[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Senate]
[Pages S2838-S2856]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ABRAHAM:

  S. 518. A bill to control crime by requiring mandatory victim 
restitution; to the Committee on the Judiciary.


                 THE VICTIM RESTITUTION ENFORCEMENT ACT

  Mr. ABRAHAM. Mr. President, I rise today to introduce the Victim 
Restitution Enforcement Act of 1997. I have long supported restitution 
for crime victims, and have long been convinced that justice requires 
us to devise effective mechanisms through which victims can enforce 
restitution orders and make criminals pay for their crimes.
  I was very pleased when we enacted mandatory victim restitution 
legislation last Congress as part of the Antiterrorism and Effective 
Death Penalty Act of 1996. I supported that legislation and very much 
appreciated the efforts of my colleagues, particularly Senators Hatch, 
Biden, Nickles, Grassley, and McCain, to ensure that victim restitution 
provisions were included in the antiterrorism legislation.
  Those victim restitution provisions--brought together as the 
Mandatory Victims Restitution Act of 1996--will significantly advance 
the cause of justice for victims in Federal criminal cases. The act 
requires Federal courts, when sentencing criminal defendants, to order 
these defendants to pay restitution to the victims of their crimes. It 
also establishes a single set of procedures for the issuance of 
restitution orders in Federal criminal cases to provide uniformity in 
the Federal system. Inclusion of mandatory victim restitution 
provisions in the Federal criminal code was long overdue, and I am 
pleased that Congress was able to accomplish that last year.
  However, much more remains to be done to ensure that victims can 
actually collect those restitution payments and to provide victims with 
effective means to pursue whatever restitution payments are owed to 
them. Even if a defendant may not have the resources to pay off a 
restitution order fully, victims should still be entitled to go after 
whatever resources a defendant does have and to collect whatever they 
can. We should not effectively tell victims that it is not worth going 
after whatever payments they might get. That is what could happen under 
the current system, in which victims have to rely on Government 
attorneys--who may be busy with many other matters--to pursue 
restitution payments. Instead, we should give victims themselves the 
tools they need so that they can get what is rightfully theirs.
  The victim restitution provisions enacted last Congress consolidated 
the procedures for the collection of unpaid restitution with existing 
procedures for the collection of unpaid fines. Unless more steps are 
taken to make enforcement of restitution orders more effective for 
victims, we risk allowing mandatory restitution to be mandatory in name 
only, with criminals able to evade ever paying their restitution and 
victims left without the ability to take action to enforce restitution 
orders.
  Last Congress, I introduced the Victim Restitution Enforcement Act of 
1995. Many components of my legislation were also included in the 
victim restitution legislation enacted as part of the Antiterrorism and 
Effective Death Penalty Act. The legislation I introduce today is 
similar to the legislation I introduced last Congress as Senate bill 
1504, and is designed to build on what are now current provisions of 
law. All in all, I hope to ensure that restitution payments from 
criminals to victims become a reality, and that victims have a greater 
degree of control in going after criminals to obtain restitution 
payments.
  Under my legislation, restitution orders would be enforceable as a 
civil debt, payable immediately. Most restitution is now collected 
entirely through the criminal justice system. It is frequently paid as 
directed by the probation officer, which means restitution payments 
cannot begin until the prisoner is released. This bill makes 
restitution orders payable immediately, as a civil debt, speeding 
recovery and impeding attempts by criminals to avoid repayment. This 
provision will not impose criminal penalties on those unable to pay, 
but will simply allow civil collection against those who have assets.
  This will provide victims with new means of collecting restitution 
payments. If the debt is payable immediately, all normal civil 
collection procedures, including the Federal Debt Collection Act, can 
be used to collect the debt. The bill explicitly gives victims access 
to other civil procedures already in place for the collection of debts. 
This lightens the burden of collecting debt on our Federal courts and 
prosecutors.
  My bill further provides that Federal courts will continue to have 
jurisdiction over criminal restitution judgments for 5 years, not 
including time that the defendant is incarcerated. The court is 
presently permitted to resentence or take several other actions against 
a criminal who willfully refuses to make restitution payments; the 
court may do so until the termination of the term of parole. Courts 
should have the ability to do more over a longer period of time, and to 
select those means that are more likely to prove successful. Under my 
bill, during the extended period, Federal courts will be permitted, 
where the defendant knowingly fails to make restitution payments, to 
modify the terms or conditions of a defendant's parole, extend the 
defendant's probation or supervised release, hold the defendant in 
contempt, increase the defendant's original sentence, or revoke 
probation or supervised release.
  My legislation will also give the courts power to impose presentence 
restraints on defendants' uses of their assets in appropriate cases. 
This will prevent well-heeled defendants from dissipating assets prior 
to sentencing. Without such provisions, mandatory victim restitution 
provisions may well be useless in many cases. Even in those rare cases 
in which a defendant has the means to pay full restitution at once, if 
the court has no capacity to prevent the defendant from spending ill-
gotten gains or other assets prior to the sentencing phase, there may 
be nothing left for the victim by the time the restitution order is 
entered.
  The provisions permitting presentence restraints are similar to other 
provisions that already exist in the law for private civil actions and 
asset forfeiture cases, and they provide adequate protections for 
defendants. They require a court hearing, for example, and place the 
burden on the Government to show by a preponderance of the evidence 
that presentence restraints are warranted.
  In short, I want to make criminals pay and to give victims the tools 
with which to make them pay. In enacting mandatory victim restitution 
legislation last Congress, we demonstrated our willingness to make some 
crimes subject to this process. I believe we must take additional steps 
to make those mandatorily issued orders easily enforceable.
  This legislation is supported by the National Victim Center and by 
the Michigan Coalition Against Domestic and Sexual Violence. I ask 
unanimous consent to have placed in the Record letters of support from 
those victims' rights organizations.
  I urge my colleagues to support my legislation, which will empower 
victims to collect on the debts that they

[[Page S2839]]

are owed by criminals and which will improve the enforceability of 
restitution orders.
  I also ask unanimous consent that the text of the bill be placed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 518

       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 ``Victim Restitution 
     Enforcement Act''.

     SEC. 2. PROCEDURE FOR ISSUANCE AND ENFORCEMENT OF RESTITUTION 
                   ORDER.

       Section 3664 of title 18, United States Code, is amended to 
     read as follows:

     ``Sec. 3664. Procedure for issuance and enforcement of order 
       of restitution

       ``(a) In General.--
       ``(1) Reliance on information in presentence report.--With 
     respect to each order of restitution under this title, the 
     court shall order the probation service of the court to 
     obtain and include in its presentence report, or in a 
     separate report, as the court directs, information sufficient 
     for the court to exercise its discretion in fashioning a 
     restitution order.
       ``(2) Contents of report.--Each report described in 
     paragraph (1) shall include, to the extent practicable, a 
     complete accounting of the losses to each victim, any 
     restitution owed pursuant to a plea agreement, and 
     information relating to the economic circumstances of each 
     defendant. If the number or identity of victims cannot be 
     reasonably ascertained, or other circumstances exist that 
     make this requirement clearly impracticable, the probation 
     service shall so inform the court.
       ``(b) Disclosures.--The court shall disclose to both the 
     defendant and the attorney for the Government all portions of 
     the presentence or other report pertaining to the matters 
     described in subsection (a).
       ``(c) Applicability of Other Law.--This chapter, chapter 
     227, and Rule 32(c) of the Federal Rules of Criminal 
     Procedure are the only laws and rules applicable to 
     proceedings under this section.
       ``(d) Ensuring Availability of Property or Assets.--
       ``(1) In general.--
       ``(A) Restraining order, injunction, execution of 
     performance bond.--Upon application of the United States, the 
     court may enter a restraining order or injunction, require 
     the execution of a satisfactory performance bond, or take any 
     other action to preserve the availability of property or 
     assets necessary to satisfy a criminal restitution order 
     under this subchapter. An order under this subparagraph may 
     be entered in the following circumstances:
       ``(i) Prior to the filing of an indictment or information 
     charging an offense that may result in a criminal restitution 
     order, and upon the United States showing that--

       ``(I) there is a substantial probability that the United 
     States will obtain a criminal restitution order;
       ``(II) the defendant has or is likely to take action to 
     dissipate or hide the property or assets of the defendant; 
     and
       ``(III) the need to preserve the availability of the 
     property or assets through the requested order outweighs the 
     hardship of any party against whom the order is entered.

       ``(ii) Upon the filing of an indictment or information 
     charging an offense that may result in a criminal restitution 
     order, and upon the United States showing that the defendant 
     has or is likely to take action to dissipate or hide the 
     property or assets of the defendant.
       ``(iii) Upon the conviction, or entry of a guilty plea, to 
     an indictment or information charging an offense that may 
     result in a criminal restitution order, and upon the United 
     States showing that the defendant may take action to 
     dissipate or hide the property or assets of the defendant or 
     that an order is necessary to marshal and determine the 
     property or assets of the defendant.
       ``(B) Period of effectiveness.--An order entered under 
     subparagraph (A) shall be effective for not more than 90 
     days, unless extended by the court for good cause shown or 
     unless an indictment or information described in subparagraph 
     (A)(ii) has been filed.
       ``(2) Notice of order.--
       ``(A) In general.--Except as provided in paragraph (3), an 
     order entered under this subsection shall be after notice to 
     persons appearing to have an interest in the property and 
     opportunity for a hearing, and upon the United States 
     carrying the burden of proof by a preponderance of the 
     evidence.
       ``(B) Admissible evidence.--The court may receive and 
     consider, at a hearing held under this subsection, evidence 
     and information that would be inadmissible under the Federal 
     Rules of Evidence.
       ``(3) Temporary restraining order.--
       ``(A) In general.--A temporary restraining order may be 
     entered without notice or opportunity for a hearing if the 
     United States demonstrates that--
       ``(i) there is probable cause to believe that the property 
     or assets with respect to which the order is sought would be 
     subject to execution upon the entry of a criminal restitution 
     order;
       ``(ii) there is a substantial probability that the United 
     States will obtain a criminal restitution order; and
       ``(iii) the provision of notice would jeopardize the 
     availability of the property or assets for execution.
       ``(B) Expiration of order.--A temporary order under this 
     paragraph shall expire not later than 10 days after the date 
     on which it is entered, unless--
       ``(i) the court grants an extension for good cause shown; 
     or
       ``(ii) the party against whom the order is entered consents 
     to an extension for a longer period.
       ``(C) Hearing.--A hearing requested concerning an order 
     entered under this paragraph shall be held at the earliest 
     possible time, and prior to the expiration of the temporary 
     order.
       ``(4) Disclosure of certain information.--
       ``(A) In general.--Information concerning the net worth, 
     financial affairs, transactions or interests of the defendant 
     presented to the grand jury may be disclosed to an attorney 
     for the Government assisting in the enforcement of criminal 
     restitution orders, for use in the performance of the duties 
     of that attorney.
       ``(B) Use of consumer credit reports.--
       ``(i) In general.--An attorney for the Government 
     responsible for the prosecution of criminal offenses, or 
     responsible for the enforcement of criminal restitution 
     orders, may obtain and use consumer credit reports to--

       ``(I) obtain an order under this section;
       ``(II) determine the amount of restitution that is 
     appropriate; or
       ``(III) enforce a criminal restitution order.

       ``(ii) Grand jury subpoena.--This subparagraph does not 
     limit the availability of grand jury subpoenas to obtain a 
     consumer credit report.
       ``(iii) Probation service.--Upon conviction, a consumer 
     credit report used under this subparagraph may be furnished 
     to the United States Probation Service.
       ``(e) Information to Probation Service.--
       ``(1) In general.--
       ``(A) Provision of information by government.--Not later 
     than 60 days after conviction, and in any event not later 
     than 10 days prior to sentencing, the attorney for the 
     Government after consulting with all victims (when 
     practicable), shall promptly provide the probation service of 
     the court all information readily available to the attorney, 
     including matters occurring before the grand jury relating to 
     the identity of the victim or victims, the amount of losses, 
     and financial matters relating to the defendant.
       ``(B) Provision of information by defendants.--Each 
     defendant shall prepare and file with the probation officer 
     an affidavit fully describing the financial resources of the 
     defendant, including a complete listing of all assets owned 
     or controlled by the defendant as of the date on which the 
     defendant was arrested, the financial needs and earning 
     ability of the defendant and the defendant's dependents, and 
     any other information that the court requires relating to 
     such other factors as the court determines to be appropriate.
       ``(C) Notice to victims.--The attorney for the Government 
     shall, to the maximum extent practicable and as soon as 
     practicable after the provision of information by the 
     Government to the probation service under subparagraph (A), 
     provide notice to all victims. The notice shall inform the 
     victims of--
       ``(i) the offenses for which the defendant was convicted;
       ``(ii) the amounts subject to restitution and any other 
     information that is relevant to restitution submitted to the 
     probation service;
       ``(iii) the right of the victim to submit information to 
     the probation service concerning the amount of the losses of 
     the victim;
       ``(iv) the scheduled date, time, and place of the 
     sentencing hearing;
       ``(v) the availability of a lien in favor of the victim 
     under subsection (n)(1)(D); and
       ``(vi) the opportunity of the victim to file a separate 
     affidavit with the court under subparagraph (E).
       ``(D) Limitations on information.--Upon ex parte 
     application to the court, and a showing that the requirements 
     of subparagraph (A) may cause harm to any victim, or 
     jeopardize an ongoing investigation, the court may limit the 
     information to be provided to or sought by the probation 
     service of the court.
       ``(E) Affidavit of objection.--If any victim objects to any 
     of the information provided to the probation service by the 
     attorney for the Government under this paragraph, the victim 
     may file a separate affidavit with the court.
       ``(2) Additional documentation or testimony.--After 
     reviewing the report of the probation service of the court, 
     the court may require additional documentation or hear 
     testimony. The privacy of any records filed, or testimony 
     heard, under this section shall be maintained to the greatest 
     extent possible and those records may be filed or testimony 
     heard in camera.
       ``(3) Additional time for determination of losses.--If the 
     losses to the victim are not ascertainable by the date that 
     is 10 days prior to sentencing as provided in paragraph (1), 
     the United States Attorney (or a designee of the United 
     States Attorney) shall so inform the court, and the court 
     shall set a date for the final determination of the losses of 
     the victim, not to exceed 90 days after sentencing. If the 
     losses to the victim cannot

[[Page S2840]]

     reasonably be ascertained, the court shall determine an 
     appropriate amount of restitution based on the available 
     information. If the victim subsequently discovers further 
     losses, the victim shall have 60 days after discovery of 
     those losses during which to petition the court for an 
     amended restitution order. The order may be granted only upon 
     a showing of good cause for the failure to include those 
     losses in the initial claim for restitutionary relief.
       ``(4) Referral to magistrate or special master.--The court 
     may refer any issue arising in connection with a proposed 
     order of restitution to a magistrate or special master for 
     proposed findings of fact and recommendations as to 
     disposition, subject to a de novo determination of the issue 
     by the court.
       ``(5) Insurance of victim not considered.--In no case shall 
     the fact that a victim has received or is entitled to receive 
     compensation with respect to a loss from insurance or any 
     other source be considered in determining the amount of 
     restitution.
       ``(f) Evidentiary Standard.--Any dispute as to the proper 
     amount or type of restitution shall be resolved by the court 
     by the preponderance of the evidence. The burden of 
     demonstrating the amount of the loss sustained by a victim as 
     a result of the offense shall be on the attorney for the 
     Government. The burden of demonstrating the financial 
     resources of the defendant and the financial needs of the 
     defendant and the dependents of the defendant shall be on the 
     defendant. The burden of demonstrating such other matters as 
     the court deems appropriate shall be upon the party 
     designated by the court as justice requires.
       ``(g) Factors for Consideration.--
       ``(1) In general.--
       ``(A) Economic circumstances of victim not considered.--In 
     each order of restitution, the court shall order restitution 
     to each victim in the full amount of the losses of each 
     victim as determined by the court and without consideration 
     of the economic circumstances of the defendant.
       ``(B) Award of reasonably ascertainable losses.--The court 
     shall order restitution in the amount of the total loss that 
     is reasonably ascertainable, if--
       ``(i) the number of victims is too great;
       ``(ii) the actual identity of the victims cannot be 
     ascertained; and
       ``(iii) or the full amount of the losses of each victim 
     cannot be reasonably ascertained;
       ``(2) Amount and timing of restitution.--The restitution 
     order shall be for a sum certain and payable immediately.
       ``(3) Nominal periodic payments.--If the court finds from 
     facts on the record that the economic circumstances of the 
     defendant do not allow and are not likely to allow the 
     defendant to make more than nominal payments under the 
     restitution order, the court shall direct the defendant to 
     make nominal periodic payments in the amount the defendant 
     can reasonably be expected to pay by making a diligent and 
     bona fide effort toward the restitution order entered under 
     paragraph (1). Nothing in the paragraph shall impair the 
     obligation of the defendant to make full restitution under 
     this subsection.
       ``(4) Status of debt.--Notwithstanding any payment schedule 
     entered by the court under paragraph (2), each order of 
     restitution shall be a civil debt, payable immediately, and 
     subject to the enforcement procedures provided in subsection 
     (n). In no event shall a defendant incur any criminal penalty 
     for failure to make a restitution payment under the 
     restitution order because of the indigency of the defendant.
       ``(h) Victim Rights.--
       ``(1) No participation required.--No victim shall be 
     required to participate in any phase of a restitution order. 
     If a victim declines to receive restitution made mandatory by 
     this title, the court shall order that the share of the 
     victim of any restitution owed be deposited in the Crime 
     Victims Fund in the Treasury.
       ``(2) Assignment of interest.--A victim may at any time 
     assign the interest of the victim in restitution payments to 
     the Crime Victims Fund in the Treasury without in any way 
     impairing the obligation of the defendant to make those 
     payments.
       ``(3) Victims not identified or located.--If the victim 
     cannot be located or identified, the court shall direct that 
     the restitution payments be made to the Crime Victims Fund of 
     the Treasury. This paragraph shall not be construed to impair 
     the obligation of the defendant to make those payments.
       ``(i) Joint and Several Liability of Multiple Defendants.--
     If the court finds that more than 1 defendant has contributed 
     to the loss of a victim, the court may make each defendant 
     jointly and severally liable for payment of the full amount 
     of restitution or may apportion liability among the 
     defendants to reflect the level of contribution to the loss 
     of the victim and economic circumstances of each defendant.
       ``(j) Priority of Payments.--If the court finds that more 
     than 1 victim has sustained a loss requiring restitution by a 
     defendant, the court may issue an order of priority for 
     restitution payments based on the type and amount of the loss 
     of the victim accounting for the economic circumstances of 
     each victim. In any case in which the United States is a 
     victim, the court shall ensure that all individual victims 
     receive full restitution before the United States receives 
     any restitution.
       ``(k) Insurance.--
       ``(1) In general.--If a victim has received or is entitled 
     to receive compensation with respect to a loss from insurance 
     or any other source, the court shall order that restitution 
     shall be paid to the person who provided or is obligated to 
     provide the compensation, but the restitution order shall 
     provide that all restitution of victims required by the order 
     be paid to the victims before any restitution is paid to any 
     such provider of compensation.
       ``(2) Reduction of amount.--Any amount paid to a victim 
     under an order of restitution shall be reduced by any amount 
     later recovered as compensatory damages for the same loss by 
     the victim in--
       ``(A) any Federal civil proceeding; and
       ``(B) any State civil proceeding, to the extent provided by 
     the law of the State.
       ``(3) Other resources.--If a person obligated to provide 
     restitution receives substantial resources from any source, 
     including inheritance, settlement, or other judgment, that 
     person shall be required to apply the value of those 
     resources to any restitution still owed.
       ``(l) Material Changes in Economic Status of Defendant.--
     The defendant shall notify the court and the Attorney General 
     of any material change in the economic circumstances of the 
     defendant that might affect the ability of the defendant to 
     pay restitution. Upon receipt of the notification, the court 
     may, on its own motion, or the motion of any party, including 
     the victim, adjust the payment schedule, or require immediate 
     payment in full, as the interests of justice require.
       ``(m) Jurisdiction of Court.--
       ``(1) In general.--The court shall retain jurisdiction over 
     any criminal restitution judgment or amended criminal 
     restitution judgment for a period of 5 years from the date 
     the sentence was imposed. This limitation shall be tolled 
     during any period of time that the defendant--
       ``(A) was incarcerated;
       ``(B) was a fugitive; or
       ``(C) was granted a stay that prevented the enforcement of 
     the restitution order.
       ``(2) Failure to pay.--While within the jurisdiction of the 
     court, if the defendant knowingly fails to make a bona fide 
     effort to pay whatever amount of restitution is ordered by 
     the court, or knowingly and willfully refuses to pay 
     restitution, the court may--
       ``(A) modify the terms or conditions of the probation or 
     supervised release of the defendant;
       ``(B) extend the probation or supervised release of the 
     defendant until a date not later than 10 years from the date 
     the sentence was imposed;
       ``(C) revoke the probation or supervised release of the 
     defendant;
       ``(D) hold the defendant in contempt; or
       ``(E) increase the sentence of the defendant to any 
     sentence that might originally have been imposed under the 
     applicable statute, without regard to the sentencing 
     guidelines.
       ``(n) Enforcement of Order of Restitution.--
       ``(1) In general.--An order of restitution may be 
     enforced--
       ``(A) through civil or administrative methods during the 
     period that the restitution lien provided for in section 3613 
     of title 18, United States Code, is enforceable;
       ``(B) by the United States in the manner provided for in 
     subchapter C of chapter 227 and subchapter B of chapter 229;
       ``(C) by the United States regardless of whether for the 
     benefit of the United States, in accordance with the 
     procedures of chapter 176 of part VI of title 28, or in 
     accordance with any other administrative or civil enforcement 
     means available to the United States to enforce a debt due 
     the United States; or
       ``(D) by any victim named in the restitution order as a 
     lien under section 1962 of title 28.
       ``(2) Estoppel.--A conviction of a defendant for an offense 
     giving rise to restitution under this section shall estop the 
     defendant from denying the essential allegations of that 
     offense in any subsequent Federal civil proceeding or State 
     civil proceeding, regardless of any State law precluding 
     estoppel for a lack of mutuality. The victim, in the 
     subsequent proceeding, shall not be precluded from 
     establishing a loss that is greater than the loss determined 
     by the court in the earlier criminal proceeding.''.

     SEC. 3. CIVIL REMEDIES.

       Section 3613 of title 18, United States Code, is amended--
       (1) in the section heading, by inserting ``or restitution'' 
     after ``fine''; and
       (2) in subsection (a)--
       (A) by striking ``The United States'' and inserting the 
     following:
       ``(1) Fines.--The United States'';
       (B) by redesignating paragraphs (1), (2), and (3) as 
     subparagraphs (A), (B), and (C), respectively, and indenting 
     accordingly; and
       (C) by adding at the end the following:
       ``(2) Restitution.--
       ``(A) In general.--
       ``(i) Lien.--An order of restitution shall operate as a 
     lien in favor of the United States for its benefit or for the 
     benefit of any non-Federal victims against all property 
     belonging to the defendant or defendants.
       ``(ii) Timing.--The lien shall arise at the time of the 
     entry of judgment or order and shall continue until the 
     liability is satisfied, remitted, or set aside, or until it 
     becomes otherwise unenforceable.
       ``(iii) Persons against whom lien applies.--The lien shall 
     apply against all property and property interests--

[[Page S2841]]

       ``(I) owned by the defendant or defendants at the time of 
     arrest; and
       ``(II) subsequently acquired by the defendant or 
     defendants.

       ``(B) Entry of lien.--The lien shall be entered in the name 
     of the United States on behalf of all ascertained victims, 
     unascertained victims, victims entitled to restitution who 
     choose not to participate in the restitution program and 
     victims entitled to restitution who cannot assert their 
     interests in the lien for any reason.
       ``(3) Jointly held property.--
       ``(A) In general.--
       ``(i) Division and sale of property.--If the court 
     enforcing an order of restitution under this section 
     determines that the defendant has an interest in property 
     with another, and that the defendant cannot satisfy the 
     restitution order from his or her separate property or 
     income, the court may, after considering all of the equities, 
     order that jointly owned property be divided and sold, upon 
     such conditions as the court deems just, notwithstanding any 
     Federal or State law to the contrary.
       ``(ii) Protection of innocent parties.--The court shall 
     take care to protect the reasonable and legitimate interests 
     of the innocent spouse and minor children of the defendant, 
     especially real property used as the actual home of that 
     innocent spouse and minor children, except to the extent that 
     the court determines that the interest of that innocent 
     spouse and children is the product of the criminal activity 
     of which the defendant has been convicted, or is the result 
     of a fraudulent transfer.
       ``(B) Fraudulent transfers.--In determining whether there 
     was a fraudulent transfer, the court shall consider whether 
     the debtor made the transfer--
       ``(i) with actual intent to hinder, delay, or defraud the 
     United States or other victim; or
       ``(ii) without receiving a reasonably equivalent value in 
     exchange for the transfer.
       ``(C) Considerations for protection of innocent parties.--
     In determining what portion of the jointly owned property 
     shall be set aside for the innocent spouse or children of the 
     defendant, or whether to have sold or divided the jointly 
     held property, the court shall consider--
       ``(i) the contributions of the other joint owner to the 
     value of the property;
       ``(ii) the reasonable expectation of the other joint owner 
     to be able to enjoy the continued use of the property; and
       ``(iii) the economic circumstances and needs of the 
     defendant and dependents of the defendant and the economic 
     circumstances and needs of the victim and the dependents of 
     the victim.''.

     SEC. 4. FINES.

       Section 3572(b) of title 18, United States Code, is amended 
     to read as follows:
       ``(b) Payments; Effect of Indigency.--Any fine, special 
     assessment, restitution, or cost shall be for a sum certain 
     and shall be payable immediately. In no event shall a 
     defendant incur any criminal penalty for failure to make a 
     payment on a fine, special assessment, restitution, or cost 
     as a result of the indigency of the defendant.''.

     SEC. 5. RESENTENCING.

       Section 3614(a) of title 18, United States Code, is amended 
     by inserting before the period at the end the following: ``or 
     may increase the sentence of the defendant to any sentence 
     that might originally have been imposed under the applicable 
     statute''.
                                                                    ____



                                       National Victim Center,

                                                   March 18, 1997.
     Hon. Spencer Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: The National Victim Center would like 
     to express it strong support for your bill, the Victims 
     Restitution Enforcement Act of 1997. Restitution is one of 
     the most direct manifestations of justice that our criminal 
     justice system can provide: requiring the convicted offender 
     to pay for the harm caused by his criminal conduct. No other 
     aspect of our system has a greater impact on the lives of 
     crime victims, or on their satisfaction with the criminal 
     justice process.
       The provisions of this bill would greatly facilitate the 
     ordering and collection of restitution for victims' of 
     federal offenses, and would serve as a mode for state 
     legislatures who are searching for a means to enhance their 
     own restitution efforts. Adoption of this bill would fully 
     implement the spirit of the Mandatory Victims' Restitution 
     Act of 1996 (P.L. 104-132, Sec. 201 et seq.). It would 
     provide courts the information necessary to issue meaningful 
     restitution orders, would create a raft of mechanisms to 
     enhance the enforcement of those orders.
       Passage of the Victims Restitution Enforcement Act of 1997 
     would send a strong signal to the American people that the 
     federal government will do everything in its power to provide 
     justice to our nation's crime victims. We urge your fellow 
     congress members to join in supporting this important 
     legislation.
           Yours truly,
                                                     David Beatty,
     Acting Executive Director.
                                                                    ____



                                           Michigan Coalition,

                                                    April 8, 1997.
     Hon. Spencer Abraham,
     U.S. Senator,
     Washington, DC.
       Dear Senator Abraham: The Michigan Coalition Against 
     Domestic and Sexual Violence (MCADSV) fully supports the 
     Victim Restitution Enforcement Act that you introduce today. 
     Perpetrators of domestic violence and sexual assault exact a 
     devastating emotional toll on their victims, a price that 
     many survivors pay for a lifetime. Additionally, there are 
     often substantial financial costs borne by the victim. 
     Obvious expenses are those for property damage and medical 
     care. Often overlooked are the costs of counseling, lost work 
     time, child care, and expenses related to preparing for and 
     attending the trial.
       While there is no legislative or other remedy to erase the 
     pain and terror experienced as a result of violent crime, we 
     can take greater measures to ensure that victims are not 
     forced to pay, out of their own pockets, for the actions of 
     criminals. This legislation is necessary both to empower 
     victims and require more perpetrators to pay for the 
     financial consequences of their crimes.
       MCADSV greatly appreciates your advocacy efforts on behalf 
     of crime victims by sponsoring this important initiative.
           Sincerely yours,

                                            Kathleen Hagenian,

                                                         Director,
                               Public Policy and Program Services.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 520. A bill to terminate the F/A-18 E/F aircraft program; to the 
Committee on Armed Services.


          TERMINATING THE F/A-18 E/F SUPER HORNET LEGISLATION

  Mr. FEINGOLD. Mr. President, I rise today to introduce legislation to 
terminate the U.S. Navy's F/A-18 E/F Super Hornet Program.
  The basis for this legislation is contained in a 1996 General 
Accounting Office report entitled ``Navy Aviation: F/A-18 E/F Will 
Provide Marginal Operational Improvement at High Cost.'' In this 
report, GAO studied the rationale and need for the F/A-18 E/F in order 
to determine whether continued development of the aircraft is the most 
cost-effective approach to modernizing the Navy's tactical aircraft 
fleet. GAO concluded that the marginal improvements of the F/A-18 E/F 
are far outweighed by the high cost of the program.
  Mr. President, in our current fiscal climate, I have serious concerns 
about authorizing funding for such a costly program, which according to 
GAO will deliver only marginal improvements over the current C/D 
version of the F/A-18.
  As GAO noted in its report, at a projected total program cost of 
$89.15 billion, the F/A-18 E/F Program is one of the most costly 
aviation programs in the Department of Defense. The total program cost 
is comprised of $5.833 billion in development costs and $83.35 billion 
in procurement costs for 1,000 aircraft.
  Mr. President, before I begin to describe GAO's findings in detail, I 
would first like to discuss briefly the role of the F/A-18 aircraft in 
our Nation's overall naval aviation force structure. The Navy performs 
its carrier-based missions with a mix of fighter (air-to-air combat), 
strike (air-to-ground combat), and strike/fighter (multicombat role) 
aircraft. Currently, carrier based F-14 fighter aircraft perform air-
to-air missions; A6E's perform air-to-ground missions; and F/A-18's 
perform both air-to-air and air-to-ground missions. The F/A-18 E/F 
Super Hornet is the latest version of the Navy's carrier-based F/A-18 
strike/fighter plane.
  Mr. President, the F/A-18 E/F is just one of three costly new fighter 
programs the Department of Defense has on the drawing boards right now.
  In addition to the F/A-18 E/F, there is the Air Force's F-22, which 
is intended to replace the A-10 and the venerable F-16 Falcon. The F-22 
is also intended to either supplant or augment the Air Force's top 
fighter, the F-15. It will have stealth capabilities and will be able 
to survive in dense air-defense environments.
  And of course, there is the Joint Strike Fighter, which I will 
discuss in greater detail in a few moments. The JSF is intended to 
perform virtually every type of mission that fighter aircraft perform 
in today's force structure, and is to be employed by the Navy, the Air 
Force, and Marine Corps in unprecedented fashion.
  There are few who seriously believe that the Pentagon can afford to 
maintain all three tactical fighter programs. The General Accounting 
Office, the Congressional Budget Office and many others have maintained 
that the

[[Page S2842]]

likelihood that all three programs can be fully funded with the planned 
number of aircraft buys is virtually nil. In fact, many view the JSF as 
the only modernization program that should be continued. Given our 
fiscal constraints and Federal budget deficit, can we afford to finance 
three separate fighter programs with the caliber and costs of the F/A-
18 E/F, the F-22, and the JSF?
  The answer is unequivocally no. And that is why I am introducing 
legislation to terminate any further development or procurement of the 
program that appears to be most questionable, the E/F upgrade.
  The Navy has based the need for development and procurement of the F/
A-18 E/F on existing or projected operational deficiencies of the F/A-
18C/D in the following key areas: strike range, carrier recovery 
payload and survivability. In addition, the Navy notes limitations of 
current C/D's with respect to avionics growth space and payload 
capacity. In its report, GAO concludes that the operational 
deficiencies in the C/D that the Navy cited in justifying the E/F 
either have not materialized as projected or such deficiencies can be 
corrected with nonstructural changes to the current C/D and additional 
upgrades made which would further improve its capabilities.
  One of the primary reasons the Navy cites in justifying the E/F is 
the need for increased range and the C/D's inability to perform long-
range unrefueled missions against high-value targets. However, GAO 
concludes that the Navy's F/A-18 strike range requirements can be met 
by either the F/A-18 E/F or F/A-18 C/D. Furthermore, it concludes that 
the increased range of the E/F is achieved at the expense of its aerial 
combat performance, and that even with increased range, both aircraft 
will still require aerial refueling for low-altitude missions.
  The F/A-18 E/F specification requirements call for the aircraft to 
have a flight range of 390 nautical miles (nm) while performing low-
altitude bombing missions. The F/A-18 E/F will achieve a strike range 
of 465 nm while performing low-altitude missions by carrying 2 external 
480 gallon fuel tanks. While current C/D's achieve a flight range of 
325 nm with 2-330 gallon fuel tanks while performing low-altitude 
missions--65 nm below the specification requirement of the E/F--when 
they are equipped with the 2-480 gallon external fuel tanks that are 
planned to be used on the E/F, the C/D can achieve a strike range of 
393 nm on low-altitude missions.
  Recent Navy range predictions show that the F/A-18 E/F is expected to 
have a 683 nm strike range when flying a more fuel-efficient, 
survivable, and lethal high-altitude mission profile rather than the 
specified low-altitude profile. Similarly, although F/A-18 E/F range 
will be greater than the F/A-18 C/D, the C/D could achieve strike 
ranges (566 nm with 3-330 gallon fuel tanks or 600 nm with 2-480 gallon 
tanks and 1-330 gallon tank) far greater than the target distances 
stipulated in the E/F's system specifications by flying the same high-
altitude missions as the E/F. Additionally, according to GAO, the E/F's 
increased strike range is achieved at the expense of the aircraft's 
aerial combat performance as evidenced by its sustained turn rate, 
maneuvering, and acceleration which impact its ability to maneuver in 
either offensive or defensive modes.

  One claim the Navy has made in response to the GAO report is that the 
C/D cannot be outfitted with 480-gallon external fuel tanks. GAO 
disputes this, citing contractor studies that concluded 480-gallon 
tanks can be carried on the C/D's inboard stations. GAO also points out 
that the Canadians have flown the F/A-18 C with the larger external 
fuel tanks.
  Mr. President, another significant reason the Navy cites in support 
of the continued development of the E/F is an anticipated deficiency in 
F/A-18C carrier recovery payload--the amount of fuel, weapons and 
external equipment that an aircraft can carry when returning from a 
mission and landing on a carrier.
  However, the deficiency in carrier recovery payload which the Navy 
anticipated of the F/A-18C simply has not materialized. When initially 
procured, F/A-18C's had a total carrier recovery payload of 6,300 
pounds. Because of the Navy's decision to increase the F/A-18C's 
maximum allowable carrier landing weight and a lower aircraft operating 
weight resulting from technological improvements, the F/A-18C now has a 
carrier recovery payload of 7,113 pounds.
  F/A-18C's operating in support of Bosnian operations are now 
routinely returning to carriers with operational loads of 7,166 pounds, 
which exceeds the Navy's stated carrier recovery payload capacity. This 
recovery payload is substantially greater than the Navy projected it 
would be and is even greater than when the F/A-18C was first introduced 
in 1988. In addition, GAO notes that while it is not necessary, 
upgrading F/A-18C's with stronger landing gear could allow them to 
recover carrier payloads of more than 10,000 pounds--greater than that 
sought for the F/A-18 E/F (9,000 pounds).
  While the Navy also cites a need to improve combat survivability in 
justifying the development of the F/A-18 E/F, the aircraft was not 
developed to counter a particular military threat that could not be met 
with existing or improved F/A-18 C/D's. Additional improvements have 
subsequently been made or are planned for the F/A-18 C/D to enhance its 
survivability including improvements to reduce its radar detectability, 
while survivability improvements of the F/A-18 E/F are questionable. 
For example, because the F/A-18 E/F will be carrying weapons and fuel 
externally, the radar signature reduction improvements derived from the 
structural design of the aircraft will be diminished and will only help 
the aircraft penetrate slightly deeper than the F/A-18 C/D into an 
integrated defensive system before being detected.
  Mr. President, as we discuss survivability, it is relevant to 
highlight the outstanding performance of the F/A-18 C/D in the gulf war 
just a few short years ago. By the Navy's own account, the C/D 
performed extraordinarily well, dropping 18 million pounds of 
ordinance, recording all Navy MiG kills, and, in the Navy's own words, 
experiencing ``unprecedented survivability.''

  In addition to noting the operational capability improvements in 
justifying the development of the F/A-18 E/F, the Navy also notes 
limitations of current C/D's with respect to avionics growth space and 
payload capacity. The Navy predicted that by the mid-1990's the F/A-18 
C/D would not have growth space to accommodate additional new weapons 
and systems under development. Specifically, the Navy predicted that by 
fiscal year 1996 C/D's would only have 0.2 cubic feet of space 
available for future avionics growth; however, 5.3 cubic feet of 
available space have been identified for future system growth. 
Furthermore, technological advancements such as miniaturization, 
modularity and consolidation may result in additional growth space for 
future avionics.
  The Navy also stated that the F/A-18 E/F will provide increased 
payload capacity as a result of two new outboard weapons stations; 
however, unless current problems concerning weapons release are 
resolved--air flow problems around the fuselage and weapons stations--
the types and amounts of weapons the E/F can carry will be restricted 
and the possible payload increase may be negated. Also, while the E/F 
will provide a marginal increase in air-to-air capability by carrying 
two extra missiles, it will not increase its ability to carry the 
heavier, precision-guided, air-to-ground weapons that are capable of 
hitting fixed and mobile hard targets and the heavier stand-off weapons 
that will be used to increase aircraft survivability.
  Understanding that the F/A-18 E/F may not deliver as significant 
operational capability improvements as originally expected, I would now 
like to focus on the cost of the F/A-18 E/F Program and possible 
alternatives to it. As previously mentioned, the total program cost of 
the F/A-18 E/F is projected to be $89.15 billion. These program costs 
are based on the procurement assumption of 1,000 aircraft--660 by the 
Navy and 340 by the Marine Corps--at an annual production rate of 72 
aircraft per year. Mr. President, as the GAO report points out, these 
figures are overstated. According to Marine Corps officials and the 
Marine Corps Aviation Master Plan, the Marine Corps does not intend to 
buy any F/A-18 E/F's and, therefore, the projected 1,000 aircraft buy 
is overstated by 340 aircraft.

[[Page S2843]]

  Although the Pentagon contends that the Navy had intended to purchase 
1,000 aircraft all along, extensive documentation and testimony 
demonstrates this not to be the case and the 1,000 figure was the 
original complete buy.
  I would also note the importance of the Marine Corps opting out of 
the E/F Program. Although the E/F was originally developed to service 
two branches with differing needs and requirements, the Marine Corps 
has chosen instead to invest in the Joint Strike Fighter program and 
use those aircraft to replace their AV-8B Harriers and F/A-18 C/D's.
  Furthermore, the Congress has stated that an annual production rate 
of 72 E/F aircraft is probably not feasible due to funding limitations 
and directed the Navy to calculate costs based on more realistic 
production rates as 18, 36, and 54 aircraft per year. In fact, 
according to the Congressional Research Service: ``* * * no naval 
aircraft have been bought in such quantities in recent years, and it is 
unlikely that such annual buys will be funded in the 1990's, given 
expected force reductions and lower inventory requirements and the 
absence of consensus about future military threats.''

  Using the Navy's overstated assumptions about the total number of 
planes procured and an estimated annual production rate of 72 aircraft 
per year, the Navy calculates the unit recurring flyaway cost of the F/
A-18 E/F--costs related to the production of the basic aircraft--at $44 
million. However, using GAO's more realistic assumptions of the 
procurement of 660 aircraft by the Navy, at a production rate of 36 
aircraft per year, the unit recurring flyaway cost of the E/F balloons 
to $53 million. This is compared to the $28 million unit recurring 
flyaway cost of the F/A-18 C/D based on a production rate of 36 
aircraft per year. Thus, GAO estimates that this cost difference in 
unit recurring flyaway would result in a savings of almost $17 billion 
if the Navy were to procure the F/A-18 C/D's rather than the E/F's.
  Mr. President, this is certainly a significant amount of savings. Now 
I know that some of my colleagues will say that by halting production 
of the F/A-18 E/F and instead relying on the F/A-18 C/D, we will be 
mortgaging the future of our Naval aviation fleet. However, Mr. 
President, there is a far less costly program already being developed 
which may yield more significant returns in operational capability. 
This program is the Joint Strike Fighter or JSF Program.
  The JSF Program office is currently developing technology for a 
family of affordable next generation multirole strike fighter aircraft 
for the Air Force, Marine Corps, and Navy. The JSF is expected to be a 
stealthy strike aircraft built on a single production line with a high 
degree of parts and cost commonality. The driving focus of the JSF is 
affordability achieved by triservice commonality. The Navy plans to 
procure 300 JSF's with a projected initial operational capability 
around 2007.
  Contractor concept exploration and demonstration studies indicate 
that the JSF will have superior or comparable capabilities in all Navy 
tactical aircraft mission areas, especially range and survivability, at 
far less cost than the F/A-18 E/F. The JSF is expected to be a stand 
alone, stealthy, first-day-of-the-war, survivable aircraft. Overall, 
the JSF is expected to be more survivable and capable than any existing 
or planned tactical aircraft in strike and air-to-air missions, with 
the possible exception of the F-22 in air-to-air missions. The Navy's 
JSF variant is also expected to have longer ranges than the F/A-18 E/F 
to attack high-value targets without using external tanks or tanking. 
Unlike the F/A-18 E/F which would carry all of its weapons externally, 
the Navy's JSF will carry at least four weapons for both air-to-air and 
air-to-ground combat internally, thereby maximizing its stealthiness 
and increasing its survivability. Finally, the JSF would not require 
jamming support from EA-6B aircraft as does the F/A-18 E/F in carrying 
out its mission in the face of integrated air defense systems.
  While the JSF is expected to have superior operational capabilities, 
it is expected to be developed and procured at far less expense than 
the F/A-18 E/F. In fact, the unit recurring flyaway cost of the Navy's 
JSF is estimated to range from $31-38 million depending on which 
contractor design is chosen for the aircraft, as compared to GAO's $53 
million estimate for the F/A-18 E/F. Additional cost benefits of the 
JSF would result from having common aircraft spare parts, simplified 
technical specifications, and reduced support equipment variations, as 
well as reductions in aircrew and maintenance training requirements.
  Mr. President, given the enormous cost and marginal improvement in 
operational capabilities the F/A-18 E/F would provide, it seems that 
the justification for the E/F is not as evident as once thought. 
Operational deficiencies in the C/D aircraft either have not 
materialized or can be corrected with nonstructural changes to the 
plane. As a result, proceeding with the E/F program may not be the most 
cost-effective approach to modernizing the Navy's tactical aircraft 
fleet. In the short term, the Navy can continue to procure the F/A-18 
C/D aircraft, while upgrading it to improve further its operational 
capabilities. For the long term, the Navy can look toward the next 
generation strike fighter, the JSF, which will provide more operational 
capability at far less cost than the E/F.
  Mr. President, succinctly put, the Navy needs an aircraft that will 
bridge between the current force and the new, superior JSF which will 
be operational around 2007. The question is whether the F/A-18 C/D can 
serve that function, as it has demonstrated its ability to exceed 
predicted capacity or whether we should proceed with an expensive, new 
plane for a marginal level of improvement. The $17 billion difference 
in projected costs does not appear to provide a significant return on 
our investment. In times of severe fiscal constraints and a need to 
look at all areas of the budget to identify more cost-effective 
approaches, the F/A-18 E/F is a project in need of reevaluation.
  Last year, I offered an amendment to the fiscal year 1997 
authorization bill for the Department of Defense that required the 
Pentagon to conduct a cost-benefit analysis of the F/A-18 E/F Program, 
and to report their findings to the Congress by March 30, 1997. This 
study was to include a review of the E/F program, an analysis and 
estimate of the production costs of the program for the total number of 
aircraft expected to be procured at several different production rates 
and a comparison of the costs and benefits of this program with the 
costs and benefits of the C/D Program. That analysis has not been 
forwarded to the Congress as of this date.
  In addition to this report, the Quadrennial Defense Review [QDR], 
responsible for evaluating all weapon system programs, is also 
scheduled to be completed in the near future.
  Unfortunately, I was enormously disappointed when the Secretary of 
Defense, rather than waiting for these reports to be completed and 
publicly released, announced on March 28 his decision to move forward 
with the E/F Program and procure 62 new F/A-18 E/F fighter planes at an 
initial cost of $48 million each.
  I would have hoped that the Secretary, who I have tremendous respect 
and admiration for, would have waited until the mandated reports had 
been provided to Congress and until the results of the QDR--which could 
have a significant impact on the Pentagon's tactical aircraft 
modernization plans--had been made public. Instead, this perplexing 
decision to proceed with the procurement of 62 of these expensive 
planes precludes the Congress from offering any input on the 
Department's policy based on a review of the required reports. I am 
puzzled as to why the new Secretary did not await these reports before 
announcing this decision.
  The 1996 GAO report concluded that we could achieve almost $17 
billion in cost savings if the Navy elected to procure additional C/D 
versions of the F/A-18 rather than the costlier E/F model. Mr. 
President, by all accounts the F/A-18 C/D is a top quality aircraft 
that has served the Navy well over the last decade, and could be 
modified to meet every capacity the E/F is intended to fulfill over the 
course of the next decade at a substantially lower cost.
  Therefore, considering the Department of Defense has clearly 
overextended itself in terms of supporting

[[Page S2844]]

three major multirole fighter programs, and given that the most 
promising tactical aviation program appears to be the triservice joint 
strike fighter which will likely outperform the F/A-18 E/F at a 
substantially lower cost, it is clear that we must discontinue the E/F 
Program before the American taxpayer is asked to fund yet another 
multibillion dollar duplicative program.
  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. 520

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

     SECTION 1. TERMINATION OF THE F/A-18E/F AIRCRAFT PROGRAM.

       (a) Termination of Program.--The Secretary of Defense shall 
     terminate the F/A-18E/F aircraft program.
       (b) Payment of Termination Costs.--Funds available for 
     procurement and for research, development, test, and 
     evaluation that are available on or after the date of the 
     enactment of this Act for obligation for the F/A-18E/F 
     aircraft program may be obligated for that program only for 
     payment of the costs associated with the termination of the 
     program.
                                 ______
                                 
      By Mr. COVERDELL (for himself, Mr. Inhofe, Mr. Hutchinson, Mr. 
        Hagel, and Mr. Shelby):
  S. 521. A bill to amend the Internal Revenue Code of 1986 to impose 
civil and criminal penalties for the unauthorized access of tax returns 
and tax return information by Federal employees and other persons, and 
for other purposes; to the Committee on Finance.


             the coverdell TAXPAYER PRIVACY PROTECTION ACT

  Mr. COVERDELL. Mr. President, today I rise to offer legislation that 
will end one of the most pernicious offenses forced upon honest 
taxpayers. I am talking about file snooping. Others may call it 
browsing or scanning. Whatever the name, it is just plain wrong, and it 
ought to be stopped. That is why today I am introducing the Taxpayer 
Privacy Protection Act.
  Too often, the Internal Revenue Service acts as a bully, enforcing 
the Tax Code through fear and intimidation. Even worse, legal loopholes 
have allowed certain IRS employees to violate the privacy of innocent 
citizens without punishment. Some of the most troubling abuses 
committed by employees of the IRS against innocent Americans include 
the practices of file snooping.
  Recently in the Wall Street Journal, we learned of the case of Mr. 
Richard W. Czubinski of Boston, MA. He is a member of the Ku Klux Klan 
who used his IRS job to search the tax returns of political opponents 
and people he suspected of being Government informers. He was 
prosecuted and convicted by a jury, but his conviction was overturned 
in the Federal Court of Appeals. In making its decision, the appellate 
panel found Mr. Czubinski's browsing to be reprehensible, but also 
found no crime had been committed because prosecutors could not prove 
he had used the information or disclosed it.
  In addition, a few years back, I was shocked to learn that in my home 
city of Atlanta, nearly 370 employees of the local IRS office were 
caught accessing the tax returns and return information of friends, 
neighbors, and celebrities without proper authorization.
  Mr. President, the Taxpayer Privacy Protection Act would make it a 
crime to engage in file snooping, punishable by a fine of up to $1,000 
and/or 1 year imprisonment. Further, a convicted offender would have to 
reimburse all costs of prosecution and face dismissal.
  My legislation also requires notification of taxpayers who suffer 
this abuse. Unfortunately, what should seem to be a simple matter of 
decency must be required of the IRS. In response to suggestions 
taxpayers be notified when their privacy has been invaded by file 
snoopers, IRS Commissioner Margaret Richardson stated, ``I'm not sure 
there would be serious value to that in terms of protecting the 
taxpayers' rights.'' With all respect, such sentiment is typical of a 
Washington status quo mentality that is out-of-touch with the rest of 
America.
  Finally, my proposal would provide taxpayers who have been victims of 
file snooping with the option of seeking civil action. Quite simply, it 
is the decent thing to do.
  Taxpayer privacy is one of the most sacred trusts we place in the 
IRS. Unfortunately, this agency has not lived up to this trust. With 
passage of the Taxpayer Privacy Protection Act, honest, hardworking 
taxpayers can be assured their full privacy will be protected every 
April 15. They deserve no less.
                                 ______
                                 
      By Mr. GLENN:
  S. 523. A bill to amend the Internal Revenue Code of 1986 to prevent 
the unauthorized inspection of tax returns or tax return information; 
to the Committee on Finance.


                    irs systems security legislation

  Mr. GLENN. Mr. President, the date of April 15 is indelibly etched in 
the minds of most Americans. For it is on or by that day that honest, 
hard-working citizens voluntarily share their most personal and 
sensitive financial information with their Government.
  All Americans should have unbridled faith that their tax returns will 
remain absolutely confidential and zealously safeguarded. That is the 
foundation of our taxpaying system. If this trust is breached, then the 
bonds that tie citizens with their Government may break, with 
disastrous consequences for us all.
  In 1993 and 1994, as chairman of the Governmental Affairs Committee, 
I held hearings which first exposed that vulnerability. We found out 
that hundreds of IRS employees had been investigated for what I term 
``computer voyeurism'', where they call up returns of friends, enemies, 
celebrities, relatives, or neighbors just to snoop and satisfy their 
own prurient interests. Even worse, in some cases, IRS employees either 
altered their own returns to get refunds, or conspired with other 
taxpayer friends to change their returns and get a kickback from those 
refunds.
  My investigation revealed serious flaws in the IRS' ability to 
monitor, prevent, and detect browsing.
  In response, the IRS Commissioner pledged a zero tolerance policy to 
protect taxpayer privacy and vigorously discipline those who abuse this 
trust. The Commissioner also implemented a new system called EARL--
Electronic Audit Research Log--to help identify inappropriate and 
unauthorized access to taxpayer information stored in the IRS' main 
computer system.
  That primary system, IDRS--Integrated Data Retrieval System--handles 
more than 100 million transactions per month and is used by over 55,000 
IRS employees. At least one-third of those employees are authorized to 
input adjustments to tax account records.
  I had asked the General Accounting Office [GAO] to review the 
progress made by the IRS in reducing computer security risks and in 
curbing browsing. Earlier this year, GAO produced that report. However, 
because some of the specific details could jeopardize IRS security, 
that report was designated for ``Limited Official Use'' with restricted 
access.
  Due to my involvement in this important issue, and because I believe 
the public has a right to know, I requested that GAO issue a redacted 
version of the report suitable for public release. I would like to 
thank GAO for their hard work in this matter and also the IRS for their 
cooperation in making this possible.
  The findings of GAO's report are disturbing. Even more important, 
their findings are reaffirmed by the IRS in a comprehensive internal 
report of their own compiled last fall.
  Before I get to the specifics, I just want to say a couple of things.
  Point One. The vast majority of IRS employees are dedicated and 
committed to their jobs, and labor in extremely difficult conditions 
with very outmoded systems. Unfortunately, in this day and age, they 
must also fear for their own personal safety.
  Some 99.9 percent of them would never engage in such snooping or 
fraud. It is not as if every American has reason to believe that his or 
her privacy and tax return information has been compromised. But even 
just a single incidence of this behavior is one too many and cannot be 
tolerated.
  Just last year, in Tennessee, a jury acquitted a former IRS employee 
who had been charged with 70 counts of improperly peeking at the tax 
returns of celebrities such as Elizabeth Taylor, Dolly Parton, Wynonna 
Judd, Michael

[[Page S2845]]

Jordan, Lucille Ball, Tom Cruise, President Clinton, and Elvis Presley.
  More recently, just a few weeks ago, a Federal appeals court in 
Boston reversed the conviction of a former employee who had been found 
guilty of several counts of wire and computer fraud by improperly 
accessing the IRS taxpayer database. It was reported that he had 
browsed through several files, including those of a local politician 
who had beaten him in an election, and a woman he once had dated. The 
Government had alleged this worker was a member of a white-supremacist 
group and was collecting data on people he thought could be Government 
informers.
  In both of these cases, because of a loophole in the law, no criminal 
penalties could be meted out. The reason? No disclosures had been made 
to third parties.
  I doubt these kinds of decisions give great comfort to honest, law-
abiding citizens. That is why today I am reintroducing my legislation--
the Taxpayer Privacy Protection Act--to close this gap and ensure that 
any unauthorized access or inspection of return information, in 
whatever form, is punishable as a criminal offense and that employees 
so convicted are fired immediately.
  I know that the chairman of the House Ways and Means Committee is 
interested in passing such a bill as are several of my Senate 
colleagues including Senator Coverdell. I commend everyone for their 
interest and looking forward to making this bill--finally--a reality.
  Let's pass this by April 15 and send a signal across the land that 
those who violate the privacy of tax paying Americans will be fined, 
will be fired, and will be jailed. The public rightfully expects no 
less.
  Point Two. The IRS has recognized this serious issue and has 
undertaken some responsive actions. Warnings of possible prosecution 
for unauthorized use of the system appear whenever employees log onto 
the taxpayer account database. They have installed automated detection 
programs in some of their systems to monitor employee use and alert 
managers to possible misuse. And, the IRS has just created a new Office 
of Systems Standards and Evaluations to centralize and enforce IRS 
standards and policies for all major security programs. I have 
confidence that this Office, if given the proper resources, will be a 
positive force in this effort.
  The problem, however, is that these efforts, while well-intentioned, 
have come too late and fall far short of the commitment, management, 
and determination sorely needed to confront this matter head-on.
  The sad fact is that with 1 week to go until tax returns are due, one 
thing is clear: the IRS has flunked its own audit and has let down the 
American people.
  The agency promised zero tolerance for browsing. Today's information 
suggests that they have failed to live up to that pledge--1,515 new 
cases of browsing have been identified since our last report. Of those 
only 27 have resulted in employees being fired. I don't know what kind 
of new math they may be using, but that doesn't sound like zero 
tolerance to me.
  GAO even found that the 1,515 figure may drastically underestimate 
actual incidents because--and I quote--the agency's ``ability to detect 
browsing is limited''.
  Overall, GAO found that IRS' approach to computer security is not 
effective. Serious weaknesses persist in security controls intended to 
safeguard IRS computer systems, data, and facilities and expose tax 
processing operations to the risk of disruption and taxpayer data to 
the risk of unauthorized use, modification, and destruction. Further, 
although IRS has taken some action to detect and prevent browsing, the 
fact remains that the IRS has no effective means for measuring the 
extent of the browsing problem, the damage being done by browsing, or 
the progress being made to deter browsing.
  This finding is candidly confirmed in IRS' own internal report:

     progress in developing efficient prevention and detection 
     programs has been painfully slow. The program has suffered 
     from a lack of overall consistent, strong leadership and 
     oversight.

  Quite distressing to me is the finding, as stated in the IRS' own 
report, that employees, when confronted, indicate that they browsed 
because they do not believe it is wrong and that there will be little 
or no consequence to them if they are caught.
  Before summarizing the major findings, I also want to point out 
another facet of this report. That is, the effectiveness of controls 
used to safeguard IRS systems, facilities, and taxpayer data. GAO found 
serious weaknesses in these efforts, especially in the areas of 
physical and logical security.
  For example, the facilities visited by GAO could not account for 
about 6,400 units of magnetic storage media, such as tapes and 
cartridges, which might contain taxpayer data. Further, they found that 
printouts containing taxpayer data were left unprotected and unattended 
in open areas of two facilities where they could be compromised.
  I really don't want to say much more on this portion of the report 
than I have already. Except that these matters, and the others referred 
to by GAO, must be dealt with swiftly and effectively.
  I have summarized GAO's findings in a handout. Where appropriate, I 
have also included references from IRS' own recent internal report on 
their browsing deterrence and detection program. As I mentioned 
earlier, that report--[Electronic Audit Research Log (EARL) Executive 
Steering Committee Report, Sept. 30, 1996]--and I commend the IRS for 
its candid and frank evaluations in it--affirms most of GAO's findings, 
conclusions, and recommendations.
  I will briefly highlight the major findings in these attachments:


      the irs system designed to detect browsing [earl] is limited

  GAO found that the system used to monitor and detect browsing is 
ineffective because it can't distinguish between legitimate work 
activity and illegal browsing.
  Moreover, EARL only monitors the main taxpayer database. There are 
several other systems used by employees to create, access, or modify 
data which, apparently, go unsupervised. This is something I have asked 
the GAO to look into further.
  According to GAO:

     because IRS does not monitor the activities of all employees 
     authorized to access taxpayer data . . . IRS has no assurance 
     that these employees are not browsing taxpayer data and no 
     analytical basis on which to estimate the extent of the 
     browsing problem or any damage being done.

  In fact, according to the IRS' EARL report:

       The current system of reports does not provide accurate and 
     meaningful data about what the abuse detection programs are 
     producing, the quality of the outputs, the efficiency of our 
     abuse detection research efforts, or the level of functional 
     management follow through and discipline. This impedes our 
     ability to respond to critics and congressional oversight 
     inquiries about our abuse detection efforts.

  IRS Progress in Reducing and Disciplining Browsing Cases is Unclear

  The systems used by the IRS cannot report on the total number of 
unauthorized browsing incidents. Nor do they contain sufficient 
information to determine, for each case investigated, how many taxpayer 
accounts were inappropriately accessed or how many times each account 
was accessed.
  Consequently, for known incidents of browsing, IRS cannot efficiently 
determine how many and how often taxpayers' accounts were 
inappropriately accessed. Without such information, IRS cannot measure 
whether it is making progress from year to year in reducing browsing.
  Internal IRS figures show a fluctuation in the number of browsing 
cases closed in the last few years: 521 cases in fiscal year 1991; 787 
in fiscal year 1992; 522 in fiscal year 1993; 646 in fiscal year 1994, 
and; 869 in fiscal year 1995.
  More distressing, however, is the fact that in spite of the 
Commissioner's announced zero tolerance policy, the percentages of 
cases resulting in discipline has remained constant from year to year, 
averaging 29 percent.
  IRS itself reported that almost one-third of the cases detected were 
situations where an employee accessed their own account, which, 
according to the report, is ``generally attributable to trainee 
error''.
  Their answer creates simply more questions, however. Why are 
employees accessing their own accounts? Is this a wise policy?


           Penalties for Browsing are Inconsistent Across IRS

  Despite IRS policy to ensure that browsing penalties are handled 
consistently across the agency, it appears

[[Page S2846]]

that there are disparities in how similar cases are decided among 
different offices.
  For instance, the number of browsing cases resulting in employees 
being terminated in the last year surveyed ranged from 0 percent at one 
facility to a high of only 7 percent at another.
  The percentage of browsing cases resulting in employee counseling 
ranged from 0 percent at one facility to 77 percent at another.
  Even more incredible to me--and quite distressing--is the extremely 
low percentage of employees caught browsing each year who are fired for 
their offense, according to the IRS' own figures. Would you believe 
that, for all of the browsing cases detected and closed each year, the 
highest number of employees fired in 1 year has been 12. Between fiscal 
year 1991 and fiscal year 1995, only 43 employees were fired after 
browsing investigations. That is generally 1 percent of the total 
number of cases brought each year. Even if you include the category of 
resignation and retirement, the highest percentage of employees 
terminated through separation or resignation/retirement in any 1 year 
has been 6 percent.
  I could go on and on, but I think you get the idea.
  Taxpayer privacy is being jeapordized and the IRS is not doing enough 
to address it.
  A new law to make browsing a crime will be an important tool and I 
have worked with the IRS and the Justice Department in crafting my 
legislation.
  I will also be looking forward to Thursday's hearing of the Senate 
Governmental Affairs Committee when the IRS will be testifying and this 
issue is likely to come up.
  In closing, I do not want to be standing up here again next year 
talking about browsing. Although the computer age makes guarding 
taxpayer privacy more difficult and complex, the fact remains: the IRS 
can and must do better. The American people expect and demand nothing 
less.
                                 ______
                                 
      By Mr. DASCHLE (for himself and Mr. Dorgan):
  S. 524. A bill to amend title XVIII of the Social Security Act to 
remove the requirement of an x ray as a condition of coverage of 
chiropractic services under the Medicare Program; to the Committee on 
Finance.


                          MEDICARE LEGISLATION

  Mr. DASCHLE. Mr. President, today I am introducing legislation that 
makes a commonsense change to Medicare's outdated policy regarding 
chiropractic care. Specifically, my bill would eliminate the 
requirement that beneficiaries get an x ray before they are authorized 
to be reimbursed for chiropractic services under Medicare. This 
legislation accomplishes two important goals. First, it removes 
outdated vestiges of still pronounced discrimination against 
chiropractic practitioners in the Medicare Program. Second, this bill 
makes chiropractic services more accessible and affordable for 
beneficiaries. I encourage my colleagues to join me in supporting this 
measure, which is the Senate companion to legislation introduced in the 
House of Representatives on March 4, 1997 by Representative Phil Crane.
  Existing Medicare law strictly limits reimbursement for chiropractic 
services to manual manipulation of the spine and only to correct a 
subluxation. However, before beneficiaries can be reimbursed for 
chiropractic care, Medicare requires that the patient get an x ray to 
confirm the need for these services. Beneficiaries must either pay for 
the x ray out of their own pockets, a cost that many cannot afford, or 
pass through the ``gateway'' controlled by other medical providers, 
whose x rays, typically far more expensive, are reimbursable under the 
program.
  While x rays are often a useful diagnostic tool to verify a medical 
condition, most medical professionals and health analysts agree that 
there is no clinical justification for a blanket requirement that 
Medicare beneficiaries verify the need for chiropactic care through an 
x ray. Medicare's statutory x ray requirement results in unnecessary 
patient exposure to x rays and simply cannot be justified as an across-
the-board requirement.
  Representatives of the Health Care Financing Administration [HCFA] 
who have closely studied this issue reached the same conclusion that I 
did and recommended to the President that this provision be included in 
his Medicare reform plan. I am pleased that the President did include 
in his fiscal year 1998 balanced budget proposal a provision calling 
for the elimination of the x ray requirement for chiropractic care. I 
am cautiously optimistic that bipartisan support from within the 
Congress and the administration will help facilitate passage of this 
modest, but important, measure.
  I grew up in a community where chiropractors perform a valuable 
service by providing an alternative to allopathic medicine. The nearly 
200 chiropractors in South Dakota serve the State well. In rural States 
like mine, chiropractors are often an essential source of health care 
delivery. Sometimes they are the only health providers in the 
community. In rural States across the country, the chiropractic 
profession plays an integral role in the health care system.
  But the issue is even larger than one of correcting inequities in the 
law and recognizing the contributions of chiropractors alone. We are 
constantly searching for ways to give more Americans greater access to 
quality health care, and to facilitate that availability of care in the 
most cost-effective manner. One proven way to make progress toward 
those goals is to exploit the talent and dedication represented in the 
diversity of practitioners increasingly involved in the delivery of 
health care services in the United States. Competition among different 
kinds of providers and access to less expensive forms of care have to 
be emphasized if we are to control escalating health care costs. Yet 
this competition is virtually impossible when programs like Medicare 
put up barriers to beneficiaries receiving care from a group of 
licensed professionals like chiropractors.
  As health care cost increases continue to threaten both the quality 
and economic stability of our national health care delivery system, the 
cost savings potential of chiropractic care should be fully explored. 
The bill I am introducing today will help provide access to quality 
care at a reasonable cost. I urge my colleagues in the Senate to 
support this measure to ensure Medicare patients have appropriate 
access to the benefits of chiropractic care.
  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. 524

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

     SECTION 1. REMOVAL OF REQUIREMENT FOR X-RAY AS A CONDITION OF 
                   COVERAGE OF CHIROPRACTIC SERVICES UNDER THE 
                   MEDICARE PROGRAM.

       (a) In General.--Section 1861(r)(5) of the Social Security 
     Act (42 U.S.C. 1395x(r)(5)) is amended by striking 
     ``demonstrated by X-ray to exist''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to services furnished on or after January 1, 
     1998.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Kennedy, Ms. Snowe, Mr. Kerry, Mr. 
        Jeffords, Mr. Dodd, Mr. Stevens, Mr. Rockefeller, Mr. Bennett, 
        Mr. Daschle, Ms. Collins, Mr. Wellstone, Mr. Smith of Oregon, 
        Mr. Bingaman, Mr. Campbell, Mrs. Murray, Mr. Reed, Mrs. Boxer, 
        Mr. Lautenberg, Mr. Durbin, and Mr. Reid):
  S. 525. A bill to amend the Public Health Service Act to provide 
access to health care insurance coverage for children; to the Committee 
on Labor and Human Resources.


              Child Health Insurance and Lower Deficit Act

  Mr. HATCH. Mr. President, today, Senator Kennedy, I, and a number of 
others, are introducing the Hatch-Kennedy child health insurance and 
lower deficit bill, or the CHILD Act, S. 525. We will also introduce a 
companion measure, S. 526, which contains a tobacco excise tax increase 
to pay for the program established in the CHILD bill.
  The CHILD bill has been negotiated over a long period of time in 
intensive and sometimes heated negotiations. As anybody can understand, 
it is difficult to get the two sides together on matters like this. So 
we have worked very, very hard to try and bring both sides together.

[[Page S2847]]

  It is no secret that Senator Kennedy and I have worked together in 
the past. And, we have fought each other in the past. But today is a 
time of unity, for I believe we have written a bill that really makes 
sense, a bill that will work and that will help one of the most 
vulnerable segments of our society, children without health insurance.
  Of the 40 million people who are uninsured in this country, 10 
million of them are children. Of those 10 million, about 3 million do 
qualify for Medicaid, but are not enrolled.
  While it has its problems, Medicaid is an excellent program overall, 
a program that does assist the poorest of the poor children and 
families. But those above the Medicaid eligibility poverty levels, 
comprise about 7 million children, most of whom are often called the 
near poor, or the working poor.
  Mr. President, as a recent study has made abundantly clear, about one 
out of three children in this country lacks health insurance. It is a 
pathetic situation.
  As my colleagues are aware, Senator Kennedy and Senator Kerry 
introduced a bill last year which addressed the child health insurance 
problem from a considerably different perspective than the bill we are 
finally going to introduce today.
  I think it is important to point out the differences for the 
edification of my colleagues.
  The bill we will file today is a bill that is a straight block grant 
to the States. The States have flexibility to determine their own 
eligibility standards with minimal Federal requirements.
  The proposal is not an entitlement program. It is a fully funded 
program. It is a 5-year authorization.
  The mechanism for funding the CHILD program authorization is an 
increase in the tobacco excise tax, amounting to 43 cents per package 
for cigarettes and proportionate increases on other tobacco products. 
Some have analogized this to a user fee on those who use tobacco 
products.
  We think this excise tax is justified. In 1955, a package of 
cigarettes cost about 23 cents. Of that amount, 8 cents consisted of a 
Federal excise tax on the cigarettes.
  Today, a package of cigarettes costs almost $2, at least $1.82 in 
most States, but we have only a 24-cent Federal excise tax on the 
utilization of those cigarettes.
  We think this provision is also justified from a public health 
perspective.
  Smoking is the largest preventable cause of premature death in the 
United States.
  Thirty percent of all cancer patients develop their diseases from 
smoking. Almost all lung cancer comes from smoking. And much of the 
cardiovascular disease that we have in our society comes from smoking--
including passive smoking as well.
  It should be no secret to my colleagues that it was a difficult 
decision for me to submit a bill which will increase taxes, but after 
considerable study I concluded in this case it is a just and a right 
thing to do.
  And if we increase the cigarette tax by 43 cents, we will still be 
below the percentage the excise tax was back in 1955 when a package of 
cigarettes cost 23 cents and the excise tax was 8 cents of that.
  It is important to note that two-thirds of the revenue raised from 
this bill over the next 5 years will be used for the new child health 
insurance. The States will be able to negotiate with private health 
insurance companies to provide coverage, and they will be able to 
utilize the community health centers which are giving low-cost but 
high-quality health care in America today.

  I am one of the strongest advocate for community health centers, and, 
I must say, they have done a superlative job of delivering health care 
in general in our society.
  In Utah, we have what is known as the Caring Foundation. For every 
dollar we raise in charity, Blue Cross/Blue Shield matches that dollar 
with $1, making $2 for child health insurance. I believe that can be 
duplicated across this country in the best interest of children and 
families.
  When someone inquires about why I am sponsoring the CHILD Act, my 
thoughts turn to scores of constituents who have brought their concerns 
about the cost and availability of health insurance to my attention.
  It is heart rending to me when I have uninsured families come into my 
office--many of whom are young and who have children. These families 
are frantic; they don't know where to turn when a child gets sick.
  Two young women from Provo in my home State came in to visit me 
recently. Both had six children. They both work part time. Their 
husbands work full time, but neither family makes more than $20,000 a 
year. They are hard-working people. They are the working people of our 
society who are the poorest of the poor not on Medicaid, who cannot 
afford health insurance and, frankly, who do not know where to turn.
  I think that it behooves us to solve this problem for them, and the 
best way to do it is with a straight block grant to the States.
  The grant approach has a lot of benefits. There should be minimal new 
bureaucracy, because the IRS already collects excise taxes on 
cigarettes. There should be minimal bureaucracy because HHS will 
distribute the funds based on a simple formula reflecting the number of 
uninsured in a State.
  We provide a safeguard so there is no incentive for businesses to 
drop the lower paid people off their health insurance. In this bill, if 
a company wishes to drop any employee from the company health plan, 
then they will have to drop all their employees, from the top 
executives on down.
  We are trying to help those who cannot help themselves, which I think 
is the most conservative thing we can do in this society. We are not 
trying to help those who can help themselves but refuse to. People who 
can help themselves ought to help themselves.
  What I am saying, Mr. President, is that it is time. It is time for 
this Congress to get down to business.
  Mr. President, it is time.
  It is time for us to get down to business.
  It is time for the Congress to focus on how to make a great country 
greater on how to set aside partisan differences and help the people we 
were elected to help.
  It is time to focus on what truly needs to be done in this country 
not on deadlock or gridlock or shutdown.
  It is time to wake up and realize that--in this great land of 
incredible riches and abundance--in the greatest country of the world--
there are still children being left behind.
  Who cannot be disturbed, even frightened, by the statistics?
  Drug use among our young people is dramatically on the rise. In its 
ninth annual survey of students in grades 6-12, the National Parents' 
Resource Institute for Drug Education [PRIDE] reported that annual use 
of most drugs was at the highest level since the survey began 10 years 
ago. Record use was reported for cigarettes, marijuana, cocaine, 
uppers, downers, inhalants, and hallucinogens.
  Serious questions have been raised about our children's ability to 
learn. Our children rank pitifully behind other countries in 
educational scores. One survey of international test scores for math 
and science, found Americans to rank dead last and South Koreans 
ranking the best. And, who could not be disturbed by this? A 1991 
National Assessment of Education Progress survey, revealed that only 5 
percent of high school seniors demonstrated enough understanding of 
geometry and algebra to be prepared for college-level math.
  Violence is rapidly becoming a way of life for today's children. Over 
the past decade, the rate of homicide committed by teenagers aged 14-17 
has more than doubled, increasing 172 percent from 1985 to 1994. In 
fact, 35 percent of all violent crime is committed by offenders less 
than 20 years of age.
  And here's another astounding fact. Two years ago, a survey of 1,000 
teachers showed that 11 percent had been assaulted in school. Teachers 
have been robbed, vandalized, slashed by razors, physically assaulted, 
shot, and set on fire in the schools. What kind of learning environment 
is that for our children?
  And, let's look at child health. How many Senators are aware that 
almost one out of three children have no health insurance?
  Ten million children have no health insurance at all. That is more 
children than the entire populations of Maine,

[[Page S2848]]

Rhode Island, Alaska, Delaware, Georgia, Hawaii, Montana, Nebraska, 
South Dakota, and Vermont--10 States--combined.
  Did anyone know this? Over 500,000 American infants are uninsured, 
infants who need such critical services as immunizations to grow up 
healthy.
  Mr. President, these are astounding statistics. Terrifying predictors 
of our world as we head into the 21st century.
  And I, for one, am going to put my foot down. I will do everything I 
can to reverse this trend.
  I challenge each Senator in this body to work with me on what must be 
the top agenda item for the 105th Congress: Making this world a better 
place for our children.
  I will make this a top priority in the Judiciary Committee.
  We will look at such issues as the Federal Gang Violence Act, 
violence in the schools, and, importantly, a strong national antidrug 
abuse strategy.
  Already the committee has approved--only to suffer the most narrow of 
defeats on the floor--the Balanced Budget Act, passage of which is 
perhaps the most important legacy we can leave for our children, each 
of whom is born saddled with $20,000 in debt.
  And I hope other committees will be working as well.
  For no effort to improve this world for our children can be complete 
without measures to improve their ability to grow up healthy.
  That is why I have united with my good friend and sometimes 
adversary, Senator Kennedy, to draft the bill we are introducing today: 
the Child Health Insurance and Lower Deficit Act. We call it the CHILD 
bill. The CHILD bill will be accompanied by additional legislation we 
also introduce today which provides the funding offset for the CHILD 
Program through an increase in the tobacco excise tax.

  Introduction today of S. 525, and the companion bill to increase the 
tobacco excise tax, completes 3 months of intense negotiations between 
myself and Senator Kennedy.
  Our discussions were sometimes heated, sometimes acrimonious, but 
always well intentioned. They have resulted in a bill, the adoption of 
which I think will make this country a better place.
  And so, today, Senator Kennedy and I have found a solid center--we 
have compromised from the left and from the right. We are doing this to 
help the 10 million children in the United States who are without 
health insurance. We are doing it because it is the right thing to do.
  The child health insurance and services bill Senator Kennedy and I 
will introduce today is targeted to the near poor, primarily working 
families, who are not covered by existing Government programs. Two-
thirds of the uninsured children come from low-income working families 
with annual incomes of $25,000 or less; 86 percent are from families 
where at least one parent is employed.
  I think any honest examination of this would show that these 
statistics are deplorable. Children are our most precious natural 
resource. If we had a vote on that today, it would pass 100 to 0. And 
if you agree on that, the next step is simple. I can't think of a more 
appropriate role for the Federal Government than helping the most 
vulnerable in our society. It has become a cliche, but children are our 
future.
  Already I have taken criticism for this bill and for uniting with a 
Democrat to sponsor the CHILD Act. It is true that Senator Kennedy and 
I represent the most divergent philosophies in the U.S. Congress. It is 
for that very reason we are proposing S. 525 today. United, we can 
provide the basis for a consensus position we hope all our colleagues 
will endorse.
  It is true that Senator Kennedy and I do not often agree on public 
policy. I can't even count the number of times I have stood on this 
floor to oppose--even filibuster--legislation he has sponsored. But 
with respect to health care--when it comes to helping people--we both 
have a strong commitment to doing the right thing regardless of 
politics. And this legislation is the right thing to do.
  Joining Senator Kennedy and me today in cosponsorship of the CHILD 
bill, S. 525, are 19 Senators, for a total of 21. Those Senators are: 
Snowe, Kerry, Jeffords, Dodd, Stevens, Rockefeller, Bennett, Daschle, 
Collins, Wellstone, Smith (OR), Bingaman, Campbell, Murray, Reed, 
Boxer, Lautenberg, Durbin, and Reid.
  Joining us in cosponsorship of the tobacco tax bill, S. 525, are 
Senators Bennett, Bingaman, Boxer, Dodd, Durbin, Jeffords, Kerry, 
Lautenberg, Murray, Reed, Reid, Rockefeller, Snowe, and Wellstone.
  What are the major features of the CHILD bill?
  Our proposal sets up a voluntary State grant program--I repeat, 
voluntary State grant program. The funds will be used by States to 
subsidize the cost, or part of the cost, of private health insurance 
for needy children. States will also be able to use Community and 
Migrant Health Centers to provide services directly to children.
  We hope our program will be a catalyst to improve health care for 
kids. It is a Federal/State/private partnership. Any State that wishes 
to participate must contribute to the program. States may require 
individuals or their employers to contribute as well.
  We have designed an approach which we believe is fiscally 
responsible. The bill authorizes program expenditures for each of 5 
years, and it is fully financed with a 43-cent increase in tobacco 
excise taxes. Two-thirds of the revenues will be used for program 
services, and one-third for deficit reduction.
  In drafting S. 525, we have worked very hard to make certain that no 
large, new bureaucracy will be needed to implement the CHILD Program. 
The idea of a huge new Federal involvement in health care frightens 
most Americans, as was so amply evidenced by the resounding defeat of 
the Clinton health care bill in 1994.
  I was one of the loudest objectors to that legislation as a member of 
both the Finance and Labor Committees at the time it was considered. I 
want to assure my colleagues that we are not replicating that exercise 
here today.
  HHS will disburse the grant money according to existing Medicaid 
formulas and the number of uninsured children in the State. The 
Treasury Department already collects an excise tax.
  The States will set eligibility levels, which presumably they could 
do very easily based on their experiences with Medicaid and other State 
programs to help the poor and near poor. The States will use their 
current Medicaid benefits packages to negotiate contracts for insurance 
coverage. These are not complex calculations. They should be easily 
achievable.
  We also worked very hard to allay any concerns that we were 
establishing a new entitlement program.
  We are not.
  The bill does not establish any individual entitlement to benefits. 
It is a 5-year authorization which is fully funded. It is not like 
Medicare where we guarantee we will pay for the services of every 
eligible beneficiary. It is not like Medicaid where we pay an open-
ended amount, which is appropriated annually.
  What we are really talking about doing with this bill is finding 
cost-effective ways to get quality health care services to children. 
Our bill recognizes and strengthens the important role that community, 
migrant and homeless centers play in caring for the Nation's uninsured 
children and their families. Community and rural health centers already 
exist. We are not creating them or remaking them in this bill.
  They are located in medically underserved communities where many 
uninsured children live. Over 940 health centers in every State serve 
one out of six low-income American children, over 4.5 million children. 
They are currently the family doctor for one out of seven uninsured 
children, totaling 1.3 million children. Last year, health center 
professionals delivered one of every 10 babies born in the United 
States, and one out of every five low income babies. They are experts 
in providing quality, comprehensive primary and preventive care to 
uninsured children--the very type of care we are trying to get to 
children with this bill.
  Our bill permits these children to continue to choose health centers 
as their primary care provider and to make the choice of a health 
center available to other uninsured children. In each area currently 
served by a health center, a direct service option will be available to 
children who are served by a health center. Families choosing the 
direct service option will

[[Page S2849]]

get the same comprehensive Medicaid package of services as do those who 
opt for a children's policy. Under the direct service option, children 
will receive their primary and preventive care at the health center 
they select and will receive specialty and inpatient care through 
networks of providers certified by the State or through a wrap-around 
insurance policy.
  We believe that the direct service option will be as cost effective 
as an insurance policy and may even be less expensive. Several studies 
which compared the total annual cost of health care for Medicaid 
patients served by health centers--including primary and specialty care 
and inpatient care--to the total annual cost of care for Medicaid 
patients served by other types of providers--including health 
maintenance organizations and private physicians--found that health 
center care was the least expensive.
  The reason? Health centers prevent illness because of the primary and 
preventive care they provide. Based on these studies, the cost of all 
care--primary, specialty, and inpatient--under the direct service 
option is expected to be lower than the cost for a child cared for by 
another type of provider.

  As the chief sponsor of the balanced budget amendment, I could not 
support the creation of any new entitlement program.
  Indeed, I believe this proposal is fully consistent with the BBA. 
First, our bill is fully financed by the proposed tobacco products tax. 
Second, for every $2 of program cost the Hatch-Kennedy bill dedicates 
$1 to deficit reduction.
  When all is said and done, this bill would help to bring the budget 
in balance--which I believe will be nearly as essential to children in 
the long-run as necessary health care is in the short-run.
  Let me underscore that the net cost to the Federal Government of the 
CHILD Act is zero, because it is fully funded. In fact, the bill 
literally saves money, because it provides at least $10 billion in 
funds for deficit reduction over the next 5 years.
  We cap Federal expenditures at $20 billion over 5 years for services, 
with $10 billion for deficit reduction. Over the 5-year period, the 
ratio of services to deficit reduction will be 2 to 1.
  For services, we will provide the following amounts: 1998: $3 
billion, 1999: $3 billion, 2000: $4 billion, 2001: $5 billion, 2002: $5 
billion.
  For deficit reduction, we provide the following amounts: 1998: $3 
billion, 1999: $3 billion, 2000: $2 billion, 2001: $1 billion, and 
2002: $1 billion.
  Let me make perfectly clear that the size of this program is capped 
each year. In fact, if not enough revenue is generated, then the size 
of the program will be lowered accordingly.
  Let me take a moment to address other potential concerns about this 
bill.
  Many have asked why we need a new program. Indeed, we have the 
Medicaid Program, which helps the poorest of the poor. Even so, there 
are 10 million children without coverage. In fact, 3 million uninsured 
children are eligible for Medicaid, but are not enrolled.
  There is no program for the remaining 7 million children, most of 
whom come from near poor families. Those families are faced with two 
very unattractive options: a choice between dropping out of the labor 
force in order to get Medicaid eligibility, or keeping their jobs with 
no health care coverage at all.
  It might be logical to assume that Medicaid would provide the basis 
for a program to increase child health coverage. And we did examine 
that idea. But, Medicaid is an open-ended entitlement--and an expensive 
one at that. Both the States and the Federal Government are seriously 
concerned about the runaway costs of Medicaid.
  In contrast, our capped program is not an entitlement. It is a 
targeted approach which allows States considerable flexibility in 
design and administration.
  Others have suggested that we use a tax-based approach. I would be 
willing to consider a tax credit approach, if we could design one that 
really works. But I foresee two problems in developing such an 
approach.
  The first is that a tax credit could really amount to an open-ended 
entitlement, whereas the size of our program is capped each year. The 
second is that poor and near-poor families, who we are trying to help 
with this bill, simply cannot afford to buy insurance coverage during 
the year, and wait until the next April to get the money back.
  For the benefit of my colleagues, I want to respond to two other 
concerns.
  First, I must emphasize that S. 525 is not the Kerry-Kennedy bill 
from last year, S. 2186. It is a new proposal that Senator Kennedy and 
I wrote together. Senator Kennedy and I have both moved considerable 
distances to write this compromise legislation.

  This bill is not an open-ended, permanent entitlement; it is a capped 
5-year program, run by the States and, as such, is very similar to a 
proposal former House Republican Leader Bob Michel authored in 1995.
  Second is the assertion that this bill is part of the Clinton agenda 
on health care. If helping the needy is crime, then I plead guilty. But 
I hope I have convinced those here today that there is a big difference 
between Clintoncare and the Hatch-Kennedy bill.
  Indeed, I am aware that some believe there is a hidden Clinton agenda 
to enact health care reform piece by piece, starting with kids care.
  I think that is a red herring. This argument suggests to me that we 
should never do anything worthwhile because of the possibility that it 
may evolve into something bad. I agree that we do not want the huge 
Clinton health care mandate proposed and debated during the 103d 
Congress. But, this bill is not that bill--it is not even a look-alike 
bill.
  I have tried to design a Reaganesque block grant tailored to meet a 
specific problem with a wide degree of flexibility for the States. 
Unlike the Clinton program, the CHILD Act is focused. It is fully 
financed; it does not establish a new Federal bureaucracy; and it does 
not create any new entitlements. There are no price controls and no 
regional alliances and no global budgets.
  Another difference is that we are trying to make this a bipartisan 
approach right from the beginning. We have the wisdom of that national 
debate 2 years ago and are far wiser for it.
  Let me next turn to the issue of the tobacco tax as a source of 
revenue for the Children's Health Insurance and Lower Deficit Act. 
There can be no doubt that smoking and tobacco use is a major public 
health problem. By any measure, it is also costly.
  Smoking is our Nation's No. 1 preventable health threat. There are 
about 48 million Americans who smoke. About 2 million Americans use 
other tobacco products like chewing tobacco.
  Consider these facts.
  Tobacco kills an estimated 419,000 Americans each year.
  An additional 2.5 million more people throughout the world die from 
smoking each year.
  Smoking accounts for about 1 in 5 deaths in the United States.
  Tobacco accounts for more deaths than homicide, car and airplane 
accidents, alcohol, heroin, crack, and AIDS--combined. In fact, 
cigarettes are also a major cause of fire fatalities in the United 
States. In 1990, cigarettes were responsible for about one-quarter of 
all deaths associated with residential fires; this represented over 
1,000 deaths.
  Each day nearly 3,000 young Americans become regular smokers. 
Eventually, 1,000 will die early from tobacco-related diseases.
  Unfortunately, cigarette smoking is on the rise among the young: 
According to the Centers for Disease Control and Prevention [CDC], the 
number of high school students reporting that they smoked in the last 
month rose about one-third between 1991 and 1995, from 27.5 percent in 
1991 to 34.8 percent in 1995.
  Among black high school age males the jump in smoking was even more 
alarming, doubling from 14 percent in 1991 to 28 in 1995.
  About 8 in 10 smokers begin to use tobacco before age 18 and about 
one-half of all smokers started at age 14 or earlier.
  In 1964, Surgeon General Luther Terry reported that smoking causes 
lung cancer in men.
  In 1988, the Surgeon General C. Everett Koop reported that smoking 
was an addictive behavior--the same as for heroin or cocaine.
  Each year, the estimated 1 million youngsters who become smokers add

[[Page S2850]]

about $9 to $10 billion to the Nation's health care costs over their 
lifetimes.
  According to a 1994 CDC report, tobacco cost an estimated $50 billion 
in direct health care costs in 1993. Of this total, CDC estimated that 
$26.9 billion went for hospital expenditures, $15.5 billion for 
physician expenditures, $4.9 billion for nursing home expenditures, 
$1.8 billion for prescription drugs, and $900 million for home health 
care expenditures.

  The 1994 CDC report notes: ``The findings in this report indicate 
that cigarette smoking accounts for a substantial and preventable 
portion of all medical-care costs in the United States.''
  According to CDC projections, in 1993 approximately 24 billion 
packages of cigarettes were sold in the United States and for each of 
these packages about $2.06 was spent on medical care attributable to 
smoking. Of this $2.06 per pack estimated societal medical care cost, 
CDC estimated that $0.89 was paid through public sources.
  The CDC study estimated that there was a twofold increase in 
estimated direct medical care costs attributable to smoking between 
1987 and 1993.
  Extrapolating the 1987 survey data reported by CDC, it can be 
estimated that, in 1993, about $10 billion in Medicare costs and $5 
billion in Medicaid costs were attributable to smoking.
  It has been estimated that smoking cost $4.75 billion to other 
Federal health care programs, $1.6 billion to other State health 
programs, and over $16.7 billion in higher premiums paid to private 
health insurance companies.
  In addition to the direct cost of about $50 billion annually, experts 
agree that a similar amount of costs are borne by society through lost 
productivity--that is, the foregone earnings of those dying 
prematurely.
  Researchers at the University of California at San Francisco, Drs. 
Wendy Max and Dorothy Rice, estimate that the 1993 mortality costs due 
to smoking were $47 billion.
  Overall, smoking costs society over $100 billion annually. This is 
simply too high a price to pay.
  It is estimated by the Joint Tax Committee that a 43 cent per pack 
increase in the cigarette tax, coupled with proportionate tax increases 
for other tobacco products, would yield about $6 billion in new 
revenues.
  Another point that I want to make today is that the tobacco tax 
simply has not kept up with inflation. As a matter of fact, the 
relative component of the price of cigarettes devoted toward taxes has 
slipped over the last three decades and, even with the increase we 
propose today, will actually be lower proportionately once this bill is 
enacted than it was in 1964 when Surgeon General Luther Terry reported 
that smoking causes cancer.
  In 1964, the average total price of a pack of cigarettes was about 
30.5 cents per pack. Of this total, 8 cents went to pay the Federal tax 
and another 8.5 cents per pack were levied in State cigarette and sales 
tax. In sum, in 1964, about 50.5 percent of the cost of a pack of 
cigarettes went to taxes.
  Currently, the average price per pack of cigarettes is about $1.94. 
Of this total, 24 cents represents the Federal tax and an additional 
31.7 cents per pack is levied by the States together with an additional 
9.3 cents per pack in sales taxes. All in all, the share of the per 
pack price of cigarettes devoted to taxes has dropped to about 33.5 
percent today from the 1964 level of 50.5 percent.
  If the CHILD Act were signed into law and the new 43 cents per pack 
tax were added, and if this new tax were passed on directly to the 
consumer to increase the per pack price to $2.37 per pack, the share of 
the total price devoted to taxes--45.6 percent--would still be lower 
than it was in 1964.
  Even when this new tax is factored in, the United States would still 
have a relatively modest tax component built into the price of 
cigarettes compared with other industrialized countries. For example, 
in Canada 64 percent of the price of cigarettes is devoted to taxes. In 
Great Britain, the comparable figure is 82 percent.
  As a conservative, I am generally opposed to tax increases. I firmly 
believe that the Federal Government should spend less, and the American 
people should keep more of the money that is earned in our economy.

  As a conservative, I believe in a balanced budget. That is why I 
spent the better part of February managing the floor debate for the 
balanced-budget amendment. That is why I worked hard to convince 
Senator Kennedy to earmark one-third of the revenues raised by the 
proposed increase in the cigarette tax for deficit reduction.
  Yet, the statistics about tobacco use and cost that I cited above, I 
believe, make the case that tobacco products are imposing external 
costs onto society that are not adequately reflected in the price of 
these inherently dangerous products. Simply stated, the producers and 
consumers of tobacco products are not paying the full costs of this 
product.
  When I balance the opportunity that we have in terms of helping to 
provide health insurance and services to children, coupled with a 
significant deficit reduction component, against my natural aversion to 
raising taxes, I come down in favor of this financing mechanism with 
this tobacco tax--or, as I call it, a user fee. I believe that both the 
public health and economics reasons are unique and compelling.
  I believe that when my colleagues in Congress have the opportunity to 
fully consider these issues that they will agree with the cosponsors of 
this legislation and support the CHILD Act.
  In closing, Mr. President, let me state my intention to work with all 
interested parties to improve this bill as it moves through the 
legislative process.
  Indeed, as I have stated, there are some provisions contained within 
this bill that I believe could be improved through a thorough public 
discussion.
  In particular, I would like to hear from the Governors about how this 
bill meets their needs with respect to the uninsured population.
  I am aware that they may have a few concerns about the bill, such as 
using the Medicaid benefits package as the model for the private 
insurance contracts.
  Senator Kennedy and I inserted that provision in the bill for two 
reasons. We knew that the Governors would be familiar with it and, most 
importantly, it would obviate the need at either the Federal or State 
levels to undertake the onerous task of creating a benefits package.
  Our Utah Governor, Mike Leavitt, has stated on more than one occasion 
that he believes the Medicaid benefit package is too ``rich;'' in other 
words, a more efficient package would be less costly and still provide 
needed care. I look forward to working with him and the leaders of 
other States to address this issue.
  Another issue of critical concern is the interrelationship of this 
program with the employer community. We were very careful to design a 
program that would complement existing employer efforts to insure their 
employees without a costly Federal mandate. On the other hand, though, 
we wanted to make sure that there was no incentive for employers to 
``dump'' employees into the new program in order to relieve themselves 
of a benefit cost.
  That is why we inserted a provision that states that any employer who 
makes health insurance contributions for an employee cannot vary such 
contributions based on an individual's eligibility under the CHILD Act. 
The only way an employer could put a currently insured employee into 
the CHILD program would be to eliminate coverage for all employees in 
the company plan. We think this is highly unlikely to happen.
  Again, let me state that we were very sensitive to the concerns about 
a mandate on employers, and we look forward to a very careful 
examination of this issue as the legislation progresses.
  Let me also discuss for a moment the issue that Senator Lott has 
already mentioned, that of making certain that the 3 million children 
who are currently eligible for Medicaid, but not participating, become 
enrolled. While our bill does not address that issue, it is something 
we need to do. I hope to work with Senator Jeffords and Senator DeWine 
who have indicated in interest to me in working to make certain that 
those who are eligible for Medicaid can participate.
  But let me hasten to add that only 3 million out of the 10 million 
uninsured children are eligible for Medicaid. So, Senator Lott's idea--
which is a good one--would still leave 70 percent of the problem 
untouched.
  Mr. President, in closing I want to reiterate my commitment to 
working

[[Page S2851]]

with Senator Kennedy and all 98 of my other colleagues to enact a bill 
this year which will improve child health insurance coverage in the 
United States.
  It is time, and I hope the majority of this body will agree.
  The PRESIDING OFFICER. Under the previous unanimous-consent request, 
the 15 minutes allocated to the Senator from Utah has expired.
  Mr. HATCH. Will my friend yield me 30 seconds?
  Mr. KENNEDY. Sure.
  Mr. HATCH. I want to compliment my friend for the remaining 30 
seconds. I wish I could spend more time.
  Development of these bills has not been an easy thing for him to do, 
or for me. But I am convinced we have drafted a program that will work.
  I have to suggest that if Senator Kennedy and Senator Hatch--who have 
such widespread differences of philosophy--can unite to propose a 
program like this, then anybody can get together. Despite our 
philosophical differences, which are wide, we both have a great deal of 
friendship and caring for each other. We are working as hard as we can 
to do what is right here.
  I want to thank my colleague for his great work in this effort.
  I yield the floor.
  Mr. KENNEDY. Mr. President, I want to thank Senator Hatch for his 
leadership on this important issue affecting our Nation's children.
  Those of us in the Senate have noted that Senator Hatch was 
instrumental a number of years ago, working with Senator Dodd and 
myself, on the child care block grant program, which still is in 
existence. It has been evaluated as an extremely effective program for 
providing child care for the working poor.
  A number of years ago we also worked closely together in the summer 
jobs initiative that included continuing education programs.
  In the area of children, I think Senator Hatch and I as well as many 
others understand that this is neither a Democratic issue nor a 
Republican issue. Nor is it a North or South issue. It is an American 
family issue.
  For every American family children come first, as well they should. 
They are our greatest asset and they represent our Nation's future. 
When we invest in our children, we are investing in America's future. 
That is why this effort is of such importance and why Senator Hatch and 
I are now working closely together to make sure that this legislation 
becomes law.
  Mr. President, it is reasonable to ask, why now? Why children?
  The fact of the matter is 3,000 children every single day lose their 
health insurance. Nine out of ten of those who are losing their health 
insurance in this country are children.
  The number of uninsured children is growing. It will rise to 5 
million by the year 2000, making it increasingly urgent that we address 
the fact that more and more children are becoming uninsured.
  We are talking about the sons and daughters of working families--
families that are working 52 weeks of the year, 40 hours a week, trying 
to make ends meet and play by the rules. One of the things they are 
unable to do is provide health care coverage for their children.
  Their children require this coverage, which is why Senator Hatch and 
I and many others want to make health insurance accessible and 
affordable for all of America's children. We know the number of 
children who have ear infections and never see a primary care doctor. 
We know the number of children who are in school at this very hour and 
have difficulty seeing the blackboard or reading a book and are 
humiliated in their classroom because they have not had their eyes 
tested.
  This crisis is occuring all over the country. It is happening in 
urban areas and in rural communities. But we can do something about it, 
and that is why the legislation is of such importance.
  Ten million children are uninsured. Their parents are working hard 
trying to make ends meet, and the one thing they cannot afford are the 
premiums to provide health care coverage for their children.
  As Senator Hatch has pointed out, our legislation will build on 
existing programs in the States, and the States by and large are 
overwhelmingly using the voucher system. I know there are those who 
favor a tax credit program, but it has been tried and did not work in 
the past.
  We are also building on the private sector because the insurance that 
will be provided and distributed is going to be as a result of 
competition in the States.
  Finally, we are paying for the program with a 43-cents-per-pack 
increase in the Federal tobacco tax.
  Some say, isn't this unfair and unjustified? We say that tobacco 
costs the Nation $50 billion a year in direct medical costs--$50 
billion a year. By adding 43 cents on a pack of cigarettes, we will 
have even less than the proportion of tax--Federal, State, and sales 
tax--for a pack of cigarettes than we had in the early 1960's.
  When we look at where we are in comparison to where other countries 
around the world--our cigarette taxes are well below every other 
industrial country in the world. With our 43-cents-per-pack increase in 
the Federal cigarette tax, it will still be among the lowest of all 
industrial nations.
  Mr. President, we strongly support this increase in the cigarette tax 
because it can do more to stop children from smoking than any other 
action we could possibly undertake. This will have a dramatic impact on 
reducing addiction among teenagers, who have less income than adults to 
spend on cigarettes. That is when the smoking really starts and where 
the child becomes addicted.
  We say that not only because that has been the history of pricing 
over the period of the last 30 years, but it is there in the documents 
and statements of the tobacco companies as we have seen in the Liggett 
story recently.
  Mr. President, this is legislation which the American people support. 
It makes sense from a health point of view. It makes sense from their 
family point of view. It makes sense for the future in terms of having 
children who are going to have good quality health care. It makes sense 
because it will save the lives of over 800,000 children who would 
otherwise have died from a smoking-caused illness. And it will also 
provide a modest reduction in terms of the deficit.
  This is a win-win-win for the American people. It should be a 
bipartisan effort. I want to commend Senator Hatch for his leadership 
and I thank all of our Democratic colleagues for joining in our 
efforts.
  I am honored to join Senator Hatch in introducing the Child Health 
Insurance and Lower Deficit Act of 1997, which will be a major step 
toward making health insurance accessible and affordable for all of 
America's children. I am hopeful that the legislation we are 
introducing today will be approved by this Congress, and signed by 
President Clinton. It shows that Democrats and Republicans can work 
together to solve this national problem.
  One of the most urgent needs of children is health insurance 
coverage. Insurance is the best possible ticket to adequate health 
care--and every child deserves such care.
  Today, however, more than 10 million children have no health 
insurance--1 child in every 7--and the number has been increasing in 
recent years. Every day, 3,000 more children lose their private health 
insurance. If the total continues to rise at the current rate, 13 
million children will have no insurance coverage by the year 2000.
  Almost 90 percent of these uninsured children are members of working 
families. Two-thirds are in two-parent families. Most of these families 
have incomes above the Medicaid eligibility line, but well below the 
income level it takes to afford private health insurance today.
  The children's health care crisis begins at the beginning--with 
inadequate prenatal care. Some 17 industrial countries have lower 
infant mortality rates than the United States. Every day, 636 infants 
are born to mothers in this country who did not have proper prenatal 
care; 56 die before they are 1 month old. And 110 die before the age of 
1. Many more grow up with permanent disabilities that could have been 
avoided with prenatal care. Uninsured pregnant mothers have sicker 
babies, and these babies are at greater risk--low birth weight, 
miscarriage, and infant mortality.
  Too many young children are not receiving the preventive medical care 
they need. Uninsured children are twice as likely to go without medical 
care for conditions such as asthma,

[[Page S2852]]

sore throats, ear infections, and injuries. One child in four is not 
receiving basic childhood vaccines on a timely basis. Periodic physical 
examinations are out of reach for millions of children, even though 
such exams can identify and correct conditions before they cause a 
lifetime of pain and disability.
  Preventive care is the key to a healthy childhood, and it also is a 
cost-effective investment for society. Every dollar invested in 
childhood immunizations saves $10 in later hospital and other treatment 
costs.
  Some say there is no health care crisis for children. But I reply, 
tell that to the hard-working parents who cannot afford coverage for 
their families or whose employers won't provide it.
  Tell it to the hospital emergency room physicians who are often the 
only family doctor these children know, and who have to treat them for 
heart-breaking conditions that could have been prevented or easily 
cured with timely care.
  Tell it to school teachers struggling to teach children too sick to 
learn. Tell it to children's advocates across the country, who see 
children every day with health care needs neglected for too long. 
Between 30 and 40 percent of children in the child protective system 
suffer from significant health problems.
  For all these reasons and many more--10 million more--the children's 
health care crisis is real, and the time to address it is now. Every 
child deserves a healthy start in life. No family should have to fear 
that the loss of a job, or an employer's decision to drop coverage or 
hike the insurance premium will leave their children without health 
care.
  The current neglect is all the more unconscionable, because children 
and adolescents are so inexpensive to cover. That is why we can and 
must cover them this year--in this Congress. The cost is affordable--
and the benefits for children are undeniable.
  The legislation that Senator Hatch and I are introducing will make 
health insurance coverage more affordable for every working family with 
uninsured children. It does so without imposing new Government 
mandates. It encourages family responsibility, by offering parents the 
help they need to purchase affordable health insurance for their 
children.
  Under our plan, $20 billion over the next 5 years will be available 
to expand health insurance coverage for children, and $10 billion will 
be available for deficit reduction. I share Senator Hatch's commitment 
to balancing the Federal budget by the year 2002. As our plan today 
suggests, we believe we can do it, and do it fairly.
  When fully phased in, our legislation will provide direct financial 
assistance to approximately 5 million children annually. Every family 
with an uninsured child will have access to more affordable coverage. 
Combined with efforts to enroll more eligible children in Medicaid, 
this plan is a giant step toward the day when every American child has 
health insurance coverage. This bill is the most important single step 
the Congress can take this year to provide a better life for every 
American child.
  States choosing to participate in the program will contract with 
private insurers to provide child-only private coverage. These 
subsidies will be available to help eligible families purchase coverage 
for their children, or participate in employment-based health plans. 
Coverage will be available for every child, including children in 
families not eligible for financial assistance. The program also allows 
States to allocate up to 5 percent of total program costs to provide 
preventive care and primary care to pregnant women. Participating 
States must contribute to the cost of the program, and must maintain 
their current levels of Medicaid coverage for children.
  The basic principles of this proposal are neither novel nor untested. 
Fourteen States already have similar programs for children. In 
Massachusetts, an existing program was expanded last year, so that 
families up to 400 percent of the poverty level are now eligible for 
financial assistance to buy insurance. In 17 additional States, Blue 
Cross/Blue Shield offers children's-only coverage, with subsidies for 
low-income families. These State initiatives provide a solid base on 
which to build an effective Federal-State-private partnership to get 
the job done for all children.
  Senator Hatch and I propose to pay for this program of children's 
health insurance and deficit reduction with an increase of 43 cents a 
pack in the Federal cigarette tax, from its current level of 24 cents. 
It makes sense to finance the coverage this way, because of the higher 
costs for health care and premature deaths caused by smoking.
  Smoking is the leading preventable cause of death in the United 
States. It kills more than 400,000 Americans a year. It costs the 
Nation $50 billion a year in direct health costs, and another $50 
billion in lost productivity. A cigarette pack sold for $1.80 costs the 
Nation $3.90 cents in smoking-related expenses.
  Even with our proposed increase, cigarette taxes as a percent of the 
product price will still be lower than they were in 1965 and will be 
far below the levels in almost every other industrialized country.
  A higher cigarette tax will have the added benefit of reducing 
smoking among teenagers. If we do nothing to reduce such smoking, 5 
million deaths from smoking-related diseases will occur over the 
lifetime of the current generation of children.
  Raising tobacco taxes to finance health insurance for children has 
the support of an overwhelming 73 percent of the public. If the tobacco 
tax is raised, an even higher 87 percent support using the revenue to 
expand health services for children.
  I look forward to early action by Congress on this issue. Every day 
we delay means more children fail to get the healthy start in life they 
need. When we fail our children, we also fail our country and its 
future.
  I yield the remaining time to the Senator from Connecticut, Senator 
Dodd.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, let me thank my colleague from Massachusetts 
for yielding.
  Let me begin these brief remarks by commending him and, of course, 
our good friend and colleague from Utah, Senator Hatch, who is the lead 
sponsor of this legislation, for his efforts here, along with our 
colleague from Massachusetts who historically, of course, has taken the 
leadership role over the last number of decades on health-care-related 
issues.
  Our colleague from Utah and I have had the pleasure and privilege of 
working together on major legislation. When he says, if you have a bill 
with Orrin Hatch's name on it, there is a good chance it is going to 
become law, I can testify to that, having worked with him on the act 
for better child care. Today millions of people have accidental health 
care and decent child care because of his efforts. So I commend, Mr. 
President, both of our colleagues.
  I offered the first child health care package almost 4 years ago to 
deal with children's health. As both of our colleagues have pointed 
out, Mr. President, we have about 10 to 10.5 million children in the 
country who do not have any health care at all. In my State of 
Connecticut, about 110,000 children are without any health care 
coverage at all.
  What makes this so ironic in many ways, Mr. President--as we have 
gone through a debate on welfare reform fairly recently--is that 88 
percent of the parents of these children without health care are 
working. The assumption I think a lot of people must have is that 
children without health care are the children of parents who are living 
on public assistance. Nothing could be further from the truth. If you 
are on public assistance, you get health care, you get Medicaid. If you 
are out of work on welfare, you get Medicaid. If you are in jail, you 
get health care in this country. But God help you if you are a working 
family out there working at the lower income levels trying to provide 
for your family when we have a seen a dramatic increase in the 
reduction of private health care coverage.
  Mr. President, I asked for a General Accounting Office study a number 
of months ago, the results of which came back about a few weeks ago on 
what has happened to private health insurance for working families. We 
have seen about a 4.5 to 5 percent increase nationwide in the number of 
families who have dropped or been dropped from private health 
insurance. In 1993, 29

[[Page S2853]]

million families lost their health care coverage in this country. And 
the premium costs went up. Small employers decided to drop it 
altogether.
  So we have watched a tremendous increase in the number of families, 
working families, with children without any kind of health care 
coverage at all.
  Many of our State laws, Mr. President, require, under law, that you 
insure your automobile. Many of our State laws, if not all of them, 
require that if you have a home mortgage, there be insurance on your 
house. All that we are suggesting here today is that if you have a 
child, there ought to be health care coverage or insurance for that 
child.
  If it is mandatory that your home be insured, if it is mandatory your 
car be insured, if you are out of work and on public assistance you get 
health care, if you are in prison you get health care, what our 
colleagues from Massachusetts and Utah, and those of us who are 
supporting them, are suggesting, is that if you are a working family in 
this country, your children--your children--also ought to have a safety 
net for health care. So this proposal does just that.
  Mr. President, I will just conclude with a story. We had a press 
conference announcing this GAO study a few days ago. I brought with me 
a woman from Connecticut. Both she and her husband work. Her husband is 
in construction. She works for a nonprofit organization in the State of 
Connecticut. They have two children. Their oldest boy has a serious 
mental health problem. It is a serious mental health illness with a 
cost of over $1,000 a month, on average, for medication. They have run 
out of support from the State program. There is not going to be any 
more. They were left with this choice--until someone stepped in and 
made an exception in their case--but left with this choice: Either they 
could quit their jobs and go on public assistance and get health care 
for that child, that is one option, or the other was to take their 
child and turn him over to the State, give up custody and let him 
become a ward of the State, so that then the child could get health 
care coverage.

  We hear people talking of family values and families staying together 
all the time. But somehow, in this situation, this family wants 
desperately to keep custody of their child, and they keep working and 
they get no help whatever. There is something fundamentally erroneous 
about the situation that presently exists that if you work and want to 
keep your children, you run the risk of losing the health care, whereas 
if you go on public assistance or give up the custody of your child, 
you can get health care coverage.
  Mr. President, the suggestion of both of our colleagues is to fill in 
this gap that exists for these 10\1/2\ million children today that are 
without any health care coverage. The numbers are growing, by the way. 
This is not a number that is declining, but is a number that is 
growing.
  They have come up with a funding scheme that I think most people will 
support in this country. It is controversial. Obviously, some will 
object to how this is paid for. I think it is a very sound idea to come 
up with this funding scheme and also to allocate some of the resources 
for deficit reduction.
  Again, Mr. President, if we can insure our cars by law, our homes by 
law, if you are on welfare or in prison and you get health care 
coverage, at the very least, we ought to do the same for America's 
children. This legislation allows us to do that. I commend both of our 
colleagues and look forward to adoption of the law.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized 
for 5 minutes.
  Mr. KERRY. Mr. President, I am delighted to join with my colleague, 
Senator Kennedy, with Senator Hatch, and others, in introducing today 
legislation to provide health care to the 10 million children in the 
United States who today do not have that care.
  Last year, Senator Kennedy and I joined together with other Senators 
to introduce legislation to similarly provide health care to these 
children. Since the time that we introduced legislation a year ago, 
over 750,000 children under the age of 18 have lost health insurance. 
One child loses health insurance every 35 seconds in the United States. 
We are the only industrial country on the face of this planet that does 
not insure our children, or that does not insure, even, many of our 
adults.
  What is extraordinary about this situation is that we are not talking 
about the poorest of our poor in America. The poorest of the poor get 
help. They have health insurance. They get Medicaid. The fact is that 
we are talking about 10 million children who are the children of 
working Americans, fully three-fifths of whom work full-time jobs, and 
90 percent of whom are working at some job or another.
  I visited recently at the Children's Hospital in Boston and I 
listened to the story of two parents who are working, both of whom are 
just not earning enough money in their full-time jobs to be able to pay 
the premiums for the expensive insurance that their sick child needs.
  The fact is that over one-half of all the children in the United 
States who have asthma never see a doctor. One-third of all the 
children in the United States who have an ear problem never see a 
doctor. Similarly, for eye problems: As we have learned from medical 
experts, those problems, often undiagnosed, become chronic ailments and 
many times become lifetime impairments. We then pick up the cost of 
those impairments with special education needs, and at the back end of 
often substance abuse or other kinds of highly intensive, labor-
intensive interventions which we could have avoided early on.
  Just take the case of neonatal/prenatal care. It costs $1,000 for a 
year of covering a pregnant woman with early nutrition, early 
intervention, for pregnancy. But if a child is born underweight as a 
consequence of the lack of that kind of intervention, it costs $1,100 a 
day.
  I have talked to teachers in schools who have told me the stories of 
young students who come into the school; they are in the classroom and 
they are disruptive, not because they want to be disruptive, but 
because they have a problem. In one particular case, a teacher told me 
of a child who chronically disrupted the entire class. They could not 
figure it out. They finally got the child to a clinic because the child 
had not been examined by a doctor, and they found the child had a 
chronic earache problem as a consequence of an infection. Antibiotics 
were given, the infection was cleared up, and the child became a full 
participant in the classroom.
  Mr. President, there are countless stories like these. I want to 
congratulate Senator Kennedy and Senator Hatch for working together in 
helping to come up with a scheme to fund this, that clearly addresses 
other health needs of the country. When we consider the costs of our 
various wings of hospitals that are dedicated to pulmonary disease, to 
emphysema, to cancer as a consequence of smoking, we are spending 
billions upon billions of dollars, far in excess of the cost of this 
kind of program, to provide preventive care at the early outset.
  So this is really an investment, not an expenditure. This will repay 
itself many times over. We know that the health care expenditure in 
early prevention will save anywhere from $3.40 to $16 by virtue of $1 
invested.
  Mr. President, it is time in America for us for catch up to the rest 
of the industrialized world and provide insurance to the young children 
of this Nation who desperately need it.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. Durbin, Mr. Harkin, Mr. 
        Wellstone and Mr. Kennedy):

  S. 527. A bill to prescribe labels for packages and advertising for 
tobacco products, to provide for the disclosure of certain information 
relating to tobacco products, and for other purposes; to the Committee 
on Commerce, Science, and Transportation.


               TOBACCO DISCLOSURE AND WARNING ACT OF 1997

  Mr. LAUTENBERG. Mr. President, I rise today to introduce a bill we 
are calling the Tobacco Disclosure and Warning Act of 1997. Frankly, I 
hope we are going to be able to look back at this day and say this was 
a great day for America's children, that this was a great day for the 
future well-being of coming generations.
  I am joined by my Senate colleague from Illinois, Senator Dick 
Durbin,

[[Page S2854]]

who worked with me in the past on establishing a ban on smoking in 
airplanes, he was a Member of the House before, and Senator Harkin from 
Iowa, and Senator Wellstone from Minnesota. They joined me this morning 
in declaring that we are interested this day in the health of our 
children. We want to warn them that a habit that they could be 
induced--if I may use the term more crudely, seduced--into, if they 
join in the tobacco addiction group, that they may be jeopardizing 
their health very seriously.
  Our bill will force tobacco companies to tell the truth, finally, to 
the American people. As witnessed by the Liggett & Myers' settlement, 
which wiped away the secrecy and deception perpetrated by the industry, 
truth is one of the few items in short supply in the tobacco industry. 
This bill will require tobacco manufacturers to disclose the 
ingredients of their product to the public.
  Actually, it is a modest step. Of the hundreds of products on sale in 
America that go into the human body, tobacco products are the only 
ones--the only ones--for which manufacturers do not have to disclose 
the ingredients. Take a company like Coca-Cola, one of the world's 
great companies. They have a proud tradition of keeping their formula 
secret. They have to list Coke's ingredients on every can.
  There is a major difference, of course, between Coca-Cola and 
cigarettes. Coca-Cola does not kill anybody and cigarettes kill 400,000 
people a year--more than 400,000. That is one out of every three new 
users that the industry is trying to recruit. That is according to the 
Centers for Disease Control.
  Manufacturers of every food product and every over-the-counter drug 
disclose their contents. Cigarette manufacturers do not. Can we wonder 
why? Yet, of any consumable product for sale in the United States, it 
is by far among the most deadly.
  When you think about the materials that are in cigarettes, 
carcinogens--43. Should not America know that when you inhale you are 
going to get some arsenic, going to get some benzine, materials that 
are very dangerous to health?
  Lead, we fight all over the place to take lead out of gasoline, take 
lead out of paint. But we sell it to the kids. That is what the tobacco 
industry wants to do. Cadmium, nickel--you would not let your child go 
near these things, yet everyday this industry, these companies, get tax 
deductions to advertise their addictive, health-damaging product--maybe 
lethal.
  Our bill also is going to replace the warnings. We ask, A, they list 
the ingredients. B, we ask also that health warnings on the side of a 
cigarette package be significant, with larger warnings on the front and 
back that are simple and direct, saying: ``Cigarettes kill. Smoking can 
kill you. Cigarettes are addictive. Cigarettes cause heart attacks and 
stroke.''
  It is pretty simple. But maybe, just maybe, then we will be able to 
stop the industry from targeting its recruits for the day. Mr. 
President, 3,000 children, young people, a day, are attracted and start 
smoking. And then they cannot quit.

  These kinds of warnings exist all around the world. Cigarettes kill 
one out of every three, again, I repeat, of its users. Over 400,000 
Americans every year die from smoking and lots more get sick: 
Emphysema, heart attacks, cannot conduct their normal activity, cannot 
associate with their families, cannot show the kids how to hit a ball, 
run a base or go skating or skiing. We should disclose information on 
the ingredients of cigarettes to the public and provide it with 
realistic warnings about the health risks that cigarettes cause. It may 
seem that most smokers know a single cigarette may have hundreds of 
dangerous ingredients, but I doubt it. When a smoker lights a 
cigarette, some of these ingredients burn to create other chemicals, 
and some of these are carcinogenic.
  A Surgeon General's report in 1989 reported that cigarettes contain 
43 carcinogens. The list is here, over 43. I did not know it until 
recently. But the public certainly has a right to know. Do most smokers 
realize that one of these chemicals is arsenic? I do not think so. Our 
bill would disclose that, as well as the other chemical carcinogens in 
cigarettes.
  With all these known dangers about smoking, we should not hide health 
warning labels in small type on the side of a cigarette pack. Other 
countries, countries like Canada, Australia, Thailand, put large labels 
on the front of each pack and they put it, of course, in their native 
language. The United States should provide equal protection to 
consumers. The warnings should be stark, brutal if necessary, and 
easily seen. When cigarettes get in the hands of kids, and 3,000 of 
them take up smoking every day, they ought to be looking at something 
that says: Smoking can kill you. Smoking is addictive. Smoking harms 
athletic performance.
  That is a lot more graphic and descriptive than the small print that 
appears today. We should have no beating around the bush because this 
bush kills you. With large and honest warnings, more children will get 
the message and perhaps some will put down that pack rather than 
lighting it up.
  Mr. President, the 105th Congress should enact this legislation. It 
should not be a partisan issue. In the coming weeks I expect this bill 
will attract cosponsors from both sides of the aisle. The public has a 
right to know. They have a right to know the truth. Unless Congress 
forces the industry's hand, it will never fully disclose to customers 
what it puts in its product, what it puts in their products.
  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. 527

       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 ``Tobacco Disclosure and 
     Warning Act of 1997''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Tobacco products are the largest preventable cause of 
     illness and premature death, responsible for one of every 5 
     deaths in the United States.
       (2) Tobacco is a uniquely harmful product in that it is the 
     only product which kills when used as intended.
       (3) Cigarettes and spit tobacco products are powerfully 
     addictive because they contain nicotine which is a poisonous, 
     addictive drug.
       (4) Tobacco-related addiction is a pediatric disease. The 
     vast majority of new smokers are teenagers or younger and 
     children are beginning to smoke today at a younger age than 
     ever before.
       (5) The United States health care system spends an 
     estimated $50 billion a year to treat diseases caused by 
     tobacco use. In addition, the United States economy loses $50 
     billion a year from lost productivity due to tobacco-related 
     illnesses and premature death.
       (6) The nicotine in tobacco products is responsible for the 
     addiction of up to one half of all children who experiment 
     with tobacco.
       (7) More than 3,000 children begin smoking each day. An 
     estimated 1,000 of them will die from a tobacco-related 
     illness.
       (8) Tobacco manufacturers manipulate the levels and 
     presence of the drug nicotine in their products with the 
     intent to cause and sustain addiction in consumers.
       (9) In 1997 the tobacco industry will spend over $5 billion 
     on advertising and promotion to attract new users, retain 
     current users, increase current consumption, and generate 
     favorable long-term attitudes toward smoking and tobacco use.
       (10) The Federal Government has a substantial interest in 
     ensuring that those who do not use tobacco products are not 
     encouraged to use them and those who use tobacco products are 
     discouraged from continuing their use.
       (11) A failure to provide adequate and complete health 
     warnings and labeling information to fully inform consumers 
     about the risks and dangers of tobacco use is misleading.
       (12) Health warnings on cigarette packages have not been 
     updated since 1984 and do not fully reflect current 
     scientific knowledge on the adverse health effects of tobacco 
     use.
       (13) The display format of tobacco health warnings can be 
     more effective as a vehicle for promoting public knowledge of 
     the health risks.
       (14) Health warnings are most effective when directed at 
     those people who are tempted to try smoking, who are 
     experimenting with smoking, or who are considering a decision 
     to quit smoking.
       (15) Health warnings will be most effective when they are 
     present each time the opportunity to use a tobacco product 
     occurs and each time tobacco products are promoted and 
     advertised.
       (16) Changes in warning format and revisions in the text of 
     health warnings further the Federal government's commitment 
     to reduce tobacco-related disease and are a low cost means of 
     enhancing the effectiveness of other tobacco reduction 
     programs.

[[Page S2855]]

     SEC. 3. DEFINITIONS.

       As used in this Act:
       (1) The term ``advertisement'' means--
       (A) all newspapers and magazine advertisements and 
     advertising inserts, billboards, posters, signs, decals, 
     banners, matchbook advertising, point-of-purchase display 
     material and all other written or other material used for 
     promoting the sale or consumption of tobacco products to 
     consumers,
       (B) advertising at an internet site,
       (C) advertising promotion allowances,
       (D) the appearance on any item (other than cigarettes or 
     other tobacco products) of the brand name (alone or in 
     conjunction with any other word), logo, symbol, motto, 
     selling message, recognizable color or pattern of colors, or 
     any other indicia of product identification identical or 
     similar to, or identifiable with, those used for any brand of 
     cigarettes or other tobacco products,
       (E) any other means used to promote the identification or 
     purchase of tobacco products.
       (2) The term ``brand'' means a variety of tobacco products 
     distinguished by the tobacco used, tar and nicotine content, 
     flavoring used, size of the tobacco product, filtration, or 
     packaging.
       (3) The term ``cigarette'' means--
       (A) any roll of tobacco wrapped in paper or in any 
     substance not containing tobacco which is to be burned,
       (B) any roll of tobacco wrapped in any substance containing 
     tobacco which, because of its appearance, the type of tobacco 
     used in the filler, or its packaging and labeling is likely 
     to be offered to, or purchased by consumers as a cigarette 
     described in subparagraph (A),
       (C) little cigars which are any roll of tobacco wrapped in 
     leaf tobacco or any substance containing tobacco (other than 
     any roll of tobacco which is a cigarette within the meaning 
     of subparagraph (A)) and as to which one thousand units weigh 
     not more than 3 pounds, and
       (D) loose rolling tobacco and papers or tubes used to 
     contain such tobacco.
       (4) The term ``constituent'' means any element of tobacco 
     or cigarette mainstream or sidestream smoke, including tar, 
     the components of the tar, nicotine, and carbon monoxide or 
     any other component designated by the Secretary.
       (5) The term ``distributor'' does not include a retailer 
     and the term ``distribute'' does not include retail 
     distribution.
       (6) The term ``ingredient'' means any substance the use of 
     which results, or may reasonably be expected to result, 
     directly or indirectly, in its becoming a component of any 
     tobacco product, including any component of the paper or 
     filter of such product.
       (7) The term ``package'' means a pack, box, carton, or 
     other container of any kind in which cigarettes or other 
     tobacco products are offered for sale, sold, or otherwise 
     distributed to customers.
       (8) The term ``Secretary'' means the Secretary of Health 
     and Human Services.
       (9) The term ``spit tobacco'' means any finely cut, ground, 
     powdered, or leaf tobacco that is intended to be placed in 
     the oral cavity.
       (10) The term ``tar'' means the particulate matter from 
     tobacco smoke minus water and nicotine.
       (11) The term ``tobacco product'' means--
       (A) cigarettes,
       (B) little cigars,
       (C) cigars as defined in section 5702 of the Internal 
     Revenue Code of 1954,
       (D) pipe tobacco,
       (E) loose rolling tobacco and papers used to contain such 
     tobacco,
       (F) products referred to as spit tobacco, and
       (G) any other form of tobacco intended for human 
     consumption.
       (12) The term ``trademark'' means any word, name, symbol, 
     logo, or device or any combination thereof used by a person 
     to identify or distinguish such person's goods from those 
     manufactured or sold by another person and to indicate the 
     source of the goods.
       (13) The term ``United States'' includes the States and 
     installations of the Armed Forces of the United States 
     located outside a State.
       (14) The term ``State'' includes, in addition to the 50 
     States, the District of Columbia, Guam, the Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the Virgin 
     Islands, American Samoa, and the Trust Territory of the 
     Pacific Islands.

     SEC. 4. PRODUCT PACKAGE LABELING.

       (a) In General.--
       (1) Cigarettes.--
       (A) Warnings.--It shall be unlawful for any person to 
     manufacture, import, package, or distribute for sale within 
     the United States any cigarettes unless the cigarette package 
     bears, in accordance with the requirements of this section, 
     one of the following warning labels:
     WARNING: Cigarettes Kill
     WARNING: Cigarettes Cause Lung Cancer and Emphysema
     WARNING: Cigarettes Cause Infant Death
     WARNING: Cigarettes Cause Heart Attacks and Stroke
     WARNING: Cigarettes Are Addictive
     WARNING: Nicotine Is An Addictive Drug
     WARNING: Cigarette Smoking Harms Athletic Performance
     WARNING: Smoking During Pregnancy Can Harm Your Baby
     WARNING: Cigarette Smoke Is Harmful to Children
     WARNING: Smoke From * Cigarettes Can Cause Cancer in 
     Nonsmokers.

     For purposes of the last warning in the preceding sentence, * 
     denotes the name of the brand of cigarettes required to bear 
     such label.
       (B) Ingredients and constituents.--It shall be unlawful for 
     any person to manufacture, import, package, or distribute for 
     sale within the United States any cigarettes unless the 
     cigarette package contains a package insert, in accordance 
     with the requirements of this section, the ingredients and 
     constituents of the cigarettes which were reported to the 
     Secretary under section 7 and which the Secretary determines 
     should be made public.
       (C) Package insert.--
       (i) In general.--It shall be unlawful for any person to 
     manufacture, import, package, or distribute for sale within 
     the United States any cigarettes unless the cigarette package 
     includes a package insert, prepared in accordance with 
     guidelines established by the Secretary by regulation, on the 
     carcinogens and other substances posing a risk to human 
     health contained in the ingredients and constituents of the 
     cigarettes in such package.
       (ii) Regulations.--The Secretary shall issue regulations 
     requiring the package insert required by clause (i) to 
     provide the information required by such clause (including 
     carcinogens and other dangerous substances) in a prominent, 
     clear fashion and a detailed list of the ingredients and 
     constituents.
       (2) Spit tobacco product.--
       (A) Warnings.--It shall be unlawful for any person to 
     manufacture, import, package, or distribute for sale within 
     the United States any spit tobacco product unless the product 
     package bears, in accordance with the requirements of this 
     section, one of the following warning labels:
     WARNING: Spit Tobacco Causes Mouth Cancer
     WARNING: Spit Tobacco Is Not a Safe Alternative to Cigarettes
     WARNING: Spit Tobacco Is Addictive
     WARNING: Nicotine Is An Addictive Drug
     WARNING: Use of * Spit Tobacco Can Cause Gum Disease
     WARNING: Use of * Spit Tobacco Can Cause Tooth Loss

     For purposes of the last warning in the preceding sentence, * 
     denotes the name of the brand of spit tobacco required to 
     bear such label.
       (B) Ingredients and constituents.--It shall be unlawful for 
     any person to manufacture, import, package, or distribute for 
     sale within the United States any spit tobacco unless the 
     spit tobacco package bears, in accordance with the 
     requirements of this section, the ingredients and 
     constituents of the spit tobacco which were reported to the 
     Secretary under section 7 and which the Secretary determines 
     should be made public.
       (3) Other tobacco products.--
       (A) Warnings.--It shall be unlawful for any person to 
     manufacture, import, package, or distribute for sale within 
     the United States any tobacco product, other than cigarettes 
     or spit tobacco, unless the product package bears, in 
     accordance with the requirements of this section, one of the 
     following warning labels:
     WARNING: Tobacco Kills
     WARNING: Tobacco Causes Lung Cancer and Emphysema
     WARNING: Tobacco Causes Infant Death
     WARNING: Tobacco Causes Heart Attacks and Stroke
     WARNING: Tobacco Is Addictive
     WARNING: Nicotine Is An Addictive Drug
     WARNING: Tobacco Harms Athletic Performance
     WARNING: Tobacco Use During Pregnancy Can Harm Your Baby
     WARNING: Tobacco Smoke Is Harmful to Children
     WARNING: Tobacco Smoke Can Cause Cancer in Nonsmokers
       (B) Ingredients and constituents.--It shall be unlawful for 
     any person to manufacture, import, package, or distribute for 
     sale within the United States any tobacco product subject to 
     subparagraph (A) unless the tobacco product package bears, in 
     accordance with the requirements of this section, the 
     ingredients and constituents of the tobacco product which 
     were reported to the Secretary under section 7 and which the 
     Secretary determines should be made public.
       (b) Label Format.--
       (1) In general.--The warning labels required by paragraphs 
     (1)(A), (2), and (3) of subsection (a) shall--
       (A) appear on the top of the 2 most prominent sides of the 
     product package on which the label is required and 1 label 
     shall be in Spanish,
       (B) be in a size which is not less than 33 percent of the 
     side on which the label is placed,
       (C) appear in white letters on black backing or in black 
     letters on white backing, whichever is more conspicuous and 
     prominent in contrast to the color of the package, except 
     that the words ``WARNING'' shall appear in bright red letters 
     and if the package does not have any color, the words 
     ``WARNING'' shall be in black or white as prescribed by this 
     subparagraph and shall be boldly underlined with a black or 
     white underlining,
       (D) be in a rectangular shape enclosed in a border of color 
     contrasting to the color of the backing prescribed by 
     subparagraph (C) and to the predominant color of the package, 
     and
       (E) include letters in a height, thickness, and type face 
     which assures that the letters in the space provided for the 
     statement will

[[Page S2856]]

     be no less legible, prominent, and conspicuous than the most 
     legible, prominent, and conspicuous typeface, typography, and 
     size of other matter printed on the side of the package on 
     which the label statement appears.
       (2) Format for other cigarette labels.--The label required 
     by paragraph (1)(B) of subsection (a) shall appear on the 
     package in such style and format as the Secretary may by 
     regulation prescribe.
       (c) Rotation.--The warning labels required by paragraphs 
     (1)(A) and (2) of subsection (a) shall be rotated by each 
     manufacturer of cigarettes and spit tobacco products on each 
     brand of cigarettes and spit tobacco products in accordance 
     with a plan approved for the manufacturer by the Secretary. 
     Each such plan shall provide for an approximately even 
     distribution of the labels among the packages of a brand of 
     the cigarettes and spit tobacco products of each manufacturer 
     each year.

     SEC. 5. LABELING IN ADVERTISING.

       (a) In General.--
       (1) Cigarette advertising.--It shall be unlawful for any 
     person to manufacture, import, package, or distribute for 
     sale within the United States any brand of cigarettes unless 
     the advertising for such brand bears the warning label 
     required for cigarettes by section 4(a)(1)(A).
       (2) Spit tobacco.--It shall be unlawful for any person to 
     manufacture, import, package, or distribute for sale within 
     the United States any spit tobacco product unless the 
     advertising for such product bears the warning label required 
     for spit tobacco products by section 4(a)(2)).
       (3) Other tobacco products.--It shall be unlawful for any 
     person to manufacture, import, package, or distribute for 
     sale within the United States any tobacco product, other than 
     cigarettes or spit tobacco, unless the advertising for such 
     product bears the warning label required for such product by 
     section 4(a)(3)).
       (b) Format.--
       (1) Warning labels.--The warning label required by 
     subsection (a) for advertising shall--
       (A) appear in white letters on black backing or in black 
     letters on white backing, whichever is most prominent 
     relative to the color of the advertisement, except that the 
     word ``WARNING'' shall appear in bright red letters and in a 
     advertisement without color ``WARNING'' shall be in black or 
     white as prescribed by this subparagraph and shall be boldly 
     underlined with a black or white underlining,
       (B) be in a rectangular shape which occupies 33 percent of 
     the space of each advertisement and which is located at the 
     top of the advertisement and enclosed in a border of color 
     contrasting to the color of the backing prescribed by 
     subparagraph (A) and to the predominant color of the 
     advertisement of the tobacco product being advertised,
       (C) include letters in a type face and size which, within 
     the space limitation prescribed by subparagraph (B), assure 
     that the letters in the statement will be no less legible, 
     prominent, or conspicuous than the most legible, prominent, 
     and conspicuous typeface, typography, and size of other 
     matter printed on the advertisement, and
       (D) be in the same language as the text of the advertising 
     in which it appears.
       (2) Billboards with lighting.--The warning label on 
     billboards which use artificial lighting shall be no less 
     visible than other printed matter on the billboard when the 
     lighting is in use.
       (c) Rotation.--
       (1) Non-billboard advertising.--Warning labels on 
     advertising (other than billboard advertising) shall be 
     rotated quarterly in alternating sequence for each brand of 
     cigarettes or spit tobacco product manufactured by the 
     manufacturer or imported by the importer in accordance with a 
     plan submitted by the manufacturer or importer and approved 
     by the Secretary.
       (2) Billboards.--Warning labels on advertising displayed on 
     billboards shall be rotated annually or whenever the 
     advertisement is changed, whichever occurs first.

     SEC. 6. AUTHORITY TO REVISE HEALTH WARNINGS.

       The Secretary may by regulation revise any health warning 
     required by section 4(a)(1)(A), 4(a)(2), or 4(a)(3) and the 
     format for the display of such warning if the Secretary finds 
     that such revision would promote greater understanding of the 
     risks of tobacco.

     SEC. 7. TOBACCO PRODUCT INGREDIENTS AND CONSTITUENTS.

       (a) General Rule.--Each person which manufactures, 
     packages, or imports into the United States any tobacco 
     product shall annually report, in a form and at a time 
     specified by the Secretary by regulation--
       (1) the identity of any added constituent of the tobacco 
     product other than tobacco, water, or reconstituted tobacco 
     sheet made wholly from tobacco, and
       (2) the nicotine, tar, and carbon monoxide yield ratings 
     which shall accurately predict the nicotine, tar, and carbon 
     monoxide intake from such tobacco product for average 
     consumers based on standards established by the Secretary by 
     regulation,
     if such information is not information which the Secretary 
     determines to be trade secret or confidential information 
     subject to section 552(b)(4) of title 5, United States Code, 
     and section 1905 of title 18, United States Code. The 
     constituents identified under paragraph (1) shall be listed 
     in descending order according to weight, measure, or 
     numerical count. If any of such constituents is carcinogenic 
     or otherwise poses a risk to human health, as determined by 
     the Secretary, such information shall be included in the 
     report.
       (b) Public Dissemination.--The Secretary shall review the 
     information contained in each report submitted under 
     subsection (a) and if the Secretary determines that such 
     information directly affects the public health, the Secretary 
     shall require that such information be included in a label 
     under sections 4(a)(1)(B), 4(a)(2)(B), and 4(a)(3)(B).
       (c) Other Sources of Information.--The Secretary shall 
     establish a toll-free telephone number and a site on the 
     Internet which shall make available additional information on 
     the ingredients of tobacco products, except information which 
     the Secretary determines to be trade secret or confidential 
     information subject to section 552(b)(4) of title 5, United 
     States Code, and section 1905 of title 18, United States 
     Code.

     SEC. 8. ENFORCEMENT.

       (a) In General.--
       (1) The Secretary shall carry out the Secretary's duties 
     under this Act through the Commissioner of Food and Drugs.
       (2) The Secretary shall issue such regulations as may be 
     appropriate for the implementation of this Act. The Secretary 
     shall issue proposed regulations for such implementation 
     within 180 days of the date of the enactment of this Act. Not 
     later than 180 days after the date of the publication of such 
     proposed regulations, the Secretary shall issue final 
     regulations for such implementation. If the Secretary does 
     not issue such final regulations before the expiration of 
     such 180 days, the proposed regulations shall become final 
     and the Secretary shall publish a notice in the Federal 
     Register about the new status of the proposed regulations.
       (3) In carrying out the Secretary's duties under this Act, 
     the Secretary shall, as appropriate, consult with such 
     experts as may have appropriate training and experience in 
     the matters subject to such duties.
       (4) The Secretary shall monitor compliance with the 
     requirements of this Act.
       (5) The Secretary shall recommend to the Attorney General 
     such enforcement actions as may be appropriate.
       (b) Injunction.--
       (1) The district courts of the United States shall have 
     jurisdiction over civil actions brought to restrain 
     violations of sections 4 and 5. Such a civil action may be 
     brought in the United States district court for the judicial 
     district in which any substantial portion of the violation 
     occurred or in which the defendant is found or transacts 
     business. In such a civil action, process may be served on a 
     defendant in any judicial district in which the defendant 
     resides or may be found and subpoenas requiring attendance of 
     witnesses in any such action may be served in any judicial 
     district.
       (2) Any interested organization may bring a civil action 
     described in paragraph (1). If such an organization 
     substantially prevails in such an action, the court may award 
     it reasonable attorney's fees and expenses. For purposes of 
     this paragraph, the term ``interested organization'' means 
     any nonprofit organization one of whose purposes, and a 
     substantial part of its activities, include the promotion of 
     public health through reduction in the use of tobacco 
     products.
       (c) Civil Penalty.--Any person who manufactures, packages, 
     distributes, or advertises a tobacco product in violation of 
     section 4 or 5 shall be subject to a civil penalty of not 
     more than $100,000 for each violation per day.

     SEC. 9. LIABILITY.

       Compliance with any requirement of this Act, the Federal 
     Cigarette Labeling and Advertising Act (15 U.S.C. 1331 et 
     seq.), or the Comprehensive Smokeless Tobacco Health 
     Education Act of 1986 (15 U.S.C. 4401 et seq.) shall not 
     relieve any person from liability to any other person at 
     common law or under State statutory law.

     SEC. 10. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

       (a) Effective Dates.--This Act shall take effect on the 
     date of the enactment of this Act, except that
       (1) sections 4, 5, and 7 shall take effect one year after 
     the date of the enactment of this Act,
       (2) section 6 shall take effect 3 years after the date of 
     the enactment of this Act.
       (b) Conforming Amendments.--Effective one year from the 
     date of the enactment of this Act, the Federal Cigarette 
     Labeling and Advertising Act (other than sections 6, 9, 10, 
     and 11) (15 U.S.C. 1331 et seq.) and the Comprehensive 
     Smokeless Tobacco Health Education Act of 1986 (other than 
     sections 1, 2, 3(f), and 8) (15 U.S.C. 4401 et seq.) are 
     repealed.

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