[Congressional Record Volume 143, Number 126 (Friday, September 19, 1997)]
[Senate]
[Pages S9726-S9729]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS (for herself, Ms. Snowe, Mr. Hollings, and Mr. 
        Robb):
  S. 1199. A bill to amend the Higher Education Act of 1965 regarding 
income protection allowances for certain students; to the Committee on 
Labor and Human Resources.


              the working students' income protection act

  Ms. COLLINS. Mr. President, today, I am introducing the Working 
Students' Income Protection Act, a bill to increase the number of 
working students who are eligible for Federal Pell grants. I am pleased 
to have Senator Snowe, Senator Hollings, and Senator Robb as 
cosponsors.
  This bill will correct a problem created by the 1992 amendments to 
the Higher Education Act that unfairly denies aid to hundreds of 
thousands of deserving students. Let me explain the problem.
  The formula used to determine the eligibility for Federal financial 
aid includes an income protection allowance, known as an IPA, which 
enables working students to retain a portion of their earnings to pay 
their basic living expenses. This allowance is not counted in 
determining eligibility for student aid. A portion of earnings above 
the IPA is used to calculate the contributions students can make to 
their education expenses. As students' incomes rise above the IPA, 
their eligibility for Federal student aid, especially for Pell grants, 
declines.
  The 1992 amendments to the Higher Education Act dramatically and 
drastically lowered the income protection allowances. For single 
students, financially independent of their families, the IPA was 
reduced from $6,400 to $3,000. The IPA for working dependent students 
was lowered from $4,250 to $1,750. As a result, the amount a typical 
independent student can receive under the Pell Grant Program begins to 
decline when his or her income exceeds $3,000, and the student becomes 
completely ineligible at an income level of $10,000.
  Because of this decrease in IPA's, the number of independent students 
receiving Pell grants declined from over a million in 1992 to about 
750,000 in 1993--a loss of over a quarter of a million grants to 
independent working students.
  This change has three unfortunate consequences:
  First, many nontraditional students are not able to pursue post-
secondary education. Typically these are older individuals with jobs 
who are attempting to improve their skills. Because the IPA is not 
enough to meet living expenses, independent students find themselves 
unable to pay tuition and meet their basic living expenses. They are 
forced to defer or even forgo higher education.
  Second, the current law creates a disincentive to work. If a student 
knows that earning more than $3,000 will reduce the size of his or her 
Pell grant award, the student can easily conclude that there is no 
reason to try to earn more than $3,000 a year.
  Third, it penalizes students who are trying to pay for their 
education through work rather than by borrowing. This is particularly 
unfair to the almost 75 percent of dependent undergraduates who are 
working while studying to pay college expenses. When earnings result in 
lower grants, these students must turn to larger loans to finance their 
education.
  The Working Students' Income Protection Act will make great strides 
toward correcting these problems. It will allow single independent 
students to retain $6,000 of their earnings for basic living expenses, 
married working independent students to retain $9,000, and working 
dependent students to retain $4,200 before they begin to loose their 
Pell grants. This will not only make higher education more affordable 
for these students, it will also encourage and reward work, a 
worthwhile objective.
  Moreover, these changes will correct an injustice by providing 
benefits to a segment of the student population that has been largely 
overlooked by the changes in student aid recently passed or currently 
under consideration. Increasing Pell grants by $300, for example, a 
move that I strongly support, which was included in the budget 
agreement, will not help the working students who are ineligible for 
these grants because of the inadequate level of the current IPA. 
Similarly, the tuition tax credit will not help them because they are 
not earning enough to pay taxes. By increasing the IPA, these students 
will be able to share in the government assistance available to those 
seeking to pursue a higher education.
  I would like to give you some examples from the University of 
Southern Maine, a State-supported institution serving 10,000 students. 
These students have an average age of just under 30 years. They are 
largely independent students and they are balancing jobs, school, and 
often family responsibilities. When these students have incomes above 
the IPA, which they must have to survive, they are not eligible for 
Pell grants under the current law. Let me describe two of these 
students to you.
  Both are single students. The first is a 25-year-old junior 
recreation therapy

[[Page S9727]]

major. She has worked as a nurses aide since graduating from high 
school, and she continues to work full time during the summers and part 
time during the school year. The second is a 31-year-old social work 
major. He works year round in a variety of part-time restaurant and 
clerical jobs. Both have total gross earnings of about $15,000 per 
year.
  The current income protection allowance permits each of these 
students to retain only $3,000 for basic living expenses. It assumes 
that the remainder is available for calculating the family contribution 
toward educational expenses. The Working Students' Income Protection 
Act will allow each of these students to retain $6,000 for basic living 
expenses and will restore their eligibility for Pell grants. It will 
allow them to complete their education without incurring significant 
amounts of debt.
  The president of the University of Southern Maine, Richard 
Pattenaude, has often noted that the mission of a public university is 
to help people of diverse backgrounds achieve their goals. These 
citizens, including recent high school graduates, adult learners with 
jobs and families, and single parents, all come to us, he says,

       With dreams of becoming more than they are. I am always 
     moved and inspired by how hard our students work to realize 
     those dreams and how deeply they care about their educations. 
     These students underscore the significance of maintaining 
     support for higher education if we are to enter the 21st 
     century with an educational system ready to meet the needs 
     and challenges of the people we serve.

  By increasing the income protection allowance, the Working Students' 
Income Protection Act will take a major step toward meeting this 
challenge by helping working students afford college and encouraging 
them to pursue higher education.
  Later in this Congress, the Senate Labor and Human Resources 
Committee, whose chairman is here today, will mark up the Higher 
Education Act reauthorization legislation. It is my hope that this 
legislation will be incorporated into the committee's bill.
  Enacting this modest change will make a significant and positive 
change in the lives of thousands and thousands of students in the 
United States I urge my colleagues to show their support by 
cosponsoring this bill.
  Mr. President, I ask unanimous consent that a letter from the 
American Council of Education on behalf of seven higher education 
associations which support this bill be included in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                American Council on Education,

                                Washington, DC, September 4, 1997.
     Hon. Susan M. Collins,
     U.S. Senate,
     Washington, DC.
       Dear Senator Collins: The higher education associations 
     listed below, representing the nation's 3,700 colleges and 
     universities, strongly support the legislation you are 
     sponsoring to correct current inequities in the need analysis 
     formula for the Pell Grant program. Your legislation 
     parallels the reauthorization proposal we have advanced to 
     reinstate or expand eligibility for single independent 
     students and for dependent students who work.
       A broad-based consensus exists among students, campus 
     officials, and higher education policy analysts, as well as 
     the Clinton administration and many members of Congress, that 
     the 1992 Higher Education Act (HEA) amendments made it overly 
     difficult for single, independent students and dependent 
     students with earnings to receive Pell Grants. These changes 
     were felt immediately and had a substantial, negative impact 
     on access to higher education. For example, at least 200,000 
     single independent students lost their Pell Grants as a 
     result of these changes in the first year they were 
     implemented.
       For a number of years, the cost of providing greater grant 
     access for these extremely needy students has been cited as a 
     reason against acting to assist them. However, the President 
     has requested funds for this purpose this year, and the House 
     Appropriations committee has included funds that will make a 
     substantial contribution toward addressing this problem in 
     its version of the FY 1998 Labor, Health and Human Services 
     and Education appropriations bill. Securing these funds, 
     along with passage of authorizing legislation such as yours 
     to permit the funds to be spent, will provide tremendous 
     relief and benefit to students on campuses across the 
     country.
       Again, we are grateful for your leadership on this 
     important issue. Prompt consideration and passage of your 
     bill immediately following the August recess will pave the 
     way for appropriations to follow, enabling students and their 
     families to make financial plans for the next academic year. 
     We are eager to assist you in any way to secure passage of 
     your legislation.
           Sincerely,
                                             Stanley O. Ikenberry,
                                                        President.

                                 ______
                                 
      By Mr. CAMPBELL:
  S. 1200. A bill to provide that countries receiving foreign 
assistance be conducive to U.S. business; to the Committee on Foreign 
Relations.


             the international anti-corruption act of 1997

  Mr. CAMPBELL. Mr. President, many of my colleagues and I have 
received complaints from constituent companies, or from constituents 
who are affiliated with companies, which are encountering unfair and 
illegal business practices in other countries. What is especially 
disturbing is that many of these countries are receiving significant 
amounts of U.S. foreign assistance.
  Ukraine, for example, is the fourth largest recipient of United 
States foreign aid, receiving approximately $228 million in 1997. Yet, 
despite this generous U.S. assistance, corrupt government officials 
cheat and threaten U.S. businesses and investors.
  In March of this year, the Motorola Corp. pulled out of a $500 
million investment because of arbitrary decisions made by powerful 
bureaucrats. News reports indicated that Motorola's decision came less 
than 2 weeks after the consortium it was leading was selected as one of 
three winners in a tight competition to install cellular phone networks 
in that country. As reported, the government kept changing the rules up 
to the last minute which drove Motorola to its startling decision to 
pull out. The Wall Street Journal called Motorola's experience ``a case 
study of the pitfalls faced by investors in Ukraine.
  The Foreign Operations Subcommittee of which I am a member held a 
hearing on May 6 regarding the Ukraine, Russia, and the New Independent 
States. The hearing considered the administration's request for 
millions of dollars in new funding for these countries. A number of 
subcommittee members and I raised with the witnesses specific examples 
of United States companies and American investors who are victims of 
corruption and dishonesty by the Ukrainian Government.
  I would like to take a minute and highlight some statements made by 
AID Assistant Administrator Thomas Dine at that hearing which 
underscore how serious the situation is in the Ukraine. Mr. Dine 
testified that ``there are real problems in the Ukraine. The perceived 
level of official and unofficial corruption is pervasive and deep.'' He 
also testified that ``the Deputy Prime Minister, the country's leading 
reformer, recently resigned.'' And, ``major and small U.S. companies, 
faced with harassment, intimidation, and bribery are leaving the 
country.'' Mr. Dine further testified that ``we cannot expect American 
investors to do business in Ukraine or any of the NIS countries if they 
are not going to be treated fairly.'' I fully agree with this last 
statement, and believe we in Congress should act to ensure American 
investors are treated fairly, especially in those countries which are 
receiving millions in American tax dollars.
  Corruption is a major problem for companies around the world. The 
World Bank recently surveyed international executives who identified 
corruption as the biggest problem they face in doing business in Latin 
America, the Caribbean, and sub-Saharan Africa.
  And, we have seen disturbing news reports of the extent of corruption 
and illegal practices which are adversely affecting U.S. businesses 
abroad. A New York Times article of May 24, 1997, cited a Commerce 
Department finding that U.S. companies lost approximately $11 billion 
in contracts since mid-1994 because of bribery by their foreign 
competitors of foreign officials. And, this staggering loss is 
attributed only to those high-profile cases which were identified. 
Another report cited in the June 2, 1997, Economist Intelligence Unit, 
cited a loss of $45 billion to American companies because of 
corruption.

  How many more millions of dollars have U.S. companies lost because of 
corrupt practices by foreign officials?

[[Page S9728]]

  Mr. President, corruption in foreign countries hurts the U.S. 
economy. Trade with foreign countries creates and supports American 
jobs. Trade helps keep prices low, provides a greater selection of 
goods, and creates a larger market in which American companies can sell 
their products. Corruption limits the possibilities for U.S. investment 
and exports. It increases the risk and costs of doing business to the 
detriment of U.S. businesses and consumers.
  Some important steps are being taken on the international scene. In 
May 1997, the 29 member nations in the Organization for Economic 
Cooperation and Development [OECD], which is composed of the world's 
largest industrialized nations, reached an agreement to fight 
corruption. This agreement is the first international accord which 
makes it a crime to bribe foreign officials.
  And, on July 31, the International Monetary Fund decided to end its 
$216 million loan agreement with Kenya because of corruption and 
governmental mismanagement in that country.
  But, more needs to be done.
  The United States, in effect, is subsidizing other countries which 
are harassing U.S. companies and American investors abroad. This is 
unfair to U.S. businesses and unfair to U.S. taxpayers. And, this 
practice should stop.
  That is why I am introducing today the International Anti-Corruption 
Act of 1997. This legislation requires the State Department to submit a 
report and the President to certify by March 1 of each year that 
countries which are receiving U.S. foreign aid are, in fact, conducive 
to American businesses and investors. If a country is found to be 
hostile to American businesses, its aid from the United States would be 
cut off.
  The certification would be based on whether a country is making 
significant progress in, and is committed to, economic reform aimed at 
stemming corruption. The specific factors of economic reform which the 
State Department would consider include: market principles, private 
ownership, equitable treatment of foreign private investment, adoption 
of a legal and policy framework necessary for such reform, protection 
of intellectual property rights, and respect for contracts. The 
certification also would determine whether that country is making 
significant progress to eliminate corrupt trade practices and become 
integrated into the world economy.
  Based on the State Department's findings, the countries would be 
assigned to one of three categories regarding their business climate: 
Conducive for U.S. business; not conducive to U.S. business; or hostile 
to U.S. business.
  If the President certifies that a country is hostile to U.S. 
businesses and investors, the U.S. Government would immediately cut off 
foreign aid to that country. The United States also would vote against 
any loans to this country in the multilateral development banks. The 
aid would remain suspended until the President certifies the country is 
making significant progress in implementing the specified economic 
indicators and is no longer hostile to U.S. business.
  If the President certifies that a country's business climate is not 
conducive for U.S. businesses, that country will, in effect, be put on 
probation. The country would continue to receive U.S. foreign aid 
through the end of the fiscal year, but aid would be cut off on the 
first day of the next fiscal year unless the President certifies the 
country is making significant progress in implementing the specified 
economic indicators and is committed to being conducive to U.S. 
business.

  This probationary period is similar to the one in S. 457, which I 
introduced on March 19, 1997, regarding the drug certification process. 
This new approach would provide a specific time period during which the 
country on probationary certification would be expected to comply with 
certain conditions stipulated by the administration. If these 
conditions were not met at the end of this period, the United States 
would act firmly and cut off aid.
  I initially designed this alternative to put countries on notice that 
the United States had serious concerns about their lack of cooperation. 
But, I also wanted to provide a fair period of time during which those 
countries could address U.S. concerns.
  I included the probationary period in the bill I am introducing today 
for those countries which fall in the ``not conducive for U.S. 
businesses'' category, because I believe it is important to provide 
adequate notice to these countries which may have important ties to the 
United States. And, access to more timely and specific information 
during this probationary period would assist Congress in exercising its 
legislative and oversight responsibilities.
  The third category applies when the President certifies a country is 
conducive to U.S. businesses. Foreign aid continues without 
interruption.
  My bill includes the customary waiver authority where the national 
interests of the United States are at stake. For countries certified as 
hostile to or not conducive for U.S. business, aid can continue if the 
President determines it is in the national security interest of the 
United States. However, the determination expires after 6 months unless 
the President determines its continuation is important to our national 
security interest.
  The bill also contains a provision which would allow aid to continue 
to meet urgent humanitarian needs, including food, medicine, disaster 
and refugee relief; to support democratic political reform and rule of 
law activities; to create private sector and nongovernmental 
organizations that are independent of government control; or to develop 
a free market economic system.
  Finally, the bill directs the Commerce Department to establish a 
corruption hotline. Through this toll-free number, U.S. businesses and 
investors will be able to report unfair and illegal practices they are 
encountering in foreign countries. The Commerce Department would use 
that information in its investigations and would pass the information 
along to the State Department to be included in its annual report.
  At a time when we are working to balance the Federal budget and make 
tough spending choices here at home, we can no longer tolerate or 
afford to have our Government misdirect U.S. foreign assistance to 
corrupt countries, especially countries harassing American investors.
  I urge my colleagues to support the bill I am introducing today to 
fight corruption, protect American investors and businesses abroad, and 
improve the allocation of U.S. foreign aid.
  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. 1700

       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 ``International Anti-
     Corruption Act of 1997''.

     SEC. 2. LIMITATIONS ON FOREIGN ASSISTANCE.

       (a) Report and Certification.--
       (1) In general.--Not later than March 1 of each year, the 
     President shall submit to the appropriate committees a 
     certification described in paragraph (2) and a report for 
     each country that received foreign assistance under part I of 
     the Foreign Assistance Act of 1961 during the fiscal year. 
     The report shall describe the extent to which each such 
     country is making progress with respect to the following 
     economic indicators:
       (A) Implementation of comprehensive economic reform, based 
     on market principles, private ownership, equitable treatment 
     of foreign private investment, adoption of a legal and policy 
     framework necessary for such reform, protection of 
     intellectual property rights, and respect for contracts.
       (B) Elimination of corrupt trade practices by private 
     persons and government officials.
       (C) Moving toward integration into the world economy.
       (2) Certification.--The certification described in this 
     paragraph means a certification as to whether, based on the 
     economic indicators described in subparagraphs (A) through 
     (C) of paragraph (1), each country is--
       (A) conducive to United States business;
       (B) not conducive to United States business; or
       (C) hostile to United States business.
       (b) Limitations on Assistance.--
       (1) Countries hostile to united states business.--
       (A) General limitation.--Beginning on the date the 
     certification described in subsection (a) is submitted--
       (i) none of the funds made available for assistance under 
     part I of the Foreign Assistance Act of 1961 (including 
     unobligated balances of prior appropriations) may be made

[[Page S9729]]

     available for the government of a country that is certified 
     as hostile to United States business pursuant to such 
     subsection (a); and
       (ii) the Secretary of the Treasury shall instruct the 
     United States Executive Director of each multilateral 
     development bank to vote against any loan or other 
     utilization of the funds of such institution to or by any 
     country with respect to which a certification described in 
     clause (i) has been made.
       (B) Duration of limitations.--Except as provided in 
     subsection (c), the limitations described in clauses (i) and 
     (ii) of subparagraph (A) shall apply with respect to a 
     country that is certified as hostile to United States 
     business pursuant to subsection (a) until the President 
     certifies to the appropriate committees that the country is 
     making significant progress in implementing the economic 
     indicators described in subsection (a)(1) and is no longer 
     hostile to United States business.
       (2) Countries not conducive to united states business.--
       (A) Probationary period.--A country that is certified as 
     not conducive to United States business pursuant to 
     subsection (a), shall be considered to be on probation 
     beginning on the date of such certification.
       (B) Required improvement.--Unless the President certifies 
     to the appropriate committees that the country is making 
     significant progress in implementing the economic indicators 
     described in subsection (a) and is committed to being 
     conducive to United States business, beginning on the first 
     day of the fiscal year following the fiscal year in which a 
     country is certified as not conducive to United States 
     business pursuant to subsection (a)(2)--
       (i) none of the funds made available for assistance under 
     part I of the Foreign Assistance Act of 1961 (including 
     unobligated balances of prior appropriations) may be made 
     available for the government of such country; and
       (ii) the Secretary of the Treasury shall instruct the 
     United States Executive Director of each multilateral 
     development bank to vote against any loan or other 
     utilization of the funds of such institution to or by any 
     country with respect to which a certification described in 
     subparagraph (A) has been made.
       (C) Duration of limitations.--Except as provided in 
     subsection (c), the limitations described in clauses (i) and 
     (ii) of subparagraph (B) shall apply with respect to a 
     country that is certified as not conducive to United States 
     business pursuant to subsection (a) until the President 
     certifies to the appropriate committees that the country is 
     making significant progress in implementing the economic 
     indicators described in subsection (a)(1) and is conducive to 
     United States business.
       (c) Exceptions.--
       (1) National security interest.--Subsection (b) shall not 
     apply with respect to a country described in subsection 
     (b)(1) or (2) if the President determines with respect to 
     such country that making such funds available is important to 
     the national security interest of the United States. Any such 
     determination shall cease to be effective 6 months after 
     being made unless the President determines that it 
     continuation is important to the national security interest 
     of the United States.
       (2) Other exceptions.--Subsection (b) shall not apply with 
     respect to--
       (A) assistance to meet urgent humanitarian needs (including 
     providing food, medicine, disaster, and refugee relief);
       (B) democratic political reform and rule of law activities;
       (C) the creation of private sector and nongovernmental 
     organizations that are independent of government control; and
       (D) the development of a free market economic system.

     SEC. 3. TOLL-FREE NUMBER.

       The Secretary of Commerce shall make available a toll-free 
     telephone number for reporting by members of the public and 
     United States businesses on the progress that countries 
     receiving foreign assistance are making in implementing the 
     economic indicators described in section 2(a)(1). The 
     information obtained from the toll-free telephone reporting 
     shall be included in the report required by section 2(a).

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Appropriate committee.--The term ``appropriate 
     committees'' means the Committee on International Relations 
     of the House of Representatives and the Committee on Foreign 
     Relations of the Senate.
       (2) Multilateral development bank.--The term ``multilateral 
     development bank'' means the International Bank for 
     Reconstruction and Development, the International Development 
     Association, and the European Bank for Reconstruction and 
     Development.

                          ____________________