:00 a.m.


        Cosponsors of S.J. Res. 1--The Balanced Budget Amendment

       Mr. Hatch (for himself and Mr. Lott, Thurmond, Craig, 
     Nickles, Domenici, Stevens, Roth, Bryan, Kohl, Grassley, 
     Graham, Specter, Baucus, Thompson, Breaux, Kyl, Moseley-
     Braun, DeWine, Robb, Abraham, Ashcroft, Sessions, D'Amato, 
     Helms, Lugar, Chafee, McCain, Jeffords, Warner, Coverdell, 
     Cochran, Hutchison, Mack, Gramm, Snowe, Allard, Brownback, 
     Collins, Enzi, Hagel, Hutchinson, Roberts, Smith (OR), 
     Bennett, Bond, Burns, Campbell, Coats, Faircloth, Frist, 
     Gorton, Grams, Gregg, Inhofe, Kempthorne, McConnell, 
     Murkowski, Santorum, Shelby, Smith (NH), and Thomas.


                 Text of the Balanced Budget Amendment

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that 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 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 whole 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 waived for 
     any fiscal year in which the United 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 except those derived from borrowing. Total 
     outlays shall include all outlays of the United States 
     Government except for those for repayment of debt principal.
       ``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. HOLLINGS. I quote from this release.

       Hatch noted that opponents to a constitutional amendment 
     have tried and will continue to try to divert attention from 
     the pressing issue of controlling our Nation's debt. The fact 
     is, contrary to the opponents' scare tactics, the balanced 
     budget amendment would ensure the long-term stability of 
     Social Security and other retirement investments of every 
     American as well as long-term growth of the United States 
     economy.

  Absolutely the contrary is the case. Absolutely the contrary is the 
case. You are not going to ``ensure the long-term stability of Social 
Security'' with this particular amendment.
  This is the Senator that put it into the Budget Committee back in 
July 1990 where we voted 20 to 1 to protect Social Security. Thereupon, 
on the floor of this Senate, 98 Senators--the distinguished Presiding 
Officer was not present at that particular time--but 98 Senators voted 
in the affirmative, section 13-301 of the Budget Act signed into law by 
President Bush. That is what section 1 and section 7 of Senate Joint 
Resolution 1 does--vitiate, or to use the language that I included from 
the particular quote, ``eviscerate the intent of the Greenspan 
Commission.'' All this, after I worked to put into the law a provision 
saying ``Thou shalt not use Social Security trust funds to obscure the 
size of the deficit.''
  When you use that $107 billion deficit for last year's figure, that 
is exactly what you are doing. So this is not a scare tactic.
  Unfortunately, the media has picked up on the diversion because, as 
you can see this morning's paper here, our friend Eric Pearman here 
says, ``President Clinton intends to raise concerns about the potential 
impact of the amendment on the Social Security trust fund, a tactic 
Democrats used last time to defeat the amendment.''
  This is no tactic. I have not talked to President Clinton about it. 
In a way, I do not welcome his joining in because it tries to make it a 
partisan issue. It was bipartisan, 98 votes of 100 in this Senate when 
we put into law section 13-301. It was a Republican President

[[Page S766]]

that signed that into law. So it was not any Democratic tactic. It is 
truth in budgeting. And that is what we have a difficult time with.
  You can see again in here--and I use the quote from our distinguished 
colleague from Utah:

       Last Congress when the amendment failed by a mere one vote 
     of passage in the Senate, I vowed that we would be back to 
     try and pass this amendment and put America back on the 
     course of fiscal responsibility,

the Senator added.

       Every one of the 55 Republicans in the Senate are original 
     cosponsors, and we are joined by 7 strong Democrats, giving 
     us 62 original cosponsors. If only five other Senators join 
     us, we will have the votes necessary. If everyone keeps their 
     promises to their constituents and votes as they said they 
     would before the November elections, we will pass a balanced 
     budget amendment.

  Mr. President, it wasn't one vote, it was five votes. And we had the 
five votes. We included it. I have that letter, Mr. President, for the 
Congressional Record. Here it is, dated March 1, 1995. We said at that 
particular time to Leader Dole, five Democratic Senators. It didn't 
fail by one vote, as they keep on saying. They had every opportunity to 
pass it, and they have every opportunity, I think, right at this moment 
to pass it. They say ``If everyone keeps their promises to their 
constituents,'' but they want to eviscerate the commitment we have made 
to Social Security. When they voted in 1990, that was a promise to 
their constituents in law. It is formalized in law, section 13301 of 
the Budget Act. That is what we are trying to do, keep our promises to 
our constituents. That is what we are doing, trying to keep our promise 
to the Greenspan Commission. When we raised the taxes, we didn't raise 
the taxes for foreign aid and welfare and food stamps. We raised the 
taxes for the Social Security trust fund--not for the seniors today, 
but as the Greenspan Commission report says, for the baby boomers in 
the next century. That is what we are trying to do. That is why we are 
having such a difficult time.
  The media is looking only at today's politics, and the seniors could 
not be less interested in today's politics. They are concentrating on 
Medicare and their health costs. They know there is a big surplus that 
is already built up. So they are going to get their Social Security 
checks. But it's the baby boomers who are now misled into IRA's and 
investments in the stock market and everything else, because they 
almost believe, to a man or woman, that they are never going to get 
that money. And we continue to make sure they don't get that money by 
passing Senate Joint Resolution 1.
  Now, I have talked to the leadership and said, ``Turn it around and 
make certain that we can carry out the trust that we instituted into 
law back in 1990.'' We voted for this again last year in another vote 
on the floor of the U.S. Senate by an overwhelming 86 votes. If we can 
carry out that promise to our constituents, you've got the Senator from 
South Carolina.
  I believe in a balanced budget amendment to the Constitution. I have 
cosponsored it. I have introduced it. I have voted for it. But not with 
this situation here, where having passed it into law, I am supposed to 
vote to repeal my own trust and repeal my own law that I worked so hard 
on the Budget Committee to get.
  We had a conscience in those days. We had a conscience. Now, it's all 
gimmickry, it's all pollster politics, unfortunately, on the floor of 
the National Government. Anything that is momentary, we fall. And right 
to the point, we are not really taking care of the needs of America.
  I was on a panel--since we have a few moments--recently of 18 
distinguished Senators and myself, and the question was, how could 
President Clinton make his mark now in history during the next 4 years? 
And the conventional wisdom right across the board with this particular 
panel, Mr. President, was that, look, there is not going to be any 
honeymoon. The Democrats are after Gingrich, and Gingrich was after 
Gingrich. So any honeymoon would be short-lived. Very little would 
happen on the domestic front here in the next 4 years, just a little 
incremental adjustment perhaps on Medicare, a little bit on welfare. 
But the President's opportunity to make his mark in history was in 
foreign policy. They recommended--and it was a bipartisan group--what 
we ought to do is get computers to the third world, get technology to 
the emerging nations. That would make his mark in history.
  When you drive home today, go down by Foggy Bottom, as I do, by the 
Watergate, and you will see the homeless lying on the streets of 
America. You will find this city in crime. You will find the children 
on drugs. You will find that schools are down, illiteracy is up. You 
will find the infrastructure, roads and bridges, haven't been repaired 
in 20 years. And those who are lucky enough to have a job are making 
less than what they were making some 20 years ago. As we work on that 
NIH budget, the medical brains of America come with these research 
grants, but 80 percent of the grants which are approved go unfunded. 
Medical and other research is languishing in this land. And here during 
this 4 years, we don't have a war, inflation is down, and the deficit 
is coming down, to President Clinton's credit.

  The economy, generally speaking--the stock market--is strong. So this 
is a beautiful opportunity. With the fall of the Berlin Wall, where we 
had to sacrifice our economy heretofore during that 50-year period, we 
can now rebuild that economy. We can come in now and flesh out the 
meaningful programs that save us money in the long run. There is no 
question that only 50 percent of those on Women, Infants, and Children, 
Head Start, and title I for the disadvantaged are funded here at the 
Federal level. Rather than Goals, let's flesh out monetarily those 
programs; let's get revenue sharing back rather than Goals 2000; give 
the communities the revenue sharing to rebuild our educational system, 
the roadbeds of our railroads, and the infrastructure of our highways 
and airports. Instead, the $50 billion is going to be frittered away 
with pollster politics: a little here on capital gains, a little bit 
here for families, a little bit over here for some higher education. We 
can do way more on Pell grants than tax cuts for higher education. We 
haven't fleshed that out for those eligible.
  We have a wonderful opportunity, but instead I am afraid we are on 
track now to get ourselves reelected. We are using the Government to 
get ourselves reelected. We are not responding to the needs, and the 
kick-off of this particular measure is totally political--Senate Joint 
Resolution 1, the balanced budget amendment to the Constitution. I will 
cut the spending with you. We will withhold on programs with you. We 
will increase taxes, if you can get some votes around here. My plan 
would not only reduce the deficit, it would reduce the trade deficit.
  We are not willing to pay for what we are getting. That is the truth 
here in America.
  Mr. DASCHLE. Mr. President, today I join with Senator Dorgan and 
others in introducing a balanced budget amendment to the Constitution. 
The amendment we are offering is identical to the one scheduled for 
markup in Judiciary Committee with one essential difference: Our 
amendment would protect Social Security by prohibiting the counting of 
Social Security trust funds toward balancing the budget.
  The amendment to be considered in Judiciary Committee is likely to be 
the same as the one offered last year. It simply requires a balanced 
budget by a date certain without any consideration of the effect that 
it would have on Social Security.
  We offered the amendment we are introducing today as an alternative 
in the last Congress. If the proponents of the Republican leadership 
amendment had accepted this single change, the amendment would have 
been sent to the States 2 years ago with resounding bipartisan support. 
Instead, they insisted on an amendment that in the year it claims to 
balance the budget will actually have a $104 billion deficit, masked by 
Social Security trust funds.
  We believe to enshrine the practice of using Social Security funds as 
a part of the calculation for a balanced budget is just wrong. So our 
amendment would simply delete the Social Security trust funds from the 
calculations in determining whether the budget is balanced. It would 
ensure that, for all perpetuity, Social Security will not be abused 
again to balance the budget. Therefore, again this year, we will offer 
a balanced budget amendment to the Constitution that maintains a 
firewall between Social Security and rest of budget.
  Why must Congress exclude Social Security? Looking back on the 
history

[[Page S767]]

of the program, it becomes clear that to do otherwise would perpetuate 
a massive fraud on the American taxpayer. In 1977, and again in 1983, 
Congress took bold steps to shore up Social Security with major 
legislation to restore solvency to the program. The intention was to 
forward fund the anticipated retirement needs of future generations, 
especially the large cohort of so-called baby boomers.
  The result was successful in terms of generating large surpluses. 
This year alone, the Government collects $72 billion more than it pays 
in benefits. Since 1983, the trust funds have developed reserves of 
over $550 billion.
  This experiment has been far less successful than intended in terms 
of setting those surpluses aside. Instead of being saved to meet the 
retirement needs of future generations, the surplus revenues are being 
spent as soon as they are collected to finance the deficits being run 
up in the rest of the budget. In other words, Social Security payroll 
taxes of hard-working Americans are being used to pay for programs 
having absolutely nothing to do with Social Security.

  Mr. President, this practice must end. Congress should balance the 
budget without counting Social Security so that those reserves will be 
there when they are needed. Consider the magnitude of this problem. 
Over the next 6 years, by 2002, surpluses will total $525 billion. In 
2002, when the budget supposedly balances, Congress will rely on $104 
billion in Social Security revenues.
  Raiding the trust funds borrows from the future and places the burden 
on our children and grandchildren. Congress must not enshrine this 
practice in the Constitution.
  If we adopt a balanced budget amendment without excluding Social 
Security, it would have the effect of reversing an earlier decision by 
Congress to take the program off-budget. In 1990, the Senate voted 98 
to 2 for an amendment by the distinguished Senator from South Carolina 
[Mr. Hollings] to take Social Security off-budget. The amendment 
proposed in the Judiciary Committee this year breaks that promise: 
Social Security could be used to pay for any other spending Congress 
chooses.
  If we do not properly craft a balanced budget amendment, the 
retirement security of today's workers and future retirees will be at 
risk. By 2020, the trust fund reserves will total about $3 trillion. At 
that time, however, when those reserves are needed, two circumstances 
will make them unavailable. First, unless we balance the budget not 
counting Social Security and actually build real reserves, no funds 
will be available in the future to draw down. Second, and equally 
importantly, if Social Security outlays are counted under a balanced 
budget amendment, any funds that are paid out from a reserve will have 
to be offset in the same year with other tax increases or spending 
cuts.
  Mr. President, this second point deserves emphasis. Unless Social 
Security is exempted from a balanced budget amendment, the reserves now 
accumulating through the tax contributions of America's work force will 
not be available as promised for retirees. The balanced budget 
amendment would make a mockery of the supposed reason for the high 
payroll taxes currently endured by today's workers. Even if those funds 
were saved as they should be, they could not be used to pay for Social 
Security benefits in the future.
  Thus, the balanced budget amendment proposed in the Judiciary 
Committee condones the continued reliance on payroll taxes to finance 
general government expenditures. Keep in mind that Social Security is 
funded by a 12.4-percent payroll tax. It is collected only on the first 
$62,700 of income. This arrangement forces low- and moderate-income 
taxpayers to pay a larger share of their income than higher-income 
taxpayers. These taxes are justified by the progressive nature of 
Social Security benefits. However, this rationale would be eviscerated 
by enactment of the proposed balanced budget amendment. It would 
absolutely prevent these surplus payroll tax collections from being 
used for their intended purpose.
  Mr. President, 58 percent of taxpayers pay more Social Security than 
income taxes. These workers, and indeed all American taxpayers, reject 
the systematic abuse of dedicated payroll taxes for purposes other than 
Social Security.
  We should stop playing with fire regarding the future of the Social 
Security system. Congress should not approve an amendment to the 
Constitution that threatens Social Security's future and makes a 
mockery of the financing system it has put in place.
  If Congress votes on our version of the balanced budget amendment, it 
will be approved with overwhelming bipartisan support. That would be 
the appropriate note with which to begin the 105th Congress.
                                 ______
                                 
      By Mr. SHELBY:
  S.J. Res. 13. A joint resolution proposing an amendment to the 
Constitution of the United States which requires--except during time of 
war and subject to suspension by the Congress--that the total amount of 
money expended by the United States during any fiscal year not exceed 
the amount of certain revenue received by the United States during such 
fiscal year and not exceed 20 per centum of the gross national product 
of the United States during the previous calendar year; to the 
Committee on the Judiciary.


             balanced budget amendment to the constitution

  Mr. SHELBY. Mr. President, today I am introducing a balanced budget 
amendment to the Constitution. This is the same amendment which I have 
introduced in every Congress since the 97th Congress. Over the past 20 
years, I have devoted much time and attention to promoting this idea 
because I believe that the single most important thing the Federal 
Government could do to enhance the lives of all Americans and future 
generations is to balance the Federal budget.
  Mr. President, Alexander Hamilton once wrote that ``* * * there is a 
general propensity in those who govern, founded in the constitution of 
man, to shift off the burden from the present to a future day.* * *''
  History has proven Hamilton correct. We have seen over the past 27 
years, that deficit spending has become a permanent way of life in 
Washington. During the past three decades, we have witnessed countless 
``budget summits'' and ``bipartisan budget deals,'' and we have heard, 
time and again, the promises of ``deficit reduction.'' But despite all 
of these charades, the Federal budget has never been balanced, and it 
remains severely out of balance today. The truth is, Mr. President, it 
will never be balanced as long as the President and the Congress are 
allowed to shortchange the welfare of future generations to pay for 
current consumption.
  A balanced budget amendment to the Constitution is the only way 
possible to break the cycle of deficit spending and ensure that the 
Government does not continue to saddle our children and grandchildren 
with this generation's debts.
  Mr. President, everyone in America would benefit from a balanced 
Federal budget. The Congressional Budget Office has stated that a 
balanced Federal budget would lower interest rates by up to 2 full 
percentage points. That would save the average American family with a 
$75,000 mortgage on their home, about $2,400 per year. It would save 
the average student with an $11,000 student loan about $1,900. That is 
real money put in the pockets of hard-working Americans, simply by the 
Government balancing its books.
  Moreover, if the Government demand for capital was reduced, that 
would increase the private sector's access to capital, which in turn, 
would generate substantial economic growth and create thousands of new 
jobs.
  On the other hand, without a balanced budget amendment, the 
Government will continue to waste the taxpayers' money on unnecessary 
interest payments. In fiscal year 1996, the Federal Government spent 
about $241 billion just to pay the interest on the national debt. That 
is more than double the amount spent on all education, job training, 
crime, and transportation programs combined.
  Mr. President, we might as well be taking these hard-earned tax 
dollars and pouring them down a rat hole. We could be putting this 
money toward improving education, developing new medical technologies, 
finding a cure for cancer, or even returning it to the people who 
earned it in the first place. But

[[Page S768]]

instead, about 15 percent of the Federal budget is being wasted on 
interest payments because advocates of big government continue to block 
all efforts to balance the budget.
  Mr. President, a balanced budget amendment will change all of that. 
It will put us on the path to begin paying off our national debt, which 
is currently more than $5 trillion. This amendment will help ensure 
that taxpayers' money will not continue to be wasted on interest 
payments.
  Opponents of a balanced budget amendment act like it is something 
extraordinary. Mr. President, a balanced budget amendment will only 
require the Government to do what every American already has to do: 
balance their checkbook. It is simply a promise to the American people 
that the Government will act responsibly.
  Mr. President, we do not need any more budget deals. We do not need 
any more ``bipartisan'' summits resulting in huge tax increases. What 
we need is a hammer to force the Congress and the President to agree on 
a balanced budget, not just for this year, but forever. Mr. President, 
a constitutional amendment to balance the budget is the only such 
mechanism available.

                          ____________________