[Congressional Record Volume 143, Number 57 (Tuesday, May 6, 1997)]
[Senate]
[Pages S3986-S3988]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        SUPPLEMENTAL APPROPRIATIONS AND RESCISSIONS ACT OF 1997

  The Senate continued with the consideration of the bill.
  Mr. BOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Mr. President, I extend my sincere thanks to the 
distinguished colleague and fellow Budget Committee Member from South 
Carolina.
  Mr. President, as we begin the discussions today about the emergency 
supplemental appropriations measure, I thought it would be very 
important to touch on some of the important issues in this bill that 
reflect the spending items in the budget of the VA-HUD Independent 
Agency Subcommittee on which I serve.
  The full committee appropriations recommendation includes for the 
emergency supplemental $3.5 billion for disaster relief for the Federal 
Emergency Management Agency, or FEMA. In the committee report we have 
recommended $2.5 billion more than the President's request of $979 
million. The amount recommended represents FEMA's current estimate of 
what is needed to meet the requirements of all disasters currently on 
the books, and those disasters projected to occur in the balance of 
fiscal year 1997.
  Approximately $1.1 billion of the funds provided are for disasters 
projected to occur based on the 5-year historical average cost of 
disaster relief.
  The funds recommended, coupled with the $2 billion currently 
available in FEMA's disaster relief fund, would enable FEMA to meet 
fully all of the fiscal year 1997 and prior year commitments. Certainly 
our hearts go out to the people of North Dakota, South Dakota, 
Minnesota, and other areas stricken by disasters this year. I join with 
others in commending FEMA for the work that it has done to respond 
quickly to disasters. For those of us who live in States which have 
been struck by disasters, we sincerely appreciate the dedicated men and 
women of FEMA and their ability to respond quickly to those needs.
  Having said that, I must notify my colleagues that FEMA's disaster 
relief expenditures are out of control. The subcommittee has been 
paying the price time and time again for FEMA's largess. It is as if we 
had a tanker truck that arrived to put out the fire. It puts out the 
fire but it leaves all of the valves open. So the water continues to 
spill out even after the fire is done, and that is what we are funding. 
We are filling up a tanker truck that still has the valves open. I 
commend the people for getting the truck there when the fire starts. 
But we need to get a handle on how much continues to run out after the 
fire is put out.
  In the past 2 years, including this legislation before us today, we 
have cut almost $12 billion from other VA-HUD programs--principally 
low-income housing--to pay for FEMA disaster relief. Yet we have 
learned that these funds have gone to rebuild stadiums, golf courses, 
yacht harbors, and to replace fully, without any State cost share--
partially damaged university hospitals, such as over $400 million in 
Federal repair costs by FEMA for the UCLA hospital because of the 
Northridge earthquake. Let me make that point again. Mr. President, we 
have spent $400 million in Federal repair costs for the UCLA hospital, 
a very important facility, a revenue-generating facility, and one 
which, frankly, has a lot more reserves than the U.S. Government.
  In the past 2 years, hundreds of millions of dollars have paid for 
snow removal. There has not been a Federal disaster declaration for 
snow removal since 1979. I think there is little accountability in the 
program, and entirely too much discretion to waste taxpayers' dollars.

  I also point out to my colleagues that we wouldn't need a 
supplemental for FEMA today if in 1996 the President's Chief of Staff 
had not recommended a $1 billion rescission from FEMA during the 
negotiations on the final bill last year. We knew these funds would be 
needed, but instead, following the administration's recommendation, 
Congress rescinded these funds to pay for administration priorities in 
other areas.
  Moreover, equally disturbing is that to offset these FEMA costs, as 
well as an additional $100 million requested by the President for CDBG, 
community development block grant emergency funding, the bill would 
rescind over $4 billion from the programs and activities within the 
jurisdiction of the VA-HUD appropriations subcommittee, including $3.65 
billion from unobligated HUD section 8 contract reserves.
  The rescission of $3.65 billion in unobligated section 8 contract 
reserves places the renewal of section 8 contracts for fiscal year 1998 
in jeopardy. As the people at HUD know full well, the cost of section 8 
contracts will skyrocket over the next few years. In particular, the 
VA-HUD fiscal year 1997 Appropriations Act appropriated $3.6 billion to 
cover the cost of renewing expiring section 8 contracts for fiscal year 
1997. The costs of renewing all section 8 contracts for fiscal year 
1998, one year later, a total of $1.7 million expiring contracts, many 
of which are for the elderly and disabled, will require an 
appropriations of some $10.2 billion in budget authority for fiscal 
year 1998. The cost of expiring section 8 contracts rises to $11.9 
billion in fiscal year 1999, $13.7 billion in fiscal year 2000; $15.l 
billion in fiscal year 2001, and $16.4 billion in fiscal year 2002.
  Just to go back, in the current year we had to find budget authority 
for $3.6 billion. For the coming year, $10.2 billion, almost a 
threefold increase, going up to $11.9 billion, up to $13.7 billion, up 
to $15.1 billion, up to $16.4 billion.
  My colleagues will have a right to ask. Are we paying out that much 
more because we have that many new section 8 contracts? The answer is 
no. The answer is no. The answer is that in the past we have provided 
multiyear contracts for the section 8 program, 20-year contracts, and 
they built in all of the budget authority--the commitment to spend--in 
prior years. Because of the

[[Page S3987]]

budgetary constraints, we have been shortening those. I think the 
direction from the Budget Committee is they want to get those down to 1 
year. That means that we have to pick up the budget authority--the 
overall obligation to spend the money--in each appropriations cycle.
  We have begun these ongoing programs that have built up. We have been 
spending the money on the programs. But the budget authority was 
appropriated in prior years. All that budget authority has expired. So 
we get almost a threefold increase in the budget authority required 
from the current year to that required for the next year just to keep 
the same people in the same section 8 houses.
  We have done a great deal through this subcommittee working with the 
authorizing committee to reform HUD. Just recently HUD announced that 
they were carrying forward a demonstration program to deal with some 
very significant problems in excess subsidies for multifamily houses--
the market-to-market portfolio reengineering process. We are doing all 
of that. But just to maintain our commitments requires new authority.
  I am very pleased that the budget agreement recognizes--the President 
and the leaders of Congress recognize--that additional budget authority 
and some outlays have to go into section 8. But given all of that, we 
are looking at these tremendous increases in the section 8 requirements 
each year in the budget.
  Yet, suddenly HUD, abruptly on April 17, found that it had $5.8 
billion in unobligated and excess section 8 contract reserves. I think 
that is a rather cynical act. They know that we are going to have to 
spend all of this money. Yet, they offered up the budget authority that 
was in there already appropriated for them to fund FEMA obligations. 
When I met with Secretary Cuomo and his staff on March 12, they told me 
there was probably less than $1 billion in section 8 reserves on hand. 
The previous year, then Chief of Staff, Mr. Katz, testified that HUD 
estimated in fiscal year 1996 there was only about less than $.5 
billion in excess section 8 contracts reserves.
  Nevertheless, on April 17 of this year, in the middle of supplemental 
appropriations, HUD wakes up and finds not only $3.5 billion in excess 
unobligated section 8 reserves but it indicates that it will revise its 
section 8 contract reserve requirements so that there is in excess of 
$5.8 billion in unobligated reserves. It is a big jump from $460 
million to $5.8 billion. That is a big problem, and, once again, it 
focuses our intention on the questions about management of HUD, an 
agency which the General Accounting Office has in the past designated 
as a troubled agency, the only department in the U.S. Government to 
have that dubious distinction.
  The bottom line is that I still have little confidence in HUD's 
ability to estimate the amount of excess section 8 contract reserves, 
or its ability to manage the programs.

  I do know, however, that there is a vital need to fund the section 8 
program next year; that 1.7 million families are depending upon the 
renewal of section 8 contracts to preserve affordable and decent 
housing, and many of these are elderly and disabled. For that reason, 
the supplemental appropriations we are proposing would require HUD to 
recapture all excess unobligated section 8 reserves and preserve these 
funds in an account to help this committee fund the section 8 contract 
renewals next year. That, I think, is critical, Mr. President.
  I honestly do not know how much section 8 assistance is unobligated 
in section 8 contract reserves, and, unfortunately, I don't believe HUD 
knows. I know that some PHA's, public housing authorities, have section 
8 contract reserves and some don't. Mostly, I find it difficult to 
believe that HUD has audited 3,400 PHA's between March 12 and April 17 
to determine, all of a sudden, that there was some $5.8 billion in 
excess reserves.
  I have been a defender of HUD and a defender of the role of the 
Federal Government as a provider of housing and community development 
assistance. Yet, my support has been justified on the belief that the 
department is capable of reform and is capable of providing a 
meaningful contribution to housing and the community development needs 
of the Nation.
  I will not belabor these issues today other than to say that we are 
confident that HUD has been shaken once again. We hope that the 
secretary and his new management team, with the assistance he is 
bringing in from the outside, will be able to implement a fiscal 
management system which will avoid these surprises and give the agency 
and the Congress some idea of how much is out there, what the 
obligations are, and how much we have built up.
  I believe strongly that Federal commitment to section 8 housing must 
be preserved. Renewing these section 8 contracts is an existing 
commitment to low-income families in need of affordable, safe, secure 
housing. But HUD has to be reformed. We cannot find surprises of found 
money as Congress takes on the serious task of reforming the budget.
  Mr. President, I said that we would have some technical amendments 
that we will offer before the 2:30 deadline. Those are currently being 
reviewed at the staff level. In consultation, we may be able to get an 
agreement on them. So I will not offer those at this moment. But we 
will submit those amendments as soon as they are ready, and prior to 
the 2:30 deadline.
  I yield the floor.
  I express my thanks to my distinguished colleague from South 
Carolina.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.


                            Amendment No. 57

  Mr. HOLLINGS. Mr. President, I think the pending business is an 
amendment by our distinguished colleague from Minnesota, Senator 
Wellstone, to strike an amendment that was included in the markup of 
the urgent supplemental at the Appropriations Committee level. I had 
this included. I think others had it, too. But in my particular 
instance, it was at the request of a constituent, Hoffman-La Roche, an 
eminent drug manufacturer, in the city of Florence. They are 
constructing a facility there now. We are very proud to have them. They 
are very responsible folks.
  This particular issue was dealt with in full debate on the floor of 
the U.S. Senate last year by the distinguished Senator from Utah, who 
dealt with the matter of copyright and patent legislation as the 
chairman of our Judiciary Committee. What really occurred--it is sort 
of complicated, but what really occurred is there are two different 
rulings with respect to the longevity of a particular patent. Under the 
regular law, a patent is granted for 17 years from the date of the 
issuance of the patent. In the early 1980's, all patents in existence 
at that time were granted 2 extra years as recognition that the 
approval process was resulting in much shorter usable life for the 
patented drugs. In this case the approval process took 11 years. Along 
came the GATT agreement. Trying to conform to the global competition 
and the global rule of 20-year patents, we passed a law which allowed a 
company to choose to operate under the current U.S. system or to 
operate a patent for 20 years from the date of the filing of the 
patent. The courts interpreted these two laws in a way that denied 
Hoffman-La Roche this choice. I, as well as many Members of the Senate 
including the chairman of the Judiciary Committee, Senator Hatch, know 
this ruling to be in contravention to the intent of the laws in 
question and this amendment simply sought to right this wrong.
  The drug in question is Toradol. It is a remarkable drug. Of course, 
it is the pain killing drug with which you can retain total 
consciousness, and it was administered to the President with his 
particular knee operation. The patent is to expire on May 16, 1997. As 
you can guess, the generic drug folks are interested whenever a patent 
expires, and my intention was to address the generic drug problem. Many 
a time the generic drug folks, along with consumer organizations, will 
come and say, ``Oh, we can get it much cheaper.'' On that particular 
point, there is no question. The question is to not only make profits, 
but make enough for other reinvestments to make another miracle drug. 
So, while I have worked and defended the generic movement in our 
country, from time to time on close study you can see that the 
manufacturer himself has a cause and a case and it ought to be 
defended. That was the intent in this particular amendment.

[[Page S3988]]

  Right to the point, everybody wants to either vote or dispose and 
move along with the underlying disaster supplemental measure rather 
than this one particular manufacturer and this one particular drug. 
Under the circumstances here on the floor, I have not been able to talk 
in caucus or to my colleagues about it. The fact is, I was told, when I 
came in this morning, it was being worked out.
  Specifically, while we had taken care, I understand, of the drug 
administered orally with the generic drug folks and consumer groups 
that called with respect to it, the drug taken intravenously had not 
been cleared with the generic groups. While we have gone to great 
lengths to solve all the problems with and get this amendment cleared, 
we have not been able to do so. It was my hope that we could get the 
best of both worlds and provide a remedy for a company hurt by a 
misinterpretation of the law and also get generic competition onto the 
market faster than it would have without this amendment. That, I 
thought, was being worked out this morning, but I understand, now, the 
Senator from Minnesota has not agreed to that.
  I will be prepared, under the circumstance here, to withdraw that 
amendment and not cause the colleagues to vote. But I do not think, 
technically or parliamentarily, you can withdraw a section of a bill. 
So I will be glad to go along with the Senator from Minnesota on a 
voice vote and vote along with him at this particular time, to see if 
we cannot get this straightened out.
  The staff, floor and all, have been anxious. They are trying to move 
this particular bill. I know Senator Stevens has been very anxious to 
do it. I appreciated being included in the Appropriations Committee 
version. I still think it is with absolute merit. But, under the 
circumstance, now I am prepared to go along with the motion of the 
Senator from Minnesota to strike and we will come back in at the 
appropriate time.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. COCHRAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Sessions). Without objection, it is so 
ordered.


                            Amendment No. 67

(Purpose: To make technical and clarifying changes to title II, chapter 
                             1 of the bill)

  Mr. COCHRAN. Mr. President, I send to the desk an amendment to make 
technical and clarifying changes to title II, chapter 1 of the bill.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Mississippi [Mr. Cochran] proposes an 
     amendment numbered 67.

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

       On page 9, line 25, strike ``, to remain available until 
     expended'' after ``ters,'' and insert ``, to remain available 
     until expended'' after ``$18,000,000''.
       On page 11, line 25, after ``disasters'' insert ``subject 
     to a Presidential or Secretarial declaration''.
       On page 11, strike all between the word ``similar'' on line 
     25 and the word ``to'' on line 26.
       On page 12, line 4, strike ``the eligibility'' and insert 
     in lieu thereof ``gross income and payment limitations''.
       On page 13, line 13, strike ``cropland'' and insert in lieu 
     thereof ``agricultural land''.
       On page 13, line 13, strike ``cropland'' and insert in lieu 
     thereof ``agricultural land''.
       On page 16, line 2, strike ``$3,000,000,'' and insert in 
     lieu thereof ``$6,500,000''.

  Mr. COCHRAN. Mr. President, this amendment, as stated, makes 
technical and clarifying changes to the agriculture title to the 
supplemental appropriations bill. The changes have been approved by the 
ranking Democrat on the committee, Mr. Bumpers, and the amendment has 
been cleared on both sides of the aisle.
  The PRESIDING OFFICER. Is there further debate? If not, the question 
is on agreeing to the amendment.
  The amendment (No. 67) was agreed to.
  Mr. COCHRAN. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.
  Mr. COCHRAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BURNS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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