Congressional Record, Volume 143 Issue 8 (Tuesday, January 28, 1997)

[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.

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